Assessment Two

Uber Eats: Campaign Objective and Strategy

Report

Word Count: 1231

Module: MARK2309 – Direct and Digital Marketing
Tutor: Mark Prescod
Deadline: 4th May 2022 (Extended)

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Contents
Introduction............................................................................................3
1.0 - Objective.........................................................................................3
2.0 - Strategic Justifications.................................................................5
2.1 - The Use of Data...........................................................................5
2.2 - Potential Limitations...................................................................5
2.3 - Communication Channel............................................................6
2.4 – Offering.......................................................................................6
3.0 – Conclusion.....................................................................................7
4.0 References........................................................................................8
Appendix 1 – Ad Spend Calculations.................................................11
Appendix 2 – Ad Spend if CLTV is increased by 55%......................11

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Introduction
Uber Eats is a sub-brand of a larger company, a rile-hailing service, Uber (Johnson,

2020). Uber Eats is a food delivery service that connects consumers to a wide array

of local food (Uber, 2022). The company solves the opportunity costs of time for

consumers and provides increased convenience. Uber Eats revenue has increased

from $1.9 billion to $4.8 billion in revenue worldwide between 2019 to 2020 (Statista,

2021). However, this growth has been due to COVID-19 lockdown, as supported by

research conducted by Statista (2022a), where there had been an increase of 17.4%

users across eight European countries. As COVID-19 restrictions are being removed

and eased the importance of retaining consumers and increasing their CLTV is

paramount.

1.0 - Objective
As Peppers and Rogers (1995, pp.48) outline, ‘marketers must decide how to make

company’s products or services more useful to individual consumers.’. Therefore, the

primary objective of the campaign is to retain approximately 90% of new consumers

by increasing the value they receive by Uber Eats. In turn the aim is to improve the

CLTV by 55% with an ad spend of £15 per customer. Acknowledging, the effects of

COVID-19 on consumer purchasing habits from brick-and-mortar supermarkets to

online, (Yang et al, 2022) it’s important to be prepared as the easing of COVID-19

may revert customers to original purchasing habits. Consequently, the incentive

proposed is to communicate to new and active regular consumers that they can

purchase ingredients of their favourite meals from local supermarkets via Uber Eats.

This will be in line with the mission of Uber Eats to ‘make eating effortless at any

time, for anyone.’ (Uber, 2017). As a result, this should improve the amount

consumers spend, as the average consumer (in the UK) spends an average of

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£24.78 on groceries at supermarkets (Statista, 2022b). Furthermore, the likelihood of

success is greater because Uber Eats will be considering relationship marketing as a

centre point in the strategy. As Ogunnaike et al. (2017, pp. 403 – 408) illustrates,

having good knowledge of brand equity and making the knowledge applicable to

campaigns can positively influence purchasing decisions. Through accomplishing

this greater brand loyalty is established, which Aaker (1991) defines as the

decreased possibility for a consumer to switch brands subject to changes in price

and or features. Investing in brand loyalty will also be beneficial as Tapp (2014)

elaborates 80% of sales are concentrated in 20% of active consumers.

Uber Eats (2021) annual report stated that its users increased by 25 million

worldwide and there was an increase in revenue by $2.9 billion as stated earlier.

Acknowledging, that amid COVID-19 online food shopping increased, new data has

shown COVID-19 restriction easing has caused the online growth to decline.

Furthermore, even with the rise in expenditure on online food services, brick and

mortar still hold the majority, with 59% of consumers (UK) saying they haven’t heard

of any online grocery services (Econsultany, 2022). This provides a moment of

opportunity for Uber Eats as the number of users increase, therefore, capitalising on

the lack of awareness of grocery services can yield greater returns. Additionally,

since the messages presented will be tailored to individual preferences of the

recipients, they will develop better connections and intimacy. Thus, inspiring them to

act (Tapp, 2014).

The parameters for this campaign are to consenting participants (GDPR and opt

in/opt out) personalised emails, using the Uber Eats database of food preferences.

The intention is that consumers who actively engage with Uber Eats will receive

personalised shopping lists for one of their most popular orders from a partnered

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grocery store on the app. The email will contain a hyperlink that recipients can use to

direct them to the app and specific grocery store approximate to their location. To

measure the success of the campaign the CTR of the hyperlinks will be measured

along with the size of sales corresponding to the hyperlink.

2.0 - Strategic Justifications

2.1 - The Use of Data
As outlined by Blattberg, Kim, and Neslin (2008) using database marketing have

enabled marketers to find out which marketing efforts are most productive.

