How to Ensure Your Restaurant Makes (Not Just Loses) Money Using Online Ordering

With in-store foot traffic down up to 90%, many restaurants are scrambling to beef up their online ordering capabilities to support business models that are more focused on delivery and curbside pick-up. Two important strategies that restaurants are considering are:

  1. Direct online ordering via the restaurant’s website: A restaurant owner can set up a simple website and start taking orders on their own website. No coding / technical knowledge needed!
  2. Indirect online ordering via Delivery Service Platforms like Doordash: Services and apps like GrubHub, DoorDash, UberEats, etc. are Delivery Service Platforms (DSPs). DSPs are easy to set up for restaurants to start getting orders from a third party company (Doordash, etc.) that has access to tons of customers. This is a great option because your business is able to drive your current customers to order via the DSP app while also getting lots of new customers who may have never heard about you before but see your business listed as a “nearby” option.

There are several challenges the restaurant owner faces in trying to shift more of their orders from offline to online:

Delivery apps (DSPs) can be expensive and cut into your margins. A small single location restaurant typically pays 25-30% of each order plus a delivery fee to the DSP app which leaves very little margin when the typical restaurant also has to pay for their cost of goods, rent, salaries, utilities, etc!

Driving lots of customers to your own restaurant website to order directly from you only can be hard. A tech-savvy restaurant owner might be able to quickly set up a website to take online orders directly to save the 25-30% cut from the DSP apps, but how do they promote more direct visits to their website? You can promote your online order website to your current customers via email, text message, or social media, but that’s only if you’ve built up a large contact list of customer emails and phone numbers, or have a large social media following. Also, what about getting new customers to find your restaurant’s online order website? Search engine optimization? Paid/sponsored social media ads? There are a lot of things to consider and it can be a lot of overhead to plan and figure out. 

How to ensure online orders make your restaurant more money and not less

Here are some strategies a restaurant business owner might consider to drive more profitable online orders:

Start taking direct online orders from your own website using an easy-to-use website builder service

Restaurants can look into simple website building platforms like Wix, Shopify, or Ecwid to set up a website that enables online ordering without needing any technical knowledge. There are also companies like Chownow and Applova that are more turnkey (a more complete product/setup ready for immediate use) and can help a restaurant owner through the website creation process and online ordering process step by step.

Use delivery apps as a way to market your restaurant business to both new and current customers

It’s almost impossible to build a sustainable restaurant business giving away 30%+ of every order, but restaurant owners can utilize delivery apps like Doordash as marketing channels to build their restaurant’s brand and to promote more direct online orders. For every order that comes in from Doordash/Grubhub apps, restaurant owners should consider placing a promotional coupon onto or into their delivery boxes/bags to encourage customers to make their next online order through their own restaurant website instead. You can offer 15% off or a free appetizer for their first direct online order to incentivize the customer to order directly from your restaurant’s website in the future.

Start building up a customer list of phone numbers and emails to message more of your customers directly

Building a large database of customer emails and phone numbers is critical to driving more direct orders, so restaurant owners should look for opportunities to build a bigger customer contact list by offering promotions in exchange for customers providing contact information. Fivestars has a “text to join” feature that we’re giving away (for free) during COVID-19 stay-at-home orders to help businesses build their database in this crazy season. Businesses can promote their “text to join” code through DSPs or through their social media channels to help build a bigger database.

While more restaurants are beginning to open up across the country, foot traffic will likely remain lower than pre-coronavirus levels for the foreseeable future. Restaurants should carefully think through how to implement an online ordering strategy that will drive more profitable online orders.

Jonathan Chen
About the Author
Jonathan Chen

Jonathan heads up channel and partner marketing at Fivestars. He spends the majority of his time finding new ways to build the Fivestars network, but always makes room in his schedule to shamelessly crush co-workers at ping pong.

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