Have you ever heard the saying "there's no such thing as free lunch"?
Last week food delivery app Grubhub reiterated that to thousands of hangry New Yorkers in a campaign that could have been huge but ended up in more tears than cheers.
The campaign, which was supposed to feed everyone in New York on one happy Tuesday with a $15 discount, failed almost as soon as it started. Technical issues were an easy one to blame, but the real issue was the lack of communication between Grubhub and restaurants and delivery people, which puts so much stress on the platform that many simply didn't get their food at all.
But... that didn't stop the downloads.
On the day of the big promotion, downloads rose more than 1,100%, sending Grubhub's app to the top of the US App Store. That's right, a botched campaign in New York City led to visibility across the entire country!
We estimate that those few short hours of excitement gave Grubhub more than 133,000 new users. Users who are more likely to delete the app in frustration than use it again, but downloads nevertheless.
Downloads went back to their normal daily average of around 10,000 the next day, and don't even get me started on the reviews.
By the way, if you're curious why Grubhub picked Tuesday, I suspect it's because it's the weakest day of the week in terms of download. Smart!
With the growing competition in big metros, new downloads are critical for the sustainability of food delivery companies. Grubhub and Seamless, the platform that really started it all here in New York City and is now owned by Grubhub, are facing stiff competition from Uber Eats, Postmates, and DoorDash, which offer endless promotions to win returning customers.
A few weeks ago I looked at fast-food restaurants and their ability to drum up downloads directly, and if you recall, most just don't get it. This is just another example of that. And in 2022, after several years of experiments.
Not focusing on new downloads is a mistake most of these companies seem to be making. Except for McDonald's, which continues to win the race.
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