We’re focused on Numbers and you should be too. That’s how you grow, that’s how you succeed.

How much $$$ does 1 person bring you?

Something that’s really helpful for you to know is what the lifetime value of a restaurant guest is. This counts not only the first time they come in and diner at your restaurant, but also how many times they’re going to come in over time. So, you want to know how long they’re going to be a customer and how much they’re going to spend over their lifetime.

Calculate the LTV with this Chart

So, I found a great helpful form here by Ascend Digital that goes through how to determine what the lifetime value of a guest is.

Let’s take a look at my screen here and I’ll show you what I found. Ascend Digital made this great form on how to determine what the lifetime value of one single customer is.

Here with this form, the formula is that the average ticket or the average sale per single person times the monthly frequency that they come in is the gross sale per person, and then we take that and we put it here and then we say times 2.3, that’s how many friends they typically bring in. There’s usually, you know, two and a half people on average coming in to eat with a party. Maybe it’s just one, sometimes it’s four, so we’ll call that 2.3. That field equals your gross sales per year.

People stay around for 5 years on Average

The gross sales per year times five years, times two, which is them bringing in a referral or then telling a referral about it, equals the lifetime value of a customer.

So, if we say that $24 is the average sale per person and the number of times they come in a year is 12. Now, not everyone’s going to come in 12 times, but you’ve also got regulars who come in once a week. So let’s just say that single person is going to come in 12 times per year.

And so, the average sale value per year of a customer is about almost $300. They typically are going to bring in a few people for that meal, so that’s going to be $662 per table. Then they’re going to give you one referral per year and that referral is also going to bring in $662 per year. So once you do all the math, the lifetime value over five years of that guest is $3,300.

The Lifetime value of a $24 average ticket/person is…

That brings it to a total lifetime value of one satisfied customer is $6,600 because of the referral.

Now, a lot of restaurant owners have never really worked through this. They don’t know how to calculate it, but I think that’s pretty accurate and it’s what we’ve seen with our own metrics. It really gives you a sense of how much you can spend to acquire a customer, and it gives you a really great path forward to know your numbers and what you can spend to get a new client or a new customer.

I hope that helps.