CLOUD KITCHEN MARKETING GUIDE: Turbo-charging with direct orders

An Advanced Guide to Cloud Kitchen Marketing

Cloud kitchens are new – so new that there’s little the owners can learn about cloud kitchen marketing to ensure long-term survival and profits.

This advanced and practical guide will give you a checklist of how to market your new business by first understanding the nature of cloud kitchens and its customers, and how to use the right technologies and tools to boost direct customer orders.

Why direct orders are important

Direct orders come straight from customers. The rest come through a third-party platform or delivery companies. Let’s examine why direct orders are critical to the survival and growth of a new cloud kitchen.

The cloud kitchen dilemma

Cloud kitchens are online-based restaurants and 100% dependent on technology. Consequently, they can save on operating expenses while focusing on kitchen efficiencies and making great foods.

The big problems, however, are as follows:

The growing dependence on the third-party platforms
Reduced margins
Having zero control of customer relationships and data

Let’s elaborate a bit on each point.

Growing dependence on third-party platforms

Doordash, Grubhub, etc. are not just delivery services as they would want you to believe. They have become the giant online restaurants that spend hundreds of millions dollars to take your customers away. Once customers land on their sites to place orders, they control which customers to send to which restaurants. Their fee structure and advanced technologies are designed to maximize their profits, not yours.

If you are simply waiting to receive orders from these giants, you are giving your business – and customers – away each day. At the same time, you continue to pay for rent, staff, utilities, and all the other operating expenses.

Reduced margins

Despite the initial resistance from participating restaurants, the 30% commission cut off the top has become widely accepted. That is because every restaurant has overhead expenses that need to be paid for with or without any orders.

As a result, most restaurants impose higher prices on the delivery menu. It’s hard to know if this business model is sustainable. Everyone loses: restaurants, customers, drivers, and even the platforms who continue to lose money as they push for market share and expansions.

Zero control of customer relationships and data

The single greatest asset of a traditional restaurant is customers and their relationships. Customers choose where to go based on familiarity with foods, services, staff and locations.

All of those reasons disappear with online or cloud kitchens. The third-party ordering platforms become the new owner of this asset. They have the customers’ names, where they live, their phone numbers, food preferences, and of course the complete order history. And they won’t share them with you.

Customers will continue to receive promotional emails and other marketing messages that promote other restaurants, not yours.

The solution: Direct Orders

In order to guarantee survival and growth, cloud kitchens need to focus on building their own customer base. In addition, they need to work on shifting more orders to direct orders.

Almost all cloud kitchens start out with 100% of their orders coming from third parties. A typical 30% commission cut off the top doesn’t leave much profits for cloud kitchens, who do not have a dine-in business to make up for the loss margins. By reducing third-party orders from 100% to 90% of total sales for example, you can put thousands of dollars back in your pocket at the end of each month.

Over the course of 3 to 6 months, cloud kitchens can aim to reduce the 100% third-party dependence to half. They will not only enjoy significantly higher profits but also much happier customers.

The key to boosting direct orders

You will need to be able to:

Optimize third-party orders
Market to customers who order through third-parties
Boost customer experience who order directly
Reward direct customers

It really doesn’t have to require a lot of time. With the right tools and technologies, all the steps can be automated with little manual work.

Optimizing the third-party orders

All restaurants, especially cloud kitchens, can benefit from third-party and marketplace orders. These orders come from the giant online restaurants such as Doordask, Grubhub, Ubereats.

They charge huge commission fees and advertising costs to bring customers to all restaurants on their platforms. This investment can be worthwhile if you know how to optimize the arrangements. Think of it as customer acquisition costs – if only you can convert their orders into your own customers (more on this later).

Sign up with the big 4

Contrary to traditional wisdom, the first order of the day is to sign up with the big 4: Doordash, Grubhub, Postmates and Ubereats. Don’t be too concerned with the high commissions. Consider them the costs of marketing and customer acquisition.

Create more concepts

In cloud kitchen language, a concept equals a name and a menu. Creating more concepts means doing business under different names and menus. Your existing menu can be split into smaller menus by category or food types, for example.

In the online food service business, everything is different from the brick-and-mortar restaurant common wisdom. Online customers have no interest in your dine-in setup, printed menu layouts, or even your hospitality (you can change this later).

