Make Your Customers More Valuable

The 3 ways to make your customers more valuable.

If we define a customer as the person who makes the booking, then we can define revenue with a simple formula:

Revenue = customers x lifetime value

Revenue is the total number of customers you get (that make a booking) multiplied by the average value of each customer in their lifetime (this stat is LTV).

So, how can you increase LTV (lifetime value)?

1. Increase visits

Customers who come back spend more than customers who don't.

2. Increase avg booking size

Customers who book larger groups, spend more than smaller groups

3. Increase avg spend per person

Customers who spend more, well, spend more.

Example

A restaurant has 10,000 customers

Avg total visits is 1.5 visits per customer (who made the booking)

Avg booking size is 2.8 pax

Avg spend per person is $100

Rev = 10,000 x 1.5 x 2.8 x $100 = $4.2M

Compared to;

A restaurant has 10,000 customers

Avg total visits is 1.7 visits per customer (who made the booking)

Avg booking size is 3 pax

Avg spend per person is $105

Rev = 10,000 x 1.7 x 3 x $105 = $5.4M

That's about $1.2M in extra revenue for the same restaurant, with the same menu and the same number of customers - but with very small increases in visits, booking size and average spend.

This, of course, is much easier said than done. So, beyond building a world class brand, winning 3 hats or getting Taylor Swift to UGC you, here are some ideas you can implement within your team.

1. Give your customers a reason to return and tell them about it through email and/or SMS.

2. Attract more birthdays, events and functions to increase average booking size or use strategic offers to incentivise your customers to dine as a group.

3. Increase the average spend per person through upselling. If you haven't already seen our 8-page PDF guide on this, download here.

Lastly, increasing LTV (customer lifetime value) is easier when using the right tools. We recommend SevenRooms for both reservations and email marketing because it has heaps of features we use to increase LTV.

New SevenRooms customers will also enjoy 3 months for free when mentioning SERV. Agency.

If you're not sure where SERV. Agency fits into all this, we'll help you win more new customers and increase LTV.