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Boosting Repeat Patronage by Improving Your Delivery and Take-out Guest Experience
In a new report, released December 2021, Deloitte Consulting surveyed 1,000 customers who dined in restaurants about their expectations, customer experience and comfort level. The report indicates something that most independent restaurant operators probably suspect, given the rise of Omicron COVID variant. As you might expect, dining habits aren't returning to pre-pandemic levels anytime soon. Particularly in the fast-casual and mid-scale dining segments, take-out and delivery business continue to fuel the restaurant industry.
Sixty-one percent of survey respondents said they ordered delivery or take-out at least once a week. More than half of the survey respondents preferred to use an app to order their food.
If there is any good news for restaurants that have had to shift emphasis to increasing off-premises business, a recent Deloitte Consulting survey indicated guests prefer to order directly from the restaurant's app instead of a third-party delivery tool when given the chance. This suggests an important takeaway for independent operators here: Guests prefer to deal directly with restaurants. If so, those that provide an easy way to order and meet or exceed customers' other expectations will gain their trust and repeat business. And it is worth exploring.
Deloitte summarized customer expectations for 2022 in three words: Convenience, safety, and digital. By leaning into digital ordering technology and maintaining focus on the quality of not only take-out and delivery orders, but the end-to-end customer experience with off-premises dining, inde- pendents can find opportunities in 2022. Industry consultants unpack the trends and help operators focus their attention on what's most likely to move the needle with customer experience and repeat patronage.
Making Take-out and Delivery Convenient for Guests (Without Stressing Your Staff)
Regardless of how they're ordering – walk-in, phone, website, or app – customers expect convenience and speed with take- out and delivery. They believe food should come quickly and taste just as good as what they'd get if they dined on premises. A weight of longer than 30 minutes is unacceptable to three of four respondents in the Deloitte study.
And here's the rub. The expectation for quick service can tax the typical independent operator who may be juggling on-premises, take-out, and delivery orders with a less-than-desired level of staffing between industry-wide labor shortages and an uptick in COVID cases due to the new variant.
Operators have varying levels of control over speed and convenience. When an order goes out with a delivery service, there's no telling how many other stops the driver will make before delivering their package. Food that sits too long in the wrong packaging is cold, soggy, or unappealing when it's delivered outside of an optimal freshness window. While the model can be frustrating, operators have choices. They can restrict delivery to items that travel well, eschew third-party delivery services in favor of an in-house model, and invest in packaging that preserves the integrity of their menu.
Stephen Zagor, principal of Steve Zagor & Associates and a clinical assistant professor at Columbia Business School, says little things like choosing the right packaging to pre-serve the quality of your food can go a long way toward giving guests positive experiences and encouraging their repeat business. You might want to order via delivery from your own restaurant to see how specific menu items arrive at your door. This is simple and affordable quality control that can pay off in repeat patronage.
As you would imagine, the preference for convenience in take-out is fueling a comeback for drive-thrus, with more than one-third of customers preferring this style of service. Drive-thru setups helped many operators to efficiently accommodate increased take-out and delivery in 2020 and they continue to prove useful.
Frankly, very few independents offer drive-thru service. The right locations for this style of service are often premium spaces that quick-service chains vie for aggressively. But it is worth looking at the direction these concepts are heading, as they compete for consumer business. At some point, these technologies could make their way into independent restaurants.
Jim Balis, managing director of strategic operations at CapitalSpring, an institutional investor in the chain restaurant sector, sees quick-service drive-thru restaurants employing "bot" and facial technology. (A 'bot' – short for robot – is a software program that performs automated, repetitive, pre-defined tasks.) Facial technology features can recognize customers' faces and call up their past orders for a more seamless ordering experience.
…there is an opportunity for restaurants to leverage data gleaned from loyalty programs and ordering platforms to get to know their customers better. 'Who are your guests? Use every opportunity to find out where your guests are coming from and what their behavior is'
Intelligent drive-thru software can take orders through a bot system, much like website customer support chat capabilities. These automations have the potential to solve labor headaches and increase efficiency, Balis notes. They support upselling by suggesting items to add on based on a guest's ordering history or other customer's preferences, similar to the way Amazon recommends items that other customers purchased after looking at a given item.
When it comes to take-out, curbside pickup continues to be popular among diners. In a recent survey from Oracle Food & Beverage, 43 percent of customers said they were more loyal to businesses that offered curbside pickup. Fifty-four percent of customers said they would probably spend more money at a restaurant that offered this service.
