Consider the following menu (from our default Chinese dining choice). Consider the incentives on that recurring question, “Should we pick-up or get it delivered?”.
The puzzle is this. Getting the food delivered is higher cost to the restaurant. They have to hire a driver to support delivery. There is no additional revenue, nothing but more cost. And yet, they reward that behavior with additional free food. Why? All it does is make me want to have them do more work for more cost to them. They won’t budge on this policy. I pointed out these perverse incentives to them and got nowhere, all the time feeling like I was Larry David getting angrier and angrier at the stupidity of the world.
Why do they have this system? After years of intermittent noodling on this, I believe I understand. Do you have an answer? Mine is below.
They don’t see the free food kicker as an incentive to switch from pick-up to delivery. They see it as an incentive to get delivery food from their restaurant instead of another one.
If that is the correct logic, I don’t believe the reasoning is justified. The percentage of customers that are newly acquired through this system is likely to be very small and the expense very likely outweighs the potential benefits.
What do you think?
So you’re saying I should actually read your posts before commenting?!?! Blasphemy!!!! 🙂
Sure, delivery is clearly cheaper than dine-in, I was comparing it to pick up.
The comments in this thread has just reinforced to me the complexity of human behavior and how hard it is to influence cleanly. The point of an incentive is to make people likely to do A more likely to do B. But everyone has different As, have different reactions to the same incentive, different views of B etc. It’s never easy!
Maybe delivery is not of higher cost to the restaurant. Think about it – if a family of 5 eats at a restaurant, all of the following staff people are involved in coordinating their meal: host, waiter, chef, potentially bartender, bus boy, dishwasher. With delivery, it is only: host (presuming that is who takes the order over the phone) chef and delivery person. Granted, with delivery you are not going to order drinks which are a huge part of a restaurant’s revenue, but maybe they get 85% of the revenue they otherwise would have without having to use up a waiter’s time, clear dishes, wash dishes, clean the table, bring out a new tablecloth, etc….
PS – I like the “show answers” function! Very cool
This method worked on me. Our local Wokcano offered a free chicken lo mein with every delivery over a certain amount of $. During that period, we ordered from them instead of any other Asian restaurant. It’s an incentive to bring your business to them, nothing else.
I’m not sure if your theory convinces me. The assumption is that the salary of the driver has already been spent, but they have extra capacity left over. Getting some money out of that extra capacity is better than getting no money out of it.
Maybe that assumption is true, but maybe not. I would have guessed that most places like this would keep their drivers busy, especially on the weekend. If the deal only applied during weekdays that logic would hold up stronger.
Picture: Yes, there should be a picture of a menu. It shows for me… not sure why it wouldn’t render for you. You figured it out from context anyhow.
Is there a picture missing after the first paragraph? It looks like you were going to include a picture of the menu or something.
They already have to hire delivery people, because the market demands it. (I dislike delivery. I want the food as soon as it comes off the range/out of the oven/wherever.) Since they have delivery people, these people need money. By incentivizing customers to use delivery services, the delivery people get more tips, and are encouraged to keep working for them. (Perhaps the owners require tip sharing, and the owners get a cut?)