 Hello ACEs, welcome back to module seven, lesson number three, increasing your sales through food delivery apps. In this lesson, you're going to learn about the five ways to increase your sales through delivery apps, leverage them for your good. And what are food delivery services? For those of you that don't know what food delivery services are, these guys are basically apps that puts your restaurant's menu on their application. So then that way, when people order through their phone, you get notified to make the items. And after you make the items, a driver will come and then pick up your items and deliver it to your customer. So think of them as a logistical company. And typically what they charges around 35%, 15 to 35% is what we're looking at in terms of fees. So typically speaking, if you are getting charged 35% from Uber Eats at the end of the week, after you generated $10,000 in sales, $3,500 goes to Uber Eats and you only get back $6,500. Now you can actually see why a lot of people are complaining about these food delivery apps and the high commission that they charge. And once again, it's 35% off the top, off the top as in revenue guys, not profits. Now I also want to be able to share some stats with you. If you're thinking about, Hey, you know what, I'm going to wait until this whole thing blows by, you know, it's only going to be a fad food delivery is not going to stay, people are not going to be willing to pay like, let's say $5 for delivery fees. Well, on that note, I do want you to really reconsider because this is not just a thing for the younger kids. As you can see from these two charts, a lot of people are ordering it, even some of the older generation who does not understand the value of it yet and they still are ordering. So this is going to become the norm and it's not if or when it's a must at this moment. So definitely be on these apps and learn how to use and how to leverage them properly. Some of the most common food delivery services that are out on the market nowadays, there are going to be much more of them specifically in your city. So the pros, we're going to be talking about the pros and the cons and why I'm all for using these food delivery apps. Number one thing is that you don't need your own driver. Just think about it for a second. If you were to have your own driver, you're going to be paying $2,000, $3,000 a month for them to actually sit into your restaurant and to work with you. And you need to worry about their insurance. You need to worry about their vehicle. You need to worry about maintenance, the gas and on top of that, you need to worry about the fact that they usually for your food restaurant, you get the lunch rushes or the dinner rushes. How can you have one person deliver food for you when let's say you have 15 different orders all ready to serve out at the same time? And that's the reason why I truly believe in the fact of having a food delivery service because you don't need to own your own driver and your own fleet of drivers if you don't have enough volume. Okay. And I'm only talking about the typical restaurants that we're consulting and that we're talking about because typically speaking, we're not looking at 1500 orders. Like one of my friends, Mark Canless in Seattle, he has 1500 orders per day. So it's actually makes sense for him to have his own team of delivery drivers because that saves him a lot. And on top of that, it allows him to build that infrastructure out. But typically speaking for a small restaurant, having a food delivery app service and a logistical team that they set out for you is much more efficient for you. And on top of that, when you onboard these apps, you get exposed to hundreds if not thousands of new customers all the time, because people are just on their phones, browsing for specific cuisines to eat. And if your food is good, and if you have proper photos and proper pricing, then you're going to be able to have that new traffic for you. And on top of that, these apps, they spend millions if not billions of dollars in marketing costs to bring in new customers. And the insight here that I want to share with you is the fact that none of the food delivery apps are making money. They're actually losing money on a monthly basis. And the only reason why they're still in business is because they're getting a lot of investment and their whole game is about consolidation. That means that if one or two giant food delivery apps exist, they're going to turn into like the Amazon. Okay. And as you can see, Amazon, even though they charge you a prime, even though they charge you $2 shipping, $3 shipping, they are able to deliver your item within 24 hours, if not 48 hours. And that really is the essence of what they're trying to build right now, the food delivery apps. Now, again, I don't want to go on a huge tangent on that, but nonetheless, know for a fact that these food delivery apps are really, really advantageous to your restaurant. On top of that, it offsets all the sunk costs with added revenue. What does that mean? That means that regardless of people coming into your restaurant or not, and regardless of you having business or not, you still need to pay for the rent. So why wouldn't we want to be able to have more orders to offset these sunk costs? And on top of that, it's super added value during cold weather, it's poor weather when it's raining, when people don't want to go out and even in the midst of pandemic. This is the reason why having food delivery apps as part of your offerings is really, really as an advantage to your restaurant. Now, the cons is of course the high fees, and it cuts right into your margins. Typically speaking, what I was sharing with you, 15% to 35% depending on the food delivery apps. And on top of that, you don't own your customers. What does that mean? That means if you want to contact your customers, you're not able to do so. And also it has a reduced brand experience because everything goes off of these apps interface. Now, one of the worst mistake to make when using food delivery service as an option is that you see it as a profit generating item and you get upset because they charge you 20 to 30% commission and you're not making money because you're like, wow, these guys are gouging money from us. This is a big no-no. We don't see them as a profit generating item. And if we don't see them that way, we see them as a marketing tool, then automatically your position changes, your perspective changes, and you see how great of a tool they are. So then that way you can leverage them. And if you never see them as a marketing tool, then you will never treat them like that. And thus you'll always be complaining and you'll always be losing money. Rather, see them as a marketing tool that's going to generate