Swot Analysis Of Canyon Ranch
Canyon Ranch
1) SWOT Analysis
Strengths:
The first key strength of Canyon Ranch is its willingness to grow and innovate its business. Innovation is the key to any successful business. In the words of Peter Drucker, “the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” Without change, a business can become old and boring to the consumers, resulting in higher defection/churn rates. Another key strength of Canyon Ranch is its excellence in on site customer service. The article stated there was a 2.5:1 staff to guest ratio. With that many employees on hand, it allows for Canyon Ranch to cater to all consumer needs, allowing for the best possible customer experience. The final strength of Canyon Ranch was its hiring process. They look for people with great personalities and who are excited to work for them. As with any service directed business, the workers are probably the biggest intangible …show more content…
asset. The workers are the ones who are selling the product and are the easiest way to increase customer retention.
Weaknesses:
The health and nutrition department is a noticeable weakness in the Canyon Ranch business. With nutritionist making roughly 50% higher wages than the fitness instructors and massage therapists, it is hard for them to turn a profit in that department. Finding a way to make this department more profitable would help greatly towards increasing annual revenues. Ideas like selling their own diet/cook books are things that Canyon Ranch should consider. Also, they are too reliant on positive word-of-mouth to acquire new customers. With all of the technological amenities out there nowadays, Canyon Ranch needs to take advantage of them. As stated earlier, the key to any successful business is change, and Canyon Ranch seems a little too set in their ways. It would be wrong for them to rely on old systems just because it worked in the past. Technology is a wonderful thing, and Canyon Ranch is not taking advantage of it.
Opportunities:
Canyon Ranch is missing a large part of the market by not appealing to men. It is stated that 75% of guests are women. From the male perspective, when they hear the word spa they think of something that only woman would go to. However, in recent years people have become much more aware of health concerns and that includes males. I am not trying to say Canyon Ranch should completely reconstruct its facilities to cater to men, but rather just add a few features that make the term “spa” more attractive to the male demographic. For instance, Canyon Ranch could build a recreation area, where males could go and play basketball or tennis, add a lounging area with a bar so after a long day of activities, males could go there and drink a beer while watching some sports. Another key opportunity is creating some type of rewards program. No one ever wants to feel they are paying full price for something; they want some type of discount. What better way to do that than by adding a rewards program.
Threats:
The obvious threats are other companies in the spa industry. The case study stated that in 2002 there were 9,632 spas just in the United States, a number that had grown from 1,374 in 1990. The spa industry is growing rapidly, so it will be much harder for Canyon Ranch to maintain its competitive edge just based on customer experience. As talked about in the case study, any vacation plan is a potential threat to Canyon Ranch. Customers who go to Canyon Ranch are choosing the spa over a trip to Florida, a cruise, or whatever else someone would want to do as opposed to being pampered at the spa. These threats are not the type that can be defeated. They will always be potential threats to the Canyon Ranch business, but being able to differentiate themselves from competitors is a great way to stay ahead of the game.
2) At the time of the case, are there any ways in which Canyon Ranch was employing CRM principles in its daily business? How would you evaluate Canyon Ranch's implementation of CRM at the time of the case? Are they doing a good job, a fair job, or a poor job? Why?
Canyon Ranch does not seem to have a CRM strategy in place. The information gathered over the years is all based on past guests and their activities. The case study presents the fact that Canyon Ranch remained low-tech because it did not want to scare off potential guests with a computerized approach. What I think they meant is they did not want employees to react in certain ways because they were told to do so by research obtained from some type of software. Over the years, Canyon Ranch had gotten more and more concerned with their CRM plans and began to implement a few forms of software to help track customer data. The only problem was that the software was not extracting customer data efficiently. They had a hot-line, where guests would call in three weeks prior to their scheduled visit and talk about what they wanted to focus on during their stay at the resort.
As discussed in the weaknesses category of the SWOT analysis, Canyon Ranch’s current marketing strategy is too reliant on word-of-mouth, which is a great marketing tool for any company, but I just believe word of mouth should not be a primary form of marketing. Instead Canyon Ranch should invest more heavily into the CRM aspect of marketing. Its CRM strategy is outdated and could use an upgrade.
