Anandam Vana Retreat: Designing Customer Loyalty Program For Long-Term Customer Relationship

WSPC/166-ACRJ 2150018 ISSN: 2189-2752
ASIAN CASE RESEARCH JOURNAL, VOL. 26, ISSUE 1, 1–16 (2022)
ACRJ
by INDIAN INSTITUTE OF MANAGEMENT @ LUCKNOW on 09/27/22. Re-use and distribution is strictly not permitted, except for Open Access articles.
Anandam Vana Retreat: Designing

This case was prepared by
Vatsala Singh, Lt Com- Customer Loyalty Program for
mander and Marketing
Researcher, and Associate Long-Term Customer Relationship
Asian Case Res. J. 2022.26:1-16. Downloaded from www.worldscientific.com
Professor Prem Prakash

Dewani, both from Indian
Institute of Management,
Lucknow, as a basis for
classroom discussion rather
than to illustrate either effec-
Anandam Vana Retreat’s endeavor is to “Unravel the hidden po-
tive or ineffective handling of tential of its guests through yoga, meditation and Ayurvedic health
an administrative or business farms”.
situation.
Please send all correspon-

— The Anandam Vana Mission Statement
dence to Associate Professor
Prem Prakash Dewani,
Indian Institute of Manage-
ment, Lucknow, Prabandh INTRODUCTION
Nagar, IIM Road, Lucknow
226013, Uttar Pradesh,
India. E-mail: premd@iiml. Sunaina, G., Vice President (VP) Sales and Marketing at
ac.in
Anandam Vana Luxury Wellness Retreat, was gazing from
her office window at the sprawling expanse of the Resort,
set amid the backwaters of Kerala. She saw contended guests
heading to yoga centers, returning from Spa centers and
enjoying fine healthy dining.
Since its inception in 1988, Anandam Vana is the
nation’s first and leading wellness brand and has grown
globally, hosting high-value clients like the Prince of Wales.
However, recently the Group has been facing increasing com-
petition from an array of new players, including day-spas,
luxury resorts and wellness centers.
To keep up with the competition and increase sales,
Sunaina was considering whether to adopt a loyalty rewards
program and shared her idea with the Management Com-
mittee. The house was divided upon the proposal and had
© 2022 by World Scientific Publishing Co., and Asia Academy of Management DOI: 10.1142/S0218927521500188
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mixed reactions to the idea; few supported the idea, while

the others were philosophically opposed to the idea of
special treatment to certain privileged guests. In case the
Anandam Vana Group adopts the rewards program, it will

be immensely complex to structure it. What sorts of rewards
should the firm offer? Who should qualify? What sorts of
partnerships should the Group form? Sunaina needed to find
ways to improve the financial wellness of the Resort and help
overcome the mounting competition.
HISTORY OF ANANDAM VANA

Anandam Vana Group, the quintessence of healthy lifestyle

and fine living, was established in 1988 by R. Ravi Balaji and
Kavya Balaji. The Balaji couple were accomplished profes-
sionals in Ayurveda, who truly believed in the capabilities of
healing body and soul through Ayurveda, yoga and medita-
tion. With the sole aim of creating an Ayurvedic health farm
for people to explore natural ways of treatments for health
and rejuvenation, they established the first Anandam Vana
Resort in the picturesque backwaters of Kerala. Business was
slow at start as the rapid pace of life had not yet caught on.
With the increasing popularity of yoga globally, especially
in the US and European nations, a leading journalist in the
US wrote an article on Anandam Vana, and its unique and
natural ways of healing using yoga, meditation and Ayurvedic
treatment. He described it as a “Premier natural wellness
resort”, and the business took off. Over the time, Anandam
Vana Group by 2013 had become a well-established brand and
expanded its base of operations; the Group has established a
firm footing with 25 treatment centers in India as well as nine
treatment centers and three Ayurvedic health retreats abroad.
Being a certified model of wellness retreat, Anandam
Vana evolved over the years, to facilitate seekers with
modern holistic luxury and elite wellness experience for
a rendezvous with the real self in the lap of nature. As per
Mr. Balaji, “The evolution has helped us in positioning our
brand as a luxury wellness retreat.”
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ANANDAM VANA RETREAT 3
Properties and Product Range
In 2018, the Group had one full-scale, overnight destina-

