Loyalty Program Essay

So the first question is What is Cabo San Viejos long term vision? Was the society directing its activities in boilersuit achievement of this vision? The vision of the company was to help population live(a) erupt lives. Initi exclusivelyy there was a pass between the working(a) objectives of making multitude lose weight by way of blue calorie diet and the vision of getting people to live better lives by inculcating sustainable lifestyle ways. However, this gap had been bridged but the positioning gap remained. Who were Cabo San Viejos targeted nodes? Was there any gap between targeted and actual customers?If we go by the vision statement, anybody wanting to live a better and healthier life was Cabo San Viejos targeted customers. These could include smokers, grievous men and women, even obese children, stressed couples or singles, workaholic professionals, over worked top executives and managers etc. However, Cabo San Viejo was each(prenominal)ureing mostly females (70%-80% of the guests) with an increase average age over the years, the last average being 57 in the year 2004. Thus, mostly honest-to-god females were visiting the resort who cherished to indulge themselves and discover better about their body and themselves.Also, their household income was high. comparison this with the summer guests, the latter group had less income and was also comparatively junior in population. Thus, we can link the age, income level and affordability. Usually junior people ar less wealthy and thus find such vacations expensive. not solo this, the perception of Cabo San Viejo first as a fat dwelling site and then as a boot camp was discouraging people to come there. Also, 67% of guests came by word of mouth indicating that the above frontier marketing was performing poorly.Campaigns targeting specific groups of people showing indulgence in activities of their interest like hiking for young crowd, spa treatment for women, consultation for couples etc would be likely to bring out the varied health solutions offered by Cabo San Viejo. What were the emergency of the guests at Cabo San Viejo? Was there any gap in meeting the demand or their expectations? The individual need of the customers varied quite a lot. To pull in and cater to the needs of the customers, the company had efficiently trained its reservation supply who helped customers choose the appropriate package as according to their goals and objectives.The very particular that 95% of the customers rated their experience as either very good or outstanding shows that Cabo San Viejo was operating efficiently. However, if Cabo San Viejo was to target a more demanding and younger customer base in future, it would have to exceed is current delivery promise. The needs have been met but the expectations of repeat customers have not been satisfied near of whom have expressed their resentment for not being refunded for their continued patronization. thence we have rec ognized Perception of Cabo San Viejo as a boot camp needed to be changed. Young customers needed to be attracted. As they had higher(prenominal) expectations and smaller pockets, fealty program needed to focus on encourage suggestion by means of discounts etc. Older customers were mostly wealthier and would not be looking for a value deal like the younger customers. We need to firs consider the present dedication situation in recount to determine where Cabo San Viejo stands and how it may gain by implement a committedness program. What was the inscription situation?Cabo San Viejo had around 5000 repeat customers each year which a healthy figure is making up about 60% of the occur arrival figure. Around 3500 new guests arrive each year of which 32% revisited within 5-6 years and 62% of repeat visitors returned again within 5-6 years. The primary feather reason for not returning was the high constitutes. Here we reiterate that to attract more repeat customers, value must be offered. In disposition to measure the wallop, we first need to chthonianstand the reasons for implementing a faithfulness program. wherefore does