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

2. Our Agenda Make No Misteak: How Morton’s Uses Their Database to Drive Loyalty Who is Morton’s The Steakhouse? Strategy for Insights Solution Impact Focus On the Fives: Guest Experience Management Situation Solution How We Use it Today Summary

5. 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

6. 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

7. Our Solutions

9. Launch

11. Lifecycle Marketing

12. Trigger

16. 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

17. Fact Base Raw Data Processing Consolidated view Of the Guest Relationship National Accounts A mix of internal and external data sources combine to build a cross-location, customer-level database POS Transactions Partial name Check # / $ With a customer / household algorithm built, all behavioral data available was summarized for analysis Loyalty Database Name Address Email/phone External Data (appends) Reservation System Timestamps Email phone Online Transactions

18. Analyses Percentage of Guests Percentage of Revenue

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

20. 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

21. Impact

22. 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

23. 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.

24. Morton’s The Steakhouse Focus on the Fives

25. 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

26. 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

27. 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

28. Building The Link: To Email

29. New Instrument

30. Multi-Channel Move beyond internal surveys Incorporate public / social ratings from public sources Incorporate competitors’ ratings at a local level for comparison

31. Results Number of survey responses, per month: 1,500-2,500 New Process Other sources 2,000-3,000 30-50 2010-2011 2009

32. Measurements Real-Time Reporting By location By segment By time period Includes open-end comments

33. What We’ve Learned With significant sample size, we have: Quantified the value of a “5” rating versus a “4”. This is driving organizational change and management of operations. Statistically modeled what aspects of delivery most lead to satisfaction (service, wait time, food quality, etc.) Built loyalty scorecards for each location, each month, so they can review their results

34. How We Use It Today

35. 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

36. Loyalty Scorecards Establishing metrics and accountability down to a location level

37. Competitive Benchmarking We compare ourselves within each local environment

38. 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

39. 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

40. 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

41. Thank you! Brad Rukstales President & CEO CAC Group, Inc. brukstales@cac-group.com (847) 805-9802 Patty Pleuss Vice President, Marketing Morton’s The Steakhouse