The number of orders that customers are placing through their phones is increasing every day. While websites for every restaurant have become a standard and are still an effective portal to drive online sales, their usage is declining. These days the most convenient way of ordering food online is through a mobile app.
Here we will compare the pros and cons of launching a branded mobile restaurant app with joining a third-party delivery app. We’ll also discuss which approach will work best to drive your sales and maximize revenue.
Pros and Cons of Branded Mobile Apps
Branded mobile apps are apps that are run by the restaurant and represent the brand of the restaurant. The initial cost of designing and launching such an app is more. That is what most business owners focus on and opt out of this option. However, there are benefits of a branded mobile app that can be worth investing in.
Pros of Branded Mobile Apps
Here’s a look at the pros of branded mobile apps.
- No Competition
If you are using a branded mobile app, the only restaurant that it features is yours. Your restaurant will be one of many in whatever category you are featured in a third-party app.
- Control Over Your Branding
You can control your branding completely. The design of the app can be such that it gives your customer a taste of what it’s like to dine in your restaurant. You can’t do that with third-party delivery apps as they have complete control over the interface and design.
- Customer Data
Now, this is the best benefit branded mobile apps have to offer. You get to keep your customers’ data and therefore market to them on a personal level. Personalized offers that are based on your customers’ past purchases are far more effective at making them your repeat customers. You can cater to their individual need and establish a connection to gain customer loyalty.
- Control Over All Aspects
You get to control every aspect of the process. Starting from what your customers see up to delivery, everything is in the restaurant’s control. If there is any issue, you can respond quickly as you know exactly what went wrong. This is important in retaining your customers. As a customer who has had a bad experience is highly unlikely to order at your restaurant again.
Cons of Branded Mobile Apps
There are several disadvantages as well. They are listed below-
- Hard To Get Downloads
This is by far the biggest issue with branded apps. A customer has limited phone storage. It makes much more sense to download a third-party app where they get so many options. Customers are not in the habit of downloading individual restaurant apps, The only customers that are likely to download your app are those who already order from you frequently.
Getting new customers to download your app is not easy. The best way to mitigate this is to offer special discounts for using your restaurant’s app to order, referral code reward campaigns, and special loyalty programs.
- High Initial Cost
Making and maintaining an app is costly.
- Training and Hiring Employees for Delivery
You’ll have to spend on additional employee salaries and training programs.
Pros and Cons of Third-Party Delivery Apps
Third-party delivery apps get millions of downloads. They’ve become closely integrated with modern life that most people reach out to their phones these days to place an order. The pandemic has only accelerated the rise of mobile ordering.
There are lots of ways in which third-party apps can boost your business. Let’s discuss them here.
Pros of Third-Party Delivery Apps
- No Initial Cost
To get registered on a third-party app, restaurants do not have to pay any additional fees. If your business is small or new, you probably want to limit your expenses. Third-party apps allow you to reach a customer base you’d otherwise have no access to.
- Easy to Acquire New Customers
Third-party apps come with their own sets of loyal customers. You can register in the most popular ones and tap into that market. These apps come up with many marketing schemes to attract even more customers. You can leverage their popularity and bring in business.
- Delivery is Taken Care Of
Third-party delivery companies have trained employees who take care of delivering your restaurant’s food to the doors of your customer. These companies are delivery experts and are very efficient.
- Access to Additional Resources
You can get access to resources and experts that your restaurant cannot invest in. Delivery tracking, various payment methods, delivery systems, and many other such resources are costly or time-consuming to manage.
- Shared Service Accountability
Your restaurant and the third-party app will both be accountable in case any issue arises. Having two brands attached to an experience confuses the customers as to which one to hold accountable. But with a branded restaurant app, you are solely responsible and your name is strongly associated with any bad experiences.
Cons of Third-Party Delivery Apps
- No Control on Visibility
You have no way of controlling your visibility in a third-party app unless you spend extra dollars to be featured heavily by those platforms. Even when customers actively search your restaurant’s name, third-party apps show other similar restaurants to the customers along with yours.
- High Commission Rate
Restaurants have to pay anywhere between 15-30% of their revenue. Needless to say, that can eat into your profits.
Branded Mobile Restaurant App Vs. Third-Party Apps- Which One to Choose?
If you run an established restaurant with many loyal customers, I’d recommend you to use a more blended approach. Investing in your restaurant’s app can lead to long-term benefits. But, if your business doesn’t have a huge customer base and is new or on the smaller side, you should stick to only using third-party delivery apps.
It is getting tougher each day to stand out in the restaurant industry. Having a website is now only the bare minimum you can do. Having a way for your customers to order through an app is essential to stay in the game.