Third-party online ordering systems can be helpful to businesses. They take generate sales, and even new customers, and can be convenient for restaurants. But at what costs?
If you’re a growing small business, the fees can be exorbitant. Some restaurants use five or six different third-party online ordering systems, including GrubHub, DoorDash, Eat24, or Seamless. Transaction fees can take a whopping 10% cut from restaurants, and still leave businesses with operational tasks. Some orders might come via email, some arrive at a tablet POS at the storefront, and some require re-entry into your existing POS systems. When you start adding manual tasks that are inconsistent across third-party systems, the time and labor costs really start to add up. The result can be employee confusion about processes, and delayed food deliveries to impatient customers.
Furthermore, any restaurant using third parties is ceding control over the customer experience—a crucial piece of marketing that creates repeat customers and ensures happy first time visitors. While an in-house POS system can track consumer behavior, including valuable data like frequent orders, when they order, and what day of the week they order, third parties give an incomplete picture. In fact, some of those systems are keeping that information for themselves, and could potentially sell that data to someone else. While your customer doesn’t realize that your business isn’t responsible for that happening, he or she will still associate ordering from your restaurant with it.
What’s a restaurant manager to do?
- Ensure you’re really benefitting from third-party systems. What are your margins, on average, from your online sales? When you factor in additional labor costs to your front of house (or whoever is doing system input), do you really make enough of a profit to give up controlling the user experience? If the answer is no, you don’t have to stop using third parties. As we said at the beginning of this article, there is some acquisition benefit to using third-party systems. If Doordash is popular in your demographic, use it to acquire new customers.
- Use an in-house POS system that can accept online orders. Systems like MobileBytes for iPad can empower restaurants and their employees to control a customer’s entire experience. With online ordering POS software, you won’t lose any of your profit to a third party, and you can gather value behavioral data about your customers. With these insights, your marketing team can create targeted campaigns that will keep customers coming back, again and again.
- Encourage customers to use your own online ordering POS system. There are a few strategies to test with this concept. Perhaps you offer specific deals on your website, that are only applicable if a customer orders there. Or, offer a benefit like faster delivery for certain zip codes. If you use third-party systems to acquire new customers, make sure their orders arrive with printed, website-exclusive offers like a coupon on a pizza box or menu with website-only specials.
By integrating third-party ordering systems with a larger marketing strategy, you can create well-defined purposes for each part of your POS systems. From there, you can maximize ROI by applying resources to the campaigns that acquire and grow accounts and make sense of your POS software by getting clear visibility on consumer data.
Looking for a new POS solution that provides customer behavioral data without the transaction fees? Check out our iPad POS software. At just $139 monthly, you’ll save on third-party fees in the first month.
Not All Superheroes Wear A Cape
Scott Fuller is the Logistical Operations Manager here at Essential Systems Solutions and in this position Scott is responsible for running the warehouse, ensuring that the incoming POS equipment and materials from suppliers are in good order and properly stored. He ensures that the all outgoing customer orders leave in the right quantities and in good condition.
Throughout the day, Scott may negotiate with shipping companies over rates or service levels; prepare documents; or review invoices. Scott regularly saves that day by resolving any issues with suppliers, customers, transportation companies, and sometimes employees. He’s even rolled up his sleeves to save us all from a leak in the bathroom. That’s just Scott 🙂
- Where’s your hometown? Rockville, Maryland
- How many children do you have? One 16 year old daughter, Hana
- What do you like about your job? Lunch time
- What did you want to be when you were small? Forest Ranger. I love being outside and hiking
- What would you sing at Karaoke night? Nothing because I can’t carry a tune in a bucket
- If money was no object, what would you do all day? I would travel a good bit and maybe open a Chick-Fil-A franchise
- If you could share a meal with any 4 individuals, living or dead, who would they be? Not sure but they would have to love Chick-Fil-A
Last Friday, a huge ransomware attack began in Europe, Japan, China and is still lingering. The WannaCry software has locked thousands of computers in more than 150 countries. Users are confronted with a screen demanding payment in order to restore their files.
Ransomware is a very fast growing and threatening type of malware attack. Everyone is a target, no matter how large or small your company is. Large companies like Target, T.J. Maxx, and Home Depot, have been attacked and had their customer data compromised. But what about smaller businesses? 1 in 5 small businesses hit by a ransomware attack are forced to close their doors. They just aren’t able to afford the payment demands and have lost years of company data.
Luckily, Friday’s the attack was thwarted before it could hit every state in the U.S., but it’s not over. The attackers will realize how they were stopped, they’ll change the code, and start again. Your POS software and firewall updates are urgent right now. Your POS solutions provider can make these updates. There are solutions available to help you safeguard your POS system and your biusiness. The cost to protect yourself from a threat can be far lower than the cost in time & money of losing your data, and not being able to serve your customers or potentially having to rebuild your IT infrastructure. Download our “7 Tips to Defeat Ransomware” for additional information. Just one tip could save your business.
All merchant POS (Point of Sale) terminals, credit card processing systems, webpage checkout software, and anywhere a Mastercard card number is accepted or housed, must be 2-series ready by June 2017.
What does this mean?
Bank Identification Numbers (BINs) are the first six-digits of a credit card number, and are fundamental to payments. They identify the issuing institution for the account and ensure that each transaction is routed correctly.
Mastercard® has received an additional range of 2-series numbers to add to the 5-series that are currently used. The 2-series BINs operate in the same way as the 5-series numbers and Mastercard has made changes to their systems to accommodate the new numbers. Banks began issuing 2-series BINs in early 2017.
Merchants should work with their service provider to evaluate their systems to determine whether updates are needed to accept 2-series BIN payments.
Potential implications for merchants
- POS terminals and/or cash register updates
- Educating your employees
- Reporting, processing, and reconciliation
- E-commerce/online checkout
Essential customers, please contact us for support. If you’re not an Essential customer, please feel free to contact us for any questions about the new Mastercard 2-series BINs.