tion wellness Resort at Palakkad, Kerala and three wellness

Resorts abroad in the US, Malaysia and Mauritius. Anandam
Vana Retreat — famously known as as the Healing Village — is
a perfect blend of modern-day luxury enveloped in the laid-
back serene backwaters of Kerela. In line with its mission
statement, the Retreat provides guests with a full range of
wellness services (Exhibit 4), the facilities include yoga and
meditation classes, Ayurvedic treatment and consultancy
with well-qualified practitioners, spa services, organic farm
and herbal garden, fine dining with two restaurants at the

Retreat, cooking classes and dietary consultancy, beauty
centers, amphi-theater, workshop on spiritual awareness and
stress management, recreational center with fully equipped
gym, badminton, squash and tennis courts and jogging tracks.
It also provides guests the opportunity to meet and consult
with charm science experts. Palmistry, astrology and numer-
ology are also available to experience the mystical side of
ancient India. The luxury and care of guests are also ensured
through an elaborate staff-to-guest ratio of 3:1. According
to Balaji, “Our primary value proposition is the concept of
health and wellness, of which, everyone has their own inter-
pretation. For some it is being pampered and others it’s reju-
venation through health and wellness.”
Ramesh Balaji adds:
“We help you to discover yourself in the most natural way

amidst nature; that’s our job. That’s what our brand stands
for!”
Anandam Vana claims to be the best in class in the

wellness business and its patrons realize that the premium
they pay for the services availed at the facility is worth every
dollar. The management emphasizes that a stay at Anandam
Vana can never be compared to any other holiday. It is an
epitome of concept hospitality and a life-changing experience,
helping reconnect nature, body and soul. In the long run, it
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saves manifolds against hospital bills. Moreover, there is no

additional cost for stay and food, which is a major expense in
any other form of vacation.
The Spa centers are smaller business units compared

to Retreat, providing limited services of spa and Ayurvedic
treatments (which also include Ayurvedic products) on an
appointment basis. Spa centers are all about pampering and
do not encompass the entire wellness package. Apart from
this, the Group also provides training on yoga.
Competitors
There has been a meteoric rise in the wellness industry from

a $3.7 trillion market to a $4.5 trillion one with 6.4% annual
increase from 2015 to 2017, nearly twice as fast as the global
economic growth (3.6% annually, based on the IMF and
Global Wellness Institute’s GWI 2018 dataa) and is approxi-
mately 17% of global tourism. With the growing global well-
ness industry and awareness towards healthy living, the
competition in the sector is also increasing. In the first decade
of its establishment, the Retreat carved its niche but recently,
it has been facing fierce competition from major luxury hotel
chain brands like the Taj, Leela, various palaces converted
into luxury resorts and hotels like the Umaid Bhavan Palace,
The Oberoi Palace, etc. The Regional Sales Manager remarked,
“We are competing against everyone. We are competing
against vacation destinations abroad as well as within the
country, as a lot of people have to decide to take a destination
vacation or to opt for comprehensive wellness vacation.”
MARKETING AND SALES AT ANANDAM VANA
The Marketing Department at Anandam Vana Group consists

of six people under the VP (Sales and Marketing) Sunaina, G.
Most of the marketing is directed towards promoting Anandam
a
Global Wellness Institute (GWI), globalwellnessinstitute.org
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Vana Retreat. The marketing approach of the Group is mainly

towards meeting specific revenue and occupancy targets at the
destination resort. Given the sophistication of Anandam Vana’s
clientele, marketing’s primary challenge was not educating con-

sumers about the Retreat but to evoke the right emotions so
that people are reminded that they want and need to feel great.
Most of the marketing efforts were devoted to brand-awareness
ads on various platforms. The Group occasionally engaged in
partnership marketing or occasionally shared bulletins with
guests who had stayed in the past. Beyond these measures,
the Group hardly directed its marketing or engaged with its
existing customers or used the customer lists.
In fact, Sunaina mentioned, “We barely do cross mar-

