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Make No Misteak:How Morton’s Uses Their Database to Drive Loyalty

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Our Agenda

Who is Morton’s The Steakhouse?Strategy for Insights

SolutionImpact

Focus On the Fives: Guest Experience Management

SituationSolutionHow We Use it Today

Summary

Make No Misteak:How Morton’s Uses Their

Database to Drive Loyalty

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Morton’s The Steakhouse

World’s largest Owner-Operator of upscale steakhousesPremier Brand, well-established 33 - year historyHigh quality cuisine. Consistent service and experienceFocus on high-end consumer, business traveler and special occasion users. (Approx. 80% expense report)Strategic Marketing Programs and Experiential Events Official Steakhouse of the PGA TOUR

Award-winning reputation

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High Quality Cuisine

The “Best Steak Anywhere” featuring USDA Midwest, grain fed, prime aged beef

High quality ingredients cooked to exacting standards

Broad menu appeals to many taste preferences

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Our Strategy

What We KnewThe Morton’s Guest: Demographics– Highly affluent– 35 to 64 years old– HHI of $100,000+– Elite interests and activities

• Sports: Golf, Tennis, Skiing• Leisure: Wine• Professional: Career-

Oriented

What We Needed To KnowThe Morton’s Guest: Behaviors– How often they visit– How much they spend– Guest Retention

Actions– Where/How to invest in

building guest relationships– Expand VIP Program

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Our Solutions

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CampaignHistory

Search

Guest Experience

WebLog File

CampaignHistory

Email ClickThrough

Data

Link to

Purchase

EnablingTechnologyData Integration

Guest Experience MappingAppropriate communication at different touch- points (don’t mix marketing with service)Idealized Interactions

Social

Mobile Log FileApp Data

Strategy

CallCenter

Display• Version• Funnel

WebClick

MobileWeb

In-Store

DM• Promotional

• Launch• Catalog

Email• Service Message

• Lifecycle Marketing• Trigger

• Promotional

Interaction Layer

Data Layer

POS Integration

Insight

Research into VOCo Needs/ExpectationsSegment ViewpointSatisfaction

Segmentation

Consistent versioning of messaging, where appropriatePrioritization of outbound Recognition in “always on” environments

Predict range of behaviorso Stimulus responseo Expected valueOptimizationo Prioritized contactsChannel propensities

Modeling

Browsing

WebProperties

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The Solution

Step 1: Compile a fact base for analysis– Reservation data– Point Of Sale data– VIP data

• Build householding algorithms, get more data– Name / Address

Step 2: Build Analysis– Value of a VIP– Retention statistics

Step 3: Build Applications– Database– VIP Expansion– Lifecycle Marketing

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Fact Base

POS TransactionsPartial nameCheck # / $

ReservationSystem

TimestampsEmailphone

NationalAccounts

OnlineTransactions

LoyaltyDatabase

NameAddress

Email/phoneExternal

Data(appends)

Consolidated viewOf the Guest Relationship

Raw Data Processing

A mix of internal and external data sources combine to build a cross-location, customer-level database With a customer / household

algorithm built, all behavioral data available was summarized for analysis

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AnalysesPercentage of Guests Percentage of Revenue

Findings Impact/Recommendation

First-time diners have low repeat visits Build a contact strategy to develop relationshipsVIP program is successful Strategically grow (statistical modeling)

Clear behavioral segments existDevelop promotional strategy appropriate to guest base

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What We Learned

Value of our loyal guestsBehavioral insights were developed to classify Active Guests: Guest Value and Guest Engagement

Guest Value results in a distribution analysis of revenue:50% of revenue from 10% of guestsMorton’s guest portfolio epitomizes a concentrated revenue distribution

The Morton’s brand appeals to a niche of consumersStrategy focus on CRM based approach vs. mass marketing

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Applying The Learning

Guest DatabaseBehavioral segment scoringReporting and trackingSource for marketing programs and list

Promotional TargetingDM/EMLifecycle marketing

Guest Satisfaction

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Impact

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The Impact

Identify marketing opportunitiesBefore working with CAC we would mass marketing everything to everyone and mass prospectingNow we are taking a Guest Relationship Marketing approach to managing existing guests while simultaneously acquiring new guestsCommunicating the right message to the right audienceFirst we had to understand the Lifecycle of a Morton’s guest:

Getting a potential guests attentionEducating them on what we had to offerTurning them into a paying guestKeeping them as a loyal guest

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The Impact

Lifecycle MarketingActive Guests – guests with an existing relationship Acquired Guests – first visit within the last 9 monthsLapsed Guests – guests who has not dined within last 2 yearsProspective Guests – guests whom have never visited

Focused Strategy and Investment differently to guests at various stages of their relationship with the brand via direct mail and email marketing

2009 we focused primarily on lifecycle management, and distributing our circulation to the most profitable guest groups.

