CABO SAN VIEJO
Cabo San Viejo, one of the nation's top spa and health resorts, seeks to implement a customer loyalty program. This paper will discuss Cabo's SWOT analysis, consumer base, and positioning.
This paper will also cover the spa’s strategic objectives for starting a loyalty program, challenges that might come with such a program, and will describe the CaboLife Rewards program designed for Cabo San Viejo.
COMPANY SUMMARY
Considered one of America’s best premium spa destinations, Cabo San Viejo paved the way for this industry for the past 30 years. Its vacation resort located in Palm Springs, California provides more to their guests than simple weight loss or beauty treatments. Cabo’s mission statement reveals the difference: “Cabo San Viejo seeks to help people unlock their hidden potential so they become healthy, happy, fully self-actualized individuals.”
To that end, Cabo offers a wide range of services, which include relaxation treatments such as massage and balancing energy; physical fitness offerings such as classes and hiking; beauty regimens such as facials and body wraps; and health and wellness services such as chiropractic and nutrition. This comprehensive, holistic approach attempts to provide guests with an almost life-altering experience. Their mission, along with their well-trained staff, low staff-to-guest ratio, and beautiful location make it a favorite destination for many guests, well worth the cost. Four CaboDaySpas round out the company’s assets.
SWOT ANALYSIS
Strengths
• 30 years of experience
• Beautiful location
• Four day spas
• Well-trained, professional staff
• 3.2 – 1 staff to guest ratio
• Quality product, full-range of services
• Focus on overall health Weaknesses
• Poor computer system
• Inaccurate/incomplete database
• Lack of cohesive marketing strategy
• Inconsistent guest recognition
• No systematic customer relationship building
• Expensive
Opportunities
• 95% positive response
• Positive word of mouth
• Repeat business, loyal customers
• Reputation, good press
• Untapped younger demographic
• Boomers in worse health than parents; trying to prevent aging Threats
• Competition
• Incorrect perception about offerings
• Perception of expense
• Aging, homogeneous demographic
• Demanding guests, sense of entitlement
STRENGTHS
Cabo’s 30 years of experience, lovely location, and four related day spas are core strengths. The well-trained, professional staff undergoes an intensive three-month training process from which they emerge very knowledgeable and highly appreciated by the guests. The 3.2 – 1 staff to guest ratio and individualized ensures the guests feel well-cared-for. Lastly, Cabo boasts a full range of quality service in a combination other spas can not claim; this attention to the health of the whole person is unique, and especially pertinent considering renewed interest in health and well-being.
WEAKNESSES
Cabo’s poor computer system is paired with a possibly inaccurate and/or incomplete database, which until now has been covered by the staff’s exemplary customer service. The lack of a cohesive marketing strategy needs scrutiny as well. For example, the Cabo San Viejo resort and its day spas share little common marketing. In addition, special recognition for guests occurs inconsistently. Exceptional treatment for one guest sometimes results in disappointment for a similarly-loyal guest who has not received the same treatment. Related to this, Cabo uses no systematic customer relationship-building activities. Lastly, the spa’s expensive price creates a barrier for some people, and is noted as the primary reason guests do not return.
OPPORTUNITIES
Cabo’s 95% positive response from guests contributes to the extremely good word of mouth advertising they enjoy and rely on. Once a guest visits Cabo, they will likely recommend it to another; 65 – 70% of their guests heard about the spa this way. Cabo also enjoys a high rate of return business and loyal guests. Regarded as one of the best spa destinations in the world and featured in travel publications, Cabo San Viejo enjoys an excellent reputation. There exist still-untapped groups of younger guests, especially children or friends of current guests. Finally, some statistics are showing that baby boomers may be the first generation of people who are less healthy than their parents ; in addition, boomers’ ongoing search for ways to extend their youth can be utilized.
THREATS
Competition remains Cabo’s number one threat. The number of spas have exploded, with more destinations, including hotels, health clubs, and even beauty salons starting their own spas. These competitors keep raising customers’ expectations. Cabo also battles the perception of being a “fat farm” or beauty boot camp for women, potential customers do not understand the holistic health benefits of a visit there. Cabo also must correct people’s perceptions that it is more expensive than a regular vacation when in fact, it is comparable. Cabo’s loyal customer base has risen from 47 to 57 in a little over a decade, and remains homogeneous. This loyal customer continues to become more demanding as their visits increase; the more they are satisfied, the more it takes to satisfy them, and the more sense of entitlement they develop.
