We talked with Kevin Wade of Previti Pizza and Michael Stadnicki of Taco Lulu about how they improve the profitability of their delivery systems. You can watch the entire video below, or read the discussion transcript.
Webinar Transcript
Elliot: “Welcome to 30 Days to More Profitable Delivery, a webinar sponsored by SpeedLine Solutions. We're here today to discuss an issue that's very important to our listeners, which is the profitability of pizza delivery. With me today is a very distinguished panel. Brad Brooks is the marketing manager of SpeedLine Solutions. Kevin Wade is the owner of Previti Pizza in Midtown Manhattan. Michael Stadnicki is the co-owner of The Franchise Edge, a franchise organization, as well as the owner of Taco Lulu Chicago restaurant. Also with us is Paul Samson, founder of The Franchise Edge. Brad, let me turn it over to you. Let's talk about profitable delivery.”
Brad: “Great. Thank you, Elliot. I appreciate the introduction. We are happy to talk to you today. We're really excited about this. I've had a chance to do some pre-interviews with my guests on the Webinar today, and I want to point out just a quick note for everyone who's on this call. You'll be receiving an email tomorrow morning with a downloadable asset that you can use that is essentially a day-by-day guide to 30 Days to More Profitable Delivery today. We're going to be walking through some of those areas that are actually outlined on that 30-day plan that you'll get emailed to you tomorrow.”
“Why don’t we start off with a quick poll here? Number one, for people on the call today, do you offer delivery? For the slide there, you can just answer ‘yes’, ‘in house’, ‘yes, but only through a third party’, ‘yes through a mix of in-house and third party’, or ‘no, you don’t offer delivery’. I’ll give you a moment to respond there.”
“Looks like we have some people who offer only in-house, but the vast majority of you either offer through a third-party or a mix of in-house and third-party. We’ll be talking today about some of the ways that you can maximize that third-party delivery and turn it into a more profitable part of your business. And there’s a couple of people on the line that don’t offer delivery at all.”
“So we welcome you and hope you can learn a few things about delivery as you move through this journey.”
“Let’s talk about marketing to begin with here. So when we talk about marketing, it’s the first engagement that your customers have with you and we’re going to talk specifically about some areas such as customer reviews.”
“Kevin, I want to talk to you a little bit about your experiences with customer reviews. I’ve got some of your customer reviews up on the screen here for Previti Pizza. Tell me about your approach to these customer reviews and how you’re able to remain at such a high level of engagement and what looks like love from your customers.”
Kevin: “Sure sure, thanks for having me on. For me, it’s so important to have the customer be happy when they come into the store. I mean we serve pizza, so it kind of makes them happy to come in anyways.”
“One of the things we do to get a good review, especially with Yelp or any of the online ordering sites, is we offer them a free something when they come in. Usually, we do like garlic knots or something. So if you come in and check in with Yelp, you get free garlic knots. That does two things for me: it gives away garlic knots, which really don’t cost that much, but what else it does is let me know that they found me through Yelp.”
“So on my POS machine, it will say that this person got garlic knots through Yelp, and maybe they might get a little extra courtesy after their meal where I go up to them and ask them how their meal was to really personalize the experience.”
Brad: “So we're talking about delivery. But at the same time, I've got a bunch of pictures up here of your in-store experience. Your customers will typically look at your website. They might go online and look at some of the reviews.”
“I think it's interesting to note the bottom picture there was actually taken from Yelp. It's one of your customers that took that beautiful picture of your display case. That's how excited they are about your product and your brand. I don't think you can underestimate how important it is that you integrate your store experience with that online and with that delivery experience that you've done so well.”
Kevin: “Absolutely. I mean, the greatest thing to me is when a customer comes in and brings a new employee or someone from their office and they do the selling for me, they pick everything out and say 'hey, look at this. This is my favorite' or 'I like this one'. So for me, the display case is giant. You have to have great lighting in your display case, obviously clean from any fingerprints. You want everything to look so perfect. People really look with their eyes, they see what they like, and you sell more things. If you want to sell more things, put them closer to the register. People will see them right there. And for me, it's all about the quality of the ingredients and presentation.”
Brad: “Michael, maybe I can turn it over to you. You got this new concept, Taco Lulu, and you've been open for how long now?”
Michael: “Since July 31. I had a previous restaurant in the same space though, for ten years.”
Brad: “Sure, but it's a new concept. When I looked at your website, there's a few things that jumped out at me. Number one, you've got beautiful images of your food, and then your use of colors is consistent and coordinated. Tell me a little bit about developing your brand and creating a brand that will resonate with customers both when they walk in, as well as when their only experiences are perhaps through the website and through your delivery.”
