If the past year and a half has taught us anything, it’s that clear communication with customers is a must-have if you want your restaurant to thrive in uncertain times.
This was especially true for restaurants trying to stay afloat during the pandemic. Many operators were able to reach out to customers directly to keep them in the loop about closures and reopenings, offer incentives to sustain sales, and even bolster aid for their employees through community fundraisers.
This has been essential to maintaining relationships and driving repeat business. Post-COVID, it will certainly continue to be the case.
And yet, many restaurants still have no way of doing this on their own.
This is largely due to the fact that third-party delivery services seldom share customer data. Restaurants who rely solely on these platforms for their takeout business often have no idea who’s actually ordering from them, so they have no guaranteed way to get them back. We’ve even heard some restaurants lament that they don’t know the names of their very best customers.
Unsurprisingly, there’s been pushback against this practice. This past May, a bill was introduced in New York City that would have required companies like GrubHub and Ubereats to share more data with restaurants. This would enable them to then “directly manage their relationships with their customers, offer them deals, market to them, and more.”
Right now, that bill is in limbo while a legal battle between NYC and DoorDash is being fought. But if it eventually passes, it stands to reason that other cities may eventually follow suit. Therefore, it’s important for restaurants to start looking closely at the gaps in their data and how they can correct course moving forward.
After all, there’s a good reason why such a bill was proposed in the first place. In a digital world where businesses live or die by their ability to communicate with customers, restaurants should never be shut out of the conversation.
Why Is Not Having Customer Data Such a Big Deal?
Simply put, when a third-party delivery service hoards data about your customers, you have no control over what happens next. You can’t build a relationship with them, and they never get to know the real people behind your business.
The third-party service will continue to market to that customer, sure — but they’ll be marketing themselves. And all of those communications will be branded for them, not you.
“Third party delivery apps with consumer-facing brands have a conflict of interest,” said Kashyap Deorah, founder and CEO of Hypertrack, on Restaurant Dive. “The app company owns customer data, not the restaurant. The app is built to maximize their conversions, not the restaurants’ conversions.”
Basically, where a customer orders from next is inconsequential to these service providers — just as long as they’re using their app to do it.
From a branding and loyalty perspective, the downside for restaurants is clear.
Customer retention relies on consistent messaging. If you’re not the one who is regularly communicating with your customers and keeping your restaurant top-of-mind, the chance of them returning will dwindle significantly over time, and your sales could go down with it.
The Benefits of Owning Your Customer Data
One of the drivers of success for any restaurant is being able to build strong relationships with your customers. After all, we all know the benefits of having regulars, and many people are still willing to go above and beyond to support their favorite restaurants.
The data backs this up, too. 82% of companies agree that retention is cheaper than acquisition. Customers with an emotional relationship with a brand are 71% more likely to recommend it to others. And that’s not all…
Frankly, communicating directly with your customers to build loyalty is a no-brainer.
Remember, most consumers want to support local businesses. Millennials and Gen Zers are particularly keen on “shopping small” over the big guys. And they’re willing to share information in exchange for perks, deals, good customer service, and a seamless ordering experience.
When you own your customer data, you can offer them all of that directly with:
- Discounts based on times ordered or milestones
- Seasonal and holiday promotions
- Loyalty and rewards programs
- Post-order surveys
All of these communications should be specifically branded for your restaurant, giving customers a consistent experience from start to finish and making it easier to recall your name (and food!) in the future.
Doing It Right: A Case Study
At 9Fold, we’ve seen first-hand how beneficial it can be for restaurants to communicate with their customers directly.
In the case of Wanisa Home Kitchen, a casual Thai eatery in Brooklyn, they’ve been able to drive a lot of repeat business from customers who ordered directly from them online thanks to the fact that they own that customer data.
In fact, over 50% of those customers have ordered multiple times.
These messages range from seasonal promos to 100% personalized offers based on a customer’s unique information, such as how long it’s been since they last ordered. Wanisa is also able to automatically follow up on recent orders to get valuable feedback.
This is only possible because they own the data to begin with. Without it, they wouldn’t be able to offer this kind of personalized service at scale, which is what many diners these days crave.
Moving Forward
Even if the third-party data bill in NYC doesn’t pass, that it was proposed at all is indicative of what’s already on everyone’s minds in the industry.
Communicating with customers directly is essential to building trust and driving repeat business. Leaving that power solely in the hands of third parties with their own interests in mind will only make that hill harder to climb.