CUSTOMER BASE CHARACTERISTICS
The majority of Cabo San Viejo’s fall, winter, and spring guests are upper-middle-class or affluent white females from California or the West coast. The average age of the Cabo guest is rising, now at 58, up from 47 in 1992. During the summer, with the spa’s lower rates, the guests tend to be younger, from a lower income bracket, and predominantly female. The spas customer base falls within the baby boom demographic. Baby boom women, on average, tend to be better educated, have held a job, and have had fewer children, later in life, than preceding generations.
The needs of this group are health, fitness, pampering, relaxation, stress relief, and vacation time. This group takes three to four vacations a year, often to foreign locales such as Europe and the Caribbean. A third of Cabo’s first-time guests return for a second visit within five to six years. Two-thirds of those guests return again, in another five to six years. Two-thirds of Cabo guests heard about the spa from word of mouth.
A survey by the AARP showed that half of Boomers are depressed that they’re aging, and nearly 20% admit to “actively resisting it.” This group’s interest lies not just in dieting or pampering, but in receiving help with getting their life on a healthy track, feeling more youthful, and having a life-altering experience of health and wellness.
POSITIONING STATEMENT
Cabo San Viejo provides:
• Wellness and overall health services
• A fun, pampering, vacation experience
• Stress relief, refreshment, revitalization
• Beauty, weight loss, and fitness services
• Adventure, personal discovery, growth, a life-changing experience
Cabo’s brand user is upper income women and their families and friends. Cabo’s point-of-difference, and also their brand benefit, is their complete range of services; not only beauty or fitness but health, wellness, and a “new start on a healthy life.”
Positioning statement: Cabo San Viejo is a premium spa offering a complete range of luxurious health and wellness treatments and services for upper-income women and their families and friends.
WHY A LOYALTY PROGRAM? WHY NOT?
Cabo San Viejo has depended on their loyal customer base for many years, but with competition becoming ever fiercer, a loyalty program may help keep Cabo competitive. Loyalty or rewards programs has become the norm for this industry and the lack of one could not only put Cabo at a disadvantage, but could give it the appearance that they feel they are above one.
Guests’ expectations could also be met in some ways with a loyalty program. Guests with a long history with Cabo have high expectations of recognition and reward for their continued patronage, and to ignore those expectations means losing valuable repeat customers, their core customer base. Conversely, a loyalty program may help CAbo manage their customers’ high sense of entitlement. Specific benefits which are based on their level of patronage will let them know what to expect.
In addition, there exists a deeper, strategic objective for starting a customer loyalty program: to build a base of strong, loyal customers who return over and over and bring family and friends along with them, and to entice a new younger clientele to start coming.
However, a loyalty program should be considered carefully for several reasons. First, longtime guests could become upset if past visits are not “grandfathered” in, or if they are, but not correctly. In addition, problems could occur if Cabo utilized a point system, where accumulated points are turned in. Once a guest used their points, their motivation for returning would be lessened, knowing they had to start accumulating points all over again. Finally, if Cabo San Viejo ever ended the loyalty program for any reason, guests who had worked to accumulate points or gain a certain level could become extremely disenchanted with the spa, and stop returning altogether.
From the perspective of Cabo management, the addition of a loyalty program would mean finally and irrevocably having to face their computer deficiencies. Mistakes could no longer be covered by good customer service. Another challenge to consider would be the possibility that their already demanding guests could continue their high expectations, demanding even more consideration beyond what they receive from their rewards program, with the results of more work for the staff. Finally, the loyalty program simply may not work to bring guests back or to attract new guests, in which case Cabo would be giving services away with no return.
THE CABOLIFE REWARDS PROGRAM
Because of the considerations listed above, it is recommended that Cabo San Viejo should adopt the CaboLife Rewards program as part of a larger, company-wide commitment to better information handling, more consistent customer service and recognition, and a more cohesive marketing strategy, as well as the commitment to being a lifetime partner with their guests in the pursuit of better health. CaboLife will not only exist for making customers for life, but for the long life of Cabo San Viejo as well.