Michael: “So interesting thing there. I'm actually not very pleased with my website. I had 60 days to convert my franchise business into our new concept. So the website itself is actually kind of a version one. I think the branding. Well, I've got an additional website which is going to be instrumental to my business, and that's my catering website. I use a company called CaterZen. So in the next two weeks, I'm going to be re-skinning my website and then adding the catering side of the business. The branding elements inside the store and the design inside the store, the current menu, and the printed menu are fabulous, but the website itself still needed a little bit of work. In a kind of transition, I was able to get the one concept closed and the new concept open in 59 days. So it was quite a challenge.”
Brad: “Well, you're forgiven for doing a version one on your website, that's for sure. Now, did you do the website yourself?”
Michael: “No, I had a part of our marketing team and The Franchise Edge that had done it, but it's serving its purpose right now.”
Brad: “Well, I just think it's important to at least have that initial look there. Let's talk a little about email marketing. Now, Kevin, you have an extensive email marketing strategy, and you are collecting emails from virtually every customer who orders for you. But you've got an interesting strategy in terms of how to collect those names. Tell me a little bit about that.”
Kevin: “Sure. With our POS from SpeedLine, we were able to tell the customer a couple of things. First of all, we can email them their receipt, which they love. And the second thing is when the pies are ready to go out the door, we can also let them know that their pies are on the way.”
“So people jump at giving me their email because they want their pies on time and they want to know when they're coming. So for me, getting emails is kind of an easy thing to do, and then like you said, once you have the email you're able to blast them either specials that you have coming up, or you can also tell if a customer hasn’t ordered in a while so that you can send them another special that says ‘come on in, we haven't seen you in a while’. There's a lot of things you can do once you get their emails.”
Brad: “Michael when we talk about marketing, one of the key things that stuck out to me when we were chatting before was that your strategy for online advertising doesn't focus on bringing in individual dining consumers. You're focused on bringing catering jobs. Why did you choose that instead?”
Michael: “So when it comes to the online marketplace and using something like Google Ads, the ad spend that you would have to make to engage a customer for an individual delivery, say on a ticket average of 15 dollars, you may be spending three to five dollars for that click. I find it much more useful and relevant to my business to go after the catering customer that may be spending anywhere from five hundred to five thousand dollars and a long-term customer that once I have them in my system, I'm able to internally market to them through my email marketing platform.”
“It's really interesting that you can go from zero to hero very quickly with the right strategy on Google. My first month when I launched catering in the previous concept, I was doing an average of about three thousand dollars a month in catering prior to the launch of my Google ad campaign. And after the launch, my first month we did twenty-five thousand dollars in catering. So that twenty-five thousand dollars is a huge opportunity in the growth side.”
“And when you're looking at delivery there's a couple of different facets. There's, you know, the small fifteen dollars like I spoke about and then there's the large catering customers that tend to be really sticky and they repeat business. And within those catering customers, I sample into the department. So if I'm working with one admin I'll speak to that admin and offer her a tasting for if there's nine other admins in the building. It's really interesting that all of a sudden a thousand-dollar order becomes a six-thousand-dollar order between multiple offices within the same company.”
Brad: “One of the things that your strategy enables you to do is to compete with some of the large brands that are also bidding on, in some cases, the same keywords as your restaurant and competing directly against you. But you're able to outbid them because the order value is so much higher than what it would typically be for an individual customer, is that correct?”
Michael: “Yes, and that's an unfortunate aspect of all of these third-party websites is that you're actually going into competition with yourself. But from brand awareness, it's a necessary evil to me to be part of GrubHub, Uber Eats, and EatStreet, and all of the third-party [apps]. We had spoken on the prior call that you have to look at the spend to Uber Eats and those companies as an advertisement, and it's part of your marketing budget overall.”
Brad: “Right and actually we're going to talk about that in a moment. I do want to talk about promotions for a second though. Kevin, you've got some promotions you mentioned to me in one of the chats we had that you actually go out on the street yourself and on the sidewalk and hand out coupons for free slices, is that correct?”
Kevin: “Yeah, that's true. In the beginning, I would just print out some coupons for a free slice. I'm so proud of the quality of our pizza. I mean, we use grande cheese, we use all the good ingredients.”
“So I just want people to come in the store at least one time to try our pizza and I know they will come back. I've stood on the corner, I've given out coupons, I've done deliveries myself just to go to the customer and let them know I'm the owner and that you know we care about them. So for me, the coupons, like you said we will get into the third-party stuff in a minute, but just doing coupons right in the street and kind of like grassroots stuff, we're all about that.”
