In the current business landscape, repeat customers represent the most profitable segment for any company, be it a retailer, restaurant, or franchisor. The emphasis on customer retention is increasingly crucial as businesses face numerous options and fierce competition.
For restaurants and retailers, success metrics are evolving. Traditional measures like year-over-year sales growth are no longer sufficient to gauge overall business health. Instead, a focus on Guest Lifetime Value (GLV) has emerged as a more significant indicator of sustained success.
Guest Lifetime Value is defined in Olo's e-book "Guest Lifetime Value, The Real North-Star Metric for Restaurants" as the total revenue generated from each guest over their relationship with a brand. According to Olo's findings, the top 5% of GLV accounts for approximately 30% of a restaurant’s revenue. Moreover, repeat guests over six months have been found to order 2.2 times more than the average guest.
This data underscores the importance of earning customer loyalty to ensure repeat business and increased transaction values.
For further insights, read the full article from Entrepreneur.