Customer Stickiness and What it Means for Your Business: Part 1
The fast casual restaurant scene is thriving. For years, the market has continued to expand at almost twice the industry average. With this rapid growth, there are many new restaurants entering the market with hopes of finding profit in this new customer base. Of course, finding customers is easy—the hard part comes in keeping them committed to your restaurant and visiting regularly, supporting long term growth. This is where consumer stickiness comes in.
What the heck is stickiness? Put simply, it’s a measure of how often your daily customers return during the week or month. To calculate stickiness, you need just two numbers: the number of daily active users at your restaurant (DAU) and either the number of weekly (WAU) or monthly (MAU) active users, depending on the time frame you want to measure (in this article, we will use monthly active users). Once you have those numbers, divide the smaller value by the larger:
Stickiness = DAU / MAU
This gives a percentage representing the number of total active users for the month that came in on that day: the given day’s stickiness. You can also average these values to get an average stickiness by month. High values indicate that your customers are loyal, returning multiple times throughout the month to order. Conversely, low stickiness means that your customers have not made visiting your restaurant a part of their daily routine, and could be further incentivized.
Let’s look at an example. In May 2017, your business had a total of 1,000 distinct customers make an order. Each day that month, 250 customers visited your restaurant. Then, in May:
Stickiness = 250 / 1000 = 25%
So, your average customer transacted around 25% of the days in May, or roughly 7-8 days that month. Congrats, those are some loyal customers!
So now you know what stickiness is, why it’s important, and how to calculate it. Stay tuned for next week, where we’ll discuss Part Two of the series and go into more detail about ways to increase stickiness and create more loyal customers and drive revenue growth.
Another amazing way to create stickiness? Develop data-driven marketing promotions. Click below to read about the data your restaurant should be collecting.