I’ll take, “Lifetime Value of a new Restaurant Customer” for $100, Alex.

I’ll take, “Lifetime Value of a new Restaurant Customer” for $100, Alex.

Many restaurants focus on response and conversion rates to determine the success of their direct mail program. Based on those analyses they often develop a CAC (Customer Acquisition Cost), sometimes also referred to as a CPA (Cost Per Customer Acquisition).

This analysis is only providing partial information since it’s limited only to analyzing the cost of adding a customer without knowledge of the value of that customer. 

Running a business is all about having a loyal customer base. Food service businesses are no exception.
For a food service business, customer lifetime value means everything.

Soooo, just how much IS a loyal guest worth to your restaurant? 

When deciding how the lifetime value of each guest is important to your restaurant, consider the following guest value facts from CORE Restaurant Marketing, and how they might impact building loyalty:

  • Restaurants can expect a loyal guest to buy 1.7 times per month; 20.4 times per year
  • The average number of years a loyal guest will visit a restaurant is 2.7 years
  • Repeat loyal customers generate 10x more revenue in their lifetime than new customers

The Customer Lifetime Value (CLV) of every guest retained will help you determine how much you’re willing to spend in order to attract and keep those guests.

Customer Lifetime Value Case Study – Starbucks

Starbucks is well known for providing high-quality products and excellent service – customer satisfaction rates are as high as 90 percent according to some studies. In 2012, Starbucks released a case study on customer lifetime value, showing the average spend and frequency of visits per month for all their customers.

  • The average lifespan of a Starbuck’s customer is 20 years.
  • The customer retention rate is 75 percent.
  • The profit margin per customer is 21.3 percent.

This equates to an average LTV = $14,099.

Of course, in order to build CLV you first have to connect with a potential customer.
Here are five no-brainer ways to accomplish this:

Personalize your content
To paraphrase Mr. Rogers, everyone wants to feel special. Taking an individualized approach with direct mail can create that feeling for potential customers.

Add more information
A flyer, brochure or insert can and should feel more permanent than a tweet or an email. Include the information you need to insure a potential customer to take action.

Make your call-to-action count
The goal of direct mail is to convince a potential customer that doing business with you will improve their life. A call-to-action should be compelling enough to spur a customer to get off the couch and do something.

Keep your data fresh
As the saying goes, data (unlike fine wine), doesn’t improve with age. Make sure your mailing list is relevant and up-to-date.

Don’t forget to integrate with your other marketing
Despite the good times had by all on Gilligan’s Island, no one really wants to be stranded on a deserted island. Integrate your DM strategy with your other marketing efforts making it a part of the same marketing plan.


GamePlan Advertising & Marketing
P.O. Box 950545
Lake Mary, FL 32795-0545



We would love to hear from you.