keting between our Spa centers and the resort. There are bro-
chures available at our centers but there is hardly any effort
for creating awareness about our resorts.”
The Sales Managers sell group and individual pack-
ages to high-end travel agencies for the Spa centers. The goal
was to maintain the occupancy level and therefore the prices
are lowered by 30–40% in winters as the occupancy reduces
during non-vacation durations. But this means there is a dif-
ferent kind of clientele during this season.
The Marketing Team has been trying hard to establish
a separate identity for Anandam Vana as a luxury wellness
resort as against just being an Ayurvedic wellness center.
THE CUSTOMER EXPERIENCE
The Clientele
At Anandam Vana, the majority of clientele are affluent

middle-aged people and females. Most of the new customers
reported having heard of the Group through word of mouth;
the rest reported having heard of the Group directly through
travel agents. The overall clientele of Anandam Vana con-
sisted of 60–65% of repeat guests; 37% of new guests returned
again within 5–6 years and 65% of repeat guests returned again
within 5 years of their first visit.
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Most of the male clients were accompanying their wives

for a laid-back vacation on their insistence, but were impressed
by the positive impact of lifestyle change during their course
of stay. Winters are heavy discount periods and see an influx

of younger, less-affluent clientele and corporate groups.
BOOKING A VISIT
Anandam Vana Group is mostly female-oriented with most of

its staff being women. The highly well-trained reservation staff
help customers to plan their vacations, understanding the objec-
tive of interested guests and mapping them to the best offerings

as per their objectives. The individualized consultation given to
callers by the reservation staff, gave them a preview of the care
and attention they would receive at Anandam Vana.
EXPERIENCE OF THE STAY
As a policy, Anandam Vana has a minimum two nights

package. But generally, the guests stayed for seven days to a
fortnight and even had a month-long vacation. “At Anandam
Vana, we give them flexibility for indulgence and experi-
encing the way of life; give them time to pause and reflect,
meet their own-self.”
The staff, fellow guests and environment at Anandam
Vana nudge the guests to push themselves and experi-
ence new things. When you see fellow guests around you,
stretching their limits, healthy, cheerful and at peace, it acts
as a motivation of different kinds itself.
Customer feedback taken is positive most of the time and
the majority ranked the experience as beyond their expectation.
Rising Expectations
Anandam Vana prefers keeping 75–80% capacity rather than

having full capacity to manage high customer satisfaction.
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According to them, working at a full house may impact the

quality of service and cause space constraints. All our staff
are highly committed, long-term employees, and are trained
to offer services with personalized touch, with many being

personally known to especially the repeat guests. Repeat
guests have an ever-increasing demand for better experience
owing to increasing competition in the sector.
Lately, there have been numerous feedbacks regarding
the absence of a loyalty program for our loyal repeat guests.
A Loyalty Program
With recurring customer feedbacks, Anandam Vana was

considering whether to implement a formal loyalty rewards
program. But Sunaina wanted to carefully study the implica-
tions of the loyalty program. The main challenge in execution
of a loyalty program is to match the expected loyalty rewards
with the offered reward. She analyzed on considering four
factors:
(1) Should Anandam Vana implement a rewards program?

There were efforts towards building customer relationships in
the past also, but they were not in an organized manner; the
efforts were made whenever the business was slowing down
and when it was full, everyone was busy with managing only
the operations. There was a lack of focused and consistent
effort towards building brand perception.
With the rapid increase in competition, it was impor-
tant for the Anandam Vana Group to have a consistent policy
of attracting and retaining customers. Sunaina was contem-
plating systematic relationship marketing (RM) investments
for acquiring and maintaining loyal customers. The rewards
and loyalty programs could nurture long-term relationships
with the customers. The reward programs will evoke the
feeling of gratitude or obligation, as per the perception of
the customer towards the rewards program. Also, with the
reward programs being part of every buyer–customer transac-
tion, the younger generation expects these rewards from their
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service providers and thus, they will help in acquiring new

customers.
The loyalty programs can be used to create synergy
between Anandam Vana Group Spa and the Resort. Pres-

ently, very few customers of the Spa turn up as guests at
the Wellness Retreat. The customer at the Spa may be given
reward points that can be utilized at the Resort and vice
versa. Also, Sunaina was aware of the growing competition
in the luxury wellness resort and spa, and with the amount
of marketing efforts put in by the competitors, Anandam
Vana Group had no other choice but to implement the loyalty
program. “I just feel the absence of a loyalty program is
giving the perception of arrogance to our customers, that we

