Every business knows that you need to spend money to make money - in many cases, this means a customer acquisition cost.
Waiting around for new business to be generated or to walk through your doors - especially for restaurants - will generally only benefit you if you have a prime location with heavy traffic and visibility.
Before modern technology and the growing usage of applications, restaurants had limited options if they were struggling to gain new customers.
In today's market, restaurants have many ways to improve their new and returning customer growth with the most successful restaurant owners acknowledging that you need to spend money to make money with an understanding of customer acquisition cost.
The main question that needs to be asked and then solved is: What are you doing after gaining a new customer to make them a repeat customer?
Examples of customer acquisition cost and how they relate to the restaurant industry
Making food delivery apps work for your restaurant
Strategies to use food delivery apps as your lead generation
Examples of customer acquisition cost and how they relate to the restaurant industry
Customer acquisition cost can range greatly depending on the industry, but one thing that is always consistent is that there will always be a cost to generate a new customer.
Example of customer acquisition cost by industry
Travel: $7
Retail: $10
Consumer Goods: $22
Manufacturing: $83
Transportation: $98
Marketing Agency: $141
Financial: $175
Technology (Hardware): $182
Real Estate: $213
Banking/Insurance: $303
Telecom: $315
Technology (Software): $395
In order to grow, scale, and compete with competition restaurants need to embrace the cost when generating a new customer and strategize on what to do after gaining a new customer.
If not, they will struggle to survive and grow their business by waiting for customers to find them and hope that they drive by and decide to stop.
Put your restaurant in front of where your customers are looking
There is a reason why some of the largest restaurant and food chains have adapted to the technology available to grow their business.
If we look at GrubHub alone, the list is extensive:
Burger King
Five Guys
Jack in the Box
Pizza Hut
Marco's Pizza
Papa Murphies
Subway
Chick-fil-a
Arby's
Firehouse Subs
Taco Bell
Chilies
KFC
With strong brand recognition, why would these companies use food apps and other technology that have a customer acquisition cost (Commission fee)?
The answer is simple - they want to be in front of where customers are looking.
When a customer orders food or is looking online for their next meal, they turn to the option that is the most convenient and readily available: Mobile and desktop ordering without ever speaking to someone.
In 2020, more than 44 million consumers used food apps with a projected 60 million by 2023.
These large brands have an already great marketing process when gaining and retaining customers which is why they will continue to embrace technology and that every customer has an acquisition cost.
These same strategies can be used for restaurants of all sizes to gain new customers and re-market to grow each month.
The goal is always: What are you doing to bring them back.
Making food delivery apps work for your restaurant
The first thing that comes to most restaurant owners' minds when they think of food delivery apps like GrubHub or DoorDash is that they have to pay a commission.
That commission boils down to your customer acquisition cost.
Ask yourself these questions:
Do you have to hire an additional employee when taking orders from a food delivery app?
Do you have to overstock or fill your shelves with additional food?
Would you have gotten that customer if not for the food app?
What are you doing to bring them back?
After landing a new customer and gaining their trust by providing an accurate order that meets your high-quality standards (Everyone hates when the order is made wrong) you can lay the foundation for bringing them back without using the food app the next time they order.
It’s important to note that customers also have to pay a fee when placing an order online through a food app. Sometimes, the fee in addition to a tip can be almost half what they are paying for the food.
This is now the opportunity you have to gain them as a loyal customer and avoid ordering through a food app the next time they order.
Strategies to use food delivery apps as your lead generation
After setting yourself up on a delivery food application with an updated menu you can expect to generate orders almost immediately.
The great thing about these food apps is that they do marketing on your behalf just by being set up on their platform.
Main features consumers use when looking to place an order
Delivery or Takeout options
Tracking and whos currently open
Delivery timeframe
Reviews and ratings
Type of food
After setting up your account with the correct menu and options to ensure each item can be customized without sacrificing quality, implementing the following strategies will not only increase return business but improve new customer growth.
Offer a smaller discount by ordering directly through you in the future
Everyone is always looking for discounts or other perks when making a purchase, especially with food. When a customer makes a payment using food Apps such as Grubhub or DoorDash, they end up paying a delivery fee as well as a tip.
This can make your customers think about placing an order next time as the costs on their end can also add up quickly.
Have business cards or flyers placed in every food delivery app purchase with a takeout discount or incentive to go directly through your restaurant on their next purchase.
Offer a discount or incentive if they place a review of your restaurant on the platform they ordered from. This will help drive additional orders, as well as increase the volume of repeat customers going directly to your restaurant.
Have QR codes ready to go to quickly grab email information to add to your monthly or weekly newsletter to further generation return business.
Wi-Fi marketing for takeout orders
Wi-Fi is a powerful and non-invasive way to grow your marketing list. Offering free Wi-Fi to your customer by using their Facebook account or Twitter login information will automatically grab their email which you can then add to your monthly or weekly newsletter.
Have a QR code available at your counter or restaurant entry advertising-free Wi-Fi.
Wi-Fi is an easy and non-invasive way to grow your marketing list and return business.
Create campaigns based on customer activity providing a small incentive for takeout or direct delivery.
Provide your own delivery
Most of the popular food delivery apps allow you to provide your own delivery which can cut down on costs while still generating new customers.
Another great reason to provide your own delivery is the control you have over the entire customer experience.
QR Code
QR codes can provide unlimited ways to engage with your customers and provide them the information they need.
A great way to engage with your customers after they place an order from a food delivery app is to include a small business card or flyer with additional ways to engage with your brand.
Like your restaurant on FB
Join your Facebook Group
Asking for reviews
Email collection
Discounts and incentives
Link directly to your restaurant website for direct ordering
Joining your loyalty program
Email list
After utilizing the strategies above to grow your email list and customer growth from orders placed on food delivery apps, you can now start marketing directly to your customers through your monthly or weekly newsletters.
Email marketing is one of the best ways to engage with your customers to generate significant return business, improve your online presence, and increase your revenue.
Updates on upcoming events
New menu items
Competitions to grow positive reviews and online presence
Programs for ordering during breakfast, lunch, and dinner
Incentives to order directly from your restaurant
Recap on how food delivery apps can help your restaurant
To recap this strategy and turn food delivery apps into your lead generating secret weapon, follow these steps:
Include a business card or flyer with QR codes or other pieces of information with every order to help customers engage further with your brand
Collect emails from customers and add them to your monthly or weekly newsletter for return business
Keep customers engaged with your brand and use them to improve your online presence
These strategies can vastly improve your new and return customer generation while improving your online presence.
Imagine the power of adding 100’s of new customers to your marketing each month and directly engaging them with your brand.
At The Mad Caddy, we have mastered this strategy and would love to get your feedback on how we can help your restaurant get to the next level of new and return customer generation.