Brad: “Okay, let's talk about third-party. Everybody's chomping at the bit to talk about this. Kevin, we’ll stay with you for a moment. What are you doing in order to take that customer who has ordered through Uber Eats, Postmates, or one of the other aggregators for ordering and turn them into your customer? Because they're not really your customer yet, are they?”
Kevin: “True. I mean I think you said before it's a necessary evil to be on these platforms because they do get you new business. One of the things we like to do is make a setup with plates, napkins, and spices for everybody, throw a couple of menus in there, and offer a discount if you order with our app or with our store. We give the same discount of usually 10% off or even 15% just to get them to order with us over ordering with those third parties.”
Brad: “And Michael you sort of alluded to the fact that you see third party as part of your marketing strategy. Talk a little bit about that if you would.”
Michael: “There's tens of thousands of eyeballs that are looking at these apps. Millennial generations are not picking up the phone and placing an order. I'm actually even seeing people walk into the restaurant, pull out an app, and order the food instead of literally speaking to my cashier. It's just the times have changed and times have shifted. But as it relates to marketing, the tens of thousands of people that you know are looking for restaurants and for food are going to come across you. If you're not on that platform, you're really missing that opportunity.”
“And to the prior point, I tend to find that people are sticking to the apps they use. I try to do the same thing as Kevin, offering discounts and having different promotions, but when someone is on Postmates and they're used to Postmates, it seems like they stick with it. I've even gotten where I'll call people and mention it to them, and some people will switch over, but it seems like most of them won’t. Now, these apps are incentivizing their customers to keep them sticking to their app and not bounce to another app, so you're working against quite a bit.”
Brad: “Sure so now we've got customers who are now aware of us when they start that ordering process. So we'll talk a little bit about what happens there, because I think that this is one of the areas that is largely underutilized in many restaurants.”
“So let me ask a question of the audience here. Do you currently offer online ordering? You can go ahead and answer. So we've got a number of people that offer it through their own ordering website and app, we have some folks that are only offering it through their website, and some people that are offering only through a third party. That's interesting to me because that's an area where if you can grow, you can look at doing some of your in-house. We'll talk a little bit about that later.”
“Okay, let's keep moving on here, and let's jump into the phone ordering piece now.”
“Kevin, you've spent a lot of time training your customers. One of the comments that you made that really stuck out was that you said that you like it when your employees can look your customers in the eye and take their order and really listen to what they're saying. What does that allow them to do?”
Kevin: “I mean, just having a POS machine does make it easier, especially if you train them properly to know where all the buttons are. In Manhattan, most people don't look you in the eye, they don't say thank you, that is gone from Manhattan as far as I see. So I definitely trained my cashiers that you want to look someone in the eye, to say thank you, and welcome them in the store.”
“There are so many things you can do to stand out in Manhattan just because of the way things are nowadays. Just having a POS machine that's able to quickly enter the orders, any kind of notes needed for people who have special needs and just being able to facilitate that's great.”
Brad: “Michael, you talked a little bit about your online strategy, so let's jump into that a little bit more. I've got Previti Pizza up there since I know you accept online ordering as well through your concept. How well has that been received for you?”
Michael: “Online ordering?”
Brad: “Yes.”
Michael: “It’s been fantastic. I was fortunate to have a database of five thousand prior customers in my individual delivery, those fifteen to twenty-dollar deliveries, and I had an additional five thousand customers in the catering database, which are actually waiting for me to launch the catering site. Interestingly enough, I just got a call about 30 minutes ago from a customer that received my email blasts and had asked if we can accommodate a hundred-person catering order on October 30th. So at $12.95 a person, that's a $1,295 individual order. There's a power of that database.”
“You have to keep in touch with your customers. Right now, you would be thinking about setting up Halloween email blasts, someday you're going to be sending out football email blasts, and in the summertime, you have the summertime barbecue email blasts for keeping relevant and keeping in touch with your customers. It's very easy for a customer to forget about you, but if they're getting that email they may not order that day or that week but you're top of mind for the next time a catering or delivery opportunity comes to pass.”
Brad: “With all of the traffic coming from mobile devices, are you testing the experience that your customers have on phones, as if you were a customer?”
Michael: “Absolutely. On all platforms, and it's actually been quite a challenge with getting these third-party apps to be consistent with your menu offerings and options. You tend now to have to make multiple calls and I think a lot of the customer service is offshore, so it's a challenge in communication. I know Uber Eats has been a real challenge. They had actually put up my new restaurant name with my new menu with the pictures of the old restaurant’s food. I was wondering why I wasn't getting any orders until I jumped on the website and saw what they were doing, and it took me three weeks to get it fixed.”
