Due September 22, 2009 1. What is the value of customer information to Canyon Ranch? To Canyon Ranch, customer information is vital in order to successfully implement their business model. The value that it provides to the business is the ability to understand each customer’s unique needs and provide appropriate alternatives that will allow each guest to achieve their individual goals. This is essential for Canyon Ranch to attain its mission to “inspire people to make a commitment to healthy living, turning hopes and intentions into the highest enjoyment of life” (www. anyonranch. com/inspiration/mission). By gathering and sharing guests’ information, Canyon Ranch can assimilate it to “understand their customers, built loyalty, and cross-sell its offerings” (Applegate , Austin, Soule page 156), all of which are critical to the success of the business. The VP of Marketing was quoted saying “everyone experiences a different Canyon Ranch; we’ll meet you where you are” (Applegate , Austin, Soule page 156). If the company doesn’t know ‘where that is’, they will never be able to live up to this pledge.
Their customers are looking for a Ritz-like experience, not a ‘Marriott’ experience. They want unique, custom opportunities and to miss the details pertinent to each customer could cost Canyon Ranch their competitive edge. Canyon Ranch has been regarded as the “gold standard in the industry” (Applegate , Austin, Soule page 156). To maintain this standard, they must know their customer better than they know themselves. This is only possible by gathering and assimilating quality customer information. 2. As CIO, how would you make the case for CRM and BI systems at Canyon Ranch?
The case for Business Intelligence (BI) and Customer Relationship Management (CRM) systems is simple: Canyon Ranch is unable to provide the level of service across all locations without the information that both systems provide. BI data is needed to understand general trends in the market. For example, the fact that trends are moving more toward overall health and well-being as opposed to simple, traditional relaxation is key to Canyon Ranch ability to plan longer term. The upward trend of men participating in spa services is another trend that could be further xplored with use of a BI system. As a complement to the BI system, the CRM is critical to ensure Canyon Ranch not only knows the market, but it understands how each individual guest fits into these market trends. Not only will these systems allow Canyon Ranch to understand the customers and the market they are in, but it will also help facilitate the business planning process. By better understanding customer needs and behaviors, they can more effectively offer services that are of interest to their guests, which will in turn help improve staffing and overall resource efficiency.
Particularly true in the Health and Healing department, higher-priced staff members must be used as efficiently as possible to ensure the most value from each resource. Using CRM and BI tools effectively, Canyon Ranch can ensure that resources are maximized by focusing on areas that are of interest and value to their customers. 3. What impact would these systems have on strategy and capabilities? By integrating the BI and CRM systems, Canyon Ranch can more effectively deliver on three strategies: of increasing synergies, strengthening their marketing, and reducing turnover.
First, well-integrated systems will increase synergies across between departments as well as across locations. Canyon Ranch executives have expressed a desire to increase synergies between the Health and Healing department and the other service areas. Establishing a tight a connection between these departments is key. When a customer requests a service from the Therapeutic Bodywork and Massage organization, the Canyon Ranch employee should be able to understand the customer’s goal and perhaps suggest a complementary service from the Health and Healing department.
Likewise, if Health and Healing employees have access to the customer information, they can proactively look for guests who may benefit from their services and target those customers with workshops, demos, etc. Without this information, employees are not able to make those connections. Another opportunity to build synergy is across locations. The synergy between the SpaClubs and the resorts was described in the case as “tenuous” (Applegate , Austin, Soule page 164). By integrating a shared CRM, employees from one location can have access to all customer data.
If a customer visits a SpaClub in Florida but expresses interest in services offered by the Canyon Ranch resorts, the Florida employee can use the CRM to document the customer needs and perhaps cross-sell those locations. This information could then feed back to the resort location, who could follow up with the customer via mail, phone call, or other appropriate method. This sharing of information will benefit both the SpaClubs as well as the resorts. When customer visit one location, their profile should follow them to the next location so the transition is seamless.
