By Alex Yakubovich

When Papa John’s invested in online ordering in 2001, many looked upon their marketing and information-technology management as foolish, if not downright mad. As is now well known, the gamble paid off handsomely with the base of online ordering customers achieving a 50 percent annual growth rate, and it is expected to grow even faster this year. The company reports that online customers appreciate the convenience so much that 75 percent of them return to order through the system again, comprising up to 20 percent of some locations’ orders.

With many industry pundits singing the praises of online ordering and experts claiming how it is the new wave in quick service, it is important to know where it will and will not work. This article aims to answer the fundamental questions of which restaurants might consider online ordering, why it is important, how to implement it in any restaurant, and how to avoid common online ordering mistakes.

Online Ordering Demographics

Restaurants that should consider online ordering possess two main characteristics. The first trait is correct location. Online ordering’s prime demographic consists of people with constant access to high-speed Internet service. College locations, densely- populated, middle- to high-income populations, and large business communities are a few examples of places where online ordering systems thrive because of high broadband penetration rates.  Studies show that well over half of broadband Internet users prefer to order things online than over the phone.  Considering that more than two-thirds of Americans have broadband access at home or at work, this is a powerful demographic to target. Also, not only is this population predisposed to order online, they also make up the population driving the growth in takeout ordering rates. This is because, on average, this group is more educated, affluent and less inclined to cook.

The second characteristic revolves around restaurant concept type. If 15 percent or more of a restaurant’s revenue is takeout or delivery orders, then online ordering could be one of the most effective methods to boost business. This is because online clients are often the most loyal and thankful for such customer service efforts. Additionally, as a consequence of employees saving time on the telephone, they will be able to fill orders significantly faster and with higher accuracy. This, of course, makes customers happier which helps to facilitate increased returning customer rates and increased overall profitability.

Possessing either one of these two criteria warrants serious consideration of online ordering implementation. If a restaurant does not fall into either category, the management’s investment dollars can most likely be better spent on other initiatives.

Several important reasons exist for restaurants with the aforementioned criteria to implement online ordering. As mentioned, customers are happier, orders are more accurate and employees’ stress levels are lessened, though the main reasons for higher profits are more direct. The most important benefit comes from the advantage of having the menu and specials always in-front of customers and giving them the ability to control the order process. Frequently, customers will up-sell themselves as long as they see all of their options. Several online ordering companies offer up-selling tools to further boost the average online check. The best online ordering Web sites individually cater the up-selling to the customer depending on the contents of their current order. For instance, if a customer had already ordered a coffee with their sandwich, the system will recommend a salad or dessert in lieu of another beverage.

The second reason that online ordering grows revenues is because it facilitates the collection of e-mail addresses. Having a means to collect e-mails and send them can be an extremely powerful revenue-growing technique. Know that it is going to be a slow month or need to get the word out about new product or special?  Just send an e-mail. Not only is this communication medium free, there is no easier way for customers to learn about a restaurant. There is also no faster way to see results as it allows the customer to immediately respond by going to the company’s Web site. If e-mail marketing is used, Additionally, the e-mail communication program using the online ordering company should produce a report so that the success of e-mail campaigns can be tracked. These reports give vital information in helping to improve grassroots marketing efforts.

Owning these qualified e-mail addresses doesn’t just boost sales, it increases a business’s brand equity as well. This is because it shows a greater sense of customer ownership as it gives a restaurant significant control over sales as compared to less advanced restaurants that are unable to leverage technology to grow sales.

Online Ordering Myths

Good news exists for restaurateurs who see why online ordering would work in their marketing strategy, but are worried about in-store implementation. Installing and maintaining and online ordering system has become easy and cost effective. Two big online ordering myths exist. The first is that a location needs to have Internet service to have online ordering. Most online ordering systems require nothing more than a fax machine. Though fax machines are much more reliable than they used to be, if a brand is uncomfortable with the fax option and has a broadband Internet connection running into the location, the system can connect a TCP/IP receipt printer or have an ordering company work it directly into the point of sale system. No matter how strong the technology infrastructure of a restaurant, one can conveniently make online ordering work in any location.

The second imposing myth is that one needs to be a technology guru to have online ordering at a restaurant. Online ordering systems are designed to be used by people with no Internet experience. All of the technology is handled by the online ordering vendor so even if one has never turned on a computer, he can still easily get Internet ordering to work. As such, it is a great way to look technologically-advanced even if one is still having trouble opening e-mails.

Locating a provider

Perhaps the most challenging responsibility for restaurant owners is finding the right online ordering provider. When looking for a vendor, it is important to do your homework. Important questions include:

• Does the vendor have extensive online ordering experience with chains like yours?
• Do they have important features such as automatic up-selling, newsletters, loyalty programs, and so on? Do the features fit the brand’s needs?
• How much effort does the vendor put into their designs?
• Is its interface clean and simple to use?
• If the vendor goes out of business or the franchised brand decides to switch providers, will it cooperate in transferring over invaluable clients?
• Does the vendor provide support that works with the chain’s hours?
• Do they have in-depth statistics that track how well restaurant(s) are doing?

All of these are important considerations that, if investigated early, can save significant time and hassle in the future.

Educate Customer and Staff

So, management has decided to employ online ordering, chosen a good provider and had it installed. Now the restaurant is ahead of many that have yet to see the benefits of online ordering. Mission accomplished? Not quite. While simply placing an “Order Online!” link on a restaurant site will lead to orders coming through, rarely will it lead to the booming success that it should be without integration into the overall marketing plan. Not educating customers and staff about the online ordering system is perhaps the biggest cause of online ordering failure. It is important to get the staff involved by educating them on how the system works and what it means to them. This way, they will be able to answer customer questions and will feel comfortable with any slight operational changes that may arise.

It is also critical to use the marketing space within a restaurant to inform customers about online ordering capabilities. This will increase online business significantly and will boost the perception of the restaurant’s brand. Online ordering demonstrates that a restaurant’s management is constantly working to improve customer service and is sophisticated enough to embrace new technology in order to do so. Moreover, it is important to spread the word to large groups of potential customers by letting local businesses, schools and churches know that they can now order online. Online ordering significantly streamlines group ordering and catering orders making institutional customers a natural, highly-profitable, target audience for any marketing plan.

The keys to online ordering success include determining if one’s restaurant fits the necessary criteria, choosing the right vendor and technology implementation, and working online ordering into the franchise’s overall development and marketing plans. Getting these three steps right will put a restaurant ahead of its competitors and increase profits, ensuring that its online ordering system will be a point of pride for its chain.

Alex Yakubovich is a partner at ONOSYS Online Ordering. He can be reached at 440-364-1385 or alex@owebtech.com.