Food delivery wars: Why Restaurants Should Build Their Own Subscription Business and Reduce Reliance on Delivery Apps
In the modern dining landscape, many restaurants have turned to third-party delivery platforms like DoorDash and Uber Eats to reach more customers. While these platforms offer convenience and increased visibility, they come with a host of challenges that can significantly impact a restaurant's long-term success. Let’s break down why relying heavily on these platforms can be problematic and how creating a subscription model can be a game-changer for your business.
1. High Commission Fees Drain Profits
One of the most common complaints from restaurant owners is the high commission fees charged by delivery platforms, which can range from 15% to 30% per order. For restaurants already operating on slim profit margins, these fees can be debilitating. Many restaurants try to compensate by increasing their menu prices on delivery platforms, but this can lead to dissatisfied customers who notice the price discrepancy between in-store and delivery prices. In a highly competitive market, losing price-sensitive customers can be a real risk.
By building your own subscription business, you bypass these exorbitant fees and retain more of your profits. With a subscription model, customers pay a monthly fee in exchange for perks such as discounts, exclusive offers, or priority service. Not only does this create a new revenue stream, but it also enables you to control pricing without the burden of platform commissions.
2. Regain Control Over Customer Experience
When you rely on DoorDash or Uber Eats, you hand over control of a crucial part of the dining experience: delivery. Issues such as late or cold food, poor presentation, or unprofessional delivery drivers often lead to negative reviews. Unfortunately, these reviews reflect on your restaurant, even if the issue was beyond your control.
By offering a subscription service, especially for in-house dining or even your own delivery service, you can ensure that your customers’ experience is exactly as you intended. You have the opportunity to deliver consistent quality and maintain the high standards that your brand is known for, which strengthens your reputation and builds customer loyalty.
3. Take Ownership of Customer Data
Customer data is one of the most valuable assets for any business, yet restaurants lose access to it when working through delivery platforms. DoorDash and Uber Eats own the customer relationship, meaning you miss out on valuable insights about your customers’ preferences, habits, and order history. This limits your ability to create targeted marketing campaigns, build loyalty, or encourage repeat visits.
With your own subscription service, you maintain ownership of customer data. This allows you to build a more personalized relationship with your patrons by offering tailored promotions and deals that can drive repeat business. Additionally, direct access to your customers gives you the ability to launch targeted marketing campaigns, increasing engagement and loyalty.
4. Reduce Risk from Over-Dependence
Relying too heavily on third-party platforms can create a dangerous dependency. Changes in platform policies or increases in commission fees can drastically affect your profitability. Additionally, if a large portion of your revenue comes from one source, your business is vulnerable to any disruptions in that channel.
By creating your own subscription service, you diversify your revenue streams and mitigate risk. Subscriptions provide a stable, recurring income, which can be especially helpful during slow seasons. Moreover, it reduces your reliance on third-party platforms, giving you more control over your business’s future.
5. Deliver Consistent, Quality Service
Delivery standards can vary widely on third-party platforms, often depending on the professionalism and experience of individual drivers. Unfortunately, mistakes in the delivery process—whether it's late deliveries or incorrect orders—can reflect poorly on your restaurant, leading to bad reviews and a tarnished reputation.
In contrast, with your own subscription or delivery service, you have full control over how your food is presented and delivered. You can establish clear standards and ensure consistency, leading to a better customer experience and fewer complaints. Plus, offering exclusive perks to subscribers, such as early access to new menu items or discounted delivery, can further enhance customer satisfaction and loyalty.
Conclusion: Build Your Own Success with Subscriptions
While platforms like DoorDash and Uber Eats may bring in incremental sales, the high costs, loss of control, and over-dependence on third parties are serious drawbacks for restaurants. Building your own subscription business empowers you to retain more profit, control the customer experience, and develop long-term loyalty with your diners.
In an industry where every dollar counts and customer relationships are key to sustained success, a subscription model can give you the tools to take control of your future. Instead of giving away a slice of your revenue to third-party apps, why not invest in building direct connections with your customers and securing your restaurant’s financial health for the long term?
