How One Manager Having a Bad Day Cost My Client Over $16,800! (Fire your Manager If They Do This)
Written by Kyle Bergthold on July 6th, 2020
Yes it's true, I've seen it happen more than once and I'm gonna share 2 stories with you but first we have to understand 2 very important business concepts that'll completely change the way you think about the guests who come into your restaurant...Ideal Customers and Life Time Value. Grab a pen and take notes because this article could save you over $20k!

Have you asked yourself who your ideal customer is? 

Most of my clients haven't. They think anyone who comes in and spends money and has a good experience is their "ideal customer." But let me introduce  you to two people I know from when I was a bartender.

Meet Mike.
Mike was a regular who used to come into a restaurant I used to work at every week, sometimes twice a week. He owned his own business and loved to talk to everyone about how much money he'd made that week, the fun things he'd done and the great food he'd eaten.

Mike really enjoyed our Prime Rib, and he would call ahead and ask if we had any available before coming in. 

The owner was a smart business man and would save Mike 38 ounces of Prime Rib every Saturday. We only offered 12 oz and 16 oz slices but Mike would order a 22 oz for him and a 16 oz for his wife; and the owner would cut him the big pieces that weren't available on the menu and upcharge him for it. 

Mike would leave a minimum of $100 every time he came in. Bill was $70? $30 tip. He was also very well known in the community and he was a food guy. He loved to tell everyone about the places he ate and how good the food was. He was practically a walking and talking billboard for our prime rib.

Mike is what you call your "ideal customer."

He comes in every week, sometimes twice a week. He spends a lot of money, he tips well, he's pleasant to talk to and never complains and he tells everyone how good his experience is and why they should come in and dine with you.

Now let's talk about a very important business concept. Life Time Value. (LTV)

You see, an amateur restaurant owner looks at Mike and says that he's worth $100. Why? Because that's how much he spent.

However, Mike came in about 80 times a year and spent $100 on average every single time. He did this every week for over 3 years straight. 

That means Mike's value to our business was actually $16,800. ($70 in sales x 80 times a year x 3 years) 

Mike was the kind of customer that "literally" kept the lights on. 

An expert restaurant owner understands that Mike's Life Time Value (LTV) is way more than $100, it's well over $16,000!

But, remember, Mike was a walking and talking billboard who knew A LOT of people in the community. He would often tell them how good the Prime Rib was and that they should come in and get it, "they wouldn't be disappointed," and "...to tell them Mike sent them."

He would personally bring them in with him occasionally as well. 

It's safe to assume a moderate estimate of 1 new person every month came in thanks to Mike, our ideal customer.

Let's assume that each one of those people had a modest ticket price of $50 and that they only came in once a month. So over 3 years, Mike would have been responsible for bringing in 36 new regulars. (1 new person every month for 3 years is 12 x 3 = 36)

And each one of those 36 new regulars spent $50 once a month over 3 years. That's $64,800. (36 regualrs x $50 x 12 months x 3 years) 

So Mike was actually responsible for bringing us almost $65,000 worth of sales in the 3 years that he frequented the restaurant.

A professional restaurant owner understands that Mike's LTV was actually well over $81,600 over a 3 year period. ($16,800 + $64,800 = $81,600)

So an amateur restaurant owner treats Mike like he's worth $100. An expert Restaurant owner treats Mike like he's worth $16,800, and a Pro treats Mike like he's worth $81,600 because a pro understands the Life Time Value of a customer. 

Meet Nick, an amateur Restaurant Manager. 
Nick was one of my managers when I worked at this restaurant and I want to start by saying that he's a great guy and very smart. He's still my friend and I enjoyed working with him because he has a lot of talent.

But, one night Nick was having a very bad day and he was not in a good mood.

Mike came in like he always did and ordered his 22 oz Prime Rib. He was a little disappointed that Nick didn't come over and greet him and say hello like the special treatment he was used to when he came in. 

Then his food came out. 

His prime rib looked like a 16 oz. Maybe it was 18 oz, but it definitely wasn't the 22 oz he had become accustomed to. 

So, Mike called Nick over and explained that he knew what a 22 oz Prime Rib looked like, and this one was smaller than what he usually got. 

Nick told him we didn't have a 22 oz prime rib, that the biggest we offered was 16 oz. Mike told him, "You know who I am, you know I come in here every week sometimes multiple times a week to get a 22 oz prime rib, all I want is what I normally get and this aint it."