Brad: “Yeah it's the old Ronald Reagan motto of trust but verify. So, Kevin, I want to just come back to this idea of these confirmations because your customer likes it when they receive the order time when the items are going out the door. From a customer perspective, at the beginning of the order, I always like it when I can see sort of an estimated time of when that item will be available because it allows me to set my mind at ease. This idea of ‘don't make me wonder, don't make me worry’. I like preventing a customer from feeling uneasy throughout the entire experience. Do you think that that contributes to some of the success that you've had in building your brand?”
Kevin: “Absolutely. I mean, before we would get calls all the time of people asking ‘where's my pizza?’ Obviously, for us, being on time is so important. If you're doing these big catering lunches where they have a certain amount of time for lunch so it can't be late, being late is not an option. So keeping the customer at ease knowing that it’s out the door 15 minutes before it has to be there, it's huge for me. It's something that I think we get repeat customers because of since we're so consistent.”
Brad: “So recapping, we've gotten the customers’ attention, they've now ordered from us, and now we have to get down to the business of actually making the order, and there are so many details. There's literally dozens that can either make or break the experience at this point. So we're going to talk about some of these areas.”
“In terms of accuracy, make tickets and stickers are some of the most obvious ways to improve accuracy. But I'm really interested to find out what both of you are doing to improve that a little bit. Michael, let's start with you. What do you do in order to ensure that every single order goes out perfectly knowing that the cost of recovering from a mistake is so high?”
Michael: “Fortunately, as that relates to the catering side of my delivery business, caterers and the web company that handles that as invoicing as part of the platform and it also has food prep built-in. So on a 137-person order, I know exactly how many plates, napkins, serving utensils, aluminum trays, and how many pounds of trays of food, so we're able to basically double-check. So our catering staff that creates the order double-check and our delivery driver that's going to be taking the order and setting it up, they double-check the order so there's kind of a checks and balances. The delivery driver’s incentives to deliver the food and get a tip so he wants to make sure nothing is forgotten and our kitchen staff obviously internally wants the order to be right so there's no stress in the kitchen. So that's kind of the checks and balances that we use.”
Brad: “That's great. Kevin, you've taken a slightly different approach because you're making your packaging do some of the heavy lifting here. Tell us a little bit about that.”
Kevin: “Sure. I went from the generic pizza box to my own custom pizza boxes. Obviously, having your label on the cover is great, but on the side, where you normally get your normal pepperoni or whatever, they put a regular cheese pie. We actually have all our custom pies on the side of the box so when we prepare for the order every box gets circled which pie is in the box. Obviously, how many pies are together in the order and it gets numbered so we never make a mistake with having our pies either go in the wrong box or someone sends the wrong pie because every box is labeled before the pizza comes out and it goes in the correct box and we never have a problem with having the wrong box. Switching to our own custom boxes was huge for us.”
Brad: “And Michael, you've talked a little bit about custom packaging in the past and we all know how expensive it is to do custom packaging. So share with us how you're able to get around that and keep your cost of packaging low, yet still offer a branded experience.”
Michael: “We're using rubber stamps. That's actually been a fantastic way to brand yourself inexpensively and it kind of has to me a vintage feel which goes along with my traditional authentic Mexican branding. It's kind of a simple opportunity to do that. I may look in the future into having some more customized bags but for the time being this has been great.”
Brad: “And Kevin, you talked about this napkin setup so tell us what goes into every single order that you send out.”
Kevin: “Sure. I mean depending on how many pies we send out, ready to go we have little setups for one pie - pies all the way up to you know 20 pies with enough plates, napkins, and spices in each bag these are usually done the night before, so on the day of, we're not running around crazy. Everything is pretty much prepared ahead of time so when the pies come out you know for us lunchtime is very busy so we don't have time to be like ‘hey, who has the paper and who has the napkin’. So having everything prepared ahead of time definitely helps.”
Brad: “So we’re now at the point where we've actually produced the food and it's ready to go out the door. So dispatching these orders here. Kevin, do you have just one or two people who are trained on delivery, or do you have multiple people working that?
Kevin: “So, I’ve come to learn that everyone in my store, from the pizza guys to the delivery guys, they all know how to use my POS system, just in case kind of thing and as a backup. But having everyone know the system, it cuts down on mistakes.”
Brad: “Do they also do deliveries? Like, do you have everybody cross-trained through your restaurant?”