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Morton’s The Steakhouse

Focus on the Fives

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Guest Satisfaction

Importance of Guest SatisfactionImprove Guest Retention & FrequencyIncrease Guest Satisfaction & LoyaltyStrengthen Guest & Brand RecognitionCompetitive AdvantageULTIMATELY build our business and remain THE BEST STEAKHOUSE WORLDWIDE!

We wanted guests to provide feedback, but wanted an unobtrusive way of asking for their feedback

This led to the survey invitation being printed at the bottom of the guests receipt

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Guest Satisfaction

Issues with this process:Channel: Survey invitation was at the bottom of the guests receiptSurvey: Questionnaire was too long (30 questions) led to low response rate and a high abandon rateReporting: Quarterly which didn’t allow for quick action

All of these issues = Actionable

Insight

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Solution

Channel– Move from receipt to email– Build trigger email (show example)

Survey– From 30 questions to 10– LINKED TO GUEST INFORMATION

Reporting– From quarterly to real-time– Portal

Insight

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Building The Link: To EmailDon't miss this exciting e-mail from Morton's. Add news@email.mortonssteakhouse.com to your address book or safe l ist.

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Upcoming Events... May 27 - Dav idoff Cigar Dinner Join Morton's as we step out on the patio for a premium cigar event complete with Morton's...

Dear Joel, Thank you for your recent visit to Morton's. I truly hope we provided a memorable dining experience and that we exceeded your expectations from the moment we welcomed you into our restaurant. We know that your time is valuable. If you would like to share your thoughts on your recent experience, we'd love to hear from you. We look forward to seeing you again soon. Neil Swinney General Manager Morton's The Steakhouse - Sacramento 916-442-5091

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This e-mail was sent to you by Morton's of Chicago, Inc. To ensure delivery to your inbox (not bulk or junk folders), please add news@email.mortonssteakhouse.com to your address book.

Dear Joel, Thank you for your recent visit to Morton's. I truly hope we provided a memorable dining experience and that we exceeded your expectations from the moment we welcomed you into our restaurant. We know that your time is valuable. If you would like to share your thoughts on your recent experience, we'd love to hear from you. We look forward to seeing you again soon. Neil Swinney General Manager Morton's The Steakhouse - Sacramento 916-442-5091

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New Instrument

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Multi-Channel

Move beyond internal surveysIncorporate public / social ratings from public sourcesIncorporate competitors’ ratings at a local level for comparison

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ResultsNumber of survey responses, per month:

30-50

2,000-3,000

2009 2010-2011

New Process1,500-2,500

Other sources

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Measurements Real-Time Reporting– By location– By segment

– By time period– Includes open-end comments

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What We’ve Learned

With significant sample size, we have:1. Quantified the value of a “5” rating versus a “4”. This is driving

organizational change and management of operations.2. Statistically modeled what aspects of delivery most lead to

satisfaction (service, wait time, food quality, etc.)3. Built loyalty scorecards for each location, each month, so they can

review their results

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How We Use It Today

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How We Use It Today

Operational measurementActionable information that we can access on a local, national, regional and company-wide levelLook for trends, problems and areas of opportunityHolding our General Managers accountable and making Problem Resolution a Priority

Data-driven LeadershipPrime focus of our CEO, Chris ArtinianDrives high quality decisions

Drives strategic, long term initiativesFramework for operational decisions (day to day)

Turn data into insightsTurn insights into action

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Loyalty Scorecards

Establishing metrics and accountability down to a location level

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Competitive Benchmarking

We compare ourselves within each local environment

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How We Use It Today

Taste of FoodTop driver of top box Overall SatisfactionOf all the survey measures, Taste has the greatest impact in differentiating a “4” experience from a “5” experienceVital to our brand: Exceptional taste must be consistently delivered for every single guest on every single visit!

Problem ResolutionTarget frequently heard complaints to reduce occurrenceIncrease Attentiveness, especially for those guests experiencing a problem

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How We Use It Today

VIPs and Fanatic GuestsOur best segments account for 20% of our guests and over 50% of our revenue (VIPs are the top 1%)Crucial to keep these guests happy and coming back (‘4’ experiences can cut future visits/frequency in half)

First-Time Diners80% of guests don’t come backImportant to identify first-time diners and pay special attention to their questions, concerns and needsMake sure first-time diners leave the restaurant excited for their next visit

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Summary

Build analytic fact base and analyzeIdentify opportunities to leverage informationTest marketing concepts, refinePush to find more ways to utilize customer information to influence decision makingGuest SatisfactionCompetitive Benchmarking

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Thank you!

Brad RukstalesPresident & CEOCAC Group, Inc.brukstales@cac-group.com(847) 805-9802

Patty PleussVice President, MarketingMorton’s The Steakhouse