Stage one of initiating CaboLife will entail updating Cabo’s computer systems and reservation software, and integrating them with the CaboDaySpas. The goal with the new system will be 100% accuracy in capture of guest information, which will extend beyond contact and reservation information. The new system will enable Cabo to record birthdays, family and friends’ names, and other personal information. Guests will use an attractive, bar-coded room card/key to check in and pay for services, classes, and even meals, which will be captured to their customer profile. Eventually, guests will receive targeted specials and correspondence. For example, a guest who took a healthy cooking class and had a nutrition consultation could receive a newsletter with healthy recipes.
A significant amount of time will be invested in including as much information as possible from past guests. Because Cabo enjoys so many long-time loyal guests, none should be made to feel they have to start over. An informational update would be sent to all guests in the current database, letting them know Cabo wants to make their stays even more personal and enjoyable. A survey with guests’ contact information and questions about past stays will assist Cabo in ensuring past information is as accurate as possible. Guests who return the survey would be rewarded with extra points toward their CaboLife account.
Based on a points system, guests will accrue CaboLifePoints for each vacation as well as for the number of days’ stay on each visit. Additional points will be awarded based on dollars spent on services above the amount allowed in the all-inclusive room prices. A guest making a reservation for their next visit while still vacationing at the spa would receive points as well, and guests who visit Cabo for three years consecutively would accrue a large reward. Those who use CaboDaySpa services can earn points toward Cabo San Viejo stays as well.
Qualifier CaboLifePoints
Per vacation 50
Per day of visit 5
Per $100 spent on additional services 5
Reserve next visit during current visit 50
Three years of consecutive visits 250
CaboDaySpa services, per visit 10
There would be four tiers to CaboLife: Silver, Gold, Platinum, and Diamond.
Total Points CaboLife Tier
100 Silver
500 Gold
1,000 Platinum
2,500 Diamond
The tiers’ set-up encourages extra spending, yearly visits, and reserving future visits early. The tiers levels make it easy to enter the program and rise to the second level, with the higher tiers requiring more loyalty. A guest on their first stay could become a Silver Member by the end of their visit by reserving their next vacation at Cabo before they depart.
The CaboLife program’s also ensures the Silver-level guests receive enough nice upgrades and services to make them feel special, but not enough that Cabo spends a lot on guests who may be infrequent or low-spending customers. On the other hand, a typical guest who makes a reservation each time they visit can reach Gold status in just three visits. At Gold level, the free services and upgrades increase enough so the guest feels adequately rewarded and appreciated, with a good return for their investment.
Guests do not turn CaboLifePoints for rewards, as in some loyalty programs. These points are accumulated to achieve the CaboLife tiers. Once a guest has hit a tier, they remain at that level for life. The system could also include a loss of points for a guest who does not return for a number of years, but a punitive system could be interpreted very negatively by guests and is not recommended.
Because loyal customers have already indicated dissatisfaction with the amount of appreciation/recognition they receive, asking them to start anew with a loyalty program could be construed as insulting and unappreciative. In addition, CaboLife was created not only to keep existing customers happy but also to build a bigger client base. Therefore, any guest who has visited Cabo San Viejo in the last 10 years would be “grandfathered” into the system at the Silver, Gold, or Platinum level.
CaboLife will utilize a combination of two different types of benefits of the program: rewards, which the guests know about and expect, and hidden perks not known or expected by the guest. First, all CaboLife members would be able to choose from rewards on a yearly basis, based on their level. Since expense remains the number one reason guests do not return to Cabo San Viejo, the rewards will be in the form of free add-ons that will either make the guest’s stay less expensive, or may allow the guest to do something they may not have otherwise decided to do. Some of these rewards might include:
• One or more free services, consultations, or treatments
• A room upgrade
• An extra day’s free stay (not including services or meals)
• Complimentary stay for a companion
A benefit of providing these types of rewards is that they are “hidden” from guests who may be at a lower tier. All guests still feel they are receiving top-level treatment regardless of the number of times they have visited.