Regardless of where they are, the Canyon Ranch employees should ‘know the customer’ based on what information they gather from the CRM. The second strategy that would benefit from an integrated CRM/BI solution is marketing. As described above, increased synergies will help to build a more targeted marketing plan. The more information that can be gathered and assimilated, the more effective the marketing can be. Not only will Canyon Ranch be better able to build effective marketing plans, but they will also be able to use the CRM tool to strengthen their already strong word-of-mouth marketing strategy.
By building a referral reward system into the CRM, which does not exist today, customers can be rewarded for their spending habits and for sharing their experiences with other potential visitors. By offering free services, upgrades, and other high-value rewards, Canyon Ranch will build a stronger CRM list and better utilize company resources. A final strategy that would benefit from a CRM tool is reducing attrition among the program coordinators. Although this was not explicitly stated in the case as a strategy, it was mentioned that turnover is an issue.
One of the challenges mentioned is that handoff between reservations and program coordination is disjointed and flawed. This may be a large source of stress for program coordinators and thus one possible root cause for attrition in this group. By providing well-integrated information systems, program coordinators would have access to enough information about guests before their arrival and be able to immediately begin to build a positive experience with the customer.
This information can also assist the program coordinator in anticipating customer needs based on market trends and specific customer behavior, which is essential for them to formulate solutions to accommodate all scenarios. 3. What advice do you have for Canyon Ranch executives? I would advise Canyon Ranch executives to thoroughly consider two factors in moving forward with any technology advances: 1) seamless integration and 2) effective implementation plan.
Canyon Ranch has several tools that are already in production. The greatest challenge, as I see it, is lack of integration and lack of easy access to the information that is available. Canyon Ranch employees are tasked with providing custom, unique solutions for each guest, but they are limited by the information available. Ideally, any morsel of information that a guest shares with a Canyon Ranch employee should easily accessible by all Canyon Ranch employees regardless of their department, division, or location.
Whether this morsel is the customer’s long-term health goals, their allergies and aversions, or their favorite shade of nail polish, this information is valuable for anyone who will come in contact with that customer. Integration of customer information will allow Canyon Ranch to maintain the competitive advantage that they have worked hard to achieve. System integration, however, is just one consideration. It is not enough to simply have the systems linked together. The system must be easy to use, transparent to the customer, and used consistently by all employees.
Regardless of the selected platform or tool, it will be critical that the user interface is well integrated and easy to use. Canyon Ranch employees’ main focus is their customer. The information systems must be efficient and intuitive. It must not detract from the employee’s ability to tend to their customer. It would be my recommendation that customer-facing employees be highly involved in the design process to ensure that the system interfaces are logical and simple. They should also be consulted to ensure that design changes not only integrate with the other systems, but also with their daily process.
Even with a fully integrated, easy to use system, there is another component that is often overlooked: integration with the human resources. Many organizations expend all of their energies focusing on the system integration and often forget that humans are the ones that will actually use the system. In order for the system to be effectively implemented, the human factor must be addressed. Therefore, it would be advisable that Canyon Ranch thoroughly consider a holistic implementation strategy for any technology implementation.
This strategy should include thorough plans for communication, training, and follow up. Canyon Ranch employees must understand why technology changes are being made, what the changes are, and how they and their customer will benefit from these changes. Once this framework has been laid, implementation will be an easier task. In addition, executive must acknowledge that change is difficult for most people. Therefore, employees must have ample time to learn and prepare for the implementation.
During implementation employees will have questions and will require support. The project team must be ready and willing to help. After implementation, another key human factor will be tested: discipline. Discipline to consistently use the new tools will be critical to its success. This discipline will need to be exhibited by all Canyon Ranch employees. The tools must be consistently utilized at all points of the process – recording customer information, retrieving customer information, and assimilating it in a way that is transparent to the customer.
If customer information is only partially shared, its value is exponentially diminished. By involving the end users throughout the process and considering the points previously mentioned, this process will be easier. It will, however, be an important ongoing process, which must be planned up front. Human behavior is always more difficult to change than technology. Canyon Ranch executives must consider this as they consider the strategy for implementation.