Ready for a Restaurant Delivery Service Downturn?
Four strategies for navigating an uncertain economy and keeping your RDS afloat.
The restaurant food delivery industry has been talking—and worrying—about inflation since March of 2022. And virtually every industry is preparing for the likelihood of a recession in the next year or two.
It’s been a while since our last recession—and it was a big one. It’s natural for business owners to feel a little anxious about the future. Thankfully, there’s a lot you can do to prepare your restaurant delivery service (RDS) for what’s ahead. Here are four strategies to consider:
Cut back on extra spending.
As the saying goes, you have to spend money to make money. But there’s usually at least one area where you can cut back a little. For example, if you were planning to replace all your insulated bags, you might decide to hold off. Or you might just replace a few at a time. In any case, be cautious before spending a lot of money at once. You may need that extra cash down the road.
You might also consider cutting back on your hours. Are there any pockets of time throughout the week that are consistently pretty slow? Do the math and see if it’d be worth simply changing your hours. Many businesses did this during the pandemic, and some have yet to return to their old schedules. As long as you’re communicating changes with your customers, this can be a good strategy for saving money.
Experiment with new marketing initiatives.
Here’s the nice thing about the food delivery business: Everyone has to eat! There’s virtually no limit to how many potential customers you can have. So don’t be afraid to test out some new marketing strategies. Have you ever tried to target college students? Are you strategic about major food delivery holidays?
And don’t forget about the basics! Stay on top of email newsletters and your social media accounts. Bringing in new people is important, but your existing customers are your most valuable asset. Don’t let them forget about you.
Raise your prices.
When inflation is high, doing business costs more. Many companies respond in kind with modest adjustments to pricing. Domino’s has already increased the price of its most popular delivery deal by $1, from $5.99 to $6.99.
Some business owners may hesitate to raise prices for fear of upsetting or losing customers. However, most customers are happy to pay a little more, as long as price increases aren’t too dramatic or sudden. The restaurant industry tends to follow these two basic rules:
- You can increase prices two to four times per year.
- Each price increase should be under 2%.
With this strategy, you could increase your prices by nearly 8% in a single year without alienating customers. Opting for the maximum year after year may not be your best strategy. But if you’re smart about it, you can stay on top of inflation without ruffling feathers.
Use technology to your advantage in a restaurant delivery service downturn.
Have you heard the famous story about the American Airlines olive? Back in the 1980s, their leader, Robert Crandall, was looking for creative ways to cut costs. He discovered that the company could save thousands by removing just one olive from every salad they served. Depending on who you ask, that simple change saved somewhere between $40,000 and $100,000 in a single year.
A small business may not be able to save at quite that scale, but the principle remains true. One or two small changes can result in much larger savings than you might expect.
Restaurant delivery software can be an incredibly powerful tool for identifying these opportunities. You might pull a report to find which restaurants are most profitable for you. You may discover that a certain neighborhood always slows down your delivery times. There is virtually no limit to the custom reporting at your fingertips. And this information can help you make powerful changes and keep your business afloat.
DataDreamers understands the need for quality data when making decisions and running a business. Our restaurant delivery software is designed to optimize every step of the process. From menu creation to driver communications, every module is designed for ease of use.
To see DataDreamers in action, schedule a demo >