Because guests crave individualized attention, special surprises or perks will be built into each level, unbeknownst to the guest. Based on the guest’s individual profile, built up based on their interests and past visits, the surprises will have a special personal touch and appear to be meant just for them. Some perks might include:
• A birthday card each year, wishing the recipient a healthy, happy year.
• A thank you gift upon returning home from a stay. Each service can have a small, related gift item based on it; a recipe booklet from a cooking class, a sleep mask for the sleep study, or a set of golf balls for golfers.
• A follow up letter written by a favorite instructor.
• Newsletters which cover subjects of interest to the guest.
• Flowers sent on special occasions such as 40th birthday or 25th wedding anniversary.
Benefits will be intrinsic, directly related to, or a reminder of, their visit to Cabo San Viejo. The program will offer a mixture of hard (free treatment) and soft (birthday card or letter) benefits. The benefits should not only to entice the guest back and reward them for their loyalty, but should also make them feel appreciated and give them a reminder of their positive experience.
CABO SAN VIEJO, CABOLIFE, AND THE FUTURE
The vision for the future is for the Cabo San Viejo experience to play an integral part in guests’ lifelong health and wellness, becoming a partner with them in achieving their goals. Through tracking of guests’ interests and preferences over the course of their stays, Cabo can offer year-round benefits such as special newsletters tailored to different interests.
In addition, the Cabo website could eventually be customized in such a way that guests can log in and receive information targeted specifically for them. For example, a guest who leaves Cabo San Viejo determined to lose weight could track her diet online and receive advice from Cabo San Viejo nutritionists. Younger guests are already familiar with such personalization from websites such as Amazon.com.
Eventually, Cabo can play a part in the milestones of their guests’ lives. Graduation vacations, honeymoons, anniversaries, and 30th, 40th, 50th, etc, birthdays could all be occasions for visiting Cabo San Viejo. Multi-generational and life partner visits could become the norm instead of the exception.
Rewarding loyal customers and building life-long relationships with valued guests will ensure Cabo San Viejo remains the premier spa and health resort in America.
Cabo San Viejo, one of the nation's top spa and health resorts, seeks to implement a customer loyalty program. This paper will discuss Cabo's SWOT analysis, consumer base, and positioning.
This paper will also cover the spa’s strategic objectives for starting a loyalty program, challenges that might come with such a program, and will describe the CaboLife Rewards program designed for Cabo San Viejo.
COMPANY SUMMARY
Considered one of America’s best premium spa destinations, Cabo San Viejo paved the way for this industry for the past 30 years. Its vacation resort located in Palm Springs, California provides more to their guests than simple weight loss or beauty treatments. Cabo’s mission statement reveals the difference: “Cabo San Viejo seeks to help people unlock their hidden potential so they become healthy, happy, fully self-actualized individuals.”
To that end, Cabo offers a wide range of services, which include relaxation treatments such as massage and balancing energy; physical fitness offerings such as classes and hiking; beauty regimens such as facials and body wraps; and health and wellness services such as chiropractic and nutrition. This comprehensive, holistic approach attempts to provide guests with an almost life-altering experience. Their mission, along with their well-trained staff, low staff-to-guest ratio, and beautiful location make it a favorite destination for many guests, well worth the cost. Four CaboDaySpas round out the company’s assets.
SWOT ANALYSIS
Strengths
• 30 years of experience
• Beautiful location
• Four day spas
• Well-trained, professional staff
• 3.2 – 1 staff to guest ratio
• Quality product, full-range of services
• Focus on overall health Weaknesses
• Poor computer system
• Inaccurate/incomplete database
• Lack of cohesive marketing strategy
• Inconsistent guest recognition
• No systematic customer relationship building
• Expensive
Opportunities
• 95% positive response
• Positive word of mouth
• Repeat business, loyal customers
• Reputation, good press
• Untapped younger demographic
• Boomers in worse health than parents; trying to prevent aging Threats
• Competition
• Incorrect perception about offerings
• Perception of expense
• Aging, homogeneous demographic
• Demanding guests, sense of entitlement
STRENGTHS
Cabo’s 30 years of experience, lovely location, and four related day spas are core strengths. The well-trained, professional staff undergoes an intensive three-month training process from which they emerge very knowledgeable and highly appreciated by the guests. The 3.2 – 1 staff to guest ratio and individualized ensures the guests feel well-cared-for. Lastly, Cabo boasts a full range of quality service in a combination other spas can not claim; this attention to the health of the whole person is unique, and especially pertinent considering renewed interest in health and well-being.
