Lifetime Value of A Restaurant Guest

Formula

1. Average Ticket (single person) ________ X Monthly Frequency ________________

= __________ per year.

2. __________ per year X 5 years (average) = _______________________ X 2 (one referral)

= ___________________ Lifetime Value of Customer

Whats One Happy Customer Worth? (example)

Average Sale Per Person $12

Number of Visits Per Month/Year 24
Sales Per Advocate Per Year $288
Average Number of People Per Table (2.3 people) $662
Number of Referral Per Customer 1
Gross Sales Per Year $662
Gross Sales Over Life of Customer $3,310
Gross Sales For Total Referrals $3,310
Total Value of One Satisfied Customer $6,620

Total value of 10 happy customers: $66,200

Total value of 100 happy customers: $662,000
Total value of 1000 Happy customers: $6,620,000

Whats The Cost of One Unhappy Customer?

Loss of a Happy Customer $6,620

How Many People They Will Tell 12
% of Negative Referrals Who Dont Become a Customer (25%) 3
Cost of These 3 Lost Customers $19,860
Total Cost of One Unhappy Customer $26,480

Total cost of 10 unhappy customers: $264,480

Total cost of 10 unhappy customers: $2,648,000
Total cost of 10 unhappy customers: $26,480,000