What Deliveroo Did To Become a Billion-Dollar Company

If you wanted food delivered to your doorstep five years ago, your options were pretty limited. You'd have called in fast food, pizza or takeout from a local restaurant. With the launch of Foodpanda, Deliveroo and UberEATS in 2012, 2013 and 2014 respectively, diners today are spoilt for choice.

With a fleet of over 5,000 riders, 2016 revenue set to hit $170m, and having recently raised $275m in a new round of funding, Deliveroo looks to be one of the successful start-ups showing steady growth and attracting investments in the crowded food delivery market.

Deliveroo’s range of choices, reliability and ease of use have made it one of the top food delivery apps in Asia and Europe. Building on its functionality, Deliveroo has used word-of-mouth marketing to reach more customers. Let's examine how Deliveroo has grown from an idea in 2013 to the “unicorn” and one of the biggest digital food delivery system it is today.

1. Enticing customers with generous promo codes

A typical lunch order for one person usually amounts to $25, including delivery. Deliveroo encourages first-time users to try its service by giving out promo codes worth $20. With such a generous discount, first-time users essentially pay $5 to enjoy a quality meal from a restaurant delivered to their doorstep.

$20 per person might seem like a lot of money for Deliveroo to spend on marketing, but it makes sense when you consider the lifetime value of a user. The low price eliminates new users’ hesitation to try out the Deliveroo service, and once they're familiar with it they're likely to use it again.

Also consider the referral effect: A good meal for $5 is sure to put a smile on anyone’s face, and a satisfied customer will be sure to tell his friends of the deal.

Read next: How to set up your referral program incentives

2. Effective use of stunt marketing

Deliveroo knows its target market well. Aside from home deliveries, a large portion of its customers order lunch in to the office. This makes the business district of any city Deliveroo operates in a key target area for its marketing efforts.

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Every Friday, the staff of Deliveroo Singapore put on kangaroo onesies and head to the streets of the Central Business District to hand out flyers, tote bags, notebooks and other Deliveroo merchandise. By themselves, flyers might sounds like an unexciting strategy for a start-up, but the experience of getting mobbed by a troop of kangaroos in the street. The onesies emphasise the uniqueness of Deliveroo’s kangaroo logo, creating a brand impact on the passers-by they meet.

In the UK, a 2-metre high “RooMachine” was installed at the bustling Waterloo station. Commuters pull the lever and spin the rollers to win prizes of food samples from Deliveroo’s popular restaurant partners. The RooMachine attraction targets the busy commuter without time to cook, and introduces them to the delicious range of food the app offers.

Deliveroo’s marketing efforts interest the audience enough to want to find out more, which is the first step toward gaining new users. A commuter wandering the streets who encounters a kangaroo mob or giant slot machine might even take photographs to share with his friends, extending Deliveroo’s reach through word-of-mouth.

3. Using influencers to generate interest

Food bloggers have gained a considerable following in this digital age, and their reviews of restaurants have an effect on their readers’ dining choices. Deliveroo has cleverly partnered with leading bloggers in its various geographies (thedimsumdiaries.com in Hong Kong, ladyironchef.com in Singapore, and thegraphicfoodie.co.uk in the UK) to sponsor posts about their service.

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The bloggers write about the convenience of using Deliveroo, explain in detail how to use the app, and also provide promo codes for first-time orders. Sponsoring posts with popular bloggers is beneficial for Deliveroo as the bloggers’ existing followers will get exposed to the brand.

In addition, potential customers searching online for ‘Deliveroo’ are likely to see a link to these reviews because of the popularity of the blogs. With positive reviews from trusted sources, potential customers can be assured of Deliveroo’s service quality and will have more reason to try it out.

Read next: 24+ examples of marketing through influencers

Recap:

1. Entice first-time customers with generous discounts off first order
2. Use stunt marketing to spark interest in the streets
3. Assure potential customers with positive reviews from influencers

Read next: 14 examples of food referral programs or check out Deliveroo's biggest competitor Uber's marketing strategies here.