Despite the appeal of curbside pickup, it is not practical for restaurants to send someone outside to hand off every order, although early in the pandemic a number of independents resorted to this service. And even behind a mask, if the person handing off the meal to the guest was friendly and polite, it created a valuable customer "touch point" that can drive repeat patronage.
Nevertheless, with the pressure to turn orders around quickly with reduced staffing, pickup shelves or secure lockers are interim solutions some restaurants may already be using. They're more efficient for employees; servers save time when they don't have to walk orders outside. Shelves and lockers are nearly as convenient for customers, who can grab their bagged order while maintaining social distance.
Digital Hospitality Can Win the Day
While the restaurant industry has tended to be a slow adopter of new technology, says Zabor, "We have to be much more futuristic in our approach." Meeting customers where they are digitally is a way to win their business, and it's also what guests expect in 2022.
Only 11 percent of customers prefer to order through a third-party delivery, the Deloitte survey found. Forty per- cent prefer to use the restaurant's website or app when that's an option. There is a clear takeaway here for independent operators, as noted in Deloitte's report: "If restaurants give their customers a way to order directly from them, they will do so time and time again. Among the modernization tactics brands should evaluate are investments in mobile applications and consistent cross-platform digital experiences."
Third-party delivery works as a way to introduce new guests to your concept, but once they are aware of you, you can cut out the middleman and increase your revenue when you have the right technology. Jean Chick, principal and U.S. restaurant & food service leader for Deloitte Consulting LLP, says the "highest order of business" for independent restaurant operators should be "maintaining a digital customer experience and visible safety protocols" built into the online ordering experience.
Chick explains why customers prefer apps. Many apps save customer preferences like favorite orders. "If they saved my favorite order and it takes one touch for me to order," customers are likely to order regularly "because it's faster and more convenient. The customer feels the restaurant knows them because they saved their preferences," says Chick.
"People need to be recognized. The best thing that can happen when you walk into a restaurant is to be known," Zagor echoes. Thus, apps that save customers' favorite orders and digital customer loyalty programs, which represent another opportunity to cultivate loyalty, make customers feel known. Customers have a positive experience, and they're more likely to order from you again.
Cleanliness and Safety Still Matters
Cleanliness and safety continue to play an important role when it comes to how often customers order from a concept. It is easier for customers to see what you're doing when they dine in, but there are still ways to show your commitment to sanitation and food safety with take-out and delivery orders. Guests running in for two minutes to pick up their take-out will register the cleanliness of the restaurant. If those customers feel like sanitary protocols are not being followed, they're less likely to order from that restaurant again, Chick explains. On premises, employees should be following mask protocols and cleaning surfaces that are visible to guests.
With delivery orders, Chick suggests placing a sticker on each package that confirms the order was checked for completion and everything was cooked to the proper temperature. Having an employee initial the sticker adds an extra layer of personalization, and is appreciated by guests.
Chick also recommends that restaurants make their safety protocols visible to their customers directly in the ordering platform. For example, this information could go at the checkout process or in a note that pops up on the screen. Maintaining transparency fosters a sense of trust, which may increase the likelihood of regular patronage.
Owning the Delivery Experience
Zagor believes third-party delivery companies really don't care about what restaurants are doing, or about the guest experience. "They're in it for the money. You're trying to be transformational and they're being transactional," in an interview with Restaurant Dive, an online trade publication covering the restaurant business.
Zagor says he expects the delivery model to evolve as focus shifts to "relationship-based delivery." Although that probably won't happen this year, it's smart to start thinking about your delivery through the lenses of customer experience, convenience and quality.
If you partner with a third-party delivery service and receive regular complaints about things like poor quality or late deliveries, make it a priority to change your delivery model now. You'll be ahead of the curve as more operators figure out how to own the delivery experience end-to-end.
One of the common operator complaints with third-party delivery is loss of control. Zagor puts it this way: "We package something and someone gets it at home. We don't get the touchpoint of seeing what they're getting, how it looks, the temperature, how it smells, the moment someone unveils that food. We lost control of the process unless we [take responsibility] for delivery."
"Delivery signifies a package delivery, like buying socks through Amazon," Zagor adds. "Restaurants are not selling packages, they're selling experiences and you have to have that in the mindset. The word 'delivery' needs to be eliminated because it's too much of a commodity base. We're trying to give some level of experience to people who are eating at home that in some way resembles what you're trying to do when people" dine in.