Along with word of mouth, Canyon Ranch seems intent on selling this Wal-Mart style approach to the spa industry. By that I mean, Canyon Ranch is a one stop shop. Whether you are there looking to get a message, or do some yoga, it basically has anything that any other spa would possibly offer and it is all under one roof. This type of business structure has proven successful in many facets and not just with Wal-Mart. For instance, Lifetime, a gym, is known for being the biggest, with all the newest/state of the art equipment, and operating on a 24/7 time schedule, is a huge force in the gym industry. I was once a member at Lifetime and must say that no other gym compares to all the amenities it offered. Even though it was a bit pricier than most other competitors, it was worth it. At Canyon Ranch, the customers seem to have a similar mentality where they do not mind paying the extra dollars because of all that is offered.
I think that with the technology in place, at the time of the case study, it was doing a pretty good job. Canyon Ranch has been able to sustain their profitability, and remain a leader in the spa industry.
3) How appropriate is CRM for Canyon Ranch and its type of business?
I think that CRM would be an asset to any business in the spa industry. The whole purpose of a spa is to tend to your guests needs, and without the proper data on your guests, no spa would be able to deliver that “special experience.” In such a rapidly growing business, it is the little things that make all the difference in the eyes of the consumer. Although the addition of CRM can be quite costly, it comes with rewards, the most important being customer data and customer satisfaction.
The case study discussed how Canyon Ranch was using a paper-based system for the guests to sign up for classes. It also talked about the data Canyon Ranch had collected on guests over the last 10 years; it was not even sure what guests were spending their money on. Needless to say, the methods being used at Canyon Ranch are not only outdated but also inefficient. It would be much easier for guests to sign up for classes online, and it would be much easier for them to keep track of that information as well. Having all customer data organized into online files typically makes it much easier to sort through than cabinets upon cabinets full of documents. In recent years, customer data has become the hottest subject in marketing. Businesses want to know every little thing about old/new/potential/current customers; after all, it is difficult to run a business without customers. To acquire more efficient data on their consumers, Canyon Ranch should employ software that tracks everything a customer does. Activities they did, the room they stayed in, and even complaints that customers filed should be tracked by some type of software. This would give them a solid foundation to better knowing their guests, leading to higher customer satisfaction. The whole purpose of a spa is for someone to get away from their everyday life and just relax. At Canyon Ranch guests are paying a premium compared to some of their competitors. So when people go there, they expect the best possible treatment. Currently, I work at Trader Joes, and the main focus of the company is delivering a “wow” customer experience. Over time, you really get to understand people’s body language, and you know which customers to approach and which to avoid. In the spa industry it would probably be harder to remember guests based on previous visits since they probably only visit a couple times a year at most. That is why customer data is so important. It gives employees a cheat-sheet on all the customers. It tells them how that person likes to be approached and talked to. When you have this much data on your customers, it allows for you to deliver that “wow” experience, which is a great way to increase customer retention.
4) Assuming that Canyon Ranch decided to improve its CRM strategy, what Technology -centered recommendations would you make?
I found it strange in the Canyon Ranch case study when it talked about how they were scared to implement the use of more technology into the current business plan. There are many things happening right now in the marketing world which could be effective in improving Canyon Ranch’s CRM system. As far as technology recommendations, I wanted to focus on a few key topics: social media, e-mail marketing, and the addition of a sufficient service automation center.
In today’s world social media is everywhere. It is a tool for any business, and the best part is that it is free. People have access to social media from almost all mediums of technology (which include Smartphones, Tablets, Laptops, and Gaming Systems). It is rare to find any franchise not utilizing social media. I think the best social media platform for Canyon Ranch would be Facebook. On its Facebook it could write posts about dieting and exercise. If it were able to get enough subscribers to their Facebook, it would be a great way for them to get customer feedback. Consumers could tell Canyon Ranch about recent visits they had there and talk about what they liked and what they did not. Customers could give suggestions of treatments and activities they would like to see at Canyon Ranch in the future. Facebook helps to get direct insight from your customers. The fact that it is a public forum and can be viewed by anyone helps the company. Another point about Facebook is Canyon Ranch would have complete control of the content that goes onto its page. If someone posts something that Canyon Ranch does not like, it can be easily removed.