The more concepts you have, the more your foods will be exposed to customers when they search for their favorite dishes on the third-party platforms.

Consolidate all concepts in the kitchen to maximize efficiency

Obviously in a cloud kitchen space is a premium. You can’t have multiple tablets or printers going for the multiple concepts. Some cloud kitchens have over 20 concepts. It is crucial to have all orders come into one tablet or kitchen display system (KDS) and manage everything from it.

Once you have created multiple concepts, or online brands, the next step is to build each brand in the customer’s mind and give them a reason to order directly from you.

Marketing your new online brands

Creating a new concept (or virtual restaurant or online brand), regardless of what you call it, goes beyond just posting the menu on the giant platforms. That is if you want to boost the direct orders to boost profits and ensure the long-term growth of your new cloud kitchen.

Customers, although they won’t see your new online restaurant in the neighborhood, still need to feel that it’s a solid brand that they can trust.

Create a separate online presence for each concept

At a minimum, a virtual restaurant starts with its own website and menu that customers can order from. For online directory, you will also need to add a separate listing on Google and Yelp. For social, add a listing on Instagram and Facebook with some food photos to start.

Get a separate phone number

Customers still love to call and speak to a human being about their next meals. They want to feel connected to the place they get foods from. The right phone service can provide the human touch while integrating with your online ordering to give customers the ultimate experience.

You don’t need to get multiple land lines in your already crowded cloud kitchen. Use the right phone service and obtain multiple numbers that are routed to the main number. List each phone number on each website and the online directories above.

Prepare flyers and to-go menus

Each flyer and to-go menu will have the ordering website and phone number for each concept. Put them in the delivery bags that go to customers who order through the third-party platforms.

Use custom labels on each packaged dish

A custom label would have the following:

Customer name
What they order, with customizations
Name of the business (concept)
Direct ordering website
Phone number
Promotions (if available)

Follow-up emails

Your ordering services should provide automated emails for each order such as:

Order receipt
Status notifications
Survey
Promotions

With the right technologies and tools, all of the above tasks can be achieved with little manual work from your staff.

Stay connected with customers from behind your new cloud kitchen

There is no substitute for connecting directly with customers if you want more direct orders.

The good news is most customers want to have a direct relationship with your kitchen instead of having to place orders through a third party.

There are 6 ways to stay connected with customers and create a unique experience for them:

Easy online ordering

Give customers an easy, friendly way to order or re-order from any devices. Your site should be extremely mobile friendly and fast.

Don’t ask them to download an app prior to ordering. Make sure your site is compatible with all mobile browsers. Accept online payments from reputable credit card processing services such as Square.

Order status updates

Give customers a heads up if the wait is long. Use a virtual line indicator and let customers know their place in line prior to ordering. During the wait, they can see their place moving up, allowing them to estimate how long it would be before they hop in the car to come to you.

Send them text (or email) notifications for order receipts, when their order starts being prepared, and when it’s ready to be picked up. Customers have experienced constant updates from the large online businesses such as Amazon and even the likes of Doordash. Your direct ordering services should at least provide similar experiences.

Easy pickups

Drive up is the new delivery. Customers are opting to pick up their food more and more. This trend is prompted by the longer wait and the increased costs of food deliveries.

Give customers an easy pick-up experience and they will come back to you again and again. Offer curbside ordering and curbside pickup without having to leave their car.

Phone and text support

Customers love to call or text their favorite restaurants even when they have all the latest online ordering technologies. They want human interactions. They need information that is not on the menu.

Most kitchen staff are busy to answer the phones promptly and consistently. Use a phone and texting response system that’s tied to your ordering system to offer the best of both worlds: ordering food efficiently while feeling the personal touch.

Following up

Customers love to share how good your food is, or how it can be improved.

Offer an automated survey after each order is completed. Hear from them first before they tell everyone else if there’s a problem with an order. You can also ask them to post a positive review on Yelp or Google, which will certainly help attract new customers.

Offer a Loyalty system to reward repeat customers with points, which can be redeemed for future purchases. Let customers know you want them back.

Social

Be as active as possible on Instagram and Facebook. This is the go-to place for many users when they look for the next meal idea.

Many restaurant owners are too busy, or don’t know how to post on these popular social platforms. Use a service with restaurant experience to post for you if necessary.