Zagor suggests operators improve the experience of delivery by focusing on two factors: food quality and a branded guest experience. What makes your restaurant's delivery different from the other guy's? Is there a nice note or a little gift inside the bag? Did you include a coupon code or special offer that could convert a guest to order directly from you instead of a third-party? Is the bag branded, or is it a plain paper brown bag that could have come from any concept in town? Stickers, branded bags, and other delivery supplies represent extra expenses, but they make the meal memorable for guests. When guests remember the meal, they'll think of your concept the next time they want that cuisine.
When asked for best practices with take-out and delivery, Zagor references the four Ps. First is performance: "You gotta offer what your customer wants," namely "good food at a good value." Packaging is critical for food quality and customer expectation. It affects food presentation, freshness, texture and appeal. Presentation, or how the food looks and smells, is important for related reasons; we eat with our eyes first.
Then there's the price value. "Am I giving a reasonable value for the price I'm charging?" Zagor asks. Pricing is complicated by supply chain issues and inflation, which is impacting proteins in particular. Ultimately if the customer doesn't feel they're getting a good value when they order from you, they are unlikely to give your concept a second chance. Streamlining the menu and cross-utilizing items are two strategies to cut food costs, which can help to capture a bit more profit given the impact of inflation on revenue.
The most successful restaurant operators Zagor knows don't frame it as on-premises versus take-out or delivery. They see the future in maintaining a multi-channel approach. This might include a dining room, an outdoor patio, a ghost kitchen, an Instagram pop-up shop, take-out, delivery, and even package delivery through a service like Goldbelly – a curated marketplace for gourmet food and food gifts. Zagor encourages operators to take on "as many revenue sources as you can in order to maximize income" while also steering clear of something he tongue-in-cheek calls ROA – not return on assets, but "return on aggravation".
He explains: "How much aggravation are you willing to put up with for how much money?" Zagor explains. This is a subjective measure. Every operator must decide for themselves what is "worth it." When you are aware of all the possible revenue streams, you can choose which makes the most sense for your concept. Then you can focus on execution with a solid understanding of guests' expectations in the current environment.
Loyalty Programs in 2022
Loyalty programs have always driven repeat business. Both Chick and Zagor point to customer loyalty programs as opportunities for restaurants in 2022. Zagor calls them the year's "biggest trend."
While loyalty programs aren't new, Zagor explains that customers now expect to get rewards for frequent business. He suggests offering different levels of loyalty for different customers. This turns loyalty into a game where an occasional customer may be incentivized to come more often if they can unlock a higher level of loyalty or a better reward. Popular rewards include coupons or discounts, free items, and exclusive products or specials not available to those outside the loyalty program.
Your loyalty program should integrate with your restaurant's online ordering platform or phone app, so it's baked into the ordering process. While this takes a bit of work to set up, Zagor notes it can encourage customers to order more frequently or build a bigger order and unlock a better deal.
Post-purchase engagement campaigns complement and reinforce loyalty. Sean Walchef, owner and operator of Cali Comfort BBQ, uses Ovation software to encourage guests to leave reviews in exchange for the chance to win a gift certificate. His team follows up by text message with customers who leave a less-than-perfect review. This helps Walchef cultivate that customer's loyalty and win their repeat business. Even if the experience wasn't great, the customer might be enticed to give them another try if they receive a discount offer. Communicating directly with the customer cultivates that sense of knowing and trust that is essential to repeat patronage.
When this sort of campaign is conducted for take-out or delivery food, operators can glean valuable information about the quality and condition of that food. They can then use this new information to update their packaging or delivery approach with the goal of improving quality and customer experience.
You have to know your audience before you can target them, whether it's by designing the perfect loyalty reward for your audience or coming up with a delivery experience that recreates what customers love most about your restaurant for an at-home experience. Zagor thinks there is an opportunity for restaurants to leverage data gleaned from loyalty programs and ordering platforms to get to know their customers better. "Who are your guests? Use every opportunity to find out where your guests are coming from and what their behavior is," he says.
While this can feel like more work for operators who are already spread thin, it actually saves time and resources in the long run. The more data you have about customers and customer preferences, the less guesswork is involved in decision making. Operators who understand exactly what their audience likes and does not like because they've done the work are better equipped to decide which channels will get traction and which may come with a higher-than-desired ROA.
