_{At ezCater, we’re dedicated to helping restaurants grow a successful catering business. That’s why we’re excited to share this video series featuring insights and lessons from industry experts behind thriving catering programs.}

As consumers increasingly use delivery apps and catering websites to order meals, some of the biggest chains—from McDonald’s to Starbucks—are rushing to cash in on online ordering and delivery. Want to profit from delivery, too? To help you master building a delivery service, we asked expert Ed Keller (Director of Off-Premise Business Development of Corner Bakery Cafe) to guide us through his approach. 

In this intensive video, Ed Keller shares principles to building a delivery service for your restaurant. Learn about the differences between third parties and self-delivery, and how to measure the ROI of your delivery service, so you can grow your catering business with confidence.

Ed Keller is Director of Off-Premise Business Development of Corner Bakery Cafe and has spent over two decades in the restaurant industry. He formerly served as Director of Off-Premise Sales for Which Wich and as Senior Director of Operations and Vice President of Catering at Boston Market.

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TRANSCRIPT:

Ed Keller: Hi everyone, I’m Ed Keller, I’m the director of off-premise sales for Corner Bakery. I’m here with ezCater to talk about delivery.

Ed Keller: I started at 16 as a dishwasher and stayed at my first job for four and a half years – worked my way into management and that’s kind of how it went. I then went to another brand where I cut my management teeth, and my boss at the time said “I think you’d be good at training.” And I’m like, “Really?” So I started doing it and that really was my niche. I love training, and developing, and coaching people.

ezCater: Is third-party or self-delivery right for your business?

Ed Keller: I almost look at it like it’s not a question if it’s right, you have to play in that world to survive nowadays. I think it’s about figuring out how do you fit into that world and how can I make it fit my brand, and still deliver quality food at the end to the customer, because that’s ultimately what it is.

ezCater: What key factors should you consider when catering food delivery?

Ed Keller: You need to take a good look and say, does third party delivery makes sense, or does internal delivery make sense? Some of it’s going to depend on the size of your brand.

I think you have to have a realistic talk with yourself, if that makes sense, to go, “Is my brand big enough to drive people to my website and my app?” The “McDonald’s” of the world, of course they do. But if you don’t drive people to your website, then trying to do internal delivery is going to be difficult because that’s where you get those orders, so third party may make more sense.

But I think more importantly is you got to take a hard look at your menu: how well does the food travel? You probably shouldn’t offer everything that you offer in-store for delivery.

What does your packaging look like? Number one, does the food travel well in it? But number two, that’s a statement you’re making to the customer at the end going, “Oh Corner Bakery, oh yeah.” You want them to remember that. You want to make that memorable as much as you can. Because I didn’t get a chance to have him in my nice restaurant here with the four walls and the hospitality. So you’ve got to consider that and then, do you have the space to do this justice?

It’s a different channel. So I need to get the order, I need to execute the order, I need to package the order. I need to check the order, I need to check the order again – that’s critical because once it’s out there, I can’t run in the back and make him another side dish or whatever I forgot, so that piece is critical. And do I have the resources to dedicate against it?

Some places, it may make sense to have those orders come through the normal kitchen. Other places, if you’ve got the space, maybe it makes sense that you get the orders through a second line or a second kitchen. So it really is assessing all of these things. But I think if you’re going to compete in the world right now of restaurant food, you’ve got to figure out how am I going to play in that sandbox and what makes sense for my brand? And keep in mind you can’t be all things to all people. Do what you do and do it well.

ezCater : What are three key factors for food delivery?

Ed Keller: So if I were to say to three things that I think are critical in the delivery world, it’s brand presence. Do you have the ability to drive people to your site and place orders?

Second I think, do you have the infrastructure in place to handle this? And this can’t be your current catering channel. This has to be dedicated people to the delivery channel itself.

And then third, are you willing to throw money at it, willing to dedicate resources to building this channel?

ezCater: How do you develop a strategy for food delivery?

