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

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 InsightsSolution

Impact

Focus On the Fives: Guest Experience Management

Situation

Solution

How We Use it Today

Summary

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Morton’s The Steakhouse

World’s largest Owner‐Operator of upscale steakhouses

Premier Brand, well‐established 33 ‐ year history

High quality cuisine.  Consistent service and experience

Focus 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 Knew

The 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 Know

The 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 ClickThroughData

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/Expectations

Segment ViewpointSatisfaction

Segmentation

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

Predict range of behaviors

o Stimulus responseo Expected value

Optimizationo Prioritized contacts

Channel 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 guests

Behavioral 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 guests

– Morton’s guest portfolio epitomizes a concentrated revenuedistribution

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

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Applying The Learning

Guest Database

– Behavioral segment scoring

– Reporting and tracking

– Source for marketing programs and list

Promotional Targeting– DM/EM

– Lifecycle marketing

Guest Satisfaction

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Impact

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The Impact

Identify marketing opportunities

– Before working with CAC we would mass marketing everything to everyone and mass prospecting

– Now we are taking a Guest Relationship Marketing approach to managing existing guests while simultaneously acquiring new guests

– Communicating the right message to the right audience

– First we had to understand the Lifecycle of a Morton’s guest:• Getting a potential guests attention

• Educating them on what we had to offer

• Turning them into a paying guest

• Keeping them as a loyal guest

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The Impact

Lifecycle Marketing

– Active Guests – guests with an existing relationship 

– Acquired Guests – first visit within the last 9 months

– Lapsed Guests – guests who has not dined within last 2 years

– Prospective 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 Satisfaction

– Improve Guest Retention & Frequency

– Increase Guest Satisfaction & Loyalty

– Strengthen Guest &  Brand Recognition

– Competitive Advantage

– ULTIMATELY 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 receipt

– Survey:  Questionnaire was too long (30 questions) led to low response rate and a high abandon rate

– Reporting:  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 Email

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New Instrument

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Multi‐Channel

Move beyond internal surveys

Incorporate public / social ratings from public sources

Incorporate competitors’ ratings at a local level for comparison

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Results

Number 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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MeasurementsReal‐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 measurement

– Actionable information that we can access on a local, national, regional and company‐wide level

– Look for trends, problems and areas of opportunity

– Holding our General Managers accountable and making Problem Resolution a Priority

Data‐driven Leadership– Prime focus of our CEO, Chris Artinian

– Drives high quality decisions

• Drives strategic, long term initiatives

• Framework for operational decisions (day to day)

– Turn data into insights

– Turn 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 Food

– Top driver of top box Overall Satisfaction

– Of all the survey measures, Taste has the greatest impact in differentiating a “4” experience from a “5” experience

– Vital to our brand:  Exceptional taste must be consistently delivered for every single guest on every single visit!

Problem Resolution– Target frequently heard complaints to reduce occurrence

– Increase Attentiveness, especially for those guests experiencing a problem

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How We Use It Today

VIPs and Fanatic Guests

– Our 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 Diners– 80% of guests don’t come back

– Important to identify first‐time diners and pay special attention to their questions, concerns and needs

– Make sure first‐time diners leave the restaurant excited for their next visit

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Summary

Build analytic fact base and analyze

Identify opportunities to leverage information

Test marketing concepts, refine

Push to find more ways to utilize customer information to influence decision making

– Guest Satisfaction

– Competitive 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