WEAKNESSES
Cabo’s poor computer system is paired with a possibly inaccurate and/or incomplete database, which until now has been covered by the staff’s exemplary customer service. The lack of a cohesive marketing strategy needs scrutiny as well. For example, the Cabo San Viejo resort and its day spas share little common marketing. In addition, special recognition for guests occurs inconsistently. Exceptional treatment for one guest sometimes results in disappointment for a similarly-loyal guest who has not received the same treatment. Related to this, Cabo uses no systematic customer relationship-building activities. Lastly, the spa’s expensive price creates a barrier for some people, and is noted as the primary reason guests do not return.
OPPORTUNITIES
Cabo’s 95% positive response from guests contributes to the extremely good word of mouth advertising they enjoy and rely on. Once a guest visits Cabo, they will likely recommend it to another; 65 – 70% of their guests heard about the spa this way. Cabo also enjoys a high rate of return business and loyal guests. Regarded as one of the best spa destinations in the world and featured in travel publications, Cabo San Viejo enjoys an excellent reputation. There exist still-untapped groups of younger guests, especially children or friends of current guests. Finally, some statistics are showing that baby boomers may be the first generation of people who are less healthy than their parents ; in addition, boomers’ ongoing search for ways to extend their youth can be utilized.
THREATS
Competition remains Cabo’s number one threat. The number of spas have exploded, with more destinations, including hotels, health clubs, and even beauty salons starting their own spas. These competitors keep raising customers’ expectations. Cabo also battles the perception of being a “fat farm” or beauty boot camp for women, potential customers do not understand the holistic health benefits of a visit there. Cabo also must correct people’s perceptions that it is more expensive than a regular vacation when in fact, it is comparable. Cabo’s loyal customer base has risen from 47 to 57 in a little over a decade, and remains homogeneous. This loyal customer continues to become more demanding as their visits increase; the more they are satisfied, the more it takes to satisfy them, and the more sense of entitlement they develop.
CUSTOMER BASE CHARACTERISTICS
The majority of Cabo San Viejo’s fall, winter, and spring guests are upper-middle-class or affluent white females from California or the West coast. The average age of the Cabo guest is rising, now at 58, up from 47 in 1992. During the summer, with the spa’s lower rates, the guests tend to be younger, from a lower income bracket, and predominantly female. The spas customer base falls within the baby boom demographic. Baby boom women, on average, tend to be better educated, have held a job, and have had fewer children, later in life, than preceding generations.
The needs of this group are health, fitness, pampering, relaxation, stress relief, and vacation time. This group takes three to four vacations a year, often to foreign locales such as Europe and the Caribbean. A third of Cabo’s first-time guests return for a second visit within five to six years. Two-thirds of those guests return again, in another five to six years. Two-thirds of Cabo guests heard about the spa from word of mouth.
A survey by the AARP showed that half of Boomers are depressed that they’re aging, and nearly 20% admit to “actively resisting it.” This group’s interest lies not just in dieting or pampering, but in receiving help with getting their life on a healthy track, feeling more youthful, and having a life-altering experience of health and wellness.
POSITIONING STATEMENT
Cabo San Viejo provides:
• Wellness and overall health services
• A fun, pampering, vacation experience
• Stress relief, refreshment, revitalization
• Beauty, weight loss, and fitness services
• Adventure, personal discovery, growth, a life-changing experience
Cabo’s brand user is upper income women and their families and friends. Cabo’s point-of-difference, and also their brand benefit, is their complete range of services; not only beauty or fitness but health, wellness, and a “new start on a healthy life.”
Positioning statement: Cabo San Viejo is a premium spa offering a complete range of luxurious health and wellness treatments and services for upper-income women and their families and friends.
WHY A LOYALTY PROGRAM? WHY NOT?
