brand strategy

How Third-Party Aggregators Are Destroying Brand-Client Connections

With 20% of consumers now using it at least once per week, food delivery is definitely catching on.[1] As usage continues to increase, however, there is growing discontent with these third-party services. More and more firms are finding that allowing third parties to interact with their customers on their behalf can be toxic for their brands.

Third party aggregators decrease a firm’s autonomous control over its user experience—and therefore its brand. For quick-serve restaurants, where the physical space plays a huge role in defining the brand’s values, delivery disconnects the customer from every aspect of the brand except for the food and prevent vital brand-to-consumer interactions.[2]

At best, decreased interaction with consumers is just that—decreased interaction. At worst, third-party aggregators can actively damage a brand’s reputation. Advertising industry executive Nick Powills, CEO of NLA, used a personal story about one particularly bad food ordering experience to illustrate this worst-case scenario. When food he’d ordered through a delivery service app had yet to arrive ten minutes after the scheduled delivery time, Powills called the restaurant directly. They told him it had been sitting—ready and waiting for a delivery driver—for over ten minutes. One driver cancellation, multiple calls to the app, a terrible customer service experience, and an hour and a half later, the food was finally delivered—to the neighbor’s house.[3] The restaurant, through no fault of its own, will now forever be associated with this terrible experience.

This threat of subpar third-party service is not limited to the restaurant industry. In 2004, InterContinental Hotels Group found third-party websites were hurting its brand and prohibited them from offering hotel reservations on their websites.[4] Practices like listing sold-out properties, adding hidden fees, and using “bait and switch” tactics led to customer complaints about the booking process.[5] According to then-SVP Jim Young, hotel guests associated these hassles with the hotels themselves—not the booking sites.[6] When it is all said and done, he explained, “customers complain about problems during the booking process not to the online booking service, but...to the hotel when they arrive.”[7]

Selling through a third-party aggregator means exposing your brand to a sucker punch—it takes a hit every time the experience fails to live up to brand standards, even if your company isn’t at fault. Creating lasting, positive connections with consumers is crucially important to long-term success. Smart firms are working to earn and strengthen these relationships, not allowing third parties to mess them up.

 


[1] https://www.statista.com/statistics/259191/ordering-takeout-delivery-from-restaurants-in-the-us/; https://www.axios.com/ubereats-uber-ipo-valuation-fb086af6-4d57-4518-abbb-39c6a1b600e5.html; https://techcrunch.com/2018/09/18/postmates-funding/

[2] https://www.qsrmagazine.com/outside-insights/are-restaurants-facing-delivery-disconnect

[3] https://1851franchise.com/grubhub-restaurants-beware-they-could-be-killing-your-brand-2703942

[4] https://www.bizjournals.com/tampabay/stories/2004/08/30/story2.html

[5] https://www.bizjournals.com/tampabay/stories/2004/08/30/story2.html

[6] https://www.bizjournals.com/tampabay/stories/2004/08/30/story2.html

[7] https://www.bizjournals.com/tampabay/stories/2004/08/30/story2.html