do not care whether they return or not”, remarked Sunaina.
(2) Who should qualify? How should “points” be accumu-

lated?
Reward programs can be designed on the basis of award
points for the number of nights, number of visits and money
spent. But then, Sunaina was contemplating how to catego-
rize all the guests, e.g., someone who comes every year for
more than 8–10 years (average revenue per guest is $6,750,
considering three-day stay every year for the past decade)
or someone who stays for a fortnight or a month (average
revenue per guest is $6,750, considering fortnight stay twice
a year in the past 10 years) (see Exhibit 1). The award points
may not conclude the correct value of loyalty. Sunaina was
also worried because the database of guests available was not
accurate enough to implement a rewards system.
(3) What should the reward look like?

Rewards could take several forms, including enhanced guest
recognition (e.g., flowers or fruits in the room, addressing
guests by their name); tangible benefits like discounts and
coupons; and/or special guest privileges. Marketing Team felt
that guest recognition was the way to go.
“Most of our guests are affluent and any monetary compensa-

tion due to any bad experience may be perceived as repulsive
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and offensive. The best way to reward them was to provide

them with due recognition instead of monetary compensa-
tion.”
However, Sales Managers were of the view that

offering rewards in the form of guest recognition might create
an adverse impact in the long term.
“If you start offering intangible rewards like special privileg-

es or recognition, you create a monster, because the return-
ing guest is going to expect more and more with every visit.
And there needs to be a cap on how much we can provide as
special service. A better approach is to have a system for col-

lecting award points and convert them into tangible service or
reward.”
Also, the Anandam Vana Group had created its own

niche and did not want to compete in the market on prices.
(4) Should rewards only apply to Anandam Vana or should

they be redeemable at other places (if later, then what types
of partners)?
Another idea was to grant gift coupons or certificates to
the guests, which could be redeemed at potential partners.
Anandam Vana had tried this kind of partnership mar-
keting and it was possible that the guests would appreciate
redeeming rewards at other places, but it was not clear if
this would help in building Anandam Vana loyalty. Also, it
was important to wisely select the partners comparable to the
brand of Anandam Vana Group.
How to Proceed?
Sunaina’s major concern was the operational difficulties in

implementation of the loyalty program. She was not confi-
dent whether the firm’s database and computer system were
reliable to support these programs. The computer system and
database were outdated, although the upgradation process
is already underway but might take time. However, the Spa
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centers did not maintain a proper customer database, thus

it was a major challenge for implementing the reward pro-
grams.
Management is very apprehensive in adopting a loyalty

program, lest it miffs the affluent clients. They are also of the
opinion to treat all guests equally and most efficiently.
The biggest problem with rewards program is that it
eliminates the feeling of surprise. Another approach would
be to forget about formal programs and instead, focus on
thanking each and every guest in a way that surprises and
delights them. We may send personalized presents like their
framed photo from their stay, an Ayurvedic plant, an aro-
matic candle or some personalized natural product, that

might prompt them about their experience here. A gift like
that is simple but potentially very powerful. Our guests
might discuss our gift with their friends and subsequently
talk about their experience at Anandam Vana. It is a marketing
vehicle of the most subtle kind.
On the other hand, it was hard to see how Anandam
Vana could sustain the competition in terms of customer-cen-
tricity without a formal loyalty program.
The loyalty program compels the organizations to be
more disciplined in building customer equity in a systematic
way. It ensures maintenance of a robust database and also
accurate customer details, so that the customers are attended
with the best possible services — in an individualized and
personalized way based on the loyalty earned.
EXHIBIT 1
Sample Room Prices (All Inclusive)
Deluxe Room Royal Room Maharaja (One Bedroom Suite)

