Chicago-based GrubHub has announced a partnership with New York-based Next Jump, which provides employee rewards programs, including deals on restaurants and other goods and services, to more than 100 million people at companies throughout the United States.
Terms of the partnership weren’t disclosed, but GrubHub will pay to participate with Next Jump, which recently launched a consumer website called www.OO.com, said Steve Sanger, vice president of business development at GrubHub. (The “OO” stands for “Overwhelming Offers.”) GrubHub is an online restaurant ordering and delivery service with a network of more than 4,000 eateries in more than a dozen markets, plus listings of thousands more.
Aligning for more breadth
Next Jump is one of several companies with wide reach that GrubHub has recently aligned with, Sanger said. “We have to be aggressive in looking at these partnerships,” he said, because the collaborations can help GrubHub expand more rapidly and cost effectively than it could on its own. “It’s all about distribution for us,” Sanger said.
GrubHub was attracted to Next Jump because the company provides its rewards platform to 60 percent of the Fortune 500, opening up a new market to GrubHub and its client restaurants, Sanger said. In addition, the two companies’ technology platforms are compatible, requiring less technical work and easing the process of sharing users, Sanger said.
GrubHub makes its application programming interface — commonly called an API — available to select partners, including Microsoft’s Bing, Sanger said. In using the API, Next Jump can direct its users to GrubHub’s platform automatically, he said.
Trading points for purchases
Next Jump attracts users through an elaborate points program, where consumers collect WOWPoints when they make a purchase through the platform. In turn, they can use the points to shop for deals through Next Jump, including food orders at GrubHub’s client restaurants. Because Next Jump’s WOWPoints network includes more than 30,000 brands and retail partners, people actively use their points, said Charlie Kim, chief executive at Next Jump.
Next Jump solicited request-for-proposals from companies interested in joining forces, Kim said. By adding partners, Next Jump provides more reason for consumers to check its site first regardless of what they are shopping for. Restaurant meals are a top draw, Kim said.
Targeting $200 million in food orders
GrubHub processed more than $85 million in food orders last year, generating about $8.3 million in revenue, chief executive Matt Maloney told SmallBizChicago.com earlier this year. It expects to process about $200 million in food orders in 2011 as it expands the number of markets it serves to 26. Restaurants pay a commission of about 15.5 percent on orders they receive from GrubHub.
The Next Jump partnership will help GrubHub accomplish its goal by boosting the company’s national exposure, Sanger said. “This is just another deal that builds on the momentum we have as a company,” he said, noting that GrubHub is working on additional partnerships that also will expand its user base and drive orders to its restaurant clients.
Maloney and partner Mike Evans launched GrubHub from Evans apartment in 2004 when they got tired of ordering the same pizza. GrubHub aggregates menu information from local restaurants and allows users to order takeout food directly from the site, reducing errors. Similarly, Kim launched Next Jump in 1994 from his apartment while still in college. His motivation, he said, was generating enough revenue to pay his phone bill for a long-distance relationship with his girlfriend.
— Ann Meyer