Cabo San Viejo has depended on their loyal customer base for many years, but with competition becoming ever fiercer, a loyalty program may help keep Cabo competitive. Loyalty or rewards programs has become the norm for this industry and the lack of one could not only put Cabo at a disadvantage, but could give it the appearance that they feel they are above one.
Guests’ expectations could also be met in some ways with a loyalty program. Guests with a long history with Cabo have high expectations of recognition and reward for their continued patronage, and to ignore those expectations means losing valuable repeat customers, their core customer base. Conversely, a loyalty program may help CAbo manage their customers’ high sense of entitlement. Specific benefits which are based on their level of patronage will let them know what to expect.
In addition, there exists a deeper, strategic objective for starting a customer loyalty program: to build a base of strong, loyal customers who return over and over and bring family and friends along with them, and to entice a new younger clientele to start coming.
However, a loyalty program should be considered carefully for several reasons. First, longtime guests could become upset if past visits are not “grandfathered” in, or if they are, but not correctly. In addition, problems could occur if Cabo utilized a point system, where accumulated points are turned in. Once a guest used their points, their motivation for returning would be lessened, knowing they had to start accumulating points all over again. Finally, if Cabo San Viejo ever ended the loyalty program for any reason, guests who had worked to accumulate points or gain a certain level could become extremely disenchanted with the spa, and stop returning altogether.
From the perspective of Cabo management, the addition of a loyalty program would mean finally and irrevocably having to face their computer deficiencies. Mistakes could no longer be covered by good customer service. Another challenge to consider would be the possibility that their already demanding guests could continue their high expectations, demanding even more consideration beyond what they receive from their rewards program, with the results of more work for the staff. Finally, the loyalty program simply may not work to bring guests back or to attract new guests, in which case Cabo would be giving services away with no return.
THE CABOLIFE REWARDS PROGRAM
Because of the considerations listed above, it is recommended that Cabo San Viejo should adopt the CaboLife Rewards program as part of a larger, company-wide commitment to better information handling, more consistent customer service and recognition, and a more cohesive marketing strategy, as well as the commitment to being a lifetime partner with their guests in the pursuit of better health. CaboLife will not only exist for making customers for life, but for the long life of Cabo San Viejo as well.
Stage one of initiating CaboLife will entail updating Cabo’s computer systems and reservation software, and integrating them with the CaboDaySpas. The goal with the new system will be 100% accuracy in capture of guest information, which will extend beyond contact and reservation information. The new system will enable Cabo to record birthdays, family and friends’ names, and other personal information. Guests will use an attractive, bar-coded room card/key to check in and pay for services, classes, and even meals, which will be captured to their customer profile. Eventually, guests will receive targeted specials and correspondence. For example, a guest who took a healthy cooking class and had a nutrition consultation could receive a newsletter with healthy recipes.
A significant amount of time will be invested in including as much information as possible from past guests. Because Cabo enjoys so many long-time loyal guests, none should be made to feel they have to start over. An informational update would be sent to all guests in the current database, letting them know Cabo wants to make their stays even more personal and enjoyable. A survey with guests’ contact information and questions about past stays will assist Cabo in ensuring past information is as accurate as possible. Guests who return the survey would be rewarded with extra points toward their CaboLife account.
Based on a points system, guests will accrue CaboLifePoints for each vacation as well as for the number of days’ stay on each visit. Additional points will be awarded based on dollars spent on services above the amount allowed in the all-inclusive room prices. A guest making a reservation for their next visit while still vacationing at the spa would receive points as well, and guests who visit Cabo for three years consecutively would accrue a large reward. Those who use CaboDaySpa services can earn points toward Cabo San Viejo stays as well.
Qualifier CaboLifePoints
Per vacation 50
Per day of visit 5
Per $100 spent on additional services 5
Reserve next visit during current visit 50
Three years of consecutive visits 250
CaboDaySpa services, per visit 10
There would be four tiers to CaboLife: Silver, Gold, Platinum, and Diamond.
