Cost-saving has emerged as a crucial strategy for restaurants striving to navigate through the current economic tightrope.
A glance at restaurant industry statistics reveals a stark reality; with notoriously razor-thin profit margins, often hovering around 3 to 5%, every dollar saved significantly impacts a restaurant’s bottom line.
Amidst this, expenses associated with third-party delivery apps have further exacerbated the financial strain.
And so begs the question: what is a restaurant owner to do in the current economic landscape?
With a well-thought strategy and the implementation of certain technologies, restaurants can maximize their profits and even reinvest savings into their business – one of these technologies being delivery management software.
Third-party platforms can rack up fees and quickly cut into profit margins. With delivery management software, restaurants can increase the efficiency of how they use their in-house drivers, and save up money on their overall delivery budget.
By leveraging such software, restaurants can potentially save a substantial portion of costs, which can then be reinvested into boosting customer satisfaction, expanding service offerings, bolstering their marketing efforts, hiring and training staff, and fostering a cycle of sustained growth and profitability.
Delivery businesses are a channel that can be utilized to increase profits in the restaurant industry, yet solely depending on food delivery apps poses a financial challenge.
The associated costs – including sign-up fees, service fees, and delivery fees levied by third-party platforms – can quickly erode a restaurant’s profits.
Beyond the financial costs, a variety of hidden expenses lurk beneath the surface, including errors in order processing, delayed delivery times, and incorrect orders, all leading to customer dissatisfaction which can diminish a restaurant’s reputation.
For starters, it gives you more control; you can mostly rely on your own in-house team when you have driver availability, and then use third-party apps only when necessary.
Working with your own drivers allows managers to devise delivery routes for faster deliveries and monitor real-time tracking.
You can then manage the entire delivery process from the kitchen to the customer’s doorstep, improving the delivery experience with your own customer feedback. Delivery drivers can be required upload proof of delivery to ensure no orders go missing.
Using delivery management systems like VROMO, you can see an increase in fulfillment rates by up to 15%, and reduce delivery times by up to 20%.
It’s also possible to expand your restaurant’s delivery zone by 3x. Plus, business owners can save a nice chunk of money, which can be reinvested back into their restaurant (read more below!).
Every dollar a restaurant can save is important, and with delivery management software like VROMO, restaurants can reduce the total cost of delivery by up to 24%.
Papa Gino’s, a pizza chain with over 100 locations, needed to improve its delivery business to support its loyal customer base that had shifted towards online ordering.
After implementing VROMO’s delivery management software, they started using automated dispatch for overflow orders during times of peak demand to a third-party fleet.
They were able to ensure their in-house drivers got first priority and reduced their delivery costs by leveraging our incredible delivery partners.
The upfront costs of opening a restaurant are massive, so thinking about doing any renovations while facing bank loans and startup costs might seem daunting.
In fact, this may not even have crossed your mind…
But while you may not be able to complete a full restaurant renovation, saving some money from delivery costs can still allow you to reinvest back into your restaurant business for the better.
Here are just a few ideas of how you can reinvest the delivery budget that you save by using a delivery management solution…
Investing in modern kitchen equipment and infrastructure significantly contributes to the operational efficiency of a restaurant business, as well as the customer experience.
Upgrading to high-speed ovens can expedite cooking time, and improve consistency and quality of food.
Integrating energy-efficient appliances can substantially reduce energy consumption and lower operational costs (while promoting sustainability!).
Restaurant robots can streamline both the kitchen and dining area – there are robots that can take orders, deliver food, make pizzas, prep food, and wash dishes.
The list goes on…
A marketing strategy can be an incredibly effective tool for restaurants to reach new customers and retain existing ones.
Restaurants can allocate funds to a variety of marketing campaigns, including:
One type of marketing that has grown increasingly important over the past few years is loyalty programs.
These can range from simple punch cards to custom apps, and are instrumental in retaining restaurant customers and increasing their average spending.
By rewarding loyal customers with perks such as discounts, complimentary items, events, or priority reservations, these programs encourage repeat visits, build a sense of belonging, and ultimately boost the business profits.
With VROMO, customers receive a personalized text message and a link where they can access real-time delivery tracking for their takeaway order and driver.
From this link, they can also receive promotional offers and coupons for your restaurant, increasing the chances of them turning into a repeat customer!
If you’ve seen the show Restaurant Impossible, you know how much the ambiance of a restaurant can affect the customer experience, as well as profits!
While amazing food and great service should of course be the focus of your restaurant, ambiance is also a “make it or break it” factor when it comes to dining out.
While you may not need a full-on restaurant renovation, you might consider changing the lighting, giving the walls a paint job, or updating the interior design.
If you have the space for it, adding outdoor seating or a patio is an option.
Bringing in entertainment like live music or a trivia night is another way to enhance the dining experience and exceed customer expectations.
Expanding the menu or introducing temporary specials can have a significant impact on a restaurant’s ability to draw in new customers and keep it exciting for the regulars.
Diversifying the menu to be inclusive to certain dietary restrictions (like vegan, gluten-free, etc.) can draw in a whole new demographic that hasn’t dined with you before.
Adding a beverage program might be the next smart investment for a restaurant. Alcohol can provide impressive profit margins, and having an espresso machine can be a huge draw for your diners.
Limited-time specials, on the other hand, create a sense of urgency and excitement, encouraging both regular and new patrons to visit while they have the chance.
This might include incorporating seasonal ingredients in your menu or featuring holiday-themed dishes.
Skilled and well-trained staff are one of the pillars of a successful restaurant. To provide exceptional service to customers, training and supporting your staff is often key.
Even if your staff is already amazing, training programs, workshops, and courses can equip staff with new skills and expertise needed to excel in their roles. It’s also a way to provide new opportunities for your employees, increasing the likelihood of staff retention.
Well-trained staff enhances customer experiences but also contributes to smoother day-to-day operations, minimizing errors, and ultimately boosting the restaurant’s reputation for excellence.
This could also be an opportunity for you to hire your own fleet of drivers to make your delivery operation first-party, rather than 100% relying on third-party platforms.
If you’ve been feeling short-staffed, reinvesting saved costs can be used to bring on new employees. Or, it may be time to add a totally new job position, like a pastry chef or bartender to continue to add value to your business.
Facing economic pressures and tight profit margins, it is imperative for restaurants to prioritize cost-saving strategies, especially through efficient delivery management.
Harnessing the capabilities of delivery management software can improve the entire delivery process and also trim down third-party delivery service fees, allowing restaurateurs to reinvest in their businesses.
While you may not save hundreds of thousands of dollars here, you could save up to 24% in operational costs, allowing your restaurant to upgrade technology, enhance the customer experience, and improve staff training and retention.
Restaurant owners should seize the opportunity to not only optimize their food delivery services, but to also reallocate their newfound savings into growth and customer satisfaction initiatives, setting the stage for long-term success.
Deliver more for your customers with reliable food delivery management software that automates dispatch, improves customer experience and increases profitability with ease.