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Cabo San Viejo Rewarding Loyalty Case Solution

Solution Id Length Case Author Case Publisher
2664 1432 Words (6 Pages) Youngme Moon, Seth Schulman, Gail McGovern Harvard Business School : 506060
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Cabo San Villa (CSV), an exclusive healthcare and wellness hotel near Orange County, Mexico, plans to implement systematic incentives for its employees. CSV first should assess whether the gratitude programed would complement its entire approach, offer to mean to its present marketing approach, as well as enhance consumer happiness. CSV may determine on such a payment system whenever a referral program is judged acceptable. CSV supports two important consumer segments: an aged, stable audience and a youthful, more price-conscious summer population. Informal consumer assessments have demonstrated a demand for the launch of a membership scheme. 

Most significantly, licenses allow this same organization to capitalize on the aggregate happiness of first clients. On the other hand, a free subscription might permit your corporation to record attendance and equipment utilization, offering pertinent data on customer loyalty. Boca could basically turn its client into a marketer. However, enticing towards the promotional function, it keeps the consumer expecting an increasing number of incentives predicated on reaching recommendations, something this real economy share has indeed learned to anticipate.

Following questions are answered in this case study solution:

  1. What are the characteristics of Cabo San Viejo’s customer base? How healthy is this customer base?

  2. Should CSV adopt a rewards program?

  3. If the firm were to adopt a rewards program, what should its strategic objective be? What problem should the firm be trying to solve? What is the biggest problem facing this firm (in terms of customer management)?

  4. If the firm were to adopt a rewards program, how should it be structured? On what basis should points be awarded? What types of rewards should the firm offer?

Case Study Questions Answers

1. What are the characteristics of Cabo San Viejo's customer base? How healthy is this customer base?

Notwithstanding its beginnings as a "fatty factory" devoted mostly to women during its early 1970s, Costa De Vista (CSV) is currently functioning in an increasingly narrow and elite industry, offering customers mainly rich with excellent client satisfaction. In respect of pure statistics, the company earns Three thousand and five hundred new customers annually. 70percent in terms over 80percent in terms of perspective, and recurring clients are female. Within peak times of January, eastern, and falls, 82percent of the total tourist have an AHI of more than $ one million; in the summertime, 59% have such a Que yolk larger than $one lac. Usually, the majority of consumers are in their thirties or fifties and reside in Southern Texas and, indeed, the San Francisco area. It's worth noting that from 1994 through two thousand and four, CSV's influence on subscriber satisfaction number climbed by ten generations, from 48 to 57.

The much more prevalent motivations for visiting Los Cabos Diablo are leisure and rejuvenation, a clean getaway, spa treatments, pampering, and athletics. Their holiday patterns are as follows: the usual guest enjoys 3-4 holidays each year, mainly commonly to Germany or Caribbean locations, excluding trips to Frisco San José. Few Costa De Clemente visitors attend competitor clinics, and the vast majority of individuals depart De San Clemente with either no tremendous desire to live a better lifestyle. Los Cabos Viejo's client demographic becomes larger by the year; the typical clientele is also now 46, up above 49 in 1992. Los Cabos Viejo attracts around 3300 new tourists every year, with 32percent of the total from next people returning between 5-6 seasons and 62percent of its total of friends returning between 5-seven months. 

2. Should CSV adopt a rewards program?

This same leadership must be extraordinarily diligent and vigilant in order to deliver to the intended audience because the market is competitive and market expectations are growing. A methodical appreciation program may be implemented since the advantages exceed the downsides. Without a loyalty program, we'd be really wonderful, we might well not deserve your support, and it could very well stay OK regardless you arrive back, pass or fail. This exclusive mindset might also have backfired because it contradicts Los Cabos Viejo's initial mission, which solely claims that it would provide a healthful holiday or care to the consumer.

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