Single $225 $325 $550
Double $375 $480 $678
Note: The prices are inclusive of taxes and encompass the prices for all facilities at
Anandam Vana Resort. The typical seven-night stay at a Retreat is in the range of
$2,590–4,700.
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Special Offerings
(1) Treat your friend: If you come to stay with a friend, you get a 15% discount
and if you recommend a new guest at Anandam Vana, you get points
equivalent to 10% to redeem.
(2) Parent/kids package: If you come with your kids, no charges for those aged
below 6 years, 50% discount for those until the age of 10 and 25% discount
for those until the age of 16. Additional discount of 15% for the mother–
daughter package (age no bar).
(3) Senior citizen offer: Senior citizens above 60 years get up to 30% off.
(4) Group discount: Group of five plus people get 10% discount.
EXHIBIT 2
Customer Data Summary: Anandam Vana Retreat (Based on Palakkad,

Kerala, Location Only)
(A) Demographic Profile

• Here, 60–70% of the guests are females.
• Also, 85% of the guests during summer have a household
income (HHI) of over $100,000–150,000. During the winters
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and monsoons, the percentage of guests with HHI>$100,000

drops to 60%.
• Winter guests on average are 6 years younger at the Resort.
(B) Psychographic Insights

• Most common reasons for coming to Healing Village: Rest and
relaxation/de-stress; healthy vacation; spa treatments and
pampering; and fitness.
• Most common reasons for returning: Health benefits (40%); and
great vacation (35%).
• Cost is the primary reason for why the guests do not return.
• Around 68% heard about Healing Village through the “Word
of mouth”.
• Also, 95% of the guests rated their stay as highly satisfactory.
• Most domestic guests are from the Metro and Tier-1 cities;
around 35% of the guests are foreign clients, especially from
the European countries and the West.
• In addition, 67% of the guests discovered that the health expe-
rience was beyond what they had expected.
(C) Vacation Habits

• An average guest takes 1–2 vacations per year.
• Other vacations are “travel” experiences, most often to
Europe, Southeast Asia or the Middle East.
• Few of our frequent guests visit competing spas.
• Majority of the guests leave Anandam Vana Retreat with a
strong intention to lead a healthier life.
(D) Customer Acquisition/Retention

• Anandam Vana Retreat receives about 500 new guests every
year.
• About 37% of the first-time guests return within 5–6 years.
• Also, 65% of the return visitors return again within 5–6 years.
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EXHIBIT 3A
Yearly Analysis of Guest Stays at Anandam Vana Retreat

Average Average Age <30 Age between Age between Age >60
Stay of Age of years 30 years and 45 years and years
Year Guest (days) the Guest (%) 45 years (%) 60 years (%) (%)
2008 5 47 15.2 33 46 5.8
2009 5 47 13.9 34 46 6.1
2010 7 48 10.7 32 51 6.3
2011 9 47 11.7 31.5 51 5.8
2012 8 50 9.1 31 53 6.9
2013 9 50 9 28 56 7
2014 9 51 5.8 29 58 7.2
2015 9 52 4.1 26 59 10.9
2016 10 54 6.9 25 55 13.1
2017 9 55 5.7 22 56.8 15.5
2018 9 57 2.7 23.1 55.3 18.9
EXHIBIT 3B
Average Spending by Various Age Groups (Year 2018)
Average Stay Age-wise Average Age-wise

of the Guest Spending per Percentage of
Age (years) (days) Guest ($) Guests
Age <30 2–3 840 2.7
Age between 30 and 45 4 1,704 23.1
Age between 45 and 60 7 2,982 55.3
Age > 60 15 6,390 18.9
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EXHIBIT 4
Ranges of Offerings and Products at Anandam Vana Retreat

Yoga and Ayurvedic Ayurvedic

Ayurveda Retreats Treatment Products Other Activities
Karma Being Preventive and Body Care Cycling
Retreat Regenerative Products
Treatment
Lakshya Yoga Treatment for Men’s Health Trekking
Retreat Sinusitis and Products
Migraine
Ananda Lahiri Treatment for Women Health Backwater Boat

Yoga Bronchial Disease Products Rides
Katha Wellness Treatment for Eye Wellness Regional
Retreat Care Product Festivals
Yoga and Holistic Treatment General Health Golf
Ayurvedic Cuisine for Rejuvenation
and Detoxification
Yoga Trainings Treatment to Diseases Swimming
Remove Stress and
Strain
Asanas Treatment of Yogic Cuisine Metaphysics
Hypertension (Astrology)
Pranayamas Treatment for Skincare Psychic
Nervous Disability Products and Consults,
Hair Handwriting
Meditation Revitalizing and Beauty Analysis,
Strengthening Products Shamanic
Treatment for Journey
Cancer Patients
Vinyasa Treatment for Slip Acupuncture
Disc
Ashtanga Yoga Treatment for Body Movement
Arthritis (Aquatics)
Power Yoga Treatment for Watsu
Various Skin (Neuromuscular
Diseases Therapy)
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(Continued )
Yoga and Ayurvedic Ayurvedic

