WHAT TACO BELL TAUGHT ME ABOUT CUSTOMER RELATIONSHIPS
When I was in business school, our professor used Taco Bell to demonstrate the importance of the lifetime value of a customer.
Customer lifetime value, or CLV, is a metric that estimates the total revenue a customer will generate over their entire relationship with a business.
This metric is important no matter who you are and what your business model is.
CLV is important for low-cost, high volume companies because it is imperative to maintain the customer relationship to earn revenue over a long period. Today, I bought a Cantina Chicken burrito for $8.59 for lunch at Taco Bell. However, according to a 2012 study, over my lifetime when adjusted for inflation, I will spend more than $40,000 at the Bell.
If Taco Bell's customers are worth this much, just imagine other business. Think of airline and auto companies. We may buy less frequently than Taco Bell, however, we spend so much more transactionally. If you're a business person who travels a lot, your lifetime value in the travel sector is enormous.
This is why it's so important to maintain a good relationship with your customers.
You do this by having a strong brand. One that pays attention to their customers and adjusts product or service offering to meet their unique needs. Other than Taco Bell, we only ever eat three meals a day. Taco Bell literally invented a meal add-on to consumer's lives. When it's late and we're hungry, we know where to go for a fourthmeal.
During the late nineties, Gidget the Chihuahua graced the living rooms of Taco Bell aficionados across America. We all remember the famous "ding" in Taco Bell commercials on T.V. with the dog saying, "Yo Quiero Taco Bell!"
In Pacifica, California at Taco Bell Cantina, patrons can enjoy beach views while sipping on Modelos and frozen margaritas.
Today, Taco Bell even has a swag shop where you can buy cool merch!
The loyalty Taco Bell shows its customers is truly unparalleled. They know us, they love us, they live to serve us.
This is why Taco Bell serves as such a great example of a business committed to maintaining strong CLV. The brand understands what to do in order to stay relevant with their customer base and maintain that relationship over long periods of time.
Remember this next time you interact with your customers. Ask them what they want. Then, deliver it.
Whatever you do, don't let your loyal customers go!
What do you think about CLV (or, Taco Bell)? Comment below!
Five3 Consulting
Sources: CPI Inflation Calculator, Prisim "What's a Customer Really Worth to You?" https://lnkd.in/ecW3dAzX
Taco Bell Commercial 1997: https://lnkd.in/ee_bux7G
Taco Bell Shop: https://lnkd.in/enpQeTe9
