Restaurant Delivery: Secrets to Success

Restaurant Delivery:Secrets to Success

Restaurant Delivery: Secrets to Success 2

The restaurant industry is continually evolving, and owners need to find ways to stay competitive. One

of the fastest-growing trends is offering delivery service in addition to in-house dining. From pizzerias to

fine dining, a wide range of restaurant styles are exploring this option to increase their revenue. Offering

delivery allows you to serve a greater number of customers per day, not limited by your venue’s seating

capacity and table turnover rate. You can also gain a wider customer base, as delivery can reach people

who may have never stopped in at your restaurant.

Convenience is as important to today’s consumers as the quality of the food and sometimes even

more important than the dining-out experience. According to 2016 data from the National Restaurant

Association, while 9 in 10 customers enjoy going to restaurants, 61% of those diners say they “would be

likely to order delivery from a table service restaurant if offered.” The market for delivery is growing; so

should you jump in?

TO DELIVER OR NOT TO DELIVER?

There are several factors to weigh when deciding if restaurant delivery is right for your business. Here are

some of the most important questions to ask:

Are my menu items suited for delivery?

Will they travel well if packaged properly? Nobody wants food that is soggy, wilted, or tepid by the time it

reaches them.

Can my restaurant handle the extra volume?

Will I need to hire additional staff to ensure that normal in-house operations are not affected? Is there

enough kitchen space to prepare an increased number of orders?


Is my location a good one for delivery?

Are there enough potential customers within a reasonable radius to make delivery a worthwhile option?

A downtown location near other businesses and office buildings might be well-positioned for lunch

deliveries, while one closer to residential areas might get more dinner orders.

Should we handle deliveries ourselves or use a third-party service?

There are an increasing number of delivery services such as, Takeout Taxi, DoorDash, and Postmates that

can assist with orders and deliveries. They can give you wider exposure to their customer bases, and you

won’t have the expenses of a company vehicle, insurance, and drivers. However, you’ll have to determine

if those savings and the increased revenue are worth the fees these companies will charge, which could

be 10%, 20%, or even 30% of each order.

Once you’ve weighed the pros and cons and decided adding delivery would benefit your business,

the next step is to plan successful implementation of the new service.

“Starting to deliver only makes sense if the market has a legitimate need and your kitchen can

double as a production line without having your service standard suffer at your restaurant. There

has to be substantial reward available to warrant the risk.”

— Cheech Kehoe. Owner Big Daddy’s Pizza, Burlington, VT

“When we deliver pizza we are able to give the customer an exact delivery time, an accurate

order total, and we control the quality of the food from the back door of the restaurant to the

customer’s front door. Third-party delivery services take all of that control away… You could either

be remaking product for someone else’s mistake or, even worse, it was a first time customer who

now thinks you have bad food, and they will never return.”

— Darren Fox, Thrive Manager/Driver, Waldo Pizza, Kansas City, MO


GETTING STARTED

It’s probably best to start small; you can always expand if things go well. If you have multiple locations, you

could pick the one with the best potential market for delivery for a trial program. Before you take your first

delivery order, even for a pilot program, there are four items to address:

Delivery AreaDetermine where your target customers located and how long will it take orders to reach them. Defining

the delivery area is important because you don’t want to make customers wait too long for their orders or

to have food quality to suffer from sitting in a vehicle too long. Figure out how far your drivers can travel in

a reasonable time period. If you’re in an area prone to traffic congestion, you might need to limit yourself to

a smaller radius (or consider an alternative mode of transportation, such as a bicycle). Also factor in how

much time their return trips will take, as that will affect the number of deliveries you can make in a shift.

“I recommend that you zone your delivery areas. It’s costlier to deliver the farther out that you go.”

— Mark Ulrey, VP, Flyers Pizza & Subs, Columbus OH

MenuLimit your deliveries to dishes that will travel best, and save other specialties for in-house dining only. You

may also decide to limit delivery hours to the breakfast, lunch, or dinner periods, depending on menu as

well as available staff.


Pricing, Fees, and TipsWhile your menu item prices will probably be the same for in-house dining or delivery, you may need to

add a surcharge to help cover the additional costs for gas, vehicle maintenance, food packaging, and

other expenses. A 2015 PMQ Pizza Magazine industry report found that 35% of pizza consumers (and

45% of millennials) don’t mind paying delivery fees for their food. You’ll also need to decide whether to add

a mandatory tip to delivery charges, or make clear to customers that the total does not include tips and

ask if they want to include one. Most restaurants also have a minimum bill amount required for delivery

eligibility, to ensure a profit margin.

Company VehiclesHaving drivers use their personal vehicles can be more trouble than it’s worth in cost and liability. In

addition to making sure vehicles and drivers are insured, you’ll be required to carry “non-own” auto

insurance, which is expensive. You’ll also have to deal with reimbursing drivers for gas, mileage, and

vehicle maintenance instead of just being able to handle it yourself with a company vehicle — which can

be used as a mobile “billboard” to increase awareness of your business.

SELECTING AND COMPENSATING DRIVERS

Your drivers are an extension of your business, representing your restaurant to the public, both in their

interactions with customers and in their driving behavior on the road. For these reasons, screen and train

drivers carefully. Check their motor vehicle records and proof of auto insurance.


“Ask your best drivers for referrals. It is always better to try a friend of a good employee over a

stranger walking in off the street. Keep your drivers by giving them all of the delivery fee, pay

them a reasonable hourly rate, do everything you can to help keep them safe, and listen to them.”

— Darren Fox, Thrive Manager/Driver, Waldo Pizza

You should provide them with delivery driver training (consult your insurance lawyer for details about such

programs) and training in basic safety practices, such as always carrying a cell phone (but never using it

while operating the vehicle), not carrying more than $20 in cash, and not entering customers’ homes. Make

sure they have a clean, presentable appearance and a polite, friendly manner.

You will also need to decide the best way to compensate drivers. Drivers can be paid an hourly rate or tip-

credited wages or paid as independent 1099 contractors. If they use their own vehicles, take into account

whether their wages cover their expenses until they are reimbursed. However you plan to approach driver

compensation, you should consult with your attorney and your state restaurant association to ensure

compliance with all local, state, and federal labor laws. Keep in mind, any extra per-delivery compensation

in addition to the driver’s hourly wage is typically considered a mileage reimbursement by the IRS, so if you

keep careful track of mileage records, these driver fees may not be taxable.

Getting the Word Out

Letting your market know that you offer delivery and fostering repeat business are integral to making this

part of your business a revenue-generator. The right mix of marketing the delivery side of your business

will be unique, but some ideas to consider include:

• Advertising on signs, with flyers, or with branding on food packaging,

• Advertising on your company vehicle

• In-house signage and promotions targeting dine-in customers

• Prominently offering delivery on your website

• Promoting delivery services on social media


Building a Following of Loyal Customers

Once a customer makes their first order for delivery from your restaurant, you want the experience to be

so positive that they will order again — and tell their friends.

To craft a great customer experience begin by making ordering and payment as simple and easy as

possible, whether it’s by phone, online, or with a mobile app. Put processes in place that ensure orders

are filled accurately and that the customer always receives the correct order.

Pay special attention to packaging and transport carriers that keep food at the right temperature and

prevent spilling or leaking. Also make sure napkins, utensils, and condiments arrive with the order.

“Drivers must carry a fully charged cell phone so when they are on the road we can talk to them,

they can talk to the customer, and in case of emergencies.”

— Darren Fox, Thrive Manager/Driver, Waldo Pizza

Consider implementing a loyalty program for delivery customers. Customers appreciate discounts and

special offers tailored especially for them.


Take Advantage of Technology

As with any aspect of your business, it will be harder to operate, manage, and turn a profit without the

correct tools. When it comes to delivery, a good point of sale (POS) system can be invaluable when taking

orders, processing payment, and managing customer relationships, drivers, and loyalty and rewards.

Online orders, customer data, and delivery information are all integrated into the POS system, and your

business can leverage functions such as route tracking, automatically calculated mileage reimbursement,

and performance reports. Coupon and loyalty program data can be easily accessed and applied.

A complete POS system that gives you control over all aspects of your business will help you create

outstanding customer experiences and increase your bottom line.

“GPS is crucial especially with new drivers. The mapping system in our POS has allowed us to

minimize our time on the road, which is critical to giving great service. Sending deliveries to the

same area in one trip will make your store more efficient.”

— Mark Ulrey, VP, Flyers Pizza & Subs

Delivery can be a great way to add a new revenue stream to your restaurant business. Careful planning,

consistent promotions, and great customer service, along with the right technology, can make delivery a

profitable part of your business.

ABOUT THR!VE POS

If you need technology to help run your delivery restaurant, turn to Thr!ve POS! We’ve got the most

combined experience in the business with a traditional workstation iPad or Android tablet. With the addition

of integrated mobile, labor management and inventory solutions, we’ve got you covered! Please give us a

call at 800-750-3947 or visit www.thrivepos.com for more info.

http://www.thrivepos.com

Restaurant Delivery: Secrets to Success

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