A hefty commission, no customer data, and no customer service. We all know losing orders to third-party marketplaces is a major challenge. In this webinar, we’ll share the keys to creating a competitive first-party ordering solution and best practices for converting your guests over. Check out the video below or read the transcript.
Margo: Hi, welcome to our Lunchbox webinar. Thanks so much for joining us. We're just going to wait one more moment for any stragglers to arrive. All right. Wow, we've got quite a crew here, so we can go ahead and get started. Welcome to our series of educational webinars at Lunchbox. Today we're going to be presenting a play-by-play for converting guests from third-party to first-party.
Lunchbox is a modern ordering system for restaurants to grow their online revenue with a mission to provide restaurants with the resources they need to boost sales and protect their profits. Please feel free to add any questions you might have in the questions box at the bottom of the page. It'll be on the right side of your screen. And we'll reach out individually with answers if we don't have time to address those questions within the webinar today.
My name is Margo. I'm the Customer Marketing Manager for Lunchbox. I manage all of our customer outreach and Communications for the marketing team. And I'm joined today by Rachel MacPhail, our Senior Marketing Success partner for Lunchbox Studio. Thank you for being here.
Rachel: Hi Margo. And thanks to everyone for joining today. As Margo mentioned, I'm part of the Lunchbox Studio team, where I help restaurant partners launch and promote their first-party ordering services. So, since this is what I talk about and do all day, I'm obviously very excited to talk about first-party growth today. I think we'll just jump right in.
To start off, I want to chat a little bit about third-party ordering overall. It's kind of seen over the last couple of years as a necessary evil and a lot of that comes down to some of the downsides of the hefty commissions associated with being part of them, the lack of ownership for customer data, as well as the little control over guest experience.
And saying all of that, there's an obvious reason why a lot of restaurants are on it, as well as why people are using it. It's a popular space. And a lot of that comes down to businesses wanting to be found on those apps. It’s a great way for new customers to learn about them. As well as they want to make sure that their ordering is as convenient as their competitors.
Now, I'm sure there's like a lot of reasons why restaurants want a presence on third-party apps and we'd love to hear from you. So we're going to throw up a few polls along the way to aid our conversation today. So it's not just Margo and I sharing our thoughts. So the first one that we have is why third-party is important to your business. So give just like 30 seconds to answer this one here. A few more moments.
Margo: All right. It looks like guest acquisition is a big focus, according to that poll, which really fits well, and what we'd like to talk about today, is shifting the perspective on third-party apps to be a tool for guest acquisition. Today, we're going to talk about how to offer a first-party ordering experience that can really compete with those third-party apps and websites, and then how to convert third-party guests to first-party, and launch first-party-specific marketing campaigns. So eventually, we might not need to rely on those apps at all. Let's jump in.
Rachel: So we found some cool research done by DoorDash themselves, which found that 43% of customers preferred to order directly from their favorite restaurant. So it had us think then why are all these customers going to third-party delivery spots in the first place? Why don’t they just support the restaurant’s own online ordering?
And we're all guilty of it and it's generally for these top reasons is that they're very convenient, they're very easy to use and it's customized to ordering preferences. So when we're building out first-party ordering platforms, these are the top three things that you have to prioritize if you want to be competitive in the space.
Starting off here with convenience, it has to be made easy. If your customer has the option of ordering on say GrubHub or your website, but GrubHub is more accessible and convenient, and on your website, it's hard to find where to order, and how to access it...I think we all know what your customers are going to do. So adding things like QR codes, big banners, or large links on your website, make it really easy for your customers to one, find it but also take advantage of ordering takeout directly from you.
Margo: Second, you can use this opportunity to make sure your digital presence is a seamless extension of your store with your brand voice, front, and center. You want to sell your food and your service and not GrubHub selling your food. Your own website, app, and in-store experience offered should feel like parts of a whole that are thoughtfully woven together and it's a chance to put your personality on display. Give your guests a reason to be loyal to ordering directly from you because it feels the same as when they walk into the store and order in person. Your online food ordering system should be akin to your store – an online store.
For pickup orders, you want to make sure that the experience of in-store or curbside pickup or a delivery service receiving an order is as easy and seamless as if it was ordered through a third-party app. A good way is a dedicated pickup area in the store with really clear signage. Like what you can see in this picture here a little pickup fridge keeps all of that food fresh and easy to find and grab when you walk in. This convenience is really key to turning to those first-party ordering systems.
