Cabo San Viejo Resort
February 10, 2015 | Advanced Marketing Management |
The purpose of this paper is to discuss and analyze the opportunity of implementing a rewards loyalty program in the Cabo San Viejo resort and Cabo San Viejo day spas.
Cabo San Viejo
Dave and Florence Blumenthal founded Cabo San Viejo Resort in 1977. The resort was built on the site of a former peach orchard in Palm Springs, California. The successful change in Dave’s lifestyle inspired the creation of the resort. They created a place where individuals with an unhealthy lifestyle could go to for the purpose of learning how to live happier and healthier lives. In the late ...view middle of the document...
In recent years, a wide variety of companies that compete with Cabo have appeared in the market. The new competition includes day spas, beauty salons, high end health clubs, cruise ships, and vacation resorts. The growing market has the potential to discourage customers from returning to the resort since the competition also has wide assortments of amenities similar to Cabo San Viejo. Considering that the majority of Cabo San Viejo’s customers are repeat customers, the company wants to use the reward program to deliver a high customer value to keep them coming back. The company presumes that the rewards program will increase loyalty in an already loyal customer base. Increasing loyalty to the resort is a very important asset to the company. The well-known 80-20 rule states that at least 80% of your company’s profits come from the top 20% of the customers, if the rewards program is successful in increasing customer loyalty, the business will not only maximize the lifetime value of the customer but it will also benefit from an increase in word of mouth advertising. By cultivating a relationship with a customer through the rewards program, the company will have the opportunity to enact precision marketing designed to build a longer and stronger relationship with the customer.
Loyalty Reward Program Benefits
Retains Existing Customers | Acquires New Customers |
Increases Customer Lifetime Value | Builds Relationships |
Increases Loyalty | Reduces Advertising Costs |
Increases Product and Service Quality | Increases Profitability |
Issues with the Program
Customers of the Cabo San Viejo Resort are not concerned about...