E-mail is another form of marketing that is relatively cheap in comparison to TV, radio, or newspaper ads. It is an easy way to stay in direct contact with your consumers and an easy way to please customers when you offer sales/promotions for those who subscribe to your e-mail directory. Typically, when subscribed to some company e-mail, you receive at least one message a day and viewers see those messages as “junk e-mail.” Finding that happy medium of sending content to subscribers but at the same time not overdoing, can be a very difficult task. However, that is where the customer data comes into play. When you have a database of your customer’s likes and dislikes, you can individualize the e-mails by each customer segment. For those who frequent the health/nutrition area of the spa, you could send out healthy recipes. For the ones who visit the healing department, send them meditation tips and stretches they can do. E-mail marketing is an art and is not something that should be overused.
Building a sufficient service automation center would probably be the most costly of the three suggested ideas, but could also be the most beneficial. In Canyon Ranch’s current CRM plan, customers would call a hot-line to talk about what services they wanted during their stay. I feel hotlines are a little outdated and are viewed negatively in the eyes of the consumer. For example, whether at my own house or friend’s houses, whenever an 1-800 number pops up on the caller-id, it is very rare that call gets answered. Giving customers the option of how they prefer to go about things goes a long way towards the customer experience. Some people like to call and talk with someone, while others prefer to do everything online. Having a service automation center would do just that. People could call the help desk when they have questions about specific services. Service automation centers are there to provide help for those in need. Many times when people face difficulty, they just give up leading to lost sales for Canyon Ranch. With the service center, they would be able to walk people through any problems and at the same time promote their company.
5) Assuming that Canyon Ranch decided to improve its CRM strategy, what Process/Procedure/Operations-centered recommendations would you make?
Building an efficient CRM system is no easy task and it always starts with the company processes, procedures, and operations. Although the current strategy is working for Canyon Ranch that does not mean it will have the same impact in the future. The lack of innovation could prove costly towards its future success. In order to avoid turmoil in the days ahead, I have suggested a few different features I believe should be added to its current processes/operations/procedures: building a stronger focus on cross/up-selling, and define what exactly what it is selling.
With a stronger CRM system in place, cross selling and up-selling would become much easier.
With knowledge of the individual customer preferences, employees would be able to suggest upgraded/ more expensive packages. For instance, one of the regulars comes in and looks to sign up for their “usual” schedule of treatments. So the employee looks up said customer in the database, and in there they find a profile of this very customer in front of them. The profile lists the customer’s age, past services, and preferences. With that information, employees could then suggest similar treatments the guest should try, and show that even though it might be a little more expensive, they are worth it. Getting the guests to try things that they had not before is good for business. When you have people doing the same activities every time they visit the spa, it can be hard to obtain new customers. You want people to be excited to try new things. That way they can give you their input on them and also suggest different activities to other
customers.
Canyon Ranch needs some type of universal identity. In order to clearly define what they want to be, they need to take a step back and look at the target market (which for them is middle aged woman with an above average income). I think it is obvious they are trying to sell the ultimate “spa experience,” but from the case study, you would not know that for sure. The identity should be obvious to customers. When they are looking to visit a spa and come across Canyon Ranch, they will know exactly what they are in for.
6) Assuming that Canyon Ranch decided to improve its CRM strategy, what People/Employee-centered recommendations would you make?
People and employees should be a top priority of any business. It is important to not only keep the customers happy but also the employees, as they are the ones who are selling the products and services. When the employees are happy it transcends through them and makes for better customer service. A couple suggestions to improve customer/employee satisfaction are: creating a customer rewards program and also an employee rewards program.
I believe the first plan of attack should be to initiate some type of rewards program into their business. Loyal customers should be rewarded for their consistent business because they are such a key component towards the current success of Canyon Ranch. The rewards program does not have to be very complex, either. It could be as simple as issuing out loyalty cards to be used every time one purchases a visit to Canyon Ranch, and depending upon the amount of the purchase, Canyon Ranch could offer some type of reward: free message, free nights stay at the hotel, or free dinner for two. People love getting discounts; they never want to feel as if they have paid full-price for something.
The rewards program would help create a better bond between Canyon Ranch and its customers. Consumers would suddenly feel the need to visit more often so that they could receive more rewards. A current example that displays this scenario is the Kroger rewards program. Recently, they partnered with local gas stations, where if you spend so much money every month at Kroger, you receive a discount on gas. With gas being as expensive as it is, people are now going to Kroger more often so that they can receive their fuel points. At Canyon Ranch, they could do something similar, where they could partner with local airlines. Since it was stated that most guests visit from out of town, a partnership with an airline sounds like a good idea. For every purchase at Canyon Ranch, customers would receive discounts on flights.