So Nick told him he could cut him a 6 oz piece and add it to his plate and his bill. "Mike told him he didn't want a 16 oz Prime Rib and a 6 oz prime rib, that he wanted the thick 22 oz all in one piece like he always got."

Nick, who was already in a bad mood and having a bad day, showed his frustration on his face. He considered Mike as being unreasonable and wanting special treatment. I mean, who was this guy thinking he could come in here and order items that aren't on the menu and be so demanding?

Nick cut him the 22 oz that he wanted and personally delivered it to him, making sure to take the 16 oz off of  his plate and throw it in the trash so that he'd know it had been wasted.

Nick came to the back fuming saying something along the lines of, "That guys nothing special, he's just like the rest of us why does he think he gets special treatment when he comes in here?"

Mike left me a $50 tip and he left in a pretty bad mood. Then I noticed something... Mike didn't come in the next week. Then I noticed I didn't see him for a month. 

The next time I saw him at the gym I went up and talked to him. "Hey Mike, long time no see!" 

"What's up brother, what's the good news?" Mike said greeting me with a smile. 

"I haven't seen you in awhile brother where you been?"

"Oh working hard, making that money, I'm pushing over $4,000 this week and I got another job tomorrow!"

"Cool man, you gonna come in and see me this weekend?"

"Nah, I'm not coming back in there after the last time I came in, I don't like that Nick guy and he rubbed me the wrong way. You know me, I'm not an asshole or anything but I just wanted what I always get and that guy treated me like shit."

It didn't actually dawn on me how much Nick having one bad day, and being in a bad mood had cost the restaurant until years later when I was running a successful business of my own and I had become a professional who understood LTV.

Let me share another story with you that will really solidify this concept. 

Meet Colin and his two sons.
Colin was one of my regulars at a different restaurant I used to work at. He was also a business man who made good money and he loved Coors light and vegas bombs. 

Colin was there, every single day, at happy hour to drink $2 Coors Light Pints. He would usually run up a $25 tab or so just in beer. He'd often buy rounds of vegas bombs for the other regulars at the bar and he liked for me to fill the shot with crown and just do a splash of peach on top.

While this was against the recipe, because I understood the value of taking care of regulars and making them feel special I would oblige and make Colin his shots the way he preferred knowing that the extra crown wouldn't be missed on the liquor cost.

Colin would order 20 traditional, All Flats no Drums, bone-in wings almost every day like clock work. He liked them cooked twice, extra extra crispy. He would tell the cooks to cook them for 20 minutes because he didn't like soft squishy wings.

He liked dry rubs and always wanted extra celery, extra carrots, extra bleu cheese, extra ranch, extra south west ranch, and a side of mango habanero - one of the spiciest sauces. 

And extra napkins. 

He would also order 12 boneless for his oldest son and a burger for his youngest son.

At least twice a week he ordered this. Of every week. Of every month. Of every year.

Now we were supposed to charge for extra ranch and extra sauces, but I never charged Colin for any of the extras he wanted, because by this point I was already running a successful business on the side and I understood LTV. 

I knew that Colin spent, on average, about $300 a week. He was there almost every day, and I saw him almost every day I worked for 2 years straight. That's $31,200. ($300 per week x 52 weeks x 2 years.)

Colin tipped me on average $20 a day. I worked 4 shifts a week. So I understood that Colin was worth $8,320 to me alone, yet alone the business. 

He literally paid my light bill every month. And I treated him as such. A valued guest and friend who frequented my bar.

Meet Matt.
I couldn't actually find a picture of Matt because I can't remember his last name and we were never friends on Facebook so I've included this random image just as a place holder - but that's not Matt.

Anyway, Matt was a district manager for this restaurant who was acting as General Manager until he could hire someone to take the job. 

Matt hated his job, rarely smiled, didn't understand employee morale, never did anything but sit in the office, and everyone hated him. 

He once left the HVAC unit at this restaurant out of order in the middle of the summer for 5 days while the employees worked in, and the guests ate in, 80 degree heat. 
Another time he left the handle on the bar bathroom door broken while people using it constantly got walked in on. (and one time a guest got trapped in their for over 30 minutes.)
And another time he left the broken sink running for 2 days straight! (The shut off valve was broken)
I share all of this to tell you what kind of a manager Matt was. He clearly didn't care about the customer and he clearly didn't understand LTV.

