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Cutting into Data

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In the arena of meat and potatoes, Morton’s The Steakhouse carries great prestige. Customers travel long distances to celebrate anniversaries,

graduations, weddings and other grand occasions at its restaurants.

But even this $320-million, 70-unit chain can’t rest on brand equity alone when it comes to customer loyalty. Today people have more fine-dining choices than ever before and are influenced by restaurant-owning celebrity chefs on the Food Network, Bravo and the Travel Channel. Couple this food-loving trend with a strong national independent restaurant presence and you have Morton’s customers potentially looking elsewhere for those special dinners.

Morton’s “is lucky to have a very large pool of loyal guests,” says Kris Guthrie, vice president of marketing for Landry’s, Morton’s parent company. “We are challenged to keep our loyal customers engaged and interacting with our brand, so we’re trying to come up with new ways to segment our guests and be sure we get the right message to the right people.”

Social media bug
Loyalty goals were once realized by placing a postcard in a customer’s bill. Now guests are checking in on Foursquare, complaining on Yelp and reviewing on TripAdvisor. Of course, there’s also Twitter, Facebook and local blogs.

“Social media has definitely changed the way people communicate and has given a voice to many that would never have mentioned a positive experience — or negative, for that matter,” Guthrie says. “We feel that interaction with these people in a public platform is part of what makes us successful. We are able to reach out to those with issues and find out how we can correct, change or compensate.

“We often see people respond with a positive experience after having had a negative one,” she says. “We also are able to draw attention to those who mention us in their social [media] activities, engaging them further with our brand.”

But as rewarding as social media can be, it’s not a true measure of Morton’s customers. That’s why Morton’s partnered with the CAC Group, an analytical solutions firm that customizes databases to ameliorate marketing efforts.

Morton’s existing process for measuring satisfaction centered on a receipt-based request that drove recent guests online to an extensive satisfaction survey. Fewer than 50 surveys were completed per month nationwide; more problematic, CAC says, these completed surveys were anonymous and could not be tied to behaviors or provide operational feedback.

So CAC and Morton’s partnered to “re-invent the survey experience,” Guthrie says. They used a comprehensive suite of guest-focused marketing tools, including an integrated guest database, survey site hosting, behavioral segmentation, online data mining and a reporting portal. In-house satisfaction surveys and third-party customer reviews were aggregated and included to provide a benchmark of performance. A focus on improving guest satisfaction became an essential aspect of ongoing customer-relationship management strategy.

“Taking the information we gather at the point of reservation, we then tied [it] to our internal point of sale system to auto-generate an e-mail survey ... to go out immediately following the experience,” Guthrie says. “With today’s use of smartphones, it’s very easy to complete the survey almost instantly while the experience is fresh in the mind.”

As a result, “We see much higher response rates and have found that typically when we are ranked highly we see greater propensity to return, which in turn means a more satisfied guest and increased sales,” she says.

Morton’s guest database expanded the client loyalty program. According to CAC, statistical models were developed to classify guests based on expected future value if invited into this exclusive program. This resulted in a 200-percent increase in program participants.

Acting on data
Brad Rukstales, president and CEO of CAC, says his company will mine databases, develop segments and build predictive models to identify customers who are most likely to buy.

“We’ve been able to build a practice around integrating all those data sources together to build the most comprehensive customer profile information,” Rukstales says. “There’s so much more data today that we’ve got to be able to digest a wide range of information.”

He says this data reflects the changing consumer. “Being able to recognize those tendencies and trends in channel preferences and channel utilization has become more critical,” Rukstales says. “But there’s still a large part of the population that does not shop online that is not engaged with smartphones.”

Rukstales says technology has evolved to allow consumer information to be available at POS. “We have a database here of 120 million U.S. households, and we’re able to use matching algorithms to identify that someone is most likely a guest based on the fact that we saw a similar name on a payment swipe at the point of sale within a restaurant,” he says.

CAC uses a combination of these techniques to complete customer profiles.

“We can picture a retailer being able to know who’s actually in their store buying products on discount, paying full price or what frequency they’re coming in on, whether or not they’re using a loyalty card,” Rukstales says. “The technology allows us to go beyond the customer-generated information and get smarter, somewhat behind the scenes, about what’s going on in a location.”

For a fine-dining restaurant, CAC can track e-mail communication to the point of knowing a customer’s preference of wine. By tagging the e-mail addresses of users that have shown an interest in the wine category, whether they clicked on the wine list via e-mail or ordered a bottle, the restaurant can cater wine marketing to these customers.

“We take a look at the behaviors and target based on people’s actual propensities in locations and making a higher level of relevance through that communication,” he says.

Guthrie says this level of detail allows Morton’s to work with specific restaurants as needed to improve and monitor specific aspects of the guest experience, as well as identify best practices.

“Each campaign is different, but across the board we’ve seen greater interaction, [higher] open rates on e-mails and increased sales around the different promotions we’ve executed,” she says. “Besides the noticeable increase in traffic, our database allows us to test and measure targeting, messaging, offers and timing.”

Having the facts to back up decisions “is an invaluable asset,” Guthrie says. “Being able to say without question that groups of people transact in certain ways, and having the ability to then target those people with a message that is important to them, is a dream for every organization.”