more sales for you and more customers for you. Food and beverage margins, as I was saying, ranges from five to 10%. For some of them that have better management, it goes all the way up to 20% margins. So what does that mean? That means a 30% cut in commission cuts right into your business and to your profits. And that's the reason why we see them as a new way of generating customers. We see them as a marketing cost. That's what I was saying all along. See them as a marketing tool. Your job is to convert these new customers, a lot of them, into regulars who dine in for your food and beverage. And on top of that, you would want to convert them and entice them, bribe them into your world. Now we're going to cover the five smart ways to convert them into and how we can leverage the food delivery apps and to increase sales for you. First of all, logistics in the orders. Super crucial for you to be able to actually have logistics in order. A lot of people on board these third party apps, but then have no logistics or have no planning in their logistics. And thus in turn, turns it into a really bad experience for not just the customer, not just the staff, but also for yourself. And that's the reason why you need to and you must have your logistics in order. Make sure the proper systems are in procedures are set in place to optimize the whole delivery experience. Because when there's a missing order, because when there is an item that is wrong, because whenever there are anything that requires a refund, Uber Eats will ding you. That means that it's added costs for you. And on top of that, customers don't blame the app. They blame the restaurant. They think the restaurant messes up. And that's the reason why if you were to onboard and leverage these food delivery apps, having your logistics in order is one of the key ingredients to make it a pleasant experience for everyone. Now give you an example. Front of the house accepts an order from the delivery app on their phone or on the iPad. Then back of the house is notified. At this moment, you need to be able to ask yourself, what would the procedures be like at this moment? How is it connected to the ordering system? How are the chefs going to be notified? And when they're notified, what priorities are they given to delivery orders? Because you're going to be servicing people having dine in, dine out, and on top of that your own delivery and then these food delivery apps. And also you're going to have multiple food delivery apps that you are going to be onboarding as well. So how can you prioritize it? So then that way you're going to have the food out to the people who place the order in a efficient manner. How is it presented? How are the items presented? And on top of that, now the back of the house sets the finished item for front of the house. Where do the back of the house put the delivery orders? Because you don't want things being mixed up. Understanding the logistics and the flow would ensure a better system and better experience for your staff as well. Because they don't want to be going through 10 orders just to find the right one for the driver that's waiting to pick that up. It's going to be a really bad experience. So having this logistics set up in the beginning is also key. Now front of the house hands the item back to the driver. Where is it being picked up? Or is it going to be put in these cubby holes? I've seen Chipotle does an amazing job. They have these cubby holes, more than 50 of them. And when their order is done, they just slot it into these cubby holes. So then that way everything is organized and all they have to do is the driver comes in, presents the code, and the staff would advise them where to pick up their food. So the whole point is to make sure that the drivers are in and out. We want to maximize the whole delivery service system. Second way is to negotiate the fees. This is something that I see a lot of people afraid to do. You can actually bargain. I talked about 15% to 35% on the high end. But nowadays you can actually negotiate them down to around 20 to 25%. That means that any percentage that you're able to negotiate goes into your pockets. These guys are profits, okay, right up the top. So that means every percentage counts. Don't be afraid to ask for negotiation and ask for a lower rate, especially during this time. A lot of these food apps will work with you. You should also choose dishes that are easy to make and have much higher margins. Work on your profit center. Go back to the module that talks about how you can craft your menu because this is a really key item in order for you to maximize your profits. Now as a bonus, you can also create a separate delivery menu that Arcator to Delivery Service. Why would you want to do that? Well, the reason why is because you want to put in menu items that have the highest margins and also easiest to make and also travels well for your customers. Once again, work on the higher margins items. And on top of that, I'll give you an example. If it takes you 40 cents and bake it brownie, okay, and you're selling them for $5 a piece, then definitely include that into your menu item because of the fact that this is an ultra high margin item. It is very, very in high demand as well, especially as a great add-on for your meal. Definitely go back to the module that we talked about crafting your menu and choose the ones that has high margins and high popularity. Now a third way is to don't pick based on numbers, okay? What I mean by that is don't pick an app just because of the fact that they're cheap, just because of the fact that they are giving you a better commission rate. Because sometimes choosing the lowest in fees isn't the best case because it's not the best experience for your customers. They don't do as much promotion. And on top of that, they just don't have enough people on their apps. So sometimes paying that extra 5% is worthwhile for you to invest with them as well. And some things that you should also look into is whether they have a great user interface. If the app doesn't have a good interface, that means that the customers ordering from them would not like to order from them. They would actually look for their competitors. So for me, I personally don't like ordering from Uber Eats because I don't like the way their interface is. I don't like how they structure the delivery fees. I love using DoorDash. I love the dash pass because it seems like I'm saving a lot of money. But in reality, when you do the math, when you do all the calculations, it comes up to be relatively the same, okay? Choose an app that is easier to use, appealing, and has a frictionless experience. It doesn't push people away from you. That is one of the keys. And on top of that, making sure you choose