For example, personally, I try to frequent my local coffee shops as much as possible and support my local businesses. But if I'm in a rush, I know the Starbucks app is easy to use, easy to place an order and that when I get to the store, my drink is going to be easy to find. Think about some of those positive experiences you have with stores you frequent as I do with Starbucks, and how you can kind of translate that experience into your own business.
Rachel: And then next, there's also the ease of use. So there was the convenience of like, how to find it itself. But then when building out and designing an app or the web ordering page itself, you really have to focus on making it user-friendly, very clear, and also beautiful.
You want your guests to enjoy the experience from opening up the app the first time to the final stage of checking out. So in this example here, like the Clean Juice app that we have on the screen, it's super easy to navigate the menu. Reordering things like your favorites or making substitutes is super simple to do on the go. And to be honest, it looks really good
Margo: All right. So now you have a gorgeous ordering page, a perfect app, but your guests are used to pulling up Door Dash or Uber Eats or other delivery apps when the cravings hit. We're going to share now some tried and true methods of converting guests over.
First and foremost, make sure your guests know about your online ordering system. None of us really can count how many guests we might have who walk into the store and place orders in person half the time. But delivery orders on third-party apps the rest of the time when they order from home. These are really easy target gas.
Rachel: And so on Lunchbox Studio, this is our bread and butter. And usually, when we meet most restaurants at the beginning of our relationships, we recommend at least starting with these three marketing tools – print, email, and social. Every business is a little bit different depending on its target markets but these are really the key place to start.
So let’s talk about print. It's all about quick attention and fast conversions. You have like milliseconds to get someone's attention. So if you have a brick and mortar, using materials like banners, window clings, and table tents are great ways to get foot traffic attention. And then for off-premise marketing, you want to think about what your highest touch points are.
So is it like delivery boxes or to-go cups? And that's why we use this example here with Maman’s because their coffee is purchased by probably like 90% of their customers. So it's a huge touchpoint. So adding an app promotion sticker to their cup was a really wonderful place to grab their customers’ attention when they’re going through checkout. And then add that QR code for really immediate action.
The second is utilizing email. So a lot of people today think email is dead or they might think it's worth their while, but just don't really know what to do about it. And it's a really wonderful and affordable way to solidify your guest relationships. And a lot of that just comes down to guest targeting.
So when a lot of people think email is dead, I'm sure it's because your inbox is filled with programs and businesses with noisy promotions that have nothing to do with you. So when you're targeting your guests, you're really thinking about like when you're sending out news, menu nudges, promotions, you're sending them specifically based on your guests’ preferences.
So you're improving the relationship between your customer because they feel like they're being heard and understood. And they're excited about the stuff that you're sending them rather than just feeling like it's a transactional relationship.
And that's like the example here that we pulled from Night Owl, where they were targeting the signups from their app. So people that have only signed up for the service, but hadn't made the first purchase. And they were using a $5 off promo code to encourage that first purchase.
If they had sent this email out to every subscriber, it would make no sense and they wouldn't have gotten the conversion that they wanted. So when you're thinking email targeting is king. You got to make sure you're doing it.
And then finally here, social. I think most of us on the call know that social is a wonderful place to interact with your audience. And it's a really good way to promote your first-party ordering. Natively, you can announce any of your new ordering systems to all the fans that you already have. And you can kind of use it as an opportunity to make exclusive offers.
So everyone thinks that this new app is almost like an exclusive club that they get to be part of because they're your biggest fans. Then you can also use paid media to target your audience. So doing things where you're targeting delivery areas that you support – retargeting third-party guests.
So as Margo was mentioning, you already have customers that are coming in and enjoying your food. It's a really easy target to just kind of nudge them that you have something new and most people are excited to come over. So I've also squeezed in a bonus because SMS is on the rise, and it's incredibly effective. So I didn't want to miss the opportunity to mention it today.
Studies are showing that about 96 of customers who opt into SMS stay within the program for like 90 days, which is huge engagement. And they see about 98% open rates, which is insane which is like email, I think a good open rate is like 20%-30% for a lot of industries. So when you're using SMS, just like everything else, it's all about the relationship that you can build and quick conversions based on what you're sending out.