Along with customer rewards programs, the employees should also receive some type of rewards. When a company achieves success, then so should its employees. The people working at any given business should not go unappreciated. Canyon Ranch should offer employees who excel at their job incentives, like paid vacations, free nights stay at the hotel, and bonuses. Happy employees are a marketing tool for a business. For instance, at Trader Joes they treat the workers generously by offering amenities like paid vacations, full-benefits, and flexible working hours. In turn, the employees are generally happy and give out very positive word-of-mouth to friends and family.
Companies should also empower their employees to do a variety of jobs. People are generally happier when they feel trusted and are given authority to make their own decisions. Canyon Ranch should cross-train employees so that they are capable of handling a crisis if ever needed. Companies should also assure their employee of job security, which allows makes employees much more personable. When someone is constantly worrying about if they said something wrong or did something against company policy, it takes away from the personality. These people were hired for not just their skill sets, but for their ability to be personable.
7) If Canyon Ranch implemented all of your recommendations, how could these potentially affect its business?
If the company was to properly implement the suggested strategies above, I believe it would see substantially positive outcomes. I believe the foundation to any successful CRM program is the customer data. When you have the software to track customer preferences and purchases, it empowers employees to be able to affect all areas of the business in a positive way. However, there are many other facets to successful CRM that do not show up directly in revenues but are huge contributors. As talked about earlier, customer and employee satisfaction are big for a business in the service industry. When people are happy, it creates positive word-of-mouth, which contributes to higher sales in the future. The strategies suggested above are meant to affect the business in their own way. Building stronger technology oriented applications into your CRM help promote your business and are good for keeping in direct contact with your customers. The process/procedure/operations help define what the company is and give them direction to aspects they should focus on. The people/employee suggestions help promote satisfaction and hopefully retention. Typically, companies with constant employee turnover struggle. Employees should always be an important focus; you need them there ready and willing to promote your company. In the end, I believe I have provided Canyon Ranch with possible strategies to think about in the future. Canyon Ranch has out grown its current strategy and could benefit greatly from some of these suggestions.
1) SWOT Analysis
Strengths:
The first key strength of Canyon Ranch is its willingness to grow and innovate its business. Innovation is the key to any successful business. In the words of Peter Drucker, “the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” Without change, a business can become old and boring to the consumers, resulting in higher defection/churn rates. Another key strength of Canyon Ranch is its excellence in on site customer service. The article stated there was a 2.5:1 staff to guest ratio. With that many employees on hand, it allows for Canyon Ranch to cater to all consumer needs, allowing for the best possible customer experience. The final strength of Canyon Ranch was its hiring process. They look for people with great personalities and who are excited to work for them. As with any service directed business, the workers are probably the biggest intangible …show more content…
asset. The workers are the ones who are selling the product and are the easiest way to increase customer retention.
Weaknesses:
The health and nutrition department is a noticeable weakness in the Canyon Ranch business. With nutritionist making roughly 50% higher wages than the fitness instructors and massage therapists, it is hard for them to turn a profit in that department. Finding a way to make this department more profitable would help greatly towards increasing annual revenues. Ideas like selling their own diet/cook books are things that Canyon Ranch should consider. Also, they are too reliant on positive word-of-mouth to acquire new customers. With all of the technological amenities out there nowadays, Canyon Ranch needs to take advantage of them. As stated earlier, the key to any successful business is change, and Canyon Ranch seems a little too set in their ways. It would be wrong for them to rely on old systems just because it worked in the past. Technology is a wonderful thing, and Canyon Ranch is not taking advantage of it.
Opportunities:
Canyon Ranch is missing a large part of the market by not appealing to men. It is stated that 75% of guests are women. From the male perspective, when they hear the word spa they think of something that only woman would go to. However, in recent years people have become much more aware of health concerns and that includes males. I am not trying to say Canyon Ranch should completely reconstruct its facilities to cater to men, but rather just add a few features that make the term “spa” more attractive to the male demographic. For instance, Canyon Ranch could build a recreation area, where males could go and play basketball or tennis, add a lounging area with a bar so after a long day of activities, males could go there and drink a beer while watching some sports. Another key opportunity is creating some type of rewards program. No one ever wants to feel they are paying full price for something; they want some type of discount. What better way to do that than by adding a rewards program.
