Article: “What is a guest worth?” (1996)


"To err on the side of conservatism, we will look at the value of a guest who comes in only twice a year and spends just $25 each time. That is $50 a year in sales. Over five years, this person will spend $250 with you. Acceptable, but not worth getting very excited about, right? Well, the true cost is a little different than the modest $250 figure might suggest.

…When we look at the real cost of losing a moderately enthusiastic, regular guest, the total loss comes in two ways: positive word lost and negative word gained. In this case, the incident really cost you $48,750 in lost sales resulting from lost positive referrals and another $2,500 in lost sales resulting from negative word-of-mouth – a total potential loss of $51,250 just from losing a $50-a-year guest! If our disgruntled diner was with a party of four, you must take the loss times four. If one person at the table has a bad time, everybody at the table has a bad time!

The good news is that if guests have a bad time it does not necessarily mean that you will never see them again or that they will say terrible things about you. However, you can probably expect that you will see them less frequently and they will be less inclined to recommend you to their friends.

The bad news is that these figures were based on a guest who comes in twice a year and spends $50 during that time. Most of your guests – certainly your regulars – come in far more frequently and spend more per year."

source: "What is a guest worth?" by Bill Marvin ("GBM: Guest-Based Marketing", 1996)

WaiterBell Angle: An interesting exercise that gives you a sense of the financial impact one customer can have on your restaurant. Now take into account what Mark Cuban (owner of the Dallas Mavericks) says in his blog:

"In today’s world, one upset customer can write in their blog about how upset they are about your product or service and it could be linked to by any number of other blogs, which in turn are linked to by any number of blogs, which is in turn picked up by a tv news show. In 24 hours or less, tens to hundreds of thousands, if not millions of people have heard the complaint and your business and brand are at risk."

source: "Using Blog Search for Business" by Mark Cuban (Blog Maverick, July 23,2005)

With consistent, high quality restaurant customer service, your customers share their satisfaction by recommending others. WaiterBell is a solution that ensures consistency, enhances customer satisfaction, and prevents the loss of customers due to poor restaurant customer service.


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