One of the things we like to do at NetWaiter is provide restaurants as much information as possible about the benefits of adding online ordering to your business plan.  A version of the following article recently appeared in Restaurant Hospitality Magazine.

A 30% boost in your takeout business within a matter of weeks.  What restaurant owner would not want that?

Those are the kinds of success stories we hear over and over from restaurateurs who have made online ordering part of their marketing plan.

Every day, restaurant owners are confronted with the costs of doing business.  The fixed expenses and staples are no brainers – rent, utilities, payroll for a great staff, the cost of quality food, etc.  The more difficult expenditures are discretionary ones like marketing. Where can a restaurant spend to get the best ROI?  Owners are bombarded with choices daily.

When asked, many successful restaurant owners have a similar response: “Online ordering has been one of our most profitable investments.  NetWaiter should be at the top of every restaurant’s to-do list if they don’t already have it.”

Companies such as NetWaiter offer a fully branded online ordering service through a restaurant’s website (a NetWaiter site can be customized with the look and brand the restaurant).  Customers order in seconds from an online menu.  They can make special requests, indicate future delivery or pickup times, and even make payments (NetWaiter electronically deposits the money to the restaurant immediately).  Custom delivery zones can be set by the restaurant (if they offer delivery), or customers can come in and pick up their order.  

The benefit to customers is convenience. They can order from anywhere (desktop, iPad, Smartphone, etc.). Imagine a mother getting off work. While still in the parking lot, she can order dinner from a restaurant and pick it up on her way home.  There is also the control given to the customer. Since they placed the order, there is less chance of error.  Customers who use online ordering typically use it again and again, quickly becoming regular customers.

Customized online ordering is a game changer for restaurants.  Using a restaurant portal that promotes online ordering for a variety of restaurants is very expensive (10-20%+).  Online ordering via a custom ordering site, such as NetWaiter, creates more business and is significantly more cost effective.  In addition, restaurants get a great tool that builds loyalty and extends and strengthens their brand.  Some NetWaiter clients even have ROIs in excess of 7,800% (the average is closer to 2,000%).

Where can a restaurant get a better ROI with their marketing dollar than online ordering?  There are many marketing options available, but none can come close to the ROI of a custom online ordering site.

When they first came out, daily deals like Groupon swept across the industry.  Smart restaurateurs, however, realized them for what they were—a trap.  An article in The New York Times more than two years ago addressed the pitfalls of these services:  "The consumers were being told: You will never pay full price again.  The merchants were hearing: You are going to get new customers who will stick around and pay full price.  Disappointment was inevitable."

Years ago, a newspaper advertisement might have been a restaurant’s ‘go-to’ way to bring in business.  Readership has dropped significantly, though, and even when newspapers were widely read, buying an ad didn’t provide a very good ROI.  It’s very hard to measure the success of such an advertisement unless you offer a redeemable discount.  Those discounts, however, significantly impact the ROI of the advertisement. 

Even more modern and effective marketing and advertising opportunities, such as email, loyalty programs, text marketing, social media marketing, etc. (which are all certainly worthwhile to deploy) would have a hard time beating the ROI of online ordering.

According to a study and paper done by The School for Hospitality Leadership at Cornell University, one of the things that draws customers to online ordering is convenience.  Once they experience it, they use it again and again.  Plus, because NetWaiter is integrated with Facebook, it allows people to share their ordering experience with their friends.  The more people ordering online, the more people learn about the restaurant’s online ordering site.

The Bottom Line – Why would you not offer online ordering?  There is no replacement for a well-run online ordering system such as NetWaiter, which gives customers the control and convenience of ordering takeout and delivery online.  Other marketing opportunities can’t come close to the ROI an online ordering site can produce.  Just as our clients say – online ordering should be at the top of the list for every restaurant.

Even before the advent of Groupon, many restaurants fell into the coupon trap.

Smart restaurateur s realized that's exactly what Daily Deals are - a trap.  A recent article in the New York Times addressed the pitfalls of Groupon and similar services: "The consumers were being told: You will never pay full price again. The merchants were hearing: You are going to get new customers who will stick around and pay full price.  Disappointment was inevitable."

Do Groupon-type customers come back?  Yes …if they have another coupon.  According to Lingo-Link, a blog discussing how companies can give the best customer service, “...people who are signed up with Groupon get a different half-off coupon offer emailed to them every day.  And as a result Groupon has developed, in a way, their own cult following."  The loyalty is to Groupon, not your business.

There is no replacement for a well-run online ordering system such as NetWaiter, which gives customers the control and convenience of ordering takeout and delivery online.  Daily Deal programs only train shoppers to come back when a discount is available - there is no loyalty.  Unlike NetWaiter, which is, in fact, very likely to draw customers back repeatedly and have them happily paying full price.

An online article from MIT's Technology Review also examined how merchant reputations changed before and after a Daily Deal.  The article reported the average rating scores from reviewers who mention Daily Deals are about 10% lower than scores of their peers.  And, what’s the cost for these poor reviews?  Extraordinary.  If the standard discount is 50%, and the Daily Deal site takes half the money paid by each customer, your restaurant is essentially giving a 75% discount to a customer that might come back.

Bottom Line: Forget flushing marketing money on Daily Deals.  Instead, implement long-term and cost effect marketing programs.  NetWaiter should be one of the key pillars of your marketing strategy to attract good customers who pay full price.  Get people into your restaurant, create brand awareness, and make money!