Definition
Customer lifetime value (CLV)
Customer lifetime value (CLV) is the total profit a guest brings over the whole span of their relationship with you, not just what they spend on one visit.
Customer lifetime value reframes a guest from a single ticket into a relationship. A regular who comes in twice a month for two years is worth vastly more than a one-time diner, even if their per-visit Average check is smaller. CLV is roughly the average check times visit frequency times how long they keep coming back, minus what it cost to serve and acquire them. It is the number that justifies spending on retention, because keeping an existing guest is far cheaper than winning a new one, and it is the mirror image of Churn.
You cannot compute or grow CLV without owning the relationship, which is why it depends on First-party ordering and First-party data. Direct guests attach to loyalty programs at 41% vs 3%, and 74% return after a unique experience of guests return after a standout experience, with email marketing making diners 3.5x more likely to come back. Loyalty programs are wanted, too: 96% of members say they are worth it. AI raises CLV by identifying who is slipping away, timing the right offer, and personalizing follow-up. See loyalty and retention and email and SMS marketing.
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