Total Points CaboLife Tier
100 Silver
500 Gold
1,000 Platinum
2,500 Diamond
The tiers’ set-up encourages extra spending, yearly visits, and reserving future visits early. The tiers levels make it easy to enter the program and rise to the second level, with the higher tiers requiring more loyalty. A guest on their first stay could become a Silver Member by the end of their visit by reserving their next vacation at Cabo before they depart.
The CaboLife program’s also ensures the Silver-level guests receive enough nice upgrades and services to make them feel special, but not enough that Cabo spends a lot on guests who may be infrequent or low-spending customers. On the other hand, a typical guest who makes a reservation each time they visit can reach Gold status in just three visits. At Gold level, the free services and upgrades increase enough so the guest feels adequately rewarded and appreciated, with a good return for their investment.
Guests do not turn CaboLifePoints for rewards, as in some loyalty programs. These points are accumulated to achieve the CaboLife tiers. Once a guest has hit a tier, they remain at that level for life. The system could also include a loss of points for a guest who does not return for a number of years, but a punitive system could be interpreted very negatively by guests and is not recommended.
Because loyal customers have already indicated dissatisfaction with the amount of appreciation/recognition they receive, asking them to start anew with a loyalty program could be construed as insulting and unappreciative. In addition, CaboLife was created not only to keep existing customers happy but also to build a bigger client base. Therefore, any guest who has visited Cabo San Viejo in the last 10 years would be “grandfathered” into the system at the Silver, Gold, or Platinum level.
CaboLife will utilize a combination of two different types of benefits of the program: rewards, which the guests know about and expect, and hidden perks not known or expected by the guest. First, all CaboLife members would be able to choose from rewards on a yearly basis, based on their level. Since expense remains the number one reason guests do not return to Cabo San Viejo, the rewards will be in the form of free add-ons that will either make the guest’s stay less expensive, or may allow the guest to do something they may not have otherwise decided to do. Some of these rewards might include:
• One or more free services, consultations, or treatments
• A room upgrade
• An extra day’s free stay (not including services or meals)
• Complimentary stay for a companion
A benefit of providing these types of rewards is that they are “hidden” from guests who may be at a lower tier. All guests still feel they are receiving top-level treatment regardless of the number of times they have visited.
Because guests crave individualized attention, special surprises or perks will be built into each level, unbeknownst to the guest. Based on the guest’s individual profile, built up based on their interests and past visits, the surprises will have a special personal touch and appear to be meant just for them. Some perks might include:
• A birthday card each year, wishing the recipient a healthy, happy year.
• A thank you gift upon returning home from a stay. Each service can have a small, related gift item based on it; a recipe booklet from a cooking class, a sleep mask for the sleep study, or a set of golf balls for golfers.
• A follow up letter written by a favorite instructor.
• Newsletters which cover subjects of interest to the guest.
• Flowers sent on special occasions such as 40th birthday or 25th wedding anniversary.
Benefits will be intrinsic, directly related to, or a reminder of, their visit to Cabo San Viejo. The program will offer a mixture of hard (free treatment) and soft (birthday card or letter) benefits. The benefits should not only to entice the guest back and reward them for their loyalty, but should also make them feel appreciated and give them a reminder of their positive experience.
CABO SAN VIEJO, CABOLIFE, AND THE FUTURE
The vision for the future is for the Cabo San Viejo experience to play an integral part in guests’ lifelong health and wellness, becoming a partner with them in achieving their goals. Through tracking of guests’ interests and preferences over the course of their stays, Cabo can offer year-round benefits such as special newsletters tailored to different interests.
In addition, the Cabo website could eventually be customized in such a way that guests can log in and receive information targeted specifically for them. For example, a guest who leaves Cabo San Viejo determined to lose weight could track her diet online and receive advice from Cabo San Viejo nutritionists. Younger guests are already familiar with such personalization from websites such as Amazon.com.
Eventually, Cabo can play a part in the milestones of their guests’ lives. Graduation vacations, honeymoons, anniversaries, and 30th, 40th, 50th, etc, birthdays could all be occasions for visiting Cabo San Viejo. Multi-generational and life partner visits could become the norm instead of the exception.
Rewarding loyal customers and building life-long relationships with valued guests will ensure Cabo San Viejo remains the premier spa and health resort in America.
Last edited by a moderator: