The diner dilemma: How restaurant marketers can keep up with third-party delivery

Technology has dramatically changed the customer experience in the past 10—even 5—years, and how people choose where to dine and when is no exception. From voice-activated ordering to in-restaurant kiosks, restaurants are hard-pressed just to stay up on the latest tech.

But few innovations have been more impactful to restaurants—especially in densely populated areas—than third-party delivery apps and services. 

As more people choose staying in over a night out, many restaurants have met the rising demand for off-premise dining through third-party delivery services. However, these vendor relationships require a new approach to their data-driven marketing strategies.

According to recent research from Technomic, 68% of regular takeout users order at least three to four times a month. An explosion of third-party services is helping to drive delivery sales, with one-third of customers saying they’re ordering more frequently because of easy-to-use mobile apps.

These stats reflect a larger societal shift toward staying in, with 28% of consumers saying they’re spending more time watching TV and movies at home and 38% saying delivery is more convenient than carryout.

And while delivery was once the domain of pizza and little else, convenience-minded consumers can now summon everything from a latte to a gourmet meal with just a few clicks. More than half (52%) of restaurant operators say deliveries have increased in the past year, Technomic found, with delivery sales rising by an average of 20%.

For restaurants, capitalizing on these trends is vital to stay relevant in a crowded market. With an expanding crop of companies like Uber Eats, Grubhub and DoorDash ready to bring food to customers’ doors, many brands are finding it’s easier to work with an established third-party delivery service than to build delivery capabilities in-house.

Although these vendors offer an opportunity to reach new customers that may not otherwise have walked into one of their locations, that can come at a cost: giving up access to valuable customer data. For restaurants, continuing to find ways to connect with and engage customers will be critical for staying relevant in a new dining landscape.

Do you really know your delivery customers?

In a study with Nation’s Restaurant News (NRN), we found that understanding who their customers are after they leave the restaurant is top of mind for 71% of restaurant owners and operators. But what happens if those people never actually come into your location and that valuable customer data doesn’t enter your system at all?

Imagine you’re a local Italian restaurant that uses third-party delivery for its off-premise orders. You might receive 100 orders a night through that delivery service, but you don’t know anything about those customers—who they are, whether they’ve dined at your restaurant before or how often they order meals from your restaurant.

Without those insights, your business can’t develop the long-term customer relationships and personalized offers that help to drive more orders and sales. Multiply these challenges by thousands of locations, and it’s clear that major restaurant brands need a solid strategy to address changing diner preferences, including whether or not they embrace third-party delivery.

In the midst of industry transformation, restaurant marketers have big choices to make about how their food ultimately makes it to customers. Trust in third-party delivery certainly is an important part of that—they can help brands cultivate loyal fans of their restaurant and gain more exposure to new people that wouldn’t normally come into their establishment. 

Each brand will have to make its own decision about how they want to work with third-party delivery companies—if at all—weighing factors like profit margins, customer expectations and operational considerations. And while third-party delivery is indisputably on the rise, consolidation among vendors could mean big changes for the landscape in the months to come. 

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For restaurant marketers, finding ways to be successful in the midst of market disruption ultimately depends on knowing your customers, including what, when and how they like to order.

To build a more holistic view of each individual, here are three strategies for you to consider:

1. Start with strong identity management.

Many brands rely only on their first-party customer data, like contact information and purchases, to make marketing decisions. For restaurants using third-party delivery services, however, that approach likely means you’re missing insights into a significant and growing portion of your customer base.

A marketing partner can help you paint a clearer picture of your customers by combining first-party data with third-party sources, like online and offline transaction data to complement your CRM data.

Our research with NRN found that only 9% of restaurant brands use this approach, which is table stakes across digitally savvy industries like retail.

Strong identity management can help you understand:

  • How much and how frequently diners spend in your category
  • How your wallet share stacks up against competitive brands
  • Your highest-opportunity prospects
  • Whether a once-loyal guest has switched brands or exited the category entirely
  • Customer interests in other categories that can help inform menu development or messaging

Although you may never have access to third-party delivery data, this information certainly helps restaurant brands connect with their best audiences across channels.

2. Understand and engage loyal customers.

Loyalty programs are a tried-and-true strategy for you to learn more about your customers and entice them with mouthwatering deals. In an age of third-party delivery, “stealth loyalty” is becoming the norm for many brands.

With third-party delivery, a customer could potentially order their favorite pad Thai or chicken wrap from your restaurant once a week without you knowing it. So how can you make these unknown loyal contacts known to your brand?

Starting with a foundation in strong identity management, you can model the attributes of your most loyal customers to find new audiences and prospects. It’s not a guarantee that you’ll connect with those ordering from your restaurant through third-party delivery apps, but it’s possible that those people display similar attributes as your loyal customers and would be included in that new audience.

You can send them messages highlighting the perks and benefits of your loyalty program through the restaurant, incentivizing them to sign up and become known contacts to your database.

3. Find multiple ways to reach customers.

Whether they’re grabbing a coffee in-store on the way to work or ordering lunch for the whole office, the most valuable customers often interact with your brand in multiple ways. That’s why many restaurants have embraced third-party delivery as a way to drive incremental sales, encouraging one more visit, purchase and dollar with every order.

By gaining insight into each customer’s shopping patterns and preferences, you can use third-party delivery as a new opportunity to reach them.

Building comprehensive customer profiles allows you to precisely target which customers are using these services and deliver personalized offers that increase order frequency and size. For example, if you know your customer often orders from a third-party delivery service like Grubhub or DoorDash, and your restaurant is also on that platform, you can send messages that highlight a new dish of yours, accompanied by an offer that works in the restaurant and with the delivery partner. 

Final thoughts

With more diners craving the convenience and variety of delivery, restaurant marketers need a plan to extend the dining experience beyond their four walls and reach customers in new ways.

By building a clear picture at the individual level, you can fight through those blind spots in the customer journey by using one-to-one messaging to drive customer purchases across multiple channels and gain greater “share of stomach” in a competitive market.

Interested in learning more about the state of data-driven restaurant marketing?

Download our research in partnership with NRN: Driving one more visit: How restaurants fare in the digital age.