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How Teriyaki Madness Saved $1M in Delivery Fees

The fast-casual chain remains committed to being on third-party delivery sites while also promoting its direct channels. Plus, the new technology it will begin testing this month that will reduce guest friction in the order pickup experience. 
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With 30 new locations and 5% same-store sales growth in 2022, Teriyaki Madness (TMAD) is not resting on its laurels. The brand known for its customizable bowls is planning to add 59 locations this year.

Also growing: the number of loyal customers. Six years ago, the Denver-based fast casual brand had 12,000 people in its email database. “Then we added our app, online ordering and our loyalty program and that brought it up to 470,000 people,” explained CMO Jodi Boyce. ”Although some of the bigger brands have a lot more than that, that is a lot of quick growth. What’s nice is those emails are people who want to hear from us, so it is a very captive audience.”

Loyalty Pays

Guests who are loyalty members spend more. “We know now from our data that our loyalty guests are spending 8 to 12% more than our non-loyalty guests, so we know it's working,” explained Boyce.

TMAD continues to enhance its tech stack, refine its marketing and drive business growth.

“With delivery and all the other integrations, we've grown tremendously over the last several years. In 2022 our same-store sales increase was 5%; I think the industry was closer to flat, so we're still up above the industry even though it was a tough year,” Boyce explained.   

TMAD is facing the same challenges plaguing other restaurants: labor and supply chain shortages. Mirroring  National Restaurant Association Business Conditions survey, labor and supply chain issues are restaurants top concerns in 2023.

Demand for Delivery

Delivery continues to be in demand, and TMAD has direct integrations with the major delivery partners through Olo.  “By having people order directly from us (through the TMAD app or website, powered by Olo Dispatch) we pay a very nominal fee per order versus a commission on the entire order (placed on a third-party marketplace.) In 2022 we saved $1,068,000 in commission fees for the shops,” explained Boyce.

72% of consumers prefer to order delivery direct from the restaurant, according to HT's 2022 Customer Engagement Technology Study.

The goal is to reach 50-50 direct ordering vs. third-party delivery orders. “ Third-party delivery marketplaces "are advertising to millions and millions of people with their large budgets and advertising dollars. If you're not there, you're not being seen, so we'll always be in both places,” Boyce said.  “But we're trying to grow our direct orders as much as possible.”

Last October TMAD added the Local Hero marketing platform. “ What's unique about our franchise system is we allow our shops to do a lot of their own advertising and social media. We use SOCi that platform for not only aggregating reviews, which is really important to Google that you are responding to reviews and monitoring those, but also for posting social media.”

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Corporate posts for its shops four to five times a week. An operator can also go onto SOCi and create their own content or adapt approved content in the library.  “We have a huge library of content for them with ads and all kinds of instructions and the guardrails there for branding,” said Boyce. “They can add additional posts through SOCi, and then with Local Hero they can create digital ads and videos.”

“Here's a good example: in Tolleson, Arizona, that shop just recently transferred to a new shop owner.  He's doing a heavy Local Hero campaign, and he is seeing sales spikes larger than when we originally opened the shop.  He's just promoting ‘We're open.’ ‘We're under new management or ownership’ and ‘Download our app’ and talking about the brand and what we offer.  It's getting people into the shop,” she said.  

Tighter integrations with other operating systems are driving 29% of restaurants’ POS upgrades, according to HT's 2023 POS Software Trends report 

In the next couple of weeks, TMAD will begin testing FlyBuy’s pickup technology at eight Colorado locations.  “They are integrated with Punchh and Olo and Revel, which are our platforms already. We have integrated them into our app,” said Boyce so customers don't have to download the FlyBuy app.

FlyBuy tracks through opt-in GPS tracking, not geofencing, so that when the customer is a few minutes out from pulling into the shop, the shop is notified.” The goal is for us to be faster than a drive-thru,” Boyce said. “We want to be waiting out there on the curb for them when they arrive so their transaction is 30 seconds to a minute where we are handing off their food and they're on their way.”

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