Consequently, Uber Eats can effectively select which recipients have an increased

likelihood in responding and increasing the CTR, essentially allowing segmentation

and targeting to performed more effectively and efficiently. For the purposes of this

campaign active users out of 25 million new users will be selected and their most

ordered meals will be collated, which is already being done as shown by (Weller,

2021). Subsequently, emails will be sent outlining grocery stores that are partnered

with Uber Eats with foods that match users most ordered meals. In Uber Eats (2021)

financial report it was explained that the active monthly users increased by 25

million. Additionally, their revenue increased by $2.9 billion that year. This would

mean the average amount individual consumers spend would be $116/year or

$9.67/month. Resulting in $1.25 profit per order (other fees have been subtracted,

shown in Appendix). Consequently, by sending out personalized emails Uber Eats

can increase average CLTV by 55%, which would mean $4.36 profit per order. As

stated previously, there is still interest in brick-and-mortar supermarkets, therefore

providing an option for the 59% that aren’t aware of online grocery services will

increase revenue. Results from campaign can be reinvested in ad spend.

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2.2 - Potential Limitations
Considering the approach is to tailor messages specific to consumers preferences

and habits, the importance of how to use their data from the database ethically

needs to be established. As cited by Tapp (2014) authorised company’s need to

have consent of data subjects before processing any data for any purpose. This is a

growing concern as 86% of consumers say privacy is a growing concern, 68% are

concerned the amount of data collected, and 30% aren’t willing to share data (Lucas,

Sokalski, and Fisher 2021). Although, this may be seen as a negative many active

monthly users have developed brand equity and therefore trust Uber Eats and its

services and will be more willing to opt in rather than opt out of the processing of

their data to better their user experience.

2.3 - Communication Channel

It’s a common misconception that email marketing isn’t effective despite the

evidence supporting that email provides capabilities that other methods fail to do. As

Alexandra (2021) explains email marketing is valuable because it’s the most cost-

effective method of targeting specific consumers. Furthermore, Hanna, Swain, and

Smith (2015) state that an IBM company received 60% increase in revenue just by

increasing the relevant content to consenting recipients via email and receive 21-

23% ROI. As explained before, email marketing is cost-efficient, at a low ad spend of

£15 per customer Uber Eats does not have the budget for a set of other methods.

However, with their internal database they should be able to maximise the use of

data.

2.4 – Offering
Due to Uber Eats mainly offering local restaurants as options for customers, the

incentive is to provide greater value for existing customers as through the processing

of data Uber Eats can establish a persona of what consumers prefer. Additionally,

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the offer should increase the CLTV of consumers as the average spend for groceries

is £24.97 physically, which can translate into digital sales per customer. Within the

email will be a message detailing that Uber Eats has seen what a customer likes and

has located an option for consumers who prefer to prepare their meals. The

hyperlink would send them to the store on the app.

3.0 – Conclusion
The research contained within the report has shown that there is an opportunity for

Uber Eats amid the easing of restrictions of COVID-19. With many consumers either

reverting to original purchasing habits of brick-and-mortar or using a combination of

both. With the interest generated in Uber Eats from the pandemic and the re-

emergence of consumers visiting supermarkets, retaining customers is essential.

Furthermore, by doing this Uber Eats can increase the CLTV of customers. The

probability of success for the campaign appears to be high, however, a point to

consider will be consumers approach to sharing their data.

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4.0 References

Aaker, A.D. (1991) Managing Brand Equity: Capitalizing on the Value of a Brand
Name. The Free Press.

Alexandra (2021) ‘A guide on how to improve your customer retention strategy with
email marketing’ Rawww blog, 14 October. Available at: https://rawww.com/a-guide-
on-how-to-improve-your-customer-retention-strategy-with-email-marketing/
(Accessed: 2 May 2022)

Blattberg, C.R., Kim, D.B., and Neslin, A.S. (2008) Database Marketing: Analyzing
Managers and Customers. Springer.

Econsultancy (2022) Stats roundup: Online grocery since Covid-19. Available at:
https://econsultancy.com/stats-roundup-online-grocery-post-covid-19/ (Accessed: 2
May 2022)

Hanna, R., Swain, S., and Smith, J. (2015) Email Marketing in a Digital World: The
Basics and Beyond. Business Expert Press.