Threats:
The obvious threats are other companies in the spa industry. The case study stated that in 2002 there were 9,632 spas just in the United States, a number that had grown from 1,374 in 1990. The spa industry is growing rapidly, so it will be much harder for Canyon Ranch to maintain its competitive edge just based on customer experience. As talked about in the case study, any vacation plan is a potential threat to Canyon Ranch. Customers who go to Canyon Ranch are choosing the spa over a trip to Florida, a cruise, or whatever else someone would want to do as opposed to being pampered at the spa. These threats are not the type that can be defeated. They will always be potential threats to the Canyon Ranch business, but being able to differentiate themselves from competitors is a great way to stay ahead of the game.
2) At the time of the case, are there any ways in which Canyon Ranch was employing CRM principles in its daily business? How would you evaluate Canyon Ranch's implementation of CRM at the time of the case? Are they doing a good job, a fair job, or a poor job? Why?
Canyon Ranch does not seem to have a CRM strategy in place. The information gathered over the years is all based on past guests and their activities. The case study presents the fact that Canyon Ranch remained low-tech because it did not want to scare off potential guests with a computerized approach. What I think they meant is they did not want employees to react in certain ways because they were told to do so by research obtained from some type of software. Over the years, Canyon Ranch had gotten more and more concerned with their CRM plans and began to implement a few forms of software to help track customer data. The only problem was that the software was not extracting customer data efficiently. They had a hot-line, where guests would call in three weeks prior to their scheduled visit and talk about what they wanted to focus on during their stay at the resort.
As discussed in the weaknesses category of the SWOT analysis, Canyon Ranch’s current marketing strategy is too reliant on word-of-mouth, which is a great marketing tool for any company, but I just believe word of mouth should not be a primary form of marketing. Instead Canyon Ranch should invest more heavily into the CRM aspect of marketing. Its CRM strategy is outdated and could use an upgrade.
Along with word of mouth, Canyon Ranch seems intent on selling this Wal-Mart style approach to the spa industry. By that I mean, Canyon Ranch is a one stop shop. Whether you are there looking to get a message, or do some yoga, it basically has anything that any other spa would possibly offer and it is all under one roof. This type of business structure has proven successful in many facets and not just with Wal-Mart. For instance, Lifetime, a gym, is known for being the biggest, with all the newest/state of the art equipment, and operating on a 24/7 time schedule, is a huge force in the gym industry. I was once a member at Lifetime and must say that no other gym compares to all the amenities it offered. Even though it was a bit pricier than most other competitors, it was worth it. At Canyon Ranch, the customers seem to have a similar mentality where they do not mind paying the extra dollars because of all that is offered.
I think that with the technology in place, at the time of the case study, it was doing a pretty good job. Canyon Ranch has been able to sustain their profitability, and remain a leader in the spa industry.
3) How appropriate is CRM for Canyon Ranch and its type of business?
I think that CRM would be an asset to any business in the spa industry. The whole purpose of a spa is to tend to your guests needs, and without the proper data on your guests, no spa would be able to deliver that “special experience.” In such a rapidly growing business, it is the little things that make all the difference in the eyes of the consumer. Although the addition of CRM can be quite costly, it comes with rewards, the most important being customer data and customer satisfaction.
The case study discussed how Canyon Ranch was using a paper-based system for the guests to sign up for classes. It also talked about the data Canyon Ranch had collected on guests over the last 10 years; it was not even sure what guests were spending their money on. Needless to say, the methods being used at Canyon Ranch are not only outdated but also inefficient. It would be much easier for guests to sign up for classes online, and it would be much easier for them to keep track of that information as well. Having all customer data organized into online files typically makes it much easier to sort through than cabinets upon cabinets full of documents. In recent years, customer data has become the hottest subject in marketing. Businesses want to know every little thing about old/new/potential/current customers; after all, it is difficult to run a business without customers. To acquire more efficient data on their consumers, Canyon Ranch should employ software that tracks everything a customer does. Activities they did, the room they stayed in, and even complaints that customers filed should be tracked by some type of software. This would give them a solid foundation to better knowing their guests, leading to higher customer satisfaction. The whole purpose of a spa is for someone to get away from their everyday life and just relax. At Canyon Ranch guests are paying a premium compared to some of their competitors. So when people go there, they expect the best possible treatment. Currently, I work at Trader Joes, and the main focus of the company is delivering a “wow” customer experience. Over time, you really get to understand people’s body language, and you know which customers to approach and which to avoid. In the spa industry it would probably be harder to remember guests based on previous visits since they probably only visit a couple times a year at most. That is why customer data is so important. It gives employees a cheat-sheet on all the customers. It tells them how that person likes to be approached and talked to. When you have this much data on your customers, it allows for you to deliver that “wow” experience, which is a great way to increase customer retention.
