4 Ways Restaurants Can Boost Customer Lifetime Value

Customer lifetime value (CLV) can have a dramatic effect on your restaurant's financial health.  Focusing on CLV, instead of looking just at revenue and cost breakdowns, provides a unique perspective on ways to drive success.

So, what are some ways to increase lifetime value?

Run Retention / "Win-Back" Campaigns

If a customer's slipping away, it'd be great to send them a timely message (possibly with a special, personalized discount) to encourage them to come back.

These campaigns can be automated and delivered via e-mail or SMS/text.  Make sure that customers can reply to the message, so they can tell you if they have a valid reason for not returning, such as a problem with their last order.  This gives you an opportunity to connect with that customer, fix the relationship, and keep them coming back.

Use Customer Feedback

Customer retention is vital to customer lifetime value.  Work to keep customers coming back by listening to their feedback and addressing their concerns.

  • Put a system in place to monitor and respond to reviews on sites like Yelp and Google
  • Provide feedback surveys to give customers a way to tell you when something's wrong, and keep them from going to public outlets like Yelp or social media
  • Respond quickly to customer feedback, whether on Yelp, social media, or via a feedback survey

Provide Easy Ordering to Drive Repeat Sales

If you do lots of delivery and carryout, customers must have an easy, convenient ordering experience -- both for first-time and repeat customers.

  • Don't keep customers waiting on hold for call-ins; consider options to reduce hold times, if customers are consistently waiting on hold
  • Provide an easy-to-use online ordering system
  • Make sure your online ordering system can save customer and payment information for easy repeat purchases
"If it's easy and convenient, then customers are more apt to order more often."
—Luke Jackson, Johnny's Pizza

Sell Them More Stuff

I saved this point for last because, let's face it: there's only so much you can charge for a pizza.  So you can't just raise prices to make more money, and you risk driving customers away!

The best way to increase check size is through upselling and cross-selling, to get customers to buy more, with higher margins for you.

  • Create a plan for what types of upsells and cross-sells you want to use
  • Train your front of house staff on suggestive selling, using your plan
  • Consider providing rewards for the staff on their sales success
  • Ensure that your other systems, like online ordering, provide a cross-selling function