Ayurveda Retreats Treatment Products Other Activities

Aerial Yoga Panchakarma Diet and
Therapy Nutrition
Consultancy
Restorative Yoga Post-pregnancy Hands-on
Health Program Cooking
Prenatal Yoga Treatment for Tennis
Paralysis
EXHIBIT 5
Customer Satisfaction Index at the Healing Village
Outstanding 73%
Very Good 21%
Satisfactory 3.5%
Unsatisfactory 1.5%
Not Applicable 1%
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EXHIBIT 6
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Anandam Vana Retreat: Route Maps
04-13-22 06:56:32

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ASIAN CASE RESEARCH JOURNAL, VOL. 26, ISSUE 1, 1–16 (2022)

Anandam Vana Retreat: Designing

Professor Prem Prakash

Please send all correspon-

2150018.indd 1 04-13-22 06:55:56

mixed reactions to the idea; few supported the idea, while

Anandam Vana Group adopts the rewards program, it will

HISTORY OF ANANDAM VANA

Anandam Vana Group, the quintessence of healthy lifestyle

2150018.indd 2 04-13-22 06:55:56

ANANDAM VANA RETREAT 3

Properties and Product Range

In 2018, the Group had one full-scale, overnight destina-

tion wellness Resort at Palakkad, Kerala and three wellness

and herbal garden, fine dining with two restaurants at the

“We help you to discover yourself in the most natural way

Anandam Vana claims to be the best in class in the

2150018.indd 3 04-13-22 06:55:56

saves manifolds against hospital bills. Moreover, there is no

The Spa centers are smaller business units compared

There has been a meteoric rise in the wellness industry from

MARKETING AND SALES AT ANANDAM VANA

The Marketing Department at Anandam Vana Group consists

2150018.indd 4 04-13-22 06:55:56

ANANDAM VANA RETREAT 5

Vana Retreat. The marketing approach of the Group is mainly

clientele, marketing’s primary challenge was not educating con-

In fact, Sunaina mentioned, “We barely do cross mar-

THE CUSTOMER EXPERIENCE

At Anandam Vana, the majority of clientele are affluent

2150018.indd 5 04-13-22 06:55:56

Most of the male clients were accompanying their wives

of stay. Winters are heavy discount periods and see an influx

Anandam Vana Group is mostly female-oriented with most of

tive of interested guests and mapping them to the best offerings

EXPERIENCE OF THE STAY

As a policy, Anandam Vana has a minimum two nights

Anandam Vana prefers keeping 75–80% capacity rather than

2150018.indd 6 04-13-22 06:55:56

ANANDAM VANA RETREAT 7

According to them, working at a full house may impact the

to offer services with personalized touch, with many being

With recurring customer feedbacks, Anandam Vana was

(1) Should Anandam Vana implement a rewards program?

2150018.indd 7 04-13-22 06:55:56

service providers and thus, they will help in acquiring new

between Anandam Vana Group Spa and the Resort. Pres-

giving the perception of arrogance to our customers, that we

(2) Who should qualify? How should “points” be accumu-

(3) What should the reward look like?

“Most of our guests are affluent and any monetary compensa-

2150018.indd 8 04-13-22 06:55:56

ANANDAM VANA RETREAT 9

and offensive. The best way to reward them was to provide

However, Sales Managers were of the view that

“If you start offering intangible rewards like special privileg-

special service. A better approach is to have a system for col-

Also, the Anandam Vana Group had created its own

(4) Should rewards only apply to Anandam Vana or should

Sunaina’s major concern was the operational difficulties in

2150018.indd 9 04-13-22 06:55:56

centers did not maintain a proper customer database, thus

WSPC/166-ACRJ 2150018 ISSN: 2189-2752