Exploring LTV:CAC—Does the Cost of OpenTable Still Make Sense in 2020?

Wisely
June 1, 2020
3
min read
Operations
In a snapshot—we answer
How are customers discovering restaurants in 2020?
What are the best channels to drive frequency and retention?
Is OpenTable the most profitable way to acquire guests?
O

penTable owns their place as a pioneer in the restaurant industry. They spearheaded the first move from pen, pad, and phone call reservations to online bookings, streamlining how brands were able to manage their operations. As a discovery network for millions, OpenTable sparked curiosity about new cuisines, interest in dining out, and a way to develop and express passion for restaurants.


But a lot has changed since 1999.


‍Guests are discovering restaurants in ever-expansive ways—food content, search platforms, and social media are commanding an increasing share of mind. “Restaurants near me” (and other “near me” food searches), and even voice search to book reservations are here now and trending into the future. Restaurant brands also now know the value of owning their own consumer data. 


‍When combined, these trends change the incentives and make it substantially easier for brands to directly communicate with consumers (rather than relying on a third party discovery network). 


‍So let’s restate the question: Is OpenTable the most profitable way for restaurant brands to acquire customers?


The answer hinges on how much profit is generated compared to the dollars spent to acquire customers. In Ecommerce, Retail, and Technology companies, they refer to this as LTV:CAC, or Lifetime Value to Customer Acquisition Cost.


In “Exploring LTV:CAC—Does the Cost of OpenTable Still Make Sense in 2020?,” Wisely digs into restaurant industry analysis to see if or when it still makes sense to use OpenTable as the customer acquisition landscape shifts.


Photo by Petr Sevcovic