Implementing a CRM strategy for Canyon Ranch Destination Resorts

Canyon Ranch CRM with two more pages

Should Canyon Ranch implement a CRM strategy?

Canyon Ranch needs a CRM system to stay competitive in their industry and retain customers. For Canyon Ranch, the relationships and trust they have with their customers is where their profits come from. Knowing their customers better and tracking what their preferences are, is key to being able to attract them back to the resort. Their customers are older baby Boomers with enough disposable income to afford spending $2,000 to $2,500 a stay. Canyon Ranch executives need to realize that their customers are purchasing the experience of being in a world-class spa, not just the immediate health and beauty benefits of the treatment. Implementing a CRM strategy will make it possible for Canyon Ranch to better understand their existing customers and create programs that fit their needs. They will also be able to attract new customers using the lessons learned from serving their existing customers too. Finally, Canyon Ranch will be in a much better position to understand how and why their spa experience is different than anyone else by staying in close contact with customers. All of these benefits are possible with a good CRM system.

2. Does a CRM Strategy fit with overall Canyon Ranch positioning?

It fits with the overall Canyon Ranch positioning perfectly. As the typical Canyon Ranch customer is high-end and can afford to spend a lot of money on spa treatments and a stay there, this should tell their senior management team that what these guests are looking for isn't just the treatment, they want an experience. They want to know they are special and that they are unique there. A good CRM system will allow for personalization of each treatment plan for each customer, and also give Canyon Ranch the ability to track customer satisfaction as well. For Canyon Ranch, in such a competitive business to succeed, they must be seen as very trusted and valued by customers.

3. How do you judge their current use of CRM concepts?

Their current IT systems are for the most part useless in tracking customers. They are not connected with each other, and there is really no way of knowing which customers are the most or least loyal, why, and what can be done to improve the overall customer relationships. They are way behind their competitors in their use of CRM systems as well.

4. What should Canyon Ranch Destination Resorts CRM initiative look like

The initiative needs to focus on each type or segment of customers the ranch serves. Having this level of detail by customer segment or even customer type will help Canyon Ranch more effectively plan its promotional, selling and service strategies. The CRM initiative also needs to show how the Destination Resorts deliver an exceptional experience as well, because that is what the customers are paying so much money for. They want to not only come back from a trip there feeling refreshed, they want to have a good time there too, which is the experience factor of Canyon's marketing.

What is the value of customer information to Canyon Ranch?

Canyon Ranch is a service business that needs to always be thinking about ways to get customers to come back and spend on visits. A good service business knows how to make promises about their performance and deliberately exceed them. The best airlines, hotel chains and many other service businesses are great at this; they have a very good idea of where their customers' expectations are and how they can consistently deliver service beyond them.

Today Canyon Ranch has no idea where, exactly, their customer experiences are. They can't figure this out just by walking around and asking customers either. Customer information captured over time will however give Canyon Ranch managers a very good idea of where they are meeting, exceeding or falling short of customer expectations. And that knowledge is critical to their overall success. A customer information system at Canyon Ranch when integrated to their financial reporting system will show exactly which customers are spending for which spa services. They will be able to even define profiles of the customers visiting each spa treatment program. These customer profiles can then be used for creating, fine-tuning and measuring marketing programs over time. The value of customer information becomes very clear when marketing campaigns designed for each of these customer profiles and their market segments start showing increased sales. Canyon Ranch needs to build customer loyalty and having a CRM system will give them the insights they need to do this faster than just by trial-and-error like many do today.

As CIO (Chief Information Officer), How would you make the case for customer relationship management (CRM) and business systems at Canyon Ranch?

I'd start the case by saying this business lives and dies by repeat purchases and customer loyalty. No doubt the internal systems, as disconnected and broken as they are, still show that Canyon Ranch's most profitable months have been when repeat customers have come back and spent more. A good CRM system integrated to business systems will tell management not just how much customer loyalty earns them in terms of sales and profits, it will also say why. Secondly I would point to how valuable these high-end spenders are and how attractive they are to competitors. If Canyon Ranch doesn't make a move with CRM, competitors will and the customers may eventually be lost. The time is now to get moving on a more customer-driven IT program to make sure Canyon Ranch holds onto its customers.

What impact would you anticipate these systems to have on the Canyon Ranch strategy and capabilities?

Creating and installing a new CRM system is going to force a big change in how management operates this business. It's going to also require senior management to start thinking it terms of the customer first, and not think so much about their own internal information needs. This is going to be difficult for Canyon Ranch to deal with as companies often get in a rut and find it hard to change. But they have to change in order to stay in touch with their customers. These systems are going to also change who has the most valuable information in the company, and for some members of senior management, this will be tough to take. As we've seen in our course, information is power. People don't give it up easily or without resistance. The same will happen at Canyon Ranch. But they have to go through this phase to become more focused on the customer and start realizing that their expectations and experiences are all that really matter. Third, using CRM systems takes a company that is committed so the systems have to become a core part of who they are too.

What advice do you have for Canyon Ranch executives?

Be prepared to change the company from the inside out if you are serious about being customer-centered. The CRM system is going to change who has the most power so be prepared for that. Get in front of all these changes with a plan beforehand and start planning out how you will collect, use and continually improve the quality of customer information as well. All of these parts of rolling out a new CRM system need to also be entirely and fully endorsed by Canyon Ranch executives if they are going to succeed. Time and again, it is the belief and support of senior managers that make or break the performance of a CRM system.