4) Assuming that Canyon Ranch decided to improve its CRM strategy, what Technology -centered recommendations would you make?
I found it strange in the Canyon Ranch case study when it talked about how they were scared to implement the use of more technology into the current business plan. There are many things happening right now in the marketing world which could be effective in improving Canyon Ranch’s CRM system. As far as technology recommendations, I wanted to focus on a few key topics: social media, e-mail marketing, and the addition of a sufficient service automation center.
In today’s world social media is everywhere. It is a tool for any business, and the best part is that it is free. People have access to social media from almost all mediums of technology (which include Smartphones, Tablets, Laptops, and Gaming Systems). It is rare to find any franchise not utilizing social media. I think the best social media platform for Canyon Ranch would be Facebook. On its Facebook it could write posts about dieting and exercise. If it were able to get enough subscribers to their Facebook, it would be a great way for them to get customer feedback. Consumers could tell Canyon Ranch about recent visits they had there and talk about what they liked and what they did not. Customers could give suggestions of treatments and activities they would like to see at Canyon Ranch in the future. Facebook helps to get direct insight from your customers. The fact that it is a public forum and can be viewed by anyone helps the company. Another point about Facebook is Canyon Ranch would have complete control of the content that goes onto its page. If someone posts something that Canyon Ranch does not like, it can be easily removed.
E-mail is another form of marketing that is relatively cheap in comparison to TV, radio, or newspaper ads. It is an easy way to stay in direct contact with your consumers and an easy way to please customers when you offer sales/promotions for those who subscribe to your e-mail directory. Typically, when subscribed to some company e-mail, you receive at least one message a day and viewers see those messages as “junk e-mail.” Finding that happy medium of sending content to subscribers but at the same time not overdoing, can be a very difficult task. However, that is where the customer data comes into play. When you have a database of your customer’s likes and dislikes, you can individualize the e-mails by each customer segment. For those who frequent the health/nutrition area of the spa, you could send out healthy recipes. For the ones who visit the healing department, send them meditation tips and stretches they can do. E-mail marketing is an art and is not something that should be overused.
Building a sufficient service automation center would probably be the most costly of the three suggested ideas, but could also be the most beneficial. In Canyon Ranch’s current CRM plan, customers would call a hot-line to talk about what services they wanted during their stay. I feel hotlines are a little outdated and are viewed negatively in the eyes of the consumer. For example, whether at my own house or friend’s houses, whenever an 1-800 number pops up on the caller-id, it is very rare that call gets answered. Giving customers the option of how they prefer to go about things goes a long way towards the customer experience. Some people like to call and talk with someone, while others prefer to do everything online. Having a service automation center would do just that. People could call the help desk when they have questions about specific services. Service automation centers are there to provide help for those in need. Many times when people face difficulty, they just give up leading to lost sales for Canyon Ranch. With the service center, they would be able to walk people through any problems and at the same time promote their company.
5) Assuming that Canyon Ranch decided to improve its CRM strategy, what Process/Procedure/Operations-centered recommendations would you make?
Building an efficient CRM system is no easy task and it always starts with the company processes, procedures, and operations. Although the current strategy is working for Canyon Ranch that does not mean it will have the same impact in the future. The lack of innovation could prove costly towards its future success. In order to avoid turmoil in the days ahead, I have suggested a few different features I believe should be added to its current processes/operations/procedures: building a stronger focus on cross/up-selling, and define what exactly what it is selling.
With a stronger CRM system in place, cross selling and up-selling would become much easier.
