This key marketing metric allows you to quantify the value of a customer over the entire future of your relationship with that customer. In the restaurant business, calculating Customer Lifetime Value shows the importance of customer service, long term customer satisfaction and focusing your marketing efforts toward customer loyalty and keeping your existing customer coming back. vs. just focusing on getting new customers in the door.

Another benefit of this calculation is for you to find out exactly how much each of your customers are worth in a dollar value. Once you are armed with that information you can have a better understanding of how much you should be willing to spend in marketing to acquire and retain customers.

How to Use this Calculator.

Each component of calculating Customer Lifetime Value is broken down for you along with how to arrive at the information needed to complete the calculation. Sections D, E, H, I and J are automatically calculated for you (fields highlighted in yellow). Simply complete sections A, B, C, F and G and you are done.

Here are some benchmarks for you:

• Restaurants can expect a “regular” customer to buy 1.7 times per month.
• The average number of years a “regular” customer will visit a restaurant is 2.7 years
• A typical dissatisfied customer will tell 8-10 people. Those people will tell 5 more people. That means up to 60 potential people could be effected by just 1 bad customer experience.
• According to the National Restaurant Association, 46% of consumers say they would be more likely to patronize a restaurant more if it offered a rewards program

If you want to increase customer loyalty, spread positive word of mouth and improve customer satisfaction consider a customer rewards program and focus on loyalty marketing. It cost between 8-10 times more to attract new customers as it does to keep existing customers coming back.