Using Your Database for Organizational Excellence: Loyalty,

Satisfaction, and Retentionat:

Kris Guthrie,Vice President, Marketing

Brad RukstalesPresident and CEO

Stay to the end of the session and:Enter your business card to enter a drawing for a

Morton’s Gift Card!

• Well known as leader in fine dining steak category • 69 locations – Domestic and International • Average check: $100pp• Revenue: $300m

• Challenges/Opportunities after purchase: – Keep loyal guests – and keep them satisfied – Engage those who hadn’t been in – Entice new brand ambassadors

Marketing Infrastructure

Who is CAC Group

• Advanced Analytics• Statistical Modeling• Customer Valuation• Experimental Design• Cross-channel Analytics• Segmentation and Primary Research

• Measurement• Campaign performance• Customer value and performance metrics

• Loyalty Program • Competitive Landscape• Choice Share Simulator

• Integration• Cross Channel Customer

Consolidation• Householding• External Data Integration

• Knowledge Engine• Transaction Detail• Customer Summary• Campaign History• Segmentation Scores• Model Scores• Selection Rules• Optimization

• Data Enhancement• Demographics / Lifestyles• Segmentation

•Business Intelligence• Campaign Reporting• ROI Evaluation

•Deployment• Email• Direct Mail• iConnect Real Time Scoring• Mobile• Online Display

Behavior

Strategic Consulting Platform

Productsi-Connect RealTime

CustomerConnect

Segmentology is the art and science of understanding your customers – in behavior, mind, and need – to deliver on the promise of true customer relationships.

CACdirect

Fact Base

Consolidated viewOf the Guest Relationship

A mix of internal and external data sources combine to build a cross-location, guest-level database

With a guest / household algorithm built, all behavioral data available was summarized for analysis

Transaction DetailGuest SummaryCampaign HistorySegmentsModel ScoresSelection RulesOptimization

Knowledge Engine: Analytic Database

Cross Channel Guest ConsolidationHouseholdingExternal Data IntegrationCustomerConnect

Data Integration

Online Transactions

National Accounts

POS TransactionsPartial name Check # / $

Reservation System

Timestamps EmailPhone

Loyalty Database

NameAddress

Email/Phone

Raw Data

CACdirect: 130mm HH

Beverage: Cognac & Cordials

Manhattan

VIP Tray

Cab and Pinot Noir

Food: Surf & Turf

Iceberg Wedge

Sea Scallops

Filet & Lobster Tail

Bone in Ribeye

Baked Potato

Crab Legs

Key Lime PieMost recent Satisfaction

What we knowStatus: VIPLTD Revenue: $14,057 LTD Visits: 30Favorite Restaurants:

• Schaumburg• New York• State Street

1860 Thornhill RoadInverness, IL 60067

brukstales@cac-group.com(847) 805-9802

Demographics: Married Homeowner Children Age & Income: - on file -

Silhouette: Silhouette: Suburban Bourgeoise High on mobile/digital engagement Medium social media engagement

Top Interests: Cultural/Arts Events Tennis Bicycling

(Attendees: Please don’t stalk me.

Thank you.)

• High frequency, high value guests

• Many better than VIPs • 21.3% of Guests / 51.0% of $$Morton’s Fanatics

F - M

Behavioral Segmentation

• Limited visits, but large checks when do visit• Huge opportunity if they come back• 17.2% of Guests / 27.4% of $$ F - M

Big Ticket Primes

• New/ recent guest – relationship undetermined• future Fanatics…or Casual Samplers• 23.4% of Guests / 9.5% of $$R - F - M

Intriguing Appetizers

• Low value guests• Either new, bar guests or older one-time diners • 38.1% of Guests / 12.1% of $$

R - F - M

Casual Samplers

Additional layers were incorporated into segmentation

Cluster analysis revealed 6 distinct patterns of food consumption. This would play a key role in customization.

Behavioral Segmentation

Marketing at Mortons

Our marketing reality• Most guests come once for a special occasion and never return

(over 70%)

Acquisition Retention

How we have marketed• GRM –

• First Time Guest

• Loyalty• VIP Program

• Prospecting• Statistically modeled for destination and local restaurants

• Event• Lunch w/a legend, scotch tastings• Wine dinners• Wine lockers• Celebrity servers

• Social• FB / Twitter / Instagram / Yelp

• Other Media

Classic Combo S&S Enhanced S&S Targeted Control

Open and Click Rates by Version

Open Click

How We Version– Food and Drink Segmentation drives more engagement with marketing efforts

through versioned creative

– Targeted creative generated improved open/click rates over control

Targeted versions exceed national benchmark * of open rates

* Q3 2011 North America Email Trends and Benchmarks Results, December, 2011

Morton’sControl Average

NationalAverage

Price-sensitive

guests

Higher-endSteaks (focus on upgrades)

Upper-income,

elite

The Future of Guest Relationship Marketing (GRM)

Stage of relationship to

understand mindset and level of brand

engagement

Historical visit and spending detail, predictive modeling to predict and anticipate future

activity, text mining to uncover triggers

Personas: insights into

lifestyle, lifestage, and wealth for

versioning communications

• Proactively deliver the right message to the right guest at the right time to profitably grow relationships and deliver incremental sales.

