Growing the Online Component

Photo by Josh Keown online orderingAngelo Halakos, owner of Seasons Pizza, was skeptical about online ordering at first. He wasn’t sure it would actually work, and then there was the fee to consider, reasonable though it was. Even so, Halakos, who owns 28 locations primarily in the Newark, Delaware area, decided to take a chance.

“All the big chains had it and were doing very well with it, and this got me interested,” he explains. “I thought, ‘why not us?’ ” He tested the program in a few of his locations but soon found it was working so well that within a few months he rolled it out to all of them. Now, seven years later, about 27 percent of his overall orders are placed online, a figure that has increased by at least five percent annually.

One benefit Halakos noticed almost immediately was that the average online ticket was $2 higher than phone orders. According to Duessa Holscher, marketing director at Granbury Restaurant Solutions, ticket averages are typically higher because customers can take their time exploring the menu online, placing and customizing their orders. This isn’t the only advantage online ordering offers, says Holscher, whose Grapevine, Texas-based company provides technology solutions.

“Operators also find online ordering reduces labor costs, as employees don’t have to be tied up taking phone orders,” she explains. “It also improves accuracy, as orders come in exactly the way the customer entered them. And online systems have excellent suggestive-selling tools to help maximize orders.”

Online order also leads to higher customer satisfaction, says Moe Taleb, owner of three Zig Zag Kitchen restaurants, all in Chicago. Taleb began offering online ordering in 2003 primarily because the catering side of his business had really taken off and he wanted to give these customers the option of ordering at any time. But it’s also popular with his non-catering clientele.

“Customers love it,” says Taleb. “They like not having to deal with placing orders by phone and they like having an e-mail confirmation receipt for their expense reports or taxes. And it’s nice for us to have the information in written form and not have to struggle taking it all down over the phone.”

Online ordering saves time for everyone involved, says Sy Bor Wong, business development for Brygid Technologies Corp., a Vancouver, Canada-based company specializing in e-commerce solutions for restaurants. “On average, it takes two to three minutes or less to submit an online order,” he says. “But it may take five to 10 minutes or more to place an order over the phone, especially on those busy Friday or Saturday nights.”

Taleb says about 25 percent of their business is done online, generating an average of around 600 orders monthly. Online orders are e-mailed and faxed over, followed up by a phone call from their service provider. Brian Fitzgerald’s online orders come to him in the same way; once received, he enters the orders into his POS system. Fitzgerald, owner of Primavera’s Pizza Bistro in Morris Plains, New Jersey, has offered online ordering for 15 years.

At first, just three or four orders a week came from his Web site, but this quickly turned into a few orders a day until by the second year, they were doing $200,000 annually in volume, he says.

“Morris Plains and the surrounding area are home to some of the largest corporations in the world,” says Fitzgerald, explaining that delivery, takeout and catering comprise about 70 percent of his business. “I found my corporate administrators ordering online more frequently and by the fifth year we were receiving close to 1,000 a day in lunch orders.”

One of the main mis-perceptions about online ordering Wong encounters is the idea that it’s out of reach for all but the larger chains. Perhaps that was truer in the past, but now, the growing number of online ordering companies entering the market has made for a much more price-competitive environment, he says. “Also, the cost of technology and economy of scale helps make this solution affordable for everyone,” Wong adds.

For example, in addition to an initial modest fee for modifying his Web site to enable online ordering, Taleb pays $1 per order, regardless of the order amount (if he falls below the provider-set minimum of 30 orders per month, there’s an additional charge). Halakos says that everything with the company he uses is pay as you go and consists of a small per-order charge and a percentage. What he likes about this is that he can end his association with his provider at any time.

Halakos advises those just starting out to negotiate the percent of the service charge. “For example, three percent of 10 orders is not a big deal,” he explains. “But down the road, three percent of 200 orders is a big deal. Companies are willing to negotiate,” Halakos adds.

But don’t buy on price alone, Wong cautions. Consider the quality of service, reliability, scalability and user-friendliness of the technology. “Customer loyalty is very sensitive,” he warns. “If they have a bad online ordering experience, more likely than not, they won’t order again.”

Tips for Success

Along with the already-mentioned benefits, online ordering enables restaurants to collect e-mail addresses and customer data, allowing for inexpensive e-mail marketing. But you first have to get your customers to use it. Try:

  • Promoting it everywhere, says Duessa Holscher of Granbury Restaurant Solutions. “Many restaurants have even removed their phone number from a prominent spot in most of their advertising and collateral,” she says. Don’t overlook box tops, menus, even on-hold messages.
  • Kicking it off with specials or incentives to encourage trial, Holscher suggests.
  • Gearing your Web site and online ordering towards the non-tech savvy, making it easy to navigate and use, says Brian Fitzgerald, owner of Primavera’s Pizza Bistro.
  • Going mobile, says Holscher. “A majority of Google searches for restaurants take place on mobile devices,” she says. “Be sure that your online ordering system works well on a mobile device; or you may want to offer a specific mobile app for downloading.”

Pamela Mills-Senn is a freelancer specializing in writing on topics of interest to all manner of businesses. She is based in Long Beach, California.

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