How to break dependence on third-party delivery

Posted
January 20, 2021
Abhinav Kapur

I still remember my first call with Dan from Zucker’s Bagels, a quintessential NYC bagel brand. He was blown away by his retention numbers – 85% of his online ordering business was from repeat guests.

I’d never seen anything like it before. 🤯

Then his heart sank – all those orders were from third-parties. 😭

It was so obvious guests loved his brand, but they kept ordering through the least profitable channels. 💸

At that point, Dan had one thing on his mind: “how do we break our dependence on third-party delivery?”

To do that, we need to break the third-party flywheel – the growth tactics they use to acquire diners + strip restaurants of the guest relationship.

DoorDash was kind enough to lay out how it works in their IPO filing:

Flywheels look complicated, but at their core are pretty simple: they’re a pain to start, but with each turn, require less and less effort for them to spin faster and faster.

Doordash’s flywheel has three components: restaurants, diners, and couriers (Dashers):

  • More restaurants = more diners, since whenever someone opens the app they see their local favorites already there
  • More diners = more couriers, since someone’s gotta deliver the food
  • More couriers + more diners = more restaurants since more orders will come through and they’ll be fulfilled efficiently

Accelerating one part mutually reinforces the other two, making it easier and easier to scale.

So how do you break it?

In the Art of War, Sun Tzu says “to know your enemy, you must become your enemy.”

To do that, restaurants need to build their own marketing funnels.

There are a whole host of tactics out there that are equally accessible to any restaurant, from mom-and-pops to McDonald’s:

  • Word of mouth / ratings and reviews (Google Yelp, Tripadvisor)
  • Organic social (Facebook + Instagram)
  • Paid social
  • Search engine optimization (SEO)
  • Search engine marketing (SEM)
  • Loyalty / rewards
  • Email marketing
  • SMS marketing

To complement the science behind the funnel, restaurants can add a bit of what they’re already in business to do – the art of hospitality. Your food, philosophy, story, and entire approach to serving your guests is a unique – a potent – asset that third-parties can’t match.

That way, no matter how fast the third-party flywheel spins, restaurants can proactively pull guests into their ecosystem. Instead of fighting third-parties, you can use them to your advantage.

Let Doordash do the work to acquire new guests – that’s their justification for high fees anyway. Instead, focus on the tools, tactics, and hospitality to own the guest relationship for the long-term.

In this content series, we’ll lay out our tactics (in painstaking detail 🤣) to help restaurants break their dependence on third-party delivery.

Don’t want to wait for that? You can book a time on my calendar so we can figure out together how to break your dependence on third-party delivery.