In our latest blog post, we discussed some of the key ways to maximize your online ordering business to grow profits by thinking big and going to bat for your commission rates. View the Top 5 Proven Tips to Profit from Online Ordering in a Big Way.
Today, we’re diving deep into controlling food costs, preparing your online ordering menu, and how to package your to-go food in an efficient way. Check out the 5 things we’ve learned by managing the digital businesses for some of the leading brands in the industry, and implement some of these tactics to win at online ordering:
How to control costs
Start slow and adapt as you go – online ordering = flexibility
Often, restaurateurs are too worried about running out of food or not keeping up with online orders, so they choose not to sign up for any, or stick to only a few. What they don’t realize is that the way restaurants are getting discovered is transforming, and lack of a strong online presence is much more threatening to them than anything else.
Start with a number you are comfortable with, keep track of your logistics, and modify as needed. Once you are comfortable again, consider what other services could bring further value to your restaurant, and begin the process again. Before long you will be able optimize your processes, increase awareness of your brand, and see sales numbers you wouldn’t have thought possible.
How to build great menus
Remember the Three P’s
Your goal is to build an online ordering menu that drives profit and delights customers. The three main factors to consider when preparing and revising your online ordering menu are:
Initially you can assess popularity or demand based on in-store sales. Over time, you will discover which items are most popular for online ordering. It can be challenging to determine which items are most popular by monitoring each of your online ordering systems. Your POS system can help achieve this task if you specifically associate each online order with payment records.
Review online sales monthly to understand which items are most popular and consider ways to expand upon this popularity. Perhaps you can offer different versions of the popular items or volume-based pricing for popular items. Similarly, you should periodically analyze the profitability of your most popular online orders. Think on these:
- Are profit margins sufficient for these items?
- Should you adjust pricing?
- Can you produce these items at a lower cost?
Finally, adequate packaging is essential to delight online ordering customers.
- Are your items arriving intact?
- At the right temperature and quality?
- Is the packaging secure?
- Is the packaging safe?
- Is the packaging appropriate for the items being delivered?
Your success with online ordering will depend on your ability to master these Three P’s. Failure to do so will result in dissatisfied customers, online complaints and damage to your restaurant’s reputation.
How to package correctly
Learn how to do it right
Some food travels well, some food doesn’t. Before even thinking about packaging, it is important to realize that your entire menu will likely not work online. Menu engineering is a vital component to ensuring online ordering satisfaction. Once your menu has been tailored down to exclude items that won’t hold up in a car for 30-60 minutes, it is important to actually run a test on the food that is on the online ordering menu. I have actually gone to the extent of ordering every item from my restaurant through delivery to see how food quality holds up. This process has helped me realize that I needed to reconsider packaging for items like french fries. My personal recommendation is to use a resource like IFS to consult with for better packaging solutions.
How to win more customers
Promote your online ordering program
Signing up for multiple online ordering services is just the beginning.
To succeed at online ordering, you must partner with online ordering services to promote your restaurant through direct marketing and special offers — both online and offline. Depending on the popularity of your restaurant you may be able to leverage free or discounted promotional services offered by the online ordering services. However, you should also be prepared to invest and promote your restaurant and most popular menu items on a saturation basis via direct mail and via digital advertising.
One-time saturation mailing is rarely effective. Once you have optimized your menu you need to experiment with small batch saturation mailings and location-based digital advertising to see what promotional investments work best for your restaurant and target customers. There are agencies that specialize in this type of promotional advertising.
For any promotional investments be sure that you account for the delay or lag in response rates so that you do not negatively impact cash flow. In other words, don’t invest in large promotions that require sizable up-front payments. You need to spread your promotional investments and payments over a longer period of time.
How to avoid costly delivery mistakes
Actively manage delivery drivers
Not every online ordering service offers delivery drivers, so you need to make sure that you have contracted with a reputable delivery service so you can handle all orders. There are many different courier services that specialize in food delivery and their availability varies by location. Be sure to interview courier services in your area to understand and compare their services and pricing.
- Will they accept tips from your customers?
- Will they integrate with the online ordering services you are using?
- Do they guarantee a minimum delivery time?
Be sure to speak with other restaurant owners and operators about their experiences with courier services before making any decisions. You should establish a process, even basic to start, for collecting customer feedback in order to determine whether courier services are performing as expected.