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Loyalty left behind in third-party delivery deals

While there are certainly a number of backend challenges when it comes to partnering with a delivery service, there’s another problem area: loyalty.
hand loyalty card

Food safety and quality control are certainly top of mind for operators when it comes to third-party delivery partnerships. But there’s another real struggle that’s impacting guests, and it doesn’t appear to have a solution yet: loyalty.

At this point, the vast majority of third-party services don’t link into restaurants’ POS systems, let alone their loyalty programs. But with millennials often equating value to the ability to earn free stuff through loyalty programs, does partnering with these services put restaurants at a disadvantage with this fickle clientele?

Operators are between a rock and a hard place. Consumers are growing to expect delivery—already, 19% of the food millennials and Gen Zers order from restaurants is for delivery, according to Technomic’s Generational Consumer Trend Report. And at the same time, while loyalty isn’t necessarily driving traffic—just 30% of consumers visit certain restaurants over others because of rewards programs—hasn’t loyalty become tablestakes?

Right now, the National Restaurant Association is working on establishing some best practices on the operational side with third-party delivery companies. Cicely Simpson, EVP of policy and government affairs, suggests operators focus on details such as contracts, intellectual property, food safety practices, and addressing “bad actors” and consumers. But doesn’t part of focusing on the consumer mean meeting their expectations in terms of what they earn for choosing your restaurant over another?

While Restaurant Business has heard representatives of some of these third-party delivery services say they are actively looking at ways to build their own loyalty programs that could integrate into a restaurant’s POS system, the companies only seem interested if they become the brand’s exclusive delivery partner.

This solution creates a couple of problems. One: Most operators do not want another loyalty program to have to deal with on the back end, especially when they already have at least that one customers have become accustomed to. And two: The exclusive delivery partnership means limited exposure. While certain deliverers are popular in some parts of the country, others have a larger following elsewhere—meaning an exclusive deal isn’t necessarily ideal for national brands.

Unfortunately, there is no clear solution out there in the conversation at the moment, or even an in-the-works idea that really solves the problem. So as operators are shopping around and meeting with these vendors—the companies who are trying to get your business—is this something to start pushing for more? Will it take demands from the top chains to force these companies’ hands into building something with smart integration that doesn’t take away from the loyalty experience? 

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