Should Canyon Ranch in the Berkshires develop a clear customer relationship management strategy and make it a cornerstone of its positioning as a preeminent destination spa. Canyon Ranch in the Berkshires has been a profitable business for the affluent customer since 1989. Following in the footsteps of the original location that opened in 1979 in Tucson Arizona by priding themselves on their exceptional customer service and ability to reach each customers individual needs (As cited in Applegate, Austin and Soule, 2009, p. 157). Their strong customer based philosophy has been a key component in their ability to maintain their loyal customers and grow business by positive word of mouth. While they initially did not believe that Information Technology (IT) would play a large role in the future of their business, they realized very quickly its role is essential in improving their business strategies. Canyon Ranch’s focus of providing the ultimate spa experience had not seen much competition early on.
They were among the elite in the spa industry by providing not only a health and fitness environment but included medical services and lectures to provide a comprehensive educational routine that could be incorporated in their daily lives (As cited in Applegate, Austin and Soule, 2009, p.157). As more and more medical practices began to include spa services as well as other spas beginning to see the need to provide health and healing and medical services to their clientele, Canyon Ranch began to feel pressure from competitors. Their past strategies of building feeder spas that would create relationships with prospective clients as well as their, bring a friend campaigns, were costly marketing initiatives that took unlimited amounts of time to complete the sale (As cited in Applegate, Austin and Soule, 2009, p.165). These pressures along with costly employees increased their need for a customer relationship management strategy.
While other industries had been using IT resources for a number of years, Canyon Ranch only relied on IT as an operational system not a strategic tool. By increasing IT staff and accepting the idea of creating a customer relationship management strategy Canyon Ranch was able to build a strategy using IT to improve their customer service skills without harming their strong detail to personal attention. “This change was a result of the need for business intelligence, decision-support functionalities and expected growth, as well as some turnover in senior management” (As cited in Applegate, Austin and Soule, 2009, p. 171). Canyon Ranch would soon realize that by incorporating a customer relationship management system they would be able to maintain their elite status as a preeminent destination spa. If so, what should this initiative look like?
Canyon Ranch will look to the customer relationship management system to provide them with strategic services that will evaluate the information that is collected from each individual and suggest possible services or solutions that would be in the best interest for Canyon Ranch to pursue. “CRM initiatives require a proven framework to ensure that projects are approached on a balanced, integrated and strategic basis. Applying such a framework will help CRM project and program leaders maximize the benefits of enterprise CRM initiatives” (As cited in Thompson, 2013, p.1). A comprehensive customer relationship management system is used to monitor progress throughout the customer life-cycle. From the beginning stages of customer acquisition to retaining business by developing new programs that fit the changing needs of the customer. The system will also provide management disciplines to all departments within the company. From marketing/sales to human resource, customer service, and accounting the system will process information through each department to not only increase exposure and customer satisfaction but to lower expenses by relying on software to coordinate and manage data that is currently collected and managed by numerous employees.
It is also important for departments to work together and maintain a positive image throughout the company. “Enterprises want their customers to see one, friendly, corporate face, as opposed to a collection of disconnected departments trying to work together” (As cited in Anderson, Stang, 2000, p.1). While Canyon Ranch was already collecting data on clientele for a number of years, this information was not being used to its greatest potential. It is important that the new system partners with the existing operational software so that it is easy to build upon the current customer bases needs as well as perform the decision process for the employees of Canyon Ranch in serving each customer. What was the value of the substantial amounts of data generated during the customer experience? The ability to collect and store unlimited amounts of information on each individual client is crucial in providing an ultimate experience, retaining business and cutting expenses. “The overall goals of customer relationship management systems are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service” (As cited in Grimley, 2012, p.1).
The customer relationship management system allows for each individual department to play a role in completing each of these tasks by entering and sharing as much personnel information that they can. It is essential for each department to have access to each client’s information so that they are able to enter new data as well as refer to data that has already been collected by other departments. As data amounts increase Canyon Ranch builds a stronger more viable company by understanding the wants and needs of their target audience. These processes ultimately make Canyon Ranch a viable competitor in the elite destination spa industry. Where there any opportunities to use this data during prospecting? Or during the customer stay? Or even after the stay? Customer relationship management systems are considered data mining programs that help the business practices of participating companies.
Building data on existing customers allows Canyon Ranch to have a better understanding of who their target audience is. This information will help them know which segments to reach out to in the general public. It will create prospecting channels that are easier to access and close deals with. Collecting data during client visits not only improves each individual’s experience as they are visiting the facility it also encourages employees to increase sales to each individual as they follow them through scheduled routines. Employees are encouraged to review client’s specific needs and recommend other services that may be beneficial to them (As cited in Applegate, Austin and Soule, 2009, p.172). The customer relationship management system also allows Canyon Ranch to market to past clients who are not currently at the facility by emailing them specials and introduce new programs that may apply to them based on their individual profile.
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