Online Delivery Services Are Eating Your Lunch

22, Jan. 2019

The Problem: You’re rapidly losing market share and share of customer to online aggregators and delivery services and paying for the privilege with loss of brand equity and customer interaction. Q: How can you stay in the online order game while retaining the customer relationship with your brand? A: Loyalty Programs.

Food Delivery Services Eating Your Lunch

Delivery Aggregators Fees are Killing You, Right?

You know the problem all too well. Online food aggregators (think Ritual or Grabb) and delivery services (Skip the Dishes and Foodora, we’re looking at you) are eating your lunch – to the tune of somewhere between 5 and 30 percent on each order. Sure, you’re passing some of that cost on to your customers…but are they really YOUR customers anymore?

Your customer relationships are being slowly eroded by the loss of brand touchpoints that the online aggregator and delivery process circumvent. It happens every day – a loyal customer goes onto a food app LOOKING TO ORDER FROM YOU and ends up chowing down with your competitor. Not only have you lost the sale, you’ve lost your customer’s loyalty, jeopardizing future orders. With online aggregators and delivery services your fate is sealed: you’ve become a supplier to the online food industry, no more than a ghost kitchen at the whim of customers you never meet, don’t get to talk to, and who are encouraged, through the food aggregator and delivery apps, to trial…elsewhere.

How Does a Lowly Restaurant Fight Back?

In a word? Loyalty. In two words? Loyalty App. You’ve got to create customer loyalty in order to protect your valuable relationship with your customers. You need them to feel compelled to return to your store again and again, in the face of the lure and temptation of a wide array of online delivery options. A loyalty app can deliver just that, incenting your customers to stay loyal – by giving them opportunities they can’t get through the other guys.

Putting the Bucks in Starbucks

If you drink coffee, you likely have the Starbucks app on your phone. You may have even used it. What loyalty apps like Starbucks do, more than anything, is keep your customer YOUR OWN, carving out your space and share of customer. With ease of access, advance ordering, repeat order convenience, and loyalty rewards, it’s a coffee drinker’s dream. With increased customer retention, comprehensive customer data (including buying habits), a permission marketing vehicle, and brand real estate where it counts, it’s every marketer’s promised land. Companies like Starbucks know that if you can successfully deliver rewards through mobile, you’re almost all the way towards winning the battle for customer loyalty.

So How Does Effective Loyalty Work?

With the help of companies like Smooth Commerce, you can build your very own loyalty app, creating a custom program that is as unique to you as you want to make it. Want your customers to order ahead and be able to skip the line? No problem, your program can even let them pay ahead of time, and store their favourites for future orders, making life easier for them, and for your staff, and reducing your wait times in your stores. Want to segment your customer base for seasonal or data-driven promos? You can target based on ordering preferences, demographics, or anything else you’ve collected from your customers over the lifetime of your relationship. Pre-loaded accounts? POS integration? Seamless payment? Yes, yes, and yes. Win customers back through promo, push notifications, social campaigns, or integration with email providers. Win their loyalty.

But My Sales Through the Delivery Services Are Crushing It…

You might think you’re gaining new customers through third-party delivery apps, but often they’re the same customers who used to call you directly. Increasingly, customers are becoming trained to simply order through these services, giving them the opportunity during the process to find something different to eat, and handing over your valuable client info, and relationship, to someone else. We know you need to be in the delivery ecosystem, but a loyalty program can begin to encourage your true Rockstar customers to deal with you directly…and reap the rewards.

Where Do I Start?

There are two important components to an effective loyalty program. The first is an agency that understands your industry and can help you to design and build your app on the front end. That same agency can create effective campaigns and promotions for your customer that build your brand over time. The second essential component is the loyalty engine – the ones and zeros on the back end that comprise the app, system, and database, that allow for access any time, from anywhere. Your loyalty service engine should provide for seamless integration with payment, banking, and POS systems, and should allow you to manage loyalty programs across a complex ecosystem of corporate stores and multiple franchisees. Finding an agency with an established partnership with the right loyalty engine can save you time, money, and get you building brand loyalty sooner.

Create Convenience For Your Customer Through Loyalty

Your customers are turning to third-party delivery apps for convenience; you may not be able to match that exactly, but with the right combination of rewards you can develop brand loyalty and encourage them to stick with you for the other benefits they CAN’T get from the delivery folks. After all, you’re producing the food your customer wants…delivery is just a mechanism to get it there. Reward them, and they’ll be swapping out the delivery icon for yours on their home screen.


This episode is brought to you by:

Jason Hemsworth

Jason Hemsworth


Jason has spent the last 30 years helping restaurant clients with marketing strategies that drive sales, inspire trial, and build brand loyalty. He would love to talk to you about creating meaningful connections to your brand through loyalty programs.

Contact Jason

Kevin Hemsworth



Kaitlin Thatcher



Sierra Katrian




The Proof

We’ve done this before. And chances are, you’ve seen our work in action. Basil Box, South St. Burger, and Swiss Chalet are all great examples of how we’ve worked with our clients and vendors like SmoothCommerce to deliver custom loyalty programs:

Like What You Heard?
Sign up below and never miss a beat.