Ed Keller: Well one, I would survey my customers and make sure there is a demand for it. Asked our loyal customers, “Hey, if we made delivery available, would you take advantage of it?” I would take a look at my food. Does it travel well? Should I offer all my food, or does some not makes sense?

You want to look at pricing – some people want to put higher pricing in for third parties, but that could aggravate your customers that are used to paying one price in store and one price to have delivery. Customers are getting much more savvy in the delivery world – early on, they would say, “Yeah I’m willing to pay for the ability to get my food delivered,” but not so much now, and that leads you to delivery fees. What’s the sweet spot? And you tend to find it’s that $4-$5 range. But I’ll tell you what, if you are willing to run a special on it, you will see your orders jump.

It sounds kind of strange but you also, at least in our situation, we wanted to evaluate urban versus suburban. Urban was much easier for us to deliver because we could do it on foot, versus suburban, you got to get in a car, you got to drive, and you want to consider how much time does each order take that way. So that determines how many orders each person can take in an hour which will drive your profitability.

Driver management: You’re gonna have to manage these people that are doing the delivery for you. If you’re gonna do it internally, how many do you need? What’s the right number? You don’t want customers waiting because you don’t have enough drivers available.

And again, technology: What technology makes sense? What’s out there? There are programs that will help you manage drivers, programs that will help you manage the order process.

And then the last thing, but probably the most important thing is what’s the flow look like in the restaurant? How are you going to put the orders together? How are you going to stage it? And how does the person delivering, figure out which order goes to which customer?

ezCater: How do you create a self-delivery service?

Ed Keller: How do I build the internal delivery business? First, I’d take a look at the customer facing systems. Can they place an order seamlessly, or are there gymnastics they have to go through when using the technology to get the order to the right place, to the right address?

The second is, I’ll look at my in-house systems. What is my staging look like for instance? I’m gonna have to put the orders at a convenient place so that they’re organized, they’ve been double checked, and I can clearly identify which order goes to which customer and which driver is going to take it.

What do your marketing systems look like? How are you driving the business? What’s the plan? And it needs to be a varied plan. You’ve got people that come in every day that could potentially order. Are you marketing in-store or are you marketing online? Are you doing social? All those things need to be taken into consideration.

Next you want to take a look at staffing. Do you have the staff that can handle it? Are they at capacity now or do you need to add somebody? But no matter what you do there, I think you do need to designate one person that’s in charge of organizing all the delivery orders for the day and managing them as they become ready. The challenge there is just staying on top of it, staying timely – otherwise you could lose track and something could slip through the cracks.

Then the last thing is, don’t take training for granted. This is a new channel and a new way of handling business. And I think putting those checklist systems in place so that things are checked and double checked are critical to the success of a building that business.

ezCater: What costs should you consider before offering food delivery?

Ed Keller: Probably would start with technology – what’s the hard cost to put technology in place? Do you already have the systems and or what do you need to add?

Next I would look at labor cost. Do you need dedicated staff or can you share some of the in-store staff? But be careful with that because if you for instance, have catering delivery people, they’re already busy. They can’t take on delivering and putting together your delivery orders, if you will.

Next I would consider delivery zone and how far am I willing to go, when what makes sense that I can get there and come back and take another delivery. Again, that will enter into your labor costs long term as far as the bandwidth that your people can handle, but also you need to consider how are you going to advertise in that delivery zone. I’ll get to that in a minute. Think about your fees and do you want to subsidize any of them. What’s that sweet spot for the customer?

You’re gonna be charged by maybe some of the technology companies. For instance, if it’s a company such as Bring that manages your delivery drivers, there’s a fee there. Is there going to be a cost for delivery vehicles? We happen to have them at Corner Bakery and that’s a big bonus for us, but if you’re going to have them, what’s the cost to acquire them and what’s the cost to maintain them?

Then you need to think about any equipment and smallwares that you’re going to need to transport the food in the right manner so that either stays cold or stays hot, whichever it should be.

Marketing is a big piece of it. How are you going to get the word out there? And this should probably be one of your big considerations as far as driving the business – you’ve got to get the word out.

Another one that I happened to stumble across is the additional storage and staging for delivery within the restaurant. Once these orders are put together and they’re bagged, where do they sit?

ezCater: How do you measure the ROI of food delivery?

Ed Keller: The big thing is I wouldn’t rush to measure the results. You can’t do it on the cheap and it’s going to take some time to build. I would focus first on creating the best experience that you can, because those customers will return, so execute the heck out of it.

As the orders build, your efficiencies will build, and then you can start measuring things like how many orders per hour can we handle? How many orders per hour can each driver handle before I have to add one? What’s my kitchen bandwidth? Can I handle orders through there or do I need to add a dedicated person or dedicated space for it?

And then, lastly, would be sales, but make the commitment on the front end to make this fantastic seamless experience. Then as it builds, start measuring the progress that all those measurables, I said at the end there, are making. And that’s when you can finally determine the R.O.I.

ezCater: How do you keep branding consistent on and off restaurant premises?

Ed Keller: I think the first thing that makes sense to me, because it’s how I think is, I do a checklist process for accuracy. I don’t want to forget anything, I don’t want to miss anything. Are they getting what they expect to get when the food’s delivered?

I also would say, don’t try and get too fancy with what you call your delivery program. We call it Corner Bakery Delivers, and that’s because I want it consistent that if you’re used to eating inside the restaurant, that when you get that food outside the restaurant, it should be as close to the same experience as possible. And then vice versa, if you’re not as familiar with Corner Bakery and need the food outside, you kind of taste it and go, “Oh, I kind of crave that some more and maybe I want to go inside the restaurant.” You want the experience to match the four walls as much as possible.

And I honestly believe that is the expectation of the customer right now. They want a quality restaurant meal at the right temperature, where they want it, when they want it, and we’ve got to figure out how to do that. So the more you can equate that to, “What do we in-store that we can do outside the store?” Aside from some of the hospitality stuff, it really is not that difficult if you just think through all the details.

ezCater: What does the future hold for food delivery?

Ed Keller: What does the future look like for delivery? Well it’s not going away. The gig economy helps the whole delivery world. There’s drivers galore out there. It’s just everybody seems to have them employed. So if you want to find your own, that could be challenging.

I also think you’re going to start seeing a push for these delivery people, these drivers to have some food knowledge. We invest a lot in the restaurant industry in proper food handling and food knowledge. I know that they’re technically not employees, is how the third parties want to look at it, but I think you may start seeing legislation that they’ve got to have some kind of food handler card. I could see that happening.

Wages are just going to continue to go up. I think I read that 30 states are going to bump minimum wage this year. We know a lot of places have gone to $15 an hour. I think you’re going to start to be challenged on, how can you afford that? And you know, maybe it’s even looking to partner with another brand to share driving resources. That would be a creative way to look at it. I think all this is going to have an impact on pricing and you don’t want to price yourself out of the market. So finding that sweet spot and what a customer is willing to pay. Like I said, technology, robots, drones aside, it’s not going away. So ultimately, what’s going to drive this is what does the customer want?

ezCater: How do B2B and B2C catering differ?

Ed Keller: It’s the fastest way to build your business: it’s more profitable, it just makes sense, and it gives you the ability to impact a lot of people at one time, positively or negatively, so hopefully it’s the first one. But you can really have the opportunity to expose your brand to 10, 20, 30, 40, maybe 100 people at a time, when you do catering. And really get the message out there that says, “Hey, we got something special and we can make your experience the best that it possibly can be.” And I think that’s ultimately what catering is all about. It’s not about trying to get every dollar out of every customer. It’s how do you take this experience, get them to believe and trust that you can do it, and make it something memorable, so that they want to use you again.