So remind your customers to keep ordering direct, any special offers that you have, or even that they've like unlocked a loyalty so that when they get that message, they can quickly tap on that notification and take action to whatever it is that you might be promoting.
Margo: All right we've got our next poll going live. Rachel mentioned marketing channels. We’re wondering what are your primary go-to channels for reaching your guests today? Are you mostly focusing on SMS and social media? Are you still sticking mostly with print marketing and email marketing? So that poll is gone live. We'll give you a minute to let us know and take a look at what you all are working with the most.
Rachel: I'm super interested in how much SMS is in there.
Margo: It looks like we've still got a really big focus on print marketing, with social media coming in second place, and much less of a focus on email marketing or SMS. That's so interesting to know.
Margo: All right. Now, we can talk about the cohort of guests who are only ordering on third-party apps. And then, in that case, they're not reachable to you through in-store, print marketing, email marketing, or SMS. We don't have any real contact information for them. This makes it a little more difficult.
Here, we certainly recommend that you utilize similar print marketing, a bag insert, a sticker, or printing on your packaging. But certainly around letting guests know that they can order directly from you, how to access that restaurant website or mobile app, and what kind of discounts or loyalty programs they'll unlock by converting from the third party to first-party.
At that point, it's just a matter of keeping those guests on first-party. You've done the work that makes the ordering experience simple and fun, and your app is really engaging. So then, you can offer promos and deals that are available only on your first-party ordering platform and not available through third-party. We also recommend looking at limiting the menu that's available on third-party apps.
This can either be reducing modifications that are available for guests to make or taking a couple of signature items off of those third-party apps and having them available through first-party only. Menu parity online and in-store is a really major factor that guests are looking for. So by providing that on first-party orders only, and a menu that doesn't quite match up on third-party marketplaces, you can use this as a tool to help shape your guests’ behavior.
Finally, some restaurants find success in charging higher prices on third-party apps than in-store and through first-party. This does the double duty of encouraging guests to find a different way to order as well as kind of offsetting some of those fees that you pay to those third-party marketplaces. Also, we all know these apps are not commission-free – charging more on third-party apps helps offset the high commissions paid by restaurants.
The flip side of that to keep in mind is it can often have the effect of deterring your net new customers who are discovering you through a third-party marketplace. So it's important to keep in mind whether this is the right tactic for you or not. A bonus idea would really depend again on the voice of your brand. But you can utilize some of those print marketing techniques like the bag insert or stickers to explain to your guests the benefit of ordering first-party.
We've seen success with brands really breaking down the fees that both guests and the restaurant pay to the marketplace. As some of the research, Rachel mentioned shows, guests want to support their favorite restaurants. It might just be a lack of awareness about how difficult third-party apps make it for restaurants that are having them place their customer orders there in the first place.
Rachel: And that moves us nicely to the next part into data, which from a marketer's point of view, it is what I think is the best part. But for restaurant owners that start taking advantage of first-party online ordering, I do think it's a piece that they also start thinking is one of the best parts.
So next, we want to just talk about how do you actually utilize guest data? It can get messy really quick, and it can get confusing really quick, but we wanted to highlight three ways where you can take advantage of it. So that your revenue stream goes up, but also your customer experience is better. And that one key place is personalization.
So when we talk about personalization, it's not about your restaurant name. It’s kind of what it sounds like, you're personalizing your touches. This could be from like a thank you note or adding an extra appetizer which can really turn a one-time owner into a repeat loyal customer. And when doing this, especially when starting out, you want to think of low-cost, low-labor food items that have a high perceived value.
So it's easy on your bottom line and your team. Recently, a good example is, we heard from one of our Lunchbox customers that had, by using Lunchbox, streamline their ordering to a point that their staff had extra time that they started putting clever notes on their regular’s orders.
So they were taking fun little ways to highlight ingredients in order. So, for example, they had a bowl that included honey, and they wrote something like, “Have a beeutiful day” like b-e-e, which is a small touch, but for a customer, it's a really big impact.
And so when going above and beyond and trying to make your customers a better day by understanding their purchase history, it's just all about helping your customer feel seen. So if there are things like you have a customer that comes in weekly for lunch, and you know that they order the same drink, but you switched up your drink menu.