Our tools:

Guest Satisfaction

Why is Guest Satisfaction Important?

• Landry’s was changing the Morton’s experience:– Updated music, lose the tuxedos– New menu items– Menu presentation– Store design

• Guest Satisfaction system allows us to measure the impact.• We could hear from our customers directly as we rolled out changes.

• Location-level problems and issues can be identified and addressed:

– Systemic– Individual problem resolution

Why is Guest Satisfaction Important?

• Also, in our business, Guest Satisfaction is not merely an internal metric.

• Consumers are watching and reading reviews when deciding on whether to come to Morton’s or not.

The Process Today

3,000-5,000 responsesper month

Upcoming Events... Please visit our website to learn about our exciting events!

Dear Cara, 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. Vedran Komazec General Manager Morton's The Steakhouse - New Orleans 504-566-0221

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

Dashboards

Dashboards

Problem Resolution / Comments

Restaurant Visit Date CommentProblem or

Note to Overall Rating Segment

Cleveland 2012-09-21 Don't change a thing !!! 5San Juan 2012-09-21 Everything excellent, as always. 5 Morton's FanaticsCleveland 2012-09-21 Would like the Black Bean soup and the brochette back even if it was seasonal specials. 5 VIP

Portland 2012-09-21The mixed grill options sounded interesting, but the descriptions didn't pull me in so I asked the waiter to pick between the sea bass and the crab cakes. 5 Morton's Fanatics

Arlington 2012-09-21 Travis provided expleminary service. 5 Morton's Fanatics

New York (Manhattan) 2012-09-21The lunch went well with no problems. I appreciated it since it was a couple of CEO's meeting each other for the first time. Thank you very much. 5

Palm Desert 2012-09-21you might want to take pictures of your good clients and put them on the walls.. good customer relations in the specific rest location. 5 VIP

Naperville 2012-09-21 The only 5 Morton's FanaticsSchaumburg 2012-09-21 Please change background music. 5

Great Neck 2012-09-21Only suggestion would be that if people are dining at the bar, the attention given to the customers should be as often as you would if you were dining at a table. 5

San Diego 2012-09-21 Understand who is a VIP and kick it up with respect Great them as a VIP 5 VIP

Schaumburg 2012-09-21

Wonderful wine tasting event - hats off to Darco and Armando for great new selections for our wine locker!!!! Dinner after was a sucees with all 8 in our group very happy with food and service!!!! Susie was a great server - thanks to the staff for always going the extra to make us feel so welcome and appreciated - from Sherry greeting us to Sonia doing her usual fulfilled interaction to Darco and Armando always stopping by it was a great night!!!! Thanks to all 5 VIP

Guest feedback from ALL sources, and visits between 2012-09-21 and 2012-09-28.

• One change made to Morton’s locations was the background music.

• Lots of comments when changes started in February.

• Experimented with best way to manage.

• Positive change seen in June forward.

Music Example

2011 40909 40940 40969 41000 41030 41061 41091 411220.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Percentage of comments mentioning Music

Satisfaction of comments mentioning Music

What We’ve LearnedA drive to satisfy our guests to the point that we get a “Five” rating

has a specific, quantifiable impact on the business:

Future Spend by Segment

Trends• The Morton’s guest remains loyal and engaged. While scores have

dipped in recent quarters, a plateau may have been reached.– Transformation: what we are undertaking is leading to instability in the short term– This is due to:

• Staff acclimating to the new menu items• Shift in service styles• Location redesigns• Our guests experiencing a “new” Morton’s

Landry’s purchase of Morton’sValentine’s Day

Valentine’s Day

Trends• Some news underneath the surface:

– Our changes were showing a positive effect on our first time guest – those who have never experienced Morton’s before.

– Our core guest still has challenges, so we are increasing our communication about the changes to our most valued guests.

Other LearningsWe learned what makes a satisfied guest:

We assess new menu items:

Taste, 70%

Service, 13%

Food Prep, 8%

Other, 9%

What’s Next?

• Morton’s - o New funnel and how it will impact saleso Continue to work on satisfaction o Build tools that help operations

• Landry’s – o Use what we know from Morton’so Integrate our Loyalty Club

Summary• Today’s marketing and business environment is challenging• More data and tools than ever before to provide perspective and guide

decision-making• Example of capturing and using intimate insights

– Behaviors (segmentation, targeting)– Attitudes (satisfaction, intention)– Needs (food / beverage preferences, demographics)

• As well as the impact:– CRM communications – Location level– Transformational guidance (menu, service, ambiance)

• This can be implemented in your organization as well!

Thank you!

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

Kris GuthrieVice President, MarketingLandry’s

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Thank you!