Glossary
Customer retention and loyalty terms, explained plainly
Every definition comes with a worked example in Australian dollars, because an abstract definition never helped anyone decide anything.
Apple Wallet pass
An Apple Wallet pass is a file format Apple uses for tickets, boarding passes, and loyalty cards stored in the Wallet app on iPhone. Passes update over the air, can appear on the lock screen near a venue, and need no separate application.
Customer lifetime value
Customer lifetime value is the total revenue a business expects from one customer over the whole relationship. For repeat-visit venues it is average spend, multiplied by visit frequency, multiplied by how long the customer stays.
Customer retention rate
Customer retention rate is the percentage of customers who return over a given period. For a café it is usually measured monthly. It is the single most useful number for a repeat-visit venue, because acquiring a new customer costs far more than keeping one.
Customer win-back campaign
A win-back campaign is an automated message sent to a customer who has stopped visiting, designed to bring them back before the habit breaks entirely. It usually triggers on a change in customer segment rather than a fixed number of days.
Digital loyalty card
A digital loyalty card is a loyalty program stored as a pass inside a customer's Apple Wallet or Google Wallet rather than on paper or in a separate app. It updates in real time, can send push notifications, and requires no app download.
Lapsed customer
A lapsed customer is one who used to visit regularly and has stopped, without complaining or cancelling anything. In hospitality they rarely announce it, which is why lapse is usually detected by a change in visit pattern rather than by any explicit signal.
Quiet-day promotion
A quiet-day promotion is an offer sent to move demand into a venue's slowest trading period. Rather than discounting everything, it targets a single weak day and only the customers most likely to respond, so the discount buys incremental trade.
RFM segmentation
RFM segmentation scores every customer on three axes: recency of last visit, frequency of visits, and monetary value spent. Customers are grouped into segments such as champions, at-risk, and lost, so campaigns can target behaviour rather than blasting everyone.