Case 1-3 Canyon Ranch

Topics: Customer relationship management, Customer service, Marketing Pages: 5 (1389 words) Published: February 25, 2013
Case 1-3 Canyon Ranch

Table of Contents
1.Summary of the problem3
2.The technology that is used to analyze the case and the technology that was discussed in the case.3 3.Summary of Available Information3
4.Pre-Analysis of the study4
5.The analysis section4
Lessons learned from the case9
Meeting minutes9

Case 1-3 Canyon Ranch

Summary of the problem

In spite of dramatic growth of the spa industry, little attention is still paid to information technologies, thus, operations remain low tech. As CIO at Canyon Ranch, based on the customer information available to Ranch Canyon, it is necessary to decide how to build effective customer relationship management (CRM) and business intelligence systems at Canyon Ranch. It is also important to analyse the impact these systems would have on the Canyon’s Ranch strategy and capabilities.

The technology that is used to analyze the case and the technology that was discussed in the case.

MS Word application is used to analyse this case.
Computerized Lodging Systems (CLS) – a UNIX-based legacy application written in BASIC that the company has been using since 1986 through multiple versions is under investigation.

Summary of Available Information

1. Canyon Ranch Business Units.
2. Canyon Ranch Services.
3. New Services and Sample Packages and Services.
4. Canyon Ranch customer profile.
5. Canyon Ranch Rates and Packages.
6. The structure of the spa industry.
7. Overview of the Information Technology (IT) at Canyon Ranch.

Pre-Analysis of the study

Computerisation was always seen as a thread rather than an opportunity for the spa industry, since many spa visitors were seeking an escape from their technology-intensive world. However, competition and the realities of current market conditions necessitated Canyon Ranch to reinvent its marketing and IT strategy. In this regard, it is important to place a great deal of emphasize that Canyon Ranch is considered as the golden standard of the industry, and it is especially true with its Health and Healing department. However, notwithstanding the high growth of the unit, its profitability leaves much to be desired. There is also low synergy between its Spa Clubs and destination resorts that hampers further development of Canyon Ranch business. It is largely reasoned by the decentralized IT infrastructure Canyon Ranch used to rely on. The only CLS software the company use has the scheduling function only for Spa and Health and Healing units. CLS is aimed primarily on efficiently processing transactions rather than collecting information to support decision making in CRM. Furthermore, there remains a paper work in signing up for activities like fitness classes, outdoor sports and lectures. Moreover, some customer data, like specific accommodation requests or anniversaries are recorded in free form text that can not be parsed by automated software. In addition, Canyon cannot track cosmetic sales in salons, since there is no POS software there.

The analysis section

Competition in the spa industry is constantly intensifying. Moreover, if a decade ago, location was a key success factor, now it is becoming increasingly difficult to compete on facilities and amenities, since they have become standardized across different brands. Price wars are also unattractive, as customers can easily find and compare prices over the Internet. As a result, customers are becoming less loyal. Therefore, CRM gains in importance for spa companies to differentiate themselves from competitors. [pic]

Exhibit 1. The effects of managing customer database through CRM systems. The second factor contributing to the necessity to establish effective CRM systems is proliferating amount of customer data. As...

References: Applegate, L.M. & Piccoli, G. (2004) Case 1-3 Canyon Ranch. Harvard Business School.
Gamble, Stone, and Woodcock (1999) Up Close & Personal: CRM @ Work, Kogan Page.
Groonroos (1990) Service management and marketing: Managing the moments of truth in service competition. Lexington Books. 
Reichheld, F. and Sasser, W. (1990) Zero defects: quality comes to services, Harvard Business Review, Sept-Oct, 1990.
Rutherford, D.G. & O 'Fallon, M.J. (2006) Hotel Management and Operations, Wiley.
Lessons learned from the case
Customer data is very valuable information that helps build trustworthy and loyal customer relationships. CRM system is an essential tool in managing customer data. IT is the key success factor for CRM implementation. It is argued that IT allows achieving wider market coverage with less entry costs and increased marketing effectiveness.
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