Achieving Higher Customer Lifetime Value in Your Restaurant

Restaurant customer lifetime value, or CLV, is the amount of revenue you can expect over the entire lifetime of a customer, from their first visit to your restaurant to their last visit. Note that acquiring new customers is much more expensive than retaining existing ones. Therefore, enhancing your restaurant’s CLV leads to greater profitability and stability in time. 

Thankfully, there are numerous strategies you can use to maximize CLV through targeted marketing and customer relationship management. This is one metric that you certainly can have some control over. Let’s examine how to increase it. 

IMPROVING The Customer Experience 

Customers frequently return to restaurants they had an amazing experience at. That’s why it’s critical to do all you can to offer exceptional service that encourages repeat business.  

Start by thinking through how your customers experience your restaurant from start to finish. Ask yourself the following questions: 

• How do they get to your restaurant? 
• Where do they park? (The average US parking space requirement is roughly 1 space for every 75 to 100 square feet of building space) 
• Is the parking lot well-lit, clean, safe, and adequate? 
• Who greets them? 
• How do they place their order? 
• How long do they wait for their meal? (US diners expect fast food orders within five minutes or less, casual dining orders within 20 minutes or less, and fine or full-service dining orders within 30 minutes or less) 
• Does a manager check on them while they eat? 
• Are their drinks refilled without asking? 
• How frictionless is it for them to pay? (US customers prefer using debit and credit cards and may spend up to 83% more when using card payments compared to cash) 
• How are they thanked for their visit? (Roughly 80% of your business comes from regular customers, so go out of your way to thank each visitor, even if it’s three seconds) 
• What can be done to improve these experiences, both short-term and long-term? 

Some brands build such exceptional customer experiences that customers remember it, return, and expect it. For instance, Chick-fil-A is one of the biggest fast-food brands with drive-thru lines that back up on streets on a regular basis. Employees tell customers “My pleasure” instead of just processing orders. 

Olive Garden gives out chocolate mints they’re known for. Sandwich chain Which Wich gives each customer complete flexibility with their order by letting them choose all the ingredients and toppings they want on printed checklists with red Sharpies. 

Implementing Targeted Marketing Programs 

Your customers aren’t all alike. A one-size-fits-all approach to marketing and customer retention is much less effective than targeted marketing programs capable of speaking directly to each customer’s needs and preferences. 

When you segment your customer base into different groups, it’s much easier to send them engaging marketing campaigns they’ll respond to. This can increase customer lifetime value, as it encourages them to return to your restaurant.  

For instance, you can create different segments based on age, income level, and family size. Ideally, you would send emails about kids eat free night promotions to families who have children and happy hour promotions to customers who work and are over the age of 21.  

Some other ways you can segment your customers to better target marketing efforts include: 

• Geography (including geofencing campaigns) 
• Past behavior 
• Occasions like birthdays 
• Dietary preferences 

Loyalty Programs 

Your restaurant’s loyalty program is the key to driving long-term relationships with customers and increasing higher customer lifetime value. Effective loyalty programs encourage customers to visit often, rewarding them for choosing to go to your restaurant over your competitors.  

To make the most of your loyalty program, it’s important to design it in a way that incentivizes frequent visits and higher spending with rewards customers actually want. Ensure that rewards are attainable so that customers will benefit from taking part in your loyalty program.  

Utilizing Technology for Personalization: 2 Overlooked Opportunities 

Personalization and customization are simple yet effective ways to engage with customers, strengthen loyalty, and encourage repeat business. With the technology available today, there are many ways that you can seamlessly accomplish this. Let’s look at two major methods: 

1. CRM Systems 

A customer relationship management (CRM) system is a tool restaurants often overlook. Since many CRM systems seem geared for longer sales cycles with repeated interactions, it’s easy to overlook how using a CRM system could benefit your restaurant. Using a CRM system at your restaurant can help you personalize communications and keep track of important customer details. 

Let’s say a customer makes a reservation at your restaurant for their wedding anniversary. You can train staff members to document this occasion in your CRM system and then send a “Happy Anniversary” email to the couple a few days before. 

This can be set up and automated with your CRM system. The thoughtful greeting will leave an impression and could trigger them to once again celebrate their anniversary at your restaurant. It may even become a tradition for them!

2. Mobile Apps 

We’ve come to a point in modern life where consumers expect every business to have mobile apps. If your restaurant doesn’t have one, you’re missing dozens, if not hundreds of daily customer engagement opportunities. 

Mobile apps can personalize the experience your customers have by keeping track of past orders and allowing customers to reorder their favorites with a single click. In a way, your mobile app gets to know customers based on past behavior and can improve their experiences. 

They can also be used as part of your loyalty program to deepen customer engagement. Customers have 24/7 access to track their progress toward rewards and can make choices about the rewards and discounts they receive.  

Fostering Customer Relationships 

Customers are most likely to return to the restaurants where they have a personal connection with the brand, owner(s), and staff. Not only does this create a more pleasant experience for customers, but these regulars also dramatically increase their lifetime value to your restaurant. Because of this, it’s logical to take steps to foster strong customer relationships. 

There are specific actions you can take to build a keen sense of community between customers, your restaurant, and even your larger community. This includes hosting special events, creating membership clubs, and sponsoring the teams and activities that are important locally. This way, your restaurant becomes a key part of the larger community.  

A part of building any connection is effective communication, and that’s equally true with your customers. By maintaining regular contact with customers through your company’s email newsletters, sending updates through social media, and using personalized messages, you can strengthen customer relationships. 

The Bottom Line 

It’s more expensive to acquire new customers than to motivate existing customers to visit again. The higher your customer lifetime value is, the more reliable your revenue is. It’s in your best interest to foster long-term customer relationships, and interactions that promote larger sales volume.  

Paytronix is proud to partner with thousands of restaurants to help them grow. Check out our 2024 Loyalty Guide to discover the latest practical strategies to drive higher customer lifetime value.  

Want more customers and want them now? Book a demo today to see how Paytronix supports all of your restaurant marketing, sales, and customer retention goals.