You can leverage this data by understanding your customers and saying that, I know, it sucks that maybe your favorite drinks aren't there anymore, but we still have some of the ingredients on hand. Let's make it for you. And then here are all the new shakes that we think you will love as well, which can be a small touch. It might take a little extra for your staff to do. But in the long run, it's a huge impact on your customers.
So for our next poll, I'm quite interested in what kind of guest information is most important to you? Is it something here like guest count, could be geographic, or what matters the most? OK. We got other kinds of menu choices or competing against each other.
Rachel: OK, so seems kind of like a tie.
Margo: Interesting. That's good to know. All right. Well, Rachel talked about the really positive ways we can interact with our guests through first-party ordering. On the other hand, there are always going to be times when something goes wrong. But a mistake can give you a great opportunity to recover and turn somebody into a loyal guest.
And when they're on third-party and you have no way to communicate, that's almost always going to result in lost guests instead. I'm sure I'm not the only one who read in Danny Meyer “Setting the Table” that recovering from a mistake successfully actually makes more loyal guests than just a full-on perfect experience does.
When you have an item missing from a third-party order, the guest is likely to just request a refund that they ordered from or go straight online and post a negative review without ever communicating to the restaurant and giving you a chance to make it right. You can even see the reviews here in this deck.
For example, “GrubHub delayed and delayed my order then canceled it. Extremely frustrating or the driver delivered to the wrong building and delivery was 45 minutes after the scheduled time. Absolutely unacceptable and ruined the day.” None of those reviews have anything to do with the restaurant experience. But that's part of your online presence and attached to your restaurant online ordering system through a third-party, and it can actually work to deter other guests from ordering from you.
When a guest orders directly from you, they can let you specifically know about a mistake and you're given a chance to make it right with a heartfelt apology and maybe a bonus item added to their current order or a gift card for a future order. Or offer for a bonus item and a future order to get them back in the door.
This is the kind of experience that spreads a lot by word of mouth or social media and definitely will encourage friends of friends to check you out. One small free item to make somebody happy can turn into a whole cadre of new loyal guests.
Rachel: I definitely believe that. I feel like anytime I've had a bad experience turned into a good experience, I will 100% be going back to that place. And then lastly here, is the pattern. So first-party orderings have the benefits of seeing patterns among cohorts of guests. So when you're like starting off, the data might be small, and you don't know much to do it. But over time, you get to see kind of this cool data like you see on the screen here, where it's really evident where you might have gaps, and then you can start kind of strategizing how it works to fill those gaps are how to improve your guest experience.
So for instance, here where that third plus visit is lower on the chart here. So it's thinking, OK, come that second purchase, what can we do so that we can get these sales up and keep people coming back after there?
Another way to really leverage this data is to find interesting ways to add to your menus. So for instance, if you're looking that you get a lot of people asking for like kid-friendly options, then you can start thinking, OK, maybe there's some way that we can add a kid's meal to our menu so that we can make those families that are coming in, have a little bit easier time to dine with us and their kids are excited to come to visit us too. And then once that's added there, you will be able to kind of see where those families are, target them, and send deals and promos, specifically around those kiddos and you would get really great turnout for that. You can have fun with your menu items.
Margo: All right, we're going to be honest. We laid out this how-to for converting third-party orders to first-party. We've let you know how amazing those benefits can be for your bank account and for your guests’ experience. But the warning is that this is not easy to do. If you have a poorly thought out online ordering platform, or even a great ordering platform but no marketing to back it up, that's not going to cut it. It takes hard work but the benefit is absolutely there.
Rachel: And our mission here at Lunchbox is to help make this as easy as possible for our restaurant partners from our app and web layouts that are easy to use and aesthetically pleasing. And also launch playbooks that we have guaranteed to drive the attention that you deserve. We're doing everything that we can to really kick third-party ordering apps and platforms to the curb.
Margo: All right, and we are just about it at the end time. Unfortunately, we don't have time for a live Q&A. But again, please put any questions you might have in that chat box down at the bottom of the screen. And we will reach out with answers to any questions that you might have individually.
If you think of a question or a thought later, feel free to email us firstname.lastname@example.org for any questions or comments that might come to you. We want to thank you so much for joining us today. We hope this has given you the roadmap to own all of your orders.
And if you're interested in getting started with Lunchbox, please get in touch with us by filling out the form below!