Kevin: “Absolutely. I’ve taken deliveries, my pizza guys have done deliveries. If my delivery guys are out and for some reason, they haven’t gotten back on time, the cashiers will take it. The whole team.”
Brad: “So it’s certainly simpler to have your own employees to do your deliveries. Michael, you work with third-party deliveries, and you’ve talked about that a little bit. How do you deal with third-party drivers? Is there anything you can do to influence that experience so that it better reflects your brand? Or are you kind of just stuck with it?”
Michael: “So, we actually use a delivery service. They have a pool of 50 drivers. We text when we receive the order to them and within 15 minutes, we have a clean-cut driver that is going to take the deliveries. On the catering side, we have six to eight of their drivers that are personally trained by me to set up catering and they’re highly incentivized by the large tips. Because a tip on a thousand dollar order at 10% is $100 for a driver, as opposed to a tip on a $10 order, which might be a dollar or two dollars. Kevin, do you have your own in-house drivers?”
Kevin: “Yep. We use in-house.”
Michael: “On the pizza side, it seems to be more in-house drivers. In downtown Chicago for non-pizza, I’m seeing more delivery services. Because managing personnel and hiring and firing delivery drivers has to be a huge challenge for you.”
Kevin: “I mean, a lot of my guys have been with me for a couple of years. The tips are big here in Manhattan too. We get a lot of guys wanting to work at my store.”
Michael: “Good for you.”
Brad: “Alright, let’s do another quick poll here. I want to ask the question about chargebacks, and here’s why. How many chargebacks do you receive per month? I’ll leave this open and tell a quick story while people answer.”
“I’m hearing from operators that I talk to that they’re receiving chargebacks sometimes in waves, where they’re getting somewhere between $100 to $500 dollars in chargebacks and one of the most terrifying stories that they told me is that when the chargebacks start happening, they all of a sudden start to snowball and they find that they’re running into that.”
“We’ve got lots of people who are saying that the number is between 1 and 10. And if you think of the average order being between $20 to $30 for takeout orders, that can add up very quickly. You could potentially be in that $100 to $300 range very fast.”
“Kevin and Michael, are you running into any of this with chargebacks?”
Kevin: “Luckily, I still use the swipe, I don’t even have the PIN yet. I’ve probably gotten two in my entire career. We never get chargebacks, I don’t know why. The swipe is so much quicker than the chip, so when you’re doing 150 to 200 people an hour, the chip just doesn’t work. Luckily for me, I don’t really have any chargebacks.”
Brad: “And Michael, you’re dealing with quite large orders in some cases. How are customers paying for those?”
Michael: “On the catering side, I’ve not had any chargebacks related to the big-ticket items. It’s typically backed by a company, so you’re able to kind of research who you’re dealing with. On the individual chargebacks, I have seen what you spoke about with the waves of chargebacks.”
“What you need to do, and SpeedLine does a fantastic job of it, is when you receive that chargeback, you need to look up that ticket and address to see what’s going on with that customer. If it’s a chargeback transaction, many times those customers are using stolen credit cards. So you flag that address, and in the following week, you need to stay on it. If you get another chargeback, you need to look up that ticket and see if it’s the same number and address. What you’ll find is that waves will happen in the two to three to four weeks, they’re consistently ordering food because they know you’re delivering to them. And then you basically need to flag that customer and not deliver to them.”
“So when I do have chargebacks, it’s multiple chargebacks over the weeks. And now my staff is trained to use SpeedLine and look back at the transitional data to look at that particular delivery order and look who it was placed with. At one point, I utilized SpeedLine’s ability to block an entire city block because once they realize I was flagging them, they would use an address next door, so I took out an entire city block so it wouldn’t accept the order in SpeedLine.”
Brad: “So you’re leveraging features in a point of sale system in order to do that? That’s terrific. I want to talk a little bit about new customers and what you’re doing to build loyalty. Michael, you’re in a bit of a unique situation, because while you have a large number of customers that are familiar with your location, but you’re still working on building those relationships. What are you doing to get people converted over to your new brand?”
Michael: “I’m taking advantage of the current databases that I have for both the regular delivery customers and the catering customers. I do a lot of what Kevin had spoken about, which is getting onto the streets with my menus. I do taco bucks, which look like a dollar bill but are branded with my Taco Lulu branding. I’ll hit the street and hand those out. I find that people really enjoy it. Who’s not going to take something that looks like a dollar bill from you? If it looks like you’re handing out money on the street, it’s almost like pigeons. Once someone sees that you’re handing out money, everyone comes and grabs it. That’s my latest approach and it’s been fun. I’ve been seeing people redeem them almost immediately. And if they don’t redeem them, they’re putting them in their wallet and every time they look, they’re seeing an advertisement for Taco Lulu.”