With knowledge of the individual customer preferences, employees would be able to suggest upgraded/ more expensive packages. For instance, one of the regulars comes in and looks to sign up for their “usual” schedule of treatments. So the employee looks up said customer in the database, and in there they find a profile of this very customer in front of them. The profile lists the customer’s age, past services, and preferences. With that information, employees could then suggest similar treatments the guest should try, and show that even though it might be a little more expensive, they are worth it. Getting the guests to try things that they had not before is good for business. When you have people doing the same activities every time they visit the spa, it can be hard to obtain new customers. You want people to be excited to try new things. That way they can give you their input on them and also suggest different activities to other
customers.
Canyon Ranch needs some type of universal identity. In order to clearly define what they want to be, they need to take a step back and look at the target market (which for them is middle aged woman with an above average income). I think it is obvious they are trying to sell the ultimate “spa experience,” but from the case study, you would not know that for sure. The identity should be obvious to customers. When they are looking to visit a spa and come across Canyon Ranch, they will know exactly what they are in for.
6) Assuming that Canyon Ranch decided to improve its CRM strategy, what People/Employee-centered recommendations would you make?
People and employees should be a top priority of any business. It is important to not only keep the customers happy but also the employees, as they are the ones who are selling the products and services. When the employees are happy it transcends through them and makes for better customer service. A couple suggestions to improve customer/employee satisfaction are: creating a customer rewards program and also an employee rewards program.
I believe the first plan of attack should be to initiate some type of rewards program into their business. Loyal customers should be rewarded for their consistent business because they are such a key component towards the current success of Canyon Ranch. The rewards program does not have to be very complex, either. It could be as simple as issuing out loyalty cards to be used every time one purchases a visit to Canyon Ranch, and depending upon the amount of the purchase, Canyon Ranch could offer some type of reward: free message, free nights stay at the hotel, or free dinner for two. People love getting discounts; they never want to feel as if they have paid full-price for something.
The rewards program would help create a better bond between Canyon Ranch and its customers. Consumers would suddenly feel the need to visit more often so that they could receive more rewards. A current example that displays this scenario is the Kroger rewards program. Recently, they partnered with local gas stations, where if you spend so much money every month at Kroger, you receive a discount on gas. With gas being as expensive as it is, people are now going to Kroger more often so that they can receive their fuel points. At Canyon Ranch, they could do something similar, where they could partner with local airlines. Since it was stated that most guests visit from out of town, a partnership with an airline sounds like a good idea. For every purchase at Canyon Ranch, customers would receive discounts on flights.
Along with customer rewards programs, the employees should also receive some type of rewards. When a company achieves success, then so should its employees. The people working at any given business should not go unappreciated. Canyon Ranch should offer employees who excel at their job incentives, like paid vacations, free nights stay at the hotel, and bonuses. Happy employees are a marketing tool for a business. For instance, at Trader Joes they treat the workers generously by offering amenities like paid vacations, full-benefits, and flexible working hours. In turn, the employees are generally happy and give out very positive word-of-mouth to friends and family.
Companies should also empower their employees to do a variety of jobs. People are generally happier when they feel trusted and are given authority to make their own decisions. Canyon Ranch should cross-train employees so that they are capable of handling a crisis if ever needed. Companies should also assure their employee of job security, which allows makes employees much more personable. When someone is constantly worrying about if they said something wrong or did something against company policy, it takes away from the personality. These people were hired for not just their skill sets, but for their ability to be personable.
7) If Canyon Ranch implemented all of your recommendations, how could these potentially affect its business?
If the company was to properly implement the suggested strategies above, I believe it would see substantially positive outcomes. I believe the foundation to any successful CRM program is the customer data. When you have the software to track customer preferences and purchases, it empowers employees to be able to affect all areas of the business in a positive way. However, there are many other facets to successful CRM that do not show up directly in revenues but are huge contributors. As talked about earlier, customer and employee satisfaction are big for a business in the service industry. When people are happy, it creates positive word-of-mouth, which contributes to higher sales in the future. The strategies suggested above are meant to affect the business in their own way. Building stronger technology oriented applications into your CRM help promote your business and are good for keeping in direct contact with your customers. The process/procedure/operations help define what the company is and give them direction to aspects they should focus on. The people/employee suggestions help promote satisfaction and hopefully retention. Typically, companies with constant employee turnover struggle. Employees should always be an important focus; you need them there ready and willing to promote your company. In the end, I believe I have provided Canyon Ranch with possible strategies to think about in the future. Canyon Ranch has out grown its current strategy and could benefit greatly from some of these suggestions.