Rewarding Loyalty

Viejo guests are looking for wellness vacation and will spare no expense to get just that. Hailing from all over the world, over 70% of guests are women with household incomes greater than $150K. Located in the majestic San Bernardino Mountains, guests experience spa and wellness services, outdoor activities, pampering, and tranquility. With accommodations and services averaging over $600 a day, the expectations of Cabo San Viejo guests have increased over time.

To keep them satisfied, Cabo San Viejo has a well trained staff who believes in the product and more importantly in providing the guest with a memorable experience. However, with increasing competition from other resorts, day spas and even cruises, Cabo San Viejo is left wondering is this enough? How healthy is it? If the firm were to adopt a rewards program, what should be its strategic objective? Cabo San Viejo has built a solid reputation and overall is a healthy company who could potentially position itself to be a major player amongst premier vacation/fitness resorts.

Cabo San Viejo lacks an elaborate customer identification program but has pulse on the needs of their guests because of the personal relationships built with them over time. For future sustainability and growth however, Cabo San Viejo will need to invest in a more sophisticated way to assess customer behavior proactively. Since a client database can be costly, Cabo San Viejo should look at implementing a rewards program from a short and long term perspective. Short-term, Cabo San Viejo should have access to the services each repeat guest took part in during their stay as well as any comments or surveys received from the guests.

This information should be shared with all staff members particularly the reservation staff who will use that information to customize conversations with guests when booking their next visit. The reservation staff will alert key staff members of that guests profile so when the guest arrives each staff member has acted upon the profile accordingly. This could mean stocking their room with their favorite healthy snacks and beverages or changing the rules for a particular service that the guest wants to take advantage of.

For example, the guest who wants a massage at 8pm, the reservation staff proactively mentions that massage service is available in the evenings and ask if the appointment should be made. The reservationists should then alert the massage staff and even if booked that appointment will happen for that guest. By implementing short-term solutions, Cabo San Viejo can immediately make impact with repeat guests while focusing on their long-term strategy of implementing and investing in a sound rewards program that takes advantage of technology focused on managing the customer relationship.

This database would force Cabo San Viejo to organize their data in such a way that they can start to understand patterns with repeat and new guest behavior, a market in which Cabo San Viejo currently struggles with. New guests cost more to attract and retain than repeat guests. By having a database, new client information such as age, services used, length of visit can be collected and a marketing strategy can be implemented to further attract these customers. New guest would benefit from having an awareness of what Cabo San Viejo has to offer.

Upon making a reservation, a spa package with the most popular services could be suggested as a way to potentially sell services in which the novice spa guest may not have otherwise chosen if left to select on their own. The long-term implementation of a rewards program would be more about understanding the needs of the customer and having internal milestones rather than an external points system which the customer manages. For example, perhaps all repeat guests get some level of service free of charge. That could include flowers for someone who has visited twice to complimentary service of choice for the highly regarded repeat guest.

Cabo San Viejo loyalty program should offer products and services based on guests purchasing patterns and profitability. What is the biggest problem facing the firm (in terms of customer management)? As mentioned above, a clear opportunity for Cabo San Viejo San Viejo is a more robust system to collect data about their guests. This database would not only house information about the clients experience but also provide information on how profitable each client has been and project future earning potential.

A challenge also exists with the necessity to target specific markets in order to support their financial future. On average, only 9. 8% of first time and repeat guest are under the age of 35 and Cabo San Viejo is not doing much to attract that segment of people. Cabo San Viejo should employ a strategy to market and reach those customers. In addition, a market that has yet to be penetrated by Cabo San Viejo is male spa visitors.

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