Brad: “Kevin, one of my favorite stories that you told me earlier on was about the nice weather program that you run. Let’s talk a little about that. Tell me how that works. You’ll see a customer who comes in and you recognize them, and you decide that today’s lunch is going to be on you.”
Kevin: “Even though Manhattan is a big city with a lot of people, you do see some of the same people coming in. I tell my cashiers every day to learn someone’s name. So instead of being a number, they can write a little note and put the person’s name on it. So now the person giving the person out will be able to say instead of ‘number 12’, ‘hey John, here’s your pizza’. We get that little feel of the suburbs right here in Manhattan. Also, if we see the person come in multiple times, there’s nothing wrong with buying them a slice of pizza every now and then. It doesn’t cost much and does bring in a kind of loyalty to the store.”
Brad: “Just as we’re wrapping up here, I have a couple of quick things I want to touch on. Michael, you’ve sort of prompted Kevin for this earlier on. The challenge of finding great drivers. Kevin, where are you recruiting from?”
Kevin: “Unfortunately, there aren’t such great places to find. Just a help wanted sign on the door usually works for me. I’ve done Craigslist, ZipRecruiter, and things like that. I’ve been doing this for ten years, and you can tell when people come in if they are a right fit or not. It’s something that over time you can pick out.”
Brad: “It’s interesting that you tried some things that don’t work. I think for a lot of us, we pin our hopes on job boards, hoping that they come in. But I often find that my best delivery people are the ones that are in the area or even customers. As they walk in the door, you can get a sense of whether or not they would be a good fit for your brand.”
Michael: “I have had tremendous success in using Facebook Jobs and using a small $5 boost. It’s immediate that you’re going to get people inquiring about the position, and the opportunity that you can take advantage of us a business owner is going in and being able to search that prospective employee’s profile. You can kind of see what type of person they are. Are they wild and partying? Are they more family-oriented? Have they worked in multiple positions? You don’t want someone who has worked at several restaurants in the last six months. It’s really been a great opportunity for me to sift through the folks before I bring them on for interviews. It helps bring on real qualified people from the get-go. It’s been a real winner for me.”
Brad: “Excellent. Just in terms of increasing profits, I want to talk to each of you about forecasting. For you Kevin, what are the most important factors that go into forecasting your sales for the upcoming week or day?”
Kevin: “In SpeedLine, you can defer orders. We would get a lot of orders and people would want them down the road. Having a heads up that the orders will be coming up soon [is great].”
Brad: “You’ve got a 55-story building. When the weather is bad, and the forecast looks bad, what do you get from knowing that it will be busier?”
Kevin: “I’m mister doom and gloom, I do love a rainy day. We can prepare when we know it is going to rain because a lot of people don’t want to go out. It can be sunny during the weekend, but on a rainy day during the week, we can prepare for that ahead of time knowing that we’re going to be busier.”
Brad: “Elliott, I want to make sure we have plenty of time for questions, so I’ll just turn it over back to you.”
Elliot: “Brad, I think the first question is going to be for you. One of the key questions people have is ‘what exactly are the elements of a delivery-focused POS system?’”
Brad: “That’s a great question because as you work through that customer’s experience, I tend to think in terms of creating a great customer experience. So number one, does it have the ability to capture email addresses so I can market to them? Does it have a way for me to automatically upsell those customers when they order? When I’m delivering the product, can I ensure accuracy by making sure that my make tickets have got all of the pertinent information? Can it print stickers so that I can fix them to each box and ensure 100% accuracy, knowing how challenging that can be? Those are some of the things I would look at from an operational standpoint.”
“Of course, reporting is critical. Understanding what happened so I can learn from it and do better next time is really important. Michael and Kevin, you both have a point of sale that are specialized for delivery. What else would you add to that list?”
Michael: “For us, it’s having the catering system. Catering would be impossible without the catering software to keep me organized, especially when we’re doing six to ten catering orders in a day.”
Kevin: “For me, the one thing I like is being able to assign a driver and then return him, which lets you know how long it takes for him to get to a certain address. You can build that in when the customer orders next time, understanding that some buildings take longer to get in and get out. Assigning and returning the drivers in the POS is definitely a plus.”