Johnson, D. (2020) ‘What is Uber Eats? Here’s what you need to know about the
ride-hailing service food delivery app’, Business Insider, August 18. Available at:
What Is Uber Eats? Here's What You Need to Know (businessinsider.com)
(Accessed: 2 May 2022)

Lucas, O., Sokalski, M., and Fisher, R. (2021) Corporate Data Responsibility. KPMG.
Available at: https://advisory.kpmg.us/articles/2021/bridging-the-trust-chasm.html?
utm_source=vanity&utm_medium=referral&mid=m-
00005652&utm_campaign=c-00107353&cid=c-00107353 (Accessed: 2
May 2022)

Ogunnaike, O.O. et al. (2017) ‘Conceptualization of the Relationship between Brand

Equity and Purchase Behaviour’, International Review of Management and
Marketing, 7(2), pp. 403 – 408. Available at:
https://dergipark.org.tr/en/download/article-file/367557 (Accessed: 02 May 2022)

Peppers, D., and Rogers, M. (1995) ‘A new marketing paradigm: share of customer
not market share’, in Managing Service Quality. MCB University Press, pp. 48 – 51.

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MARK2309: Direct and Digital Marketing. Available at:
https://vle.dmu.ac.uk/webapps/blackboard/content/contentWrapper.jsp?
course_id=_601443_1&displayName=ResourceList&href=%2Fwebapps
%2Fblackboard%2Fexecute%2Fblti%2FlaunchPlacement%3Fblti_placement_id
%3D_5_1%26course_id%3D_601443_1%26mode%3Dview%26wrapped%3Dtrue
(Accessed: 02 May 2022)

Statista (2021) Uber Ears revenue worldwide 2017-2020. Available at:

https://www.statista.com/statistics/1235816/revenue-uber-eats-worldwide/
(Accessed: 2 May 2022)

Statista (2022a) Food delivery user growth during COVID-19 Europe 2020. Available
at: https://www.statista.com/statistics/1235816/revenue-uber-eats-worldwide/
(Accessed: 2 May 2022)

Statista (2022b) Average cost of a shopping basket in the United Kingdom (UK) as
of January 2022, by supermarket. Available at:
https://www.statista.com/statistics/1100981/average-cost-of-a-shopping-basket-in-
the-united-kingdom-by-supermarket/ (Accessed: 2 May 2022)

Tapp, C. (2014) ‘Principles of direct, database and digital marketing’. Pearson

Education, MARK2309: Direct and Digital Marketing. Available at:
https://vle.dmu.ac.uk/webapps/blackboard/content/contentWrapper.jsp?
course_id=_601443_1&displayName=ResourceList&href=%2Fwebapps
%2Fblackboard%2Fexecute%2Fblti%2FlaunchPlacement%3Fblti_placement_id
%3D_5_1%26course_id%3D_601443_1%26mode%3Dview%26wrapped%3Dtrue
(Accessed: 2 May 2022)

Uber (2017) Uber Eats: Celebrating 2 years | Uber Newsroom. Available at:
https://www.uber.com/en-TR/newsroom/eats-2yrs-fresh-look/ (Accessed 02 May
2022)

Uber (2021) Uber 2021 Annual Report. Available at:

https://s23.q4cdn.com/407969754/files/doc_financials/2022/ar/2021-Annual-
Report.pdf (Accessed: 2 May 2022)

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Uber (2022) What is Uber Eats? Available at:
https://help.uber.com/ubereats/article/what-is-uber-eats-?nodeId=fbf73e2a-c21f-
4a48-8333-c874ae195fd1 (Accessed: 2 May 2022)

Weller, L. (2021) ‘Email Marketing – Critical Analysis’, University of Brighton Blog, 10

February. Available at: https://blogs.brighton.ac.uk/lweller/2021/02/10/email-
marketing-critical-analysis-ubereats/ (Accessed: 2 May 2022)

Yang, S. et al. (2022) ‘Impacts of COVID-19 Lockdown on Food Ordering Patterns

among Youths in China: The COVID-19 Impact on Lifestyle Change Survey’, Karger.
Available at: https://www.karger.com/Article/Abstract/520160 (Accessed: 2 May
2022)

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Appendix 1 – Ad Spend Calculations

Increase in active monthly users: 25,000,000

Increase in annual revenue: 2,900,000,000
2,900,000,000 / 25,000,000 = 116/year
116/12 = 9.67/month
9.67 x 0.7 (70% restaurants take from sale) = 6.77
9.67 – 6.77 = 2.9
*Average delivery fee: 1.99 x 0.17 (17% uber receives) = 0.34
(2.9 – 1.99) + 0.34 = 1.25
1.25 X 12 months = 15 a year per customer.

Appendix 2 – Ad Spend if CLTV is increased by 55%

Increase in active monthly users: 25,000,000

Increase in annual revenue: 2,900,000,000
2,900,000,000 / 25,000,000 = 116/year
240/12 = 20/month
20 x 0.7 (70% restaurants take from sale) = 14
20 – 14 = 6
*Average delivery fee: 1.99 x 0.17 (17% uber receives) = 0.34
(6 – 1.99) + 0.34 = 4.36
4.36 X 12 months = 52.32 a year per customer.

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