an app that has an efficient food delivery process. Because once again, when people order from you, you would expect your customers would expect the food there within 15, 20 minutes. And that's the experience we want to be able to deliver. If the app doesn't have that infrastructure, if their drivers for those apps are not incentivized that way, then sometimes orders take 45 minutes, 50 minutes to deliver. And when your customers receive it, not only does the food quality go down, but also they'll blame you, the restaurant for preparing the food so late. And that's the reason why choosing one based on price is not always the most optimal case. Okay, make sure that the drivers are well trained, polite, food arrives on a timely manner. This all comes back down to the experience. Next up, number four, keeping good quality at maximum. What does that mean? That means you need to check all your menu item to make sure that they're good for delivery, because fries may be good right up fresh, crunchy, and tastes great. But if it's in a container delivered for 30 minutes, what would it become? It would become a soggy piece of mess. And that's the reason why I would never ever recommend my students to serve fries as a delivery item, because it's just not the greatest quality. Even if you specialize in fries, okay, that is a really, really bold statement. Because if the product is no good, why do you want to serve it? You don't have any incentive to serve a bad product. Do an internal test run to see how your product looks and tastes by delivering your food to your friend after 30 minutes. Okay, if after 30 minutes, the item is still good, then you have passed the test. If it is not, then make sure you tweak and only offer products that has the best quality. Because once again, think about it, so many restaurants are now on these apps. So that means if your food is not good, if you don't have a pleasant experience for your customer, they directly link it back to your restaurant and the experience that they have with you, and they're not going to choose you again. And sometimes you only have one chance to prove yourself. Lastly, we talked about converting them. We talked about not seeing them as a profit center. We talked about seeing them as a marketing tool. How do we do that? We need to convert them. These customers are coming in because of the app. So think about their journey, about what the customers go through. They're hungry, they're looking for some really good Vietnamese food, so therefore they come into your app and then they select your restaurant. So what do you do? You convert them into your regulars by bribing them, because why would you want to do that? You want them to come in as a regular so they order from your site, so then they order for pickup, and then they order for dine in, because that's when you see that bigger margin that you can keep as your profits. Now, how do you do that? I always talk about bribe, right? Ask them to add you on social media so that way you can own your customer, so then that way you can market to your customers whenever you have deals, add them into your world and bridge that culture that I always talk about. Now, how do you bribe that and allows you to nurture the relationship? You need to be able to slip in bribes. We're talking about either having percentages off for your next time visit or having a free appy or free drink, or even having a $5 off, $10 off for the next dine in service. These are all really, really great bribes for your potential customers that you're changing and converting them from a meal kit or delivery app customer into a dining customer that gives you the margins you're looking for. Ultimately, what we want to be able to do is even if they just order from your app, you're not going to be losing money. That's how good of a menu you want to be able to create. Now, after you convert them, when they come in, you're going to be making much more margins, and that's the reason why having these bribes and having these $5 off, $10 off, or even an appy or drink is really, really effective because just think about for one second, even if they come in and they spend, let's say, $50 with you and you give them a free appy at your cost is probably what? $4, $5, that is only 10% of the revenue that you're going to be generating, whereas if your customers order from these food delivery apps, they will still be paying 20 to 30% margins, and that's the reason why you can give an afford to give these different types of bribes to your customers. And ultimately, what you can also do to bribe them is to have them do contests, viral contests, so then that way they are much more engaged with your brand. Now, you are whole goal here is to get them off the app and onto your food and beverage establishment. That's the whole goal here. So be creative and be innovative when you're crafting these whole experiences. In the next lesson, we're going to cover how you can actually create a viral contest. So once again, in this lesson, we learned about logistics in order, negotiate your fees, don't pick apps based on pricing or the commission and making sure that you keep your food quality at a max. And also lastly, make sure you convert them. When you put all these things together, you have created yourself a bulletproof food delivery item and system. So then that way you can go to market properly and be able to benefit from them. A lot of people skip this step and everything adds up together. Okay. If they skip this step, this is two, three percent. If they mess up in the logistics, they're going to lose customers. And in turn, it would cost them more money. And here, same thing right here. If the experience is not good enough, then it's not going to be a pleasant experience for your customers. These items that I'm sharing with you might seem simple, might seem like it's a given, but believe it or not, not a lot of people focus on stacking and doing this in the perfect manner. When you have done this perfectly, that's when I've seen some really incredible results that they are one of the top hosts that they have a dozen reviews all the time, positive reviews all the time. So once again, have your secret menu as well. Now it is your turn to go out there and create your five ways and you actually go and implement these ways to have your food delivery services. And if you need the resources, go into the link below, download the resources, so then that way you can follow along. What you have learned right now is the five ways to leverage the food delivery services to increase your sales. And next up, we're going to be talking about how you can create your own very own viral contest to 10 times your social following. I can't wait to share this with you. I'll see you guys in the next video.