Michael: “SpeedLine’s ability to tender a transaction for all of the third-party deliveries. So from an accounting perspective, you can understand the money side of it. The waters get really muddy when you’re accepting orders from Uber Eats, Grubhub, and Caviar. SpeedLine allows you to tender all of those transactions into each individual third party with a button feature. At the end of the week or month, you can make sure that Grubhub and the other companies are sending you the right amount of money for the transactions that have taken place. That’s been a really important feature of SpeedLine.”
Kevin: “I have to agree with you there. That is a huge plus to have each button assigned to each different third-party company.”
Elliot: “Well, the next question, which is a big one, is for Kevin and Michael. When does it make sense to handle your own delivery versus using third-party delivery services? Kevin, let’s start with you.”
Kevin: “I’m always trying to do the deliveries myself. With pizza, a lot of the this-party delivery companies don’t even have a hot bag when they arrive. They don’t realize you have to hold the pizza straight, and do little things like that. I know my guys know how to deliver a pie, and it’s going to be hot when it gets there. I have had bad experiences with third parties.”
Elliot: “And Michael, how about you?”
Michael: “I’ve had the same experience. Interestingly, when Uber Eats launched in Chicago, I was one of their beta restaurants. They had given me such issues with the heat of my sandwich, they were doing internal probes which made my sandwiches not hot enough when they were delivered. They had heated bags that were plugged in electrically. If you have a pulse and a car, Uber Eats is going to bring you on for delivery.”
“It’s really been a challenge because customers will call you when there is a problem with their Uber Eats order. They don’t understand that I don’t have anything to do with it and they need to deal with Uber Eats. In that circumstance, it’s the best opportunity for you to win a customer over.”
“Should your customers have issues with a Grubhub order or the way they delivered it, as opposed to the food quality which would be your fault, you can get on the phone with your customer and win them over by letting them know that you have your own in-house drivers and are able to manage the process much better if they order using your online ordering app. On TacoLulu.com, your first order is 20% off. That’s where you can turn the problem into an opportunity for them to become a sticky customer to you.”
Elliot: “Brad, do you have any perspective to add on this question?”
Brad: “No, these guys are the experts. They’re the ones that deal with this every day. I think it’s interesting what Michael mentioned about converting a customer. With that bad experience for a customer, if you have the opportunity to make it right, and explain to them how they can avoid that challenge in the future, I think there’s a huge opportunity for restaurants to win over those customers and convert them over to their brand rather than being loyal to the third-party program that they were using.”
Elliot: “Another big question among our listeners, which I’ll direct to Kevin and Michael. Is it better to provide the delivery vehicles yourself, or have the drivers choose their own vehicles? Kevin?”
Kevin: “Most of my deliveries are done without a vehicle since I’m in Manhattan. So Michael might have a better perspective on this. We do a lot of deliveries by bicycles or a hand cart.”
Michael: “My internal delivery service is not branded because they’re working with 50 different restaurants. They do offer the ability to bring some of their vehicles, so I do have the triangular toppers on some of their vehicles, which is a good opportunity to market yourself.”
Brad: “Michael, have you looked into doing your own delivery? What’s prevented you from taking that leap? Is it not being able to find drivers? Is it the cost? Is it the liability? What’s happened there?”
Michael: “For me, the cost of the delivery service is $400 per month. For that, I’m taking a whole element of the business out of my lab. I don’t have to hire or fire drivers, deal with drivers not showing up to work, or do anything else related to drivers. I simply submit the order into the tablet, or the night before if it’s catering, and voila, drivers are there and they’re clean-cut. So the delivery service is managing that part of my operations. In the pizza business, I do understand why you would have your own in-house drivers since a huge portion of your business is deliveries. It makes sense either way.”
Brad: “Hey Elliott, I just noticed a question come in. Do you mind if I read it off the screen here?”
Elliot: “Go right ahead.”
Brad: “It says ‘Hi, thank you all for the great webinar. How do you guys prepare for the online orders versus in-store orders? Do you have a separate prep line for store and online orders?’”
Kevin: “I don’t have a separate line. We just put it in altogether. Usually, online orders should come in right on time. It seems like we’re able to handle it with no problems, so we don’t have anything different.”
Brad: “So you just have a single line where you run everything through, but you mark all of your boxes so it’s very clear that online versus in-store are not mixed up?”
Kevin: “Yep, absolutely. The key is to have it all put together where we have no mistakes, whether it’s online or in-store.”
Brad: “How about you Michael?”
Michael: “We separate the tickets for deliveries and pickups. I’m not sure if SpeedLine does this, but we utilize Chowly to handle one of the biggest challenges that you’re going to see if you sign up with multiple third-party online ordering companies. You’re going to have five or six tablets that are all surrounding your point of sale system, probably in a designated area where you have your telephone.”