So one day I put in Colin's order just like I always did and I went to bag it. But Matt was in the kitchen and he'd put the ranch and bleu cheese and other dressings and condiments in the back of the kitchen to stop servers from giving them out for free. 

No ticket no taco. 

I explained to him that I needed extra ranch, extra bleu cheese, extra carrots, extra celery, and a side of mango habanero for Colin, our regular at the bar who never paid for this extra stuff because of how much money he spent in the restaurant every day.

Matt said he didn't care, Colin wasn't special and I had to ring them up just like everyone else. 

So the first time this happened I rang them up and I paid for it. 65 cents each, times 9 for a total of $5.85. I wasn't about to charge Colin $6 for some dressings and condiments because my manager didn't understand good and smart business. 

But the other bartenders weren't as savvy as me. Colin didn't just come in on my shifts and the others did charge him $6 for his extras. 

The next time I came in Colin didn't order food or shots. He just had a few beers at the happy hour price; less than a $20 tab. 

He was sure to let me know he wasn't going to order anymore food there, and he didn't like the new manager who was "nickle and dimeing" him for some extra ranch when he knew how much money he spent there.

I slowly saw Colin less and less until he disappeared. The other regulars said he went to JJ's now, a new bar that had opened near by that had a "happy minutes" special. 

The truth of the matter is that both of these managers cost their respective restaurants A LOT of money by not treating these regulars like the valued customers they were.

Neither one of them understood the very important business concepts I've shared with you today. They didn't understand what an "ideal customer" was and they didn't understand what Life Time Value (LTV) was. 

They were amateurs, who treated their guests as such and the results speak for themselves.

Good job Matt, you got your $6 and showed Colin he wasn't special and it cost the restaurant over $31,200 in sales that they would have made over the next year.

Is it worth charging the guest $6 for some ranch and condiments if it costs you $300 per week in sales to do so? Of courses not!

If your guest wants a 22 oz Prime Rib, give it to them. 

If your guest wants their tacos made with lettuce wraps instead of a tortilla, make it for them. 

If your guests wants their black olives on their pizza diced up into tiny pieces, dice it up for them.

Take special care of them. Make them feel important and make them feel special.

Or it could cost you way more than what they spend on that day on that ticket.

I share this story with you so that you or your managers don't make the same mistake. Treat your regulars like the highly valued and valuable customers they are. Give them free stuff.

If you charge everyone else 65 cents for ranch, give it to them for free. If you give them a little extra alcohol in their drinks or shots, let them know you're doing it for them because you appreciate them. 

And if your managers don't understand what an ideal customer is and how their LTV is far more than what they spend on a given night on a single ticket; coach them and train them or they just might end up costing your restaurant $16,800 (or more) in sales every year. 

And create a negative walking billboard telling everyone about their "bad experience" and how they used to be a regular but won't step foot in your restaurant anymore because "the management has gone down hill."

If you have a manager that ever treats your regular ideal customers like less than the highly valuable and honored guests that they are...

If you ever have a manager who doesn't make your ideal customers and regulars feel special and important.

Fire them. 

It will save you money in the long run I promise you.

Bad attitudes can't be coached.

Bottom line: Be a professional and treat your guests like they're worth $100,000 because they are. Don't be an amateur and treat them like they're only worth one sale because if you do, that's all you'll get and they won't be back.

If you'd like to be a client of mine and treat all of your regulars in your huge database of guest avatars like the rock star, special, super-uber important ideal customers they are; then reach out to me today and schedule a FREE strategy session to learn more about how Food Funnels can grow sales in your Restaurant!

Kyle Bergthold


Kyle Bergthold helps companies dominate online with Facebook Ads. He's an expert at helping businesses get customers using online methods and making things super simple to understand. If you're interested in creatives that grab attention, copywriting that sells, funnels that convert, and Facebook Ads that get a high return, then definitely reach out and request a free strategy session today.
FB Comments Will Be Here (placeholder)
All Rights Reserved 2020. © KAB Ventures LLC
This site is not a part of the Facebook website or Facebook Inc.
Additionally, This site is NOT endorsed by Facebook in any way.
FACEBOOK is a trademark of FACEBOOK, Inc.