How Does the Average Order Value Affect a Restaurant's Ranking on Delivery Apps?

Success in food delivery relies on visibility via platforms like DoorDash, Uber Eats, GrubHub, and Deliveroo. With hundreds, if not thousands, of options available to hungry customers, how do some restaurants consistently appear higher in search results while others still need to be buried at the bottom?

One key factor that can significantly impact a restaurant's ranking on these platforms is the average order value (AOV). But how exactly does AOV influence a restaurant's ranking, and why should it be a primary focus for any restaurant seeking to grow its delivery business? This article will discuss how AOV affects ranking, the indirect metrics it influences, and how restaurants can capitalize on this knowledge to boost their visibility and revenue.

What Is Average Order Value (AOV)?

Before diving into the details, let’s define AOV. Average order value is the average amount of money a customer spends per order at a restaurant. To calculate AOV, divide the total revenue by the number of orders during a given period. For example, if a restaurant generates $10,000 in revenue from 500 orders, its AOV would be $20.

AOV is a critical metric because it indicates the revenue potential from each customer interaction. The higher the AOV, the more profit a restaurant can make from fewer transactions. But beyond revenue, AOV also plays a crucial role in how restaurants are ranked on food delivery platforms.

Direct Impact of AOV on Ranking

Higher AOVs can give restaurants an advantage in ranking algorithms used by platforms like DoorDash and Uber Eats. These platforms want to promote restaurants that drive higher revenue, directly increasing their commission earnings. Here’s why:

• Revenue Generation: Restaurants with higher AOVs generate more revenue per order, which benefits both the restaurant and the platform. This creates a win-win scenario where platforms prioritize those restaurants in their search algorithms because they are more likely to generate higher profits.

• Customer Willingness to Spend: A higher AOV suggests that customers are willing to spend more at a restaurant, which indicates perceived quality and value. Algorithms consider this, favoring restaurants customers trust enough to spend more money with.

Indirect Effects on Performance Metrics

A higher AOV doesn’t just impact ranking directly; it also affects other critical performance metrics that affect a restaurant's overall visibility on delivery platforms. Let's explore these metrics:

1. Customer Satisfaction and Reviews

Customers tend to correlate larger orders with higher satisfaction. Customers who are willing to spend more often expect and receive a better dining experience. For example, larger orders may include a more diverse selection of menu items, appetizers, and extras that enhance the overall dining experience. A satisfied customer is likelier to leave positive reviews, boosting the restaurant's rankings.

Positive reviews are key to restaurant ranking on platforms like GrubHub and Deliveroo. Since higher AOVs often lead to happier customers, restaurants with higher AOVs receive better ratings, improving their ranking.

2. Order Completion Rate

Restaurants with higher AOVs may be more incentivized to ensure orders are fulfilled accurately and promptly. Fulfilling a larger, more profitable order becomes a priority for staff, as there’s more at stake with a higher dollar value on the line. This reduces errors and cancellations, improving the order completion rate—another metric that delivery platforms monitor closely when determining rankings.

A restaurant’s ability to consistently and accurately complete orders increases its likelihood of appearing higher in search results, particularly during peak ordering times when customers are hungry and time-sensitive.

Algorithm Preferences: Favoring Higher Revenue and Spending

Most delivery platforms operate on a simple yet effective principle: promoting restaurants that maximize their revenue. Many algorithms favor restaurants that can generate more income per transaction to achieve this. Here's why:

• Higher Commissions: Food delivery platforms earn a percentage of the revenue generated by each order. Restaurants with higher AOVs naturally contribute more to the platform's revenue, making them more attractive candidates for algorithmic boosts.

• Maximizing Customer Spending: Platforms want customers to spend as much as possible in a single order. Promoting restaurants with higher AOVs increases the likelihood that customers will continue to make larger purchases, aligning with the platform’s goal of maximizing the value of each transaction.

For example, if a customer is presented with two similarly ranked restaurants—one with an AOV of $15 and the other with an AOV of $25—the platform may prioritize showing the higher AOV restaurant first, as it's more likely to lead to a larger, more profitable transaction.

Promotional Opportunities for Restaurants with Higher AOV

In addition to better rankings, restaurants with higher AOVs often unlock promotional opportunities on food delivery apps. These promotions can include:

• Featured Placements: Many platforms offer premium spots within their apps to restaurants with high-performance metrics, including AOV. These placements give restaurants more visibility and can dramatically increase their order volume.

• Exclusive Offers and Discounts: Restaurants with a higher AOV have more flexibility to create attractive promotions, such as bundle deals or discounts on orders over a certain value, while maintaining profitability. This drives customer engagement and further boosts visibility on the platform.

For example, a restaurant on DoorDash might offer a 10% discount on orders over $50. While this might seem like a revenue loss, the larger overall order compensates for the discount, ultimately leading to higher AOV and better rankings.

Data-Driven Decision Making: Optimizing for AOV

Increasing AOV isn't just about adding more items to an order. It's about making strategic decisions to optimize every part of the customer experience. Here are three actionable strategies to help restaurants increase AOV and improve their rankings on delivery platforms:

1. Menu Engineering

Restaurants should analyze their menu offerings and identify opportunities to encourage larger orders. This might involve introducing new bundle deals or promoting family-size portions. By carefully engineering the menu to emphasize high-margin items, restaurants can naturally boost their AOV.

2. Upselling and Cross-Selling

Staff can be trained to suggest additional items that complement customers' orders. Similarly, apps can be designed to encourage customers to add desserts, beverages, or sides during the checkout process. These simple upsell techniques can lead to significant increases in AOV over time.

3. Targeting High-Value Customers

Restaurants should focus their marketing efforts on attracting customers who are more likely to place larger orders. This might involve offering special promotions to frequent buyers or tailoring social media ads to highlight premium menu items that appeal to higher-income demographics.

The Virtuous Cycle of Higher AOV and Improved Ranking

When restaurants focus on increasing AOV, they unlock a virtuous cycle that leads to improved performance across multiple metrics. Higher AOV drives better customer satisfaction, improves completion rates, and enhances platform profitability—all of which contribute to better rankings on food delivery platforms.

By leveraging this knowledge, restaurants can take actionable steps to increase their average order value, improve their chances of ranking higher in search results, attract more customers, and ultimately grow their revenue