“The online order entry process is a sticking point, especially when you’re at a high-volume area like during lunch. Before having Chowly, I’d have a person manually confirm the order on the tablet, it would print on the printer or have to punch in all the information like the customer’s name and address as well as what they wanted. The probability of an employee making a mistake when the phones are ringing and the lines are building has been eliminated by Chowly. When those orders come in now, they’re automatically confirmed and are spit out of SpeedLine, which has been brilliant. The order is put into dispatch if it’s a delivery, if it’s a pickup, then it’s appropriately put in. The tender summary, whether it’s a GrubHub or Uber Eats order, it’s tended specifically to that third-party company. That part of the process is absolutely instrumental in being able to accommodate multiple orders from multiple platforms. That is definitely something I’d look into.”
Kevin: “I use Chowly myself, and you’re right on point with that. The mistakes that used to happen are all gone. It doesn’t cost that much.”
Michael: “It costs like $100. It’s almost laughable when you realize that you’d have to have someone standing there and there’d be so much more to do otherwise. I’m sure in New York and Chicago, it’s the same where when lunchtime hits, the lineup goes out the door.”
Brad: “The situation you’re describing is exactly why we built an integration with Chowly. We didn’t want to see our customers have to re-enter information over and over again. There’s a quick question here about whether or not we’ll share the results of the poll. Yes, we will. We’ll include those in the email we send out tomorrow for those that are interested.”
Elliot: “Okay, we have time for a couple of more. Kevin and Michael, do you charge a surcharge for delivery and how much is it?”
Kevin: “Here in the city, we don’t have a surcharge. On catering orders, we do put a 10% delivery fee on orders. But we don’t have a surcharge per order.”
Michael: “We charge $3.99 for standard delivery and $15 for catering delivery. One other element that I want to talk about, which SpeedLine has been fantastic at doing, is using their ability to include delivery boundaries. You don’t want to accept deliveries where your driver is having to drive 10 miles. In New York, you might be able to set the boundaries within four blocks. For me, I go about four miles in either direction.”
“I have seen some restaurants have multiple delivery zones, which SpeedLine is able to accommodate. So a delivery down the block might be $2, which is an incentive to order at the lower delivery fee, but an order that is 4 miles away might be $6. So with the price of gas, a driver isn’t losing money on that. So when setting up your delivery, whether you use in-house or third-party drivers, I’d lay out the territory so that you can best serve the customers within those boundaries.”
Elliot: “I think we have time for one more question. What ways do you market your delivery service?”
Michael: “We use our database quite extensively. I rely very heavily on Google Adwords to drive the catering leads.”
Kevin: “In the city, I have a lot of delis around me that don’t serve pizzas. Most delis in the city have big catering departments. So I’ve sent free pizza to all these delis and now they actually sell my pies. I give them a discount, but they sell my pies through their deli.”
Elliot: “Well that’s creative.”
Michael: “One thing I want to mention very quickly. We’ve spoken about my relationship with Taco Lulu, but if anyone in the audience is looking to franchise their business, The Franchise Edge is a franchise development company. So we can assist you in developing your delivery systems, whether they be internally or for a chain. We can assist in taking you to the franchise marketplace. I just wanted to share the experience that we bring to the table.”
Brad: “Thank you for bringing that up Michael.”
Elliot: “Brad, one more question for you. What causes some restaurants to fail with delivery?”
Brad: “I’ve watched restaurants and spent literally a thousand hours in restaurants helping them to optimize their delivery. And one of the things I’ve seen is not having an integrated system and not understanding that delivery is a very complex addition to your business. If you think about the restaurant as being a manufacturing plant, combined with the service business, and then you put it in the most expensive retail spots in the world, and then have 15-year-olds run it, it’s no wonder why it’s so hard. And then add a courier service on top of it. That’s really what’s happened.”
"We’ve spent the last hour walking through every facet of the customer experience, which are all the places where things can go wrong. There’s dozens of ways to improve all of those touchpoints, to increase the accuracy, to make sure the customer experience is good, and reinforce your brand over and over again. So you have the opportunity to delight every customer as much as possible. Underestimating the complexity of adding delivery is one of the biggest mistakes that restaurants make.”
Elliot: “Okay, well that brings us to the end of our time here. I want to thank the panel for your participation, and I want to thank everyone who was tuned in to listen to this very interesting webinar. This has been 30 Days to More Profitable Delivery, sponsored by SpeedLine Solutions. Thank you.”
