Restaurant management

Three Ways Restaurants Can Earn Food Delivery | modern restaurant management

Offering the right type of discount will help operators win more loyal customers

The food and grocery delivery space is booming — and it shows no signs of slowing down. Even as the pandemic moves into endemic territory and people are less afraid of being out in public, there are some conveniences we’ve all come to love, including food delivery. And of course, everyone also wants a deal. Data gathered from receipts and other publicly available sources in a January report shows a clear conclusion for quick-service restaurants (QSRs): Percentage discounts win food delivery space.

Percentage based discounts

The January report included a graph illustrating the month-over-month growth in offers from the hamburger brands (McDonald’s, Burger King and Wendy’s) broken down by type of promotion. One takeaway: Merchants offered more deals with a percentage off, rather than dollar discounts. “Percentage” offers steadily increased from September to December, while dollar discounts decreased over the same period.

As noted in a recent Modern Restaurant Management (MRM) research roundup, QSR’s shares of single-party orders are down, meaning there’s an increase in people commander together. With larger orders, “percentage” offers may have a greater advantage for the customer. From 2019 to 2021, the number of items in a single order increased by 14.3%.

Dollar rebates were the second most frequently used approach; delivery-based discounts consistently accounted for the lowest percentage share of offers, hovering around 20% in the months from May to December.

Among popular burger brands, McDonald’s offered the most overall discounts to customers. As McDonald’s “percentage” discounts continued to rise, this could provide proof to other companies that this type of promotion is a success.

Finding the “right” type of discount to offer is important for small businesses and carriers who want to get the most out of delivery partnerships while ensuring their own bottom line isn’t squeezed.

Creative and urgent offers

It’s clear that popular burger brands are experimenting a lot with their offering strategies.

During the 2021 Summer Olympics, McDonald’s offered a timely discount: the “GO4GOLD” deal, which offered customers a free 6-piece chicken nugget for orders over $15. Similarly, throughout the NCAA March Madness Tournament, on Grubhub, Wendy’s has offered $1 Dave’s Singles when customers spend over $15.

It is always a good idea to consider current events and local happenings when deciding on discounts for delivery services.

Loyalty rewards

Most QSRs have a loyalty rewards program, so promotions for these programs are key to a program’s success. As noted in the MRM research roundup mentioned earlier, 39% of respondents say they download an app for a loyalty program because of an offer or promotion. Operators who create promotions in loyalty rewards apps specifically for food delivery services are likely to find success.

However, merchants need to pay attention to every detail, as consumers are likely to delete an app if food arrives cold or an item is missing. Order speed, quality and accuracy are key to retaining customers, even those who buy at discounts

As many consumers believe that ordering through apps is more convenient than ordering in person, it is important for merchants to capitalize on these platforms.

In an ever-digitalizing market, with the need for immediacy and precision in orders, merchants face fierce competition. Creating offers is an important way to win customers. Doing this through “% off” offers, timely offers, and loyalty programs has seen success for food delivery.