What's a Loyal Customer Worth?

Does it drive you crazy when a customer complains and you end up having to comp a meal or two? Do you get on your staff when they substitute a baked potato for the vegetables? If so, you may be focusing on short term results at the expense of building a solid base of loyal, repeat customers. Have you ever estimated what a loyal customer is worth in sales over their lifetime, if they keep coming back to your restaurant? Many operators have. A national pizza operator has estimated the average “life time sales value” of a loyal customer is around $13,000. Do you think they mind having to give away a pizza or two in order to keep a customer happy? A high-end hotel operator puts the life time sales value of a loyal guest at over $100,000. They are so adamant about keeping their guests happy that any staff member can spend up to $2,000 on the spot, no questions asked, to resolve a guest problem. Smart operators know it always costs less to keep a customer than it does to find a new one. Look at your customers in terms of their long term sales potential if they keep coming back again and again, not just what they may to spend at one meal. Communicate this concept to your staff and enlist their ideas and support in finding ways to turn casual customers into loyal guests. www.yaseintl.com