Whether you’re a new takeaway business launching, or an existing restaurant trying to reinvigorate your marketing, it would be foolish to ignore the profit-making opportunities available from online takeaway ordering.
But technology can be a costly business investment, even when using an existing ordering platform, with restaurants paying start-up fees and continual commissions on each order placed online.
So, when we compare the different marketing tactics for your takeaway restaurant business, which is more cost-effective, the old way or the new?
The Growth of Online Ordering
According to 2015 figures from Euromonitor International, British consumers are expected to spend almost £8 billion a year on takeaways (Source: Guardian) by the end of the decade.
This increasing popularity of home delivery meals – despite a rising trend of “healthy eating” – has been cited as the result of widespread smartphone usage and busy households cooking fewer meals from scratch.
Digital advancements have done much to help the restaurant industry as a whole to grow with 70% of smartphone users saying they view menus on their phones before visiting.
Yet the use of tech in restaurant marketing is relatively new. A big section of the industry still operates overwhelmingly offline. 51% of all Google searches on mobile are for restaurants, yet as few as 5% of restaurants have mobile-optimised websites.
The option to order takeaway food online is certainly growing in popularity with customers who want the convenience of home delivery, as big brands like Domino’s Pizza report their order rates soaring (75% placed online and 61% of those made using a mobile device).
It’s easy to understand the rise when you look at it from a customer point of view – ordering online is easy and convenient. Using an aggregator app brings even more benefits, allowing customers to research all the local takeaway options, read reviews, order and pay, all in the one place.
Europe’s biggest restaurant “middle man” JustEat – which aggregates local takeaway options for users – has experienced significant growth. It is the market leader in 12 of the 13 territories it operates in. But even Just Eat themselves estimate that six out of 10 UK orders are still made by phone call (Source: Telegraph).
Traditional Takeaway Marketing
The usual way to ensure local customers had access to both your restaurant menu and telephone number was by delivery of flyers, direct to homes. This marketing tactic consists of three main pieces of work; menu design, menu printing and distribution. While none of these take place online, they still require investment.
When it comes to design, a day or two of a freelance designer’s time might cost around £350 (unless you know someone willing to do it free of charge), providing the project doesn’t involve additional photography.
The costs of printing menu flyers can also vary as you may need unusual shapes, sizes or paper quality. But a good estimate would be the price of printing 5,000 A5 flyers with a traditional B2B trade printing company comes in at £172.
Finally, you need to get the flyers into the hands of potential customers. The general consensus is that the average market for any takeaway offering is somewhere between 5,000 – 25,000 homes depending on how built-up the area is (in terms of urban versus rural). The houses that fall within the 5-mile radius circle around your business is where those homes will ideally be located.
If you want to save your time and outsource the job, then the practical act of delivery can be carried out one of three ways; by an employee, by Royal Mail or by a specialist delivery service.
An average 18-year old’s wage is about £6 per hour and they could realistically deliver 1,000 flyers in 10 hours of work. Royal Mail charge similarly – £61.95 per 1,000 flyers (although these would be delivered in with other mail, remember). Specialist leaflet distribution companies charge between £25 – £60 for every 1,000 flyers they deliver (but again, there is the potential for your flyer to land beside competitors on the door mat).
- SETUP TOTAL: £822
- ONGOING COSTS: Perhaps a quarterly reprint and redistribution exercise (£1,416 per year)
- AVERAGE ANNUAL COSTS: £2,238
Takeaway Order Apps
Well known ordering app JustEAT requires an initial setup cost of £699+VAT. This can be intimidating especially for new business start-ups, but the cost does cover the technology setup meaning a restaurant simply plugs in a JustEAT terminal and starts receiving orders directly into their kitchens.
JustEAT also do much of the advertising work for a restaurant. While consumers already know to go to the platform to order, they will often research new local eateries and browse new menu options, exposing restaurants to potentially new audiences (8 million monthly visitors, overall).
In order to continue using the app, restaurants then pay JustEAT 10% commission for each order value total. It doesn’t sound like much, but what does it look like in operational figures?
Well research suggests that the average UK takeaway order is around £17.82. That means that a restaurant would pay about £1.70 commission on each order. According to managementtoday.co.uk takeaway restaurants “paid an average of £725 per month in fees.”
While that figure is high, it is balanced by the fact that restaurants who use these apps see their average order values increase by 30%. It’s safe to presume that the number of orders they get increases too. In theory then, that 30% profit increase could actually offset the 10% commission fee per order.
- SETUP TOTAL: £838.80
- ONGOING COSTS: Average commissions of £725 per month (£9,538.80 per year)
- AVERAGE ANNUAL COSTS: £10,377.60
Marketing your business through direct mail to letterboxes is a tactic whose effectiveness is under debate. While often tarred as “junk mail” the Direct Marketing Association’s research found that 79% of people who received flyers read them, kept them or passed them on.
But there’s no doubt that it requires much less marketing budget than current digital methods, like bespoke online ordering, or third-party aggregator apps.
As with everything in the digital realm though, the world of online takeaway ordering is constantly evolving. From new players like Deliveroo using couriers to provide non-takeaway restaurants with a delivery option, to taxi companies like Halo or Uber, and even retail giant Amazon, entering the UK food delivery market, there will always be new marketing options open to restaurant owners.
Apps and menu flyers are just one of many ways you can market your restaurant. Most of them are extremely affordable and effective ways of taking control of your own brand marketing.
The key to restaurant marketing then, is to experiment. With relatively low costs, you can try different channels, use them to complement each other at different times, until you find the one that optimises your sales in your area with your target audience.