You are going to lose 10-20% of your guests for various reasons (death, life-style changes, moving, change of jobs, retirement, competitors stole them, etc.) over the next year. It is very important that you have cost effective marketing programs to replace these guests. That's why it is important that you understand the Lifetime Value of your regular Guests (LVG). This is what an average guest spends in your restaurant over a period of time.
For example: If your average guest expenditure is $33 every time they visit your restaurant (for an average table of 2.7) and they come once a month for three years, this means that guest is worth: $33.00 x 12 x 3 = $1,188.00. If you are a quick serve restaurant they will spend less, but they will probably come in more often
Additional profit with cost of goods deducted |
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| Customer Visits | Year One | Year Two | Year Three | Year Five |
| Three times a week: | $ | $ | $ | $ |
| Two times a week: | $ | $ | $ | $ |
| 52 times a year: | $ | $ | $ | $ |
| 24 times a year: | $ | $ | $ | $ |
| 12 times a year: | $ | $ | $ | $ |
Once you work out the lifetime value of the guests you want to attract to your restaurant , you can then determine what you are willing to do and what to offer new guests to get them to try your restaurant.
Knowing that a guest is worth, $1,188.00 to you over a period of time means that you can make an "up-front" or acquisitional investment on their first visit with you and still make good money over the next 12 months. The gross profit on this guest after a 31% food cost is taken out is $819.72 per year.
In today's competitive marketplace it is vitally important that you get guests to try your restaurant as quickly as possible, and that you turn them into regular customers.
The first step to getting lots of repeat guests is to get them dining at your restaurant for the first time.
Once a guest dines at your restaurant , your goal is to get them to come back a second time and then become a regular guest who will visit your restaurant at least once a month.
You must become the "Restaurant of Choice" in your marketing area. When people think about restaurants, your restaurant name must be Top-Of-Mind with everyone in your market area.
Look for new guests all the time. Let's say that you set a personal goal to acquire 10 new guests a month and provide the outstanding food and service to make "regulars" out of them. How much additional profit would you make over the next year? Here is the answer:
If your restaurant has an average guest check of $33.00 that means one guest could represent $10,656 in sales less approximately $3,197 (30%). in food cost, to give new additional profit of $7,459 dollars over three years, or $2,486 for one year. Sounds great, doesn't it? Now think about the profit that 30 NEW guests a month brings over three years... $454,944.00. WOW!
Now we all realize that it isn't this simple to figure "gross profit" for a guest and that one size doesn't fit all, but in reality, in most cases the only real additional expense is food cost.
The graph below will help to emphasize the importance of gaining new guests each month.
| "Be My Guest" | 12 Months | 18 Months | 24 Months | 30 Months | 36 Months |
| Accumulated Number of New Guests 10 New Guests per month. |
120 | 180 | 240 | 300 | 360 |
| Yearly Additional Gross Profit | $17,760 | $38,936 | $68,310 | $105,880 | $151,648 |
| 20 New Guests per month | $35,520 | $77,872 | $136,620 | $211,760 | $303,296 |
| 30 New Guests per month | $53,280 | $116,808 | $204,930 | $317,640 | $454,944 |
Thirty new guests a month is only one new guest a day! As the new guests respond to your offer, sign them up in your VIP Club, more on your VIP Club later. But, you would send them an immediate "Thank You" Certificate to get the new guest back to your restaurant very quickly. It is important to have your new guests develop a "habit" of eating at your restaurant. You need to be the "Restaurant of Choice" when they think about eating out.