• Restaurant Marketing

Why Customer Lifetime Value is Key in the Restaurant Industry

by: Robin Johnston On: June 19, 2018
3 min read

Customer retention is a crucial factor in the success of all businesses, but particularly important in the restaurant industry. Among the KPIs restaurants need to track, repeat business is a significant indicator of customer loyalty and helps drive the lifetime value of a customer.

Loyal customers typically fall into these three categories:


These are customers who not only visit constantly, but recommend your restaurant to others, post positive reviews online, and mention you on social media. These advocates are invaluable, boosting your brand awareness and visibility, and providing unbiased referrals to everyone who they influence. Brand evangelists are key drivers of long-term success in any business: not only do they advertise your restaurant at no cost to you, but their recommendations are trusted by 92% of people, compared to the 24% of people who trust ads. In most industries, a single brand advocate generates 2.5 new customers, but in the restaurant industry that number is much higher.


These customers have made your restaurant part of their routine, whether it’s coffee every morning, or brunch every Saturday. Among a wide variety of options, they continue to choose your restaurant. In fact, psychology studies demonstrate that once a consumer has formed a habit by repeating the same choice over and over again, the behavior reinforces itself and will continue unless the brand changes so much that it prompts a new choice.

Special Occasioners

While special occasioners are sometimes slightly maligned as the compromise choice (the one restaurant the whole family can agree on, for example), these customers also have significant lifetime value. Whether it’s the family tradition, the annual birthday or anniversary, or the favorite restaurant during vacation, these customers choose to create and share some of their most special and significant moments in your restaurant, building important lifetime memories around their experience.

No matter which kind of repeat business you have, there are important reasons to track the lifetime value of your customer.


  1. It informs your business. Knowing the value of your customers allows you to more accurately predict their behavior and inform inventory and staffing decisions. It has also been shown that restaurant service improvements are a great way to convert customers into brand evangelists and improve loyalty.
  2. It informs marketing decisions. Once you know the lifetime value of a customer, you can spend your marketing budget on the initiatives and programs that make the most sense. There are a variety of innovative ways to market your restaurant, but your marketing strategy will be best informed by prioritizing a desire to recruit new customers or deepen relationships with existing ones.
  3. It informs your loyalty program. Speaking of deepening relationships, once you know the lifetime value of your customers, you can craft a more effective loyalty program. Good loyalty programs are an excellent way to convert frequent customers into brand evangelists, and restaurant loyalty programs increase a customer’s lifetime value by up to 30%.


If you haven’t yet figured out the lifetime value of your customer, the folks at nextrestaurant.com have come up with a convenient calculator that allows you to calculate the lifetime value for free, anonymously. Importantly, you can even store the results and track changes over time, to see how your efforts are paying off.

In every business, customer lifetime value is an important metric to track. But in restaurants, where competition is so fierce, loyalty is key to survival, and word of mouth can make or break you, it’s more important than anywhere else. If you aren’t yet tracking the lifetime value of your customer, and using that information to inform business and marketing decisions, it’s time to begin, and know the real value of your customer.

Restaurant Marketing FAQs

What is Restaurant Marketing?

Restaurant marketing is the process of getting people to visit your restaurants. Restaurant marketing creates loyalty, provides data to research, analytics, and allows restaurants to gain a better understanding of their ideal customer profile. It utilizes all customer channels: guest WiFi, website, social, rating sites, mobile apps, email, text, and advertising.

Learn More About Restaurant Marketing Here

What is WiFi Marketing?

WiFi marketing is a marketing technique that uses guest WiFi to collect & clean customer data such as names, emails, phone numbers, customer behavior, and demographics. This data is used to personalize marketing campaigns to increase customer loyalty, build online reviews, and save at-risk customers. The performance of every campaign can be tracked down to the tangible ROI of a customer walking back in your door.

Learn More About WiFi Marketing Here

What is Restaurant Reputation Management?

Restaurant reputation management is the process for restaurants to manage customer feedback and creating systems to improve customer experiences, passively build positive online reviews, and save at-risk customers. It is a very important aspect of running a successful restaurant business.

Learn More About Restaurant Reputation Management Here

How Does Bloom Identify and Bring Back Lost Customers?

Bloom Intelligence uses machine learning to identify at-risk customers. When one is recognized, the system will send them a message with an incentive to get them to return and re-establish their visit pattern. Bloom users are seeing up to 37% of churning customers return.

Learn More About Saving At-Risk Customers Here


What our happy customers
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Austin Eggleston
Bob Cross, Vice President of Operations
Ron Murray
Matt Thompson, Managing Partner
Jacqueline Martin

“I highly recommend restaurants, dental/medical offices, and other businesses look into Bloom Intelligence as 1) their marketing technology is very powerful and 2) their team is AWESOME. As a marketing agency, Bloom has helped several of our clients grow their businesses via building their database and re-targeting them at the right time. Thanks Again!”

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Jacqueline Martin

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