Some thoughts on Grubhub's "free lunch" promo
The ways in which this campaign failed to communicate to restaurant partners, consider its delivery workers, and manage consumer expectations
Last Tuesday, Grubhub’s “free lunch” NYC marketing campaign went completely awry. What started as simply an inadequate heads-up for restaurants was further compounded by the small redemption window for customers and added general chaos for delivery workers, resulting in the city going into a full-on tizzy.
Grubhub’s drawn my ire before, as was the case when I went toe-to-toe on arguing that their 24-hour dispute policies were not applicable (on account of them not being posted or communicated), and won. I mentioned the 24-hour window in a few tweets on Tuesday, but corrected myself a bit later when I looked through my notes and recalled that the window had since been expanded to 7 days, as of October 2020.
I originally wasn’t planning to write on the snafu, but I thought about it more and wanted to add a few points that may not have been articulated when Grubhub found itself trending on Twitter for all the wrong reasons.
And yes, I chose “This is Us” for this newsletter’s GIF theme because I love the show and the series finale airs on Tuesday night.
Where communication was really needed: restaurants
The promotion came off as a surprise. Sometimes I receive the pertinent updates from Grubhub, other times I don’t (I’m still not sure why; I asked to be made as the primary contact at one point, but the ask hasn’t seemed to have gone through).
Anyway, I didn’t receive the one communicating the free promo, but Ms. Julie did. However, it took a few tries to find the email, especially since the official memo looked more like a consumer-facing promotion.
The subject line read: “The big day is almost here”, which doesn’t really signal to any restaurant partner that this message is important and will affect business. Previous important notes from Grubhub had subject lines along the lines of:
"Do you sell beer, wine, or cocktails? Let's add to your Grubhub/Seamless listing!”
“Your restaurant will be closed on 1/01”
“Alert: We're suspending delivery”
“Our updated order refund process”
It’s suffice to say that when Grubhub wanted our attention, they communicated in a clear and succinct manner.
No hours of duration, discount dollars of percentage, and usage terms of the promotion are mentioned, which doesn’t help if this message was the only advance notice and had to base scheduling employees off of that. Not to mention, nowhere can you click for more information. The only clickable part of this email is to learn about how to implement a Loyalty program, which is a misdirect on Grubhub’s part of what the focus of the email should be addressing.
And to add to the amount of food made and not picked up, another thing to consider is that not all third-party platform commissions are equal. Some restaurants may have struck a better deal with DoorDash or Uber Eats; however, because of the deluge of orders, Grubhub made it impossible for anyone to even put in an order on the other two platforms as restaurants were already dealing with sheer volume from Grubhub. In other words, even if restaurants recoup the funds for all undelivered orders from Grubhub, they could have easily lost a few percentage points off total revenue if their preferred partner had a lower commission rate.
The folks who don’t win at all: delivery workers
Remember when I tried to pick up some Uber Eats deliveries? It was a pretty short-lived thing, especially after a few days in when I was quickly discouraged by the fact that my tiered status would be reset every month.
In my experience, the compensation per delivery is based on a base fee, distance, and estimated time. The algorithm doesn’t seem to account for paid time if a delivery order isn’t ready or time spent trying to locate an order amidst a large waiting crowd. Waiting a few minutes for to pickup an order isn’t unheard of and is one of many factors that goes into whether or not someone opts in for the gig (i.e. if you know a restaurant takes a longer time to prep than estimated, you can skip accepting that job); however, in an incident that is so far off the rails, it’s hard to gauge which trips to take at that point.
There wasn’t much of a way to circumvent the mess with regards to Tuesday’s events; even if you hop onto another delivery app, the wait time for prep is still going to be considerable. Likewise, moving to a different platform, such as DoorDash or Uber Eats, to pick up gigs doesn’t change the fact that restaurants were inundated with delivery and pickup orders form Grubhub.
How consumer demand could’ve been better managed
If anyone is wondering, I did redeem my $15, but I was deliberate in my choice of where to spend it. I picked out the bubble tea shop near my house, specifically for the reason that I’ve never seen it particularly busy during lunchtime. And when I arrived to pick up my order, closer to 2PM, there was a small rush, but only 2–3 persons waiting with me and my order was promptly ready, which got me thinking: was some of this influx based on disproportionate demand?
After all, there are certain places—such as sandwiches and salads—that cater more to the lunch crowd, which is where I was seeing a lot of the anecdotes about long lines (but also for fried chicken!). To mitigate the spiral that the promotion became, there could’ve been a few preemptive measures in place, which may have included:
Load management. Implementing restrictions on how many order a restaurant could take and accept the promo code at certain points in time, as well as instituting an all-time limit for the entire campaign’s duration would’ve helped tremendously.
Minimum spend. Paying only taxes was no doubt a huge draw for many of the customers; therefore, including a minimum spend of at least $25 before the promotion could be redeemed would be a way to mitigate some of the traffic. For instance, back in the early 2010s of Seamless, there would be a promo code guaranteeing a percentage or dollar amount off if a minimum amount was spent.
Longer redemption window. The three-hour window from 11AM–2PM is an incredibly short one, which meant a lot of compression of orders. If it were a little more spread out, at least there’d be a tad of balance added to the equation.
Eat the delivery fees. The reason why we saw many anecdotes about an uptick in pickup orders was because customers wanted a “free lunch”, which wasn’t possible when ordering delivery and facing the associated fees, instead of only paying the taxes on the food. Some of the ways that restaurants handle orders is by determining which orders are pickup and dine-in (i.e. the customers is here right now) vs. delivery (waiting until the driver is here), but if the balance is tipped way too over to one side, the process becomes difficult to manage. Grubhub should’ve been quick to realize that people would’ve wanted to skirt fees, especially with the nice weather, and elected to remove them and just call it all a marketing expense.
And the aftermath of it all
Two days after the promotion, Grubhub sent out an email at 3:20PM ET titled “Our free lunch promotion: what we learned”. Presumably, the poor Social team who had been listening in on all the complaints compiled a chief list of gripes, which were addressed in the memo below.
On Tuesday, we offered diners in your area a Grubhub-funded promo for free lunch and the customer response was remarkable. We saw much higher redemptions than we anticipated when we communicated with you in advance of the event.
While we're always looking for ways to drive more business to your restaurant, we know that the significant surge in orders may have impacted your service, and we're committed to making it right. That’s why we’re:
Ensuring that no restaurant is charged for a cancellation that was due to Grubhub drivers being unavailable to deliver orders
Removing all customer ratings of 3 or fewer stars for promotion eligible restaurants
Encouraging any customer who experienced service-related issues to order again by sending them a $15 credit funded by Grubhub
Taking your feedback seriously and incorporating it into our promotion communication plans for future large order-driving events
Thank you for your continued partnership. We value your feedback and look forward to continuing to find new ways to drive new customers and orders to your restaurant in sustainable ways.
Please reach out to your dedicated Account Advisor if you have any questions or additional feedback you’d like to share to help make the next promotion even more effective.
While Grubhub states that no restaurant shall be charged for a cancellation due to drivers being unavailable, I would suggest that restaurants still take the time to double check that the payout is posted correctly. After all, some orders may not have been coded with the proper error, and therefore not subject to the receiving compensation, and will therefore still require a dispute. Anyway, the window is closing very soon, so it’s best that restaurant folks take a look now at their posted orders.
Conspicuously absent, though, is the mention of anything related to the delivery drivers. I wish they were included in the actionable items noted above; without delivery drivers, a chunk of the business model of these third-party platforms goes out the window. They deserve to be treated better, recognized as essential partners, and compensated likewise for this kerfuffle.
Another snag for The Restaurant Revitalization Fund hits
Not that anyone expected this news to come as a surprise, but last week, senators blocked the advancement of the $48B aid package. This bill would include dollars for not only restaurants, but also other small businesses who haven’t yet received any COVID-related funding.
It’s unlikely that we will see further movement here unless the cost of the package comes down enough to become palatable for the objecting senators.
If you’d like the know the details on what resulted in the 52-43 vote, I’ve found Roll Call’s Lindsey McPherson’s reporting to be quite helpful, click here.
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