Customer Lifetime Value (CLV) for QSR Guests

This is the hardest part. If you have loyalty program data, you can see how long customers stay active. If not, you have to estimate. A common starting point for a QSR might be 12-24 months, but this depends heavily on your brand, location, and customer loyalty.

CAC is the total cost to acquire a new customer (including marketing, promotions, etc.). A fundamental rule for a healthy business is that your CLV should be significantly higher than your CAC. A common target is a CLV:CAC ratio of 3:1 or higher.

Loyalty programs directly increase both Purchase Frequency (by incentivizing repeat visits) and Customer Lifetime (by building a habit and relationship). They are one of the most effective tools for boosting CLV.

CLV is about the *profit* a customer generates, not just the revenue. A customer who spends $1000 but on low-margin items is less valuable than a customer who spends $800 on high-margin items. Factoring in profit margin gives you a more accurate picture of a customer's true value.

Both are useful. An average CLV for your whole base is a good starting point. But segmenting (e.g., breakfast vs. dinner customers, app users vs. walk-ins) provides much more actionable insight. You'll likely find that some segments are far more valuable than others.