4 Challenges for Food Delivery Companies on Social Media

Crystal Cha
Jul 15, 2019 10:43:03 AM

The on-demand economy is thriving. Customers today expect to get what they want, with one simple click. To meet these expectations, on-demand delivery platforms across verticals have popped up, promising speed and convenience. Analysts estimate that takeout and delivery could represent 15% of restaurant sales a decade from now.

The amount of funding pouring into food delivery companies is a strong indication that this industry is booming. In 2018 alone, venture capital firms invested over $3.5 billion into food and delivery companies. Just over the last 12 months:

These well-funded competitors are driving down margins and driving up user acquisition costs. Add to that low customer retention rates, which contribute to the already high cost of customer acquisition, and it becomes apparent that this capital is needed to survive the crowded landscape.

To prevail in this environment, food delivery companies are starting to focus on customer loyalty and branding and not only new user acquisition. However, there are many challenges that come with this shift in focus.

What are some of the top challenges faced by brands in this vertical? We took a look at some recent social media statistics from food delivery companies to understand what brands in this vertical can do to stay ahead and continue delivering happiness to their customers.

 

1. Standing out in a crowded landscape requires a multifaceted approach

With billions raised by new competitors in this vertical, the competition is fierce, and brands face a two-fold challenge:

  1. Differentiating themselves from the competition by delivering exceptional customer service: Responding promptly to customer inquiries or comments demonstrating purchase intent is essential, but filtering out genuine customer queries from the noise on social media is challenging.
  2. Living up to customer expectations: Those failing to live up to customer expectations often face immediate feedback in the form of customer comments and complaints on their social media assets (including ads).

Many brands are unable to respond promptly enough to inquiries and complaints, due to insufficient resources for around-the-clock engagement management. This exposes them to potential threats of a social media crisis, lackluster ad performance, missed opportunities, and high levels of customer dissatisfaction.

All of these can damage brand reputation and be detrimental in this competitive landscape.

In one month, on ads belonging to brands in this vertical, an average of 11% out of total comments received consist of customer complaints and user questions demonstrating purchase intent, such as:

- How much is it just for three people if i want to order
- How reasonably priced is this?? I would love to try it, but kinda wanna know how the prices are before i commit...
- How does this actually work. Can anybody tell me.
- Would like more information please

Due to the challenging nature of detecting and moderating paid ad posts’ comments natively in Ads Manager, many customer inquiries often go unnoticed and unattended.

To increase conversions, brands should aim to respond to all sales opportunities promptly.

This helps to convert users while they are still engaged and interested in the product, while possibly preventing them from going to a competitor. Responding quickly is also a proven approach for turning around disgruntled customers before their frustration grows. This proactive approach also demonstrates the brand’s ability to deliver excellent customer service.

BrandBastion’s Customer Engagement solution is able to analyze and identify comment response opportunities and issue predefined responses on the brands’ behalf around the clock in 6 languages.

 

2. Customers have more options than ever, and switching costs for them are low

Customers have more options than ever before when it comes to food delivery, leading to increasingly high expectations. On food delivery ads, 2% out of total comments received are from users praising competitor brands, such as:

- I DO NOT recommend *****! I'm sticking with *****.
- Looks like this is pretty common for your company...back to *****
- Wow ... these comments I better delete this app and stick with *****
- ***** is so much better. https://*****.com/invite/Felicia2253670

In a competitive market, service is king. Delivery apps work around the clock to provide customers with convenience, and keeping them satisfied is crucial. As new online platforms race to capture markets and customers, this fierce competition is reflected in the comment section of the ad.

To gain an edge over the competition, businesses can start by moderating competitor promotions on their promoted content. This is where users like to share positive reviews of competing brands, consequently pushing prospects to try these other alternatives.

This means that advertisers are paying to promote ads that are sending viewers directly to their competitors’ sites, effectively decreasing their ROAS. BrandBastion recommends that all competitor ads be hidden in real-time, 24/7, to protect the brand and ad investment.

 

3. Brand reputation is becoming increasingly relevant as retaining users becomes more challenging

As the use of delivery apps becomes more prevalent and increasingly a part of people’s daily lives, brands in this vertical face more scrutiny than ever. Online discussions revolve around the treatment of delivery workers, the service (or lack thereof) provided on these apps, and the quality of the food delivered.

Keeping track of what is being said, and nipping negativity and brand attacks before they spiral into a PR crisis is essential to build brand reputation and customer loyalty.

On ads we analyzed in this vertical, harmful comments such as inappropriate or offensive language, brand criticisms, and spam make up 28% out of total comments received on promoted content on Facebook and Instagram. Some examples of harmful comments include:

- WARNING This company is a scam !!!!!!
- This company is trash.
- This is modern day slavery, they dont care about the workers at all
- In debt? PM me - quick and easy loan

When running many ads at the same time with thousands of comments received on a weekly or even daily basis, it can be hard to identify such harmful comments. And yet, even one harmful comment has the power to impact brand perception and conversion rates.

Neglecting these harmful comments and leaving them visible on ads sends a message to consumers that the brand does not care to resolve or pay attention to such behavior.

On average, it takes five positive comments to erase the effect of one negative comment. To prevent negative attacks from harming brand reputation and ad performance, it is important to hide these harmful comments.

On Facebook, advertisers are able to hide comments on ads instead of deleting them, which means that although the commenter still sees his or her comment, they become hidden from all other viewers.

 

4. For multisided platforms, there are multiple customer segments to manage relationships with

Overall, food delivery brands tend to gather more negative comments (26%) than positive (16%). The nature of these comments will vary among the customer segments, from shoppers to riders/drivers to diners.

The challenge for companies in this vertical is to be aware of the key concerns and criticisms from each segment to be able to address them effectively and build confidence in their brands. Responding to positive comments, especially those that are positive about the brand, has many benefits. Some examples of positive comments that brands in this vertical tend to receive are:

- Used them today for the first time, had my food in about 30 minutes. Service was great.
- I’ve used them twice now (in Alabama ) & so far great experience both times!
- I just tried ***** today for the first time. Food was delivered quicker than expected, everything was fine, the driver was very polite, assured me he checked that the order was correct & asked me to do the same before he left. Very pleased!!!!
Just got my first paycheck yesterday!
 

Positive comments on ads drive increased conversions and positive brand perception. If brands ‘Like’ and respond to users’ positive comments, these comments gain increased visibility and rank as “Most Relevant” comments. This places them directly under the ad post and makes them highly visible to everyone viewing the ad.

BrandBastion recommends that brands actively respond to and ‘Like’ positive comments, especially those from passionate fans, to encourage positive feedback and generate maximum visibility for these comments.

 

Summary

The billions of dollars in funding poured into this industry and the increased number of players in the field provides more variety than ever for consumers. Many of these companies who have recently fundraised are delivering excellent customer service, and building a strong brand with appetizing, tantalizing ad creatives and hard-to-resist offers. The growth of this industry brings many exciting opportunities, but also many challenges to navigate.

In this competitive vertical with high expectations for speed and quality service, brands should take action to stay ahead and continue delivering happiness to their customers. From actively responding to customer comments, to hiding harmful comments, and eliminating competitor promotions, BrandBastion is there to help you every step of the way.

Learn more about the value we bring delivery app brands on social media

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