Apr 25, 2024
 min read

Pivotal Questions to Drive Guest Lifetime Value

This article outlines:

A brief overview of guest lifetime value

4 pivotal questions to drive guest lifetime value

A preview of our latest ebook, “Guest Lifetime Value: The Real North-Star Metric for Restaurants”

Personalization used to be a differentiator. Now, guests expect it

To meet those expectations and drive profitable acquisition, retention, and growth, leading restaurant brands are prioritizing a new metric: guest lifetime value (GLV).

Keep scrolling for a basic overview of GLV, including four questions to help you increase it over time. Then, download our ebook, “Guest Lifetime Value: The Real North-Star Metric for Restaurants,” to find out why GLV matters more than ever for restaurants and how to use it to propel your business forward.

Download our Guest Lifetime Value ebook


What is guest lifetime value?

Guest lifetime value is the revenue generated from each guest throughout their relationship with the brand. In other words, it’s how valuable a guest is to your business, not just on a transaction basis, but with regard to their recency, frequency, and spend.

By focusing on GLV, you can use real guest data to predict three key things: 

  • Which guests will come back
  • How often they will come back
  • How much they will spend

… and use that intel to make strategic business decisions—from marketing to real estate.

How restaurants can be truly guest-focused

A good understanding of your GLV depends on which behaviors you’re tracking and if they’re linked to a single source of truth. A guest data platform, for example, can tell you exactly where and why your guests spend money—and measure the impact of repeat orders, marketing dollars spent, and beyond—by ingesting data from multiple sources across your tech stack.

The endgame is turning all this insight into action to improve your guest experience. And, once you know how your best guests behave, you can leverage that knowledge to put first-time or infrequent guests on a proven path to high-GLV.


4 pivotal questions to drive guest lifetime value

To give you a sense of what this looks like in practice, here are four behavior-based questions you can ask to drive GLV:

1. Are you making it easy for your guests to dine how they want?

It’s never been more important to meet guests where they are. If a high percentage of your guests order food to-go, focusing your menu innovation and streamlining systems around online ordering, pick-up, and delivery will be critical for driving GLV.

Similarly, when evaluating your on-premise guest experience, ease of ordering and payment can directly impact order frequency and spend. Convenient ordering methods like self-service kiosks—favored by 65% of all adults if given the option—and QR codes can provide faster service and more control over order customization and accuracy.


2. Are you using your guests’ preferred method of communication? 

If your guests are highly engaged with email, create more targeted email content. If they are more active on social media, build processes to interact with comments, posts, and mentions—and share guest content on your channels. And if you’re unsure about their preferred method of communication, look at your data—or better yet, ask them.

Unified guest data and a fully integrated restaurant marketing solution will help you determine the sweet spot—time, day, channel, and messaging—to reach each guest so they return sooner, spend more, and become increasingly valuable to your brand.

Related Case Study: How First Watch drives online orders with guest frequency campaigns

Hear leaders from bartaco, California Fish Grill, and First Watch share how guest lifetime value is changing the way they run their restaurants and driving better results.

3. Do you proactively provide opportunities for guests to give feedback?

According to “The Data-Driven Restaurant,” a Market Leader Report from Nation’s Restaurant News Intelligence, leading brands cite online reviews and ratings (63%) and voice-of-the-guest feedback (34%) as key data categories for measuring guest satisfaction.

Considering guest satisfaction can directly impact check size, tip amount, return visits, and your brand’s online reputation, it’s important to solicit feedback proactively. You can drive GLV—and potentially thwart negative reviews—with automated surveys that show guests you value their opinions. Bonus points for offering a delicious incentive … free fries, anyone?

4. Do you cater to your guests’ regional behaviors and preferences?

Your guests’ dine-in/to-go ratio, favorite dishes, and order frequency likely differ by location. Taking action based on guest behaviors unique to each location is a best practice in driving up GLV. 

For example, brands like Starbucks and Sonic use their drive-thru screen or app to highlight popular menu items or “local favorites” at the specific location where a guest is ordering. This type of data-driven recommendation can create a sense of community similar to hometown pride—and inspire guests to try something new.


Dive deep into guest lifetime value

Pivoting to GLV as your north star means focusing on actual guest behavior. Restaurant brands can boost profitability over time by analyzing metrics like order frequency, average spend, favorite menu items, preferred daypart, and go-to sales channel—and then taking impactful actions to enhance the guest experience.

Whether you’re new to the concept of GLV or simply looking for fresh ways to leverage the metric across your business, our new Guest Lifetime Value ebook can help. In it, you’ll find out

  • Why top brands are focused on GLV and how you can access this essential guest insight
  • How order recency, frequency, and spend can impact restaurant success and vary by service model and food type—with benchmarks
  • How to increase GLV and, therefore, revenue by focusing on individual guest behavior and leveraging those insights across departments

Click the button below to get your copy.

Download our Guest Lifetime Value ebook

Ready to use guest lifetime value to grow your business? Request a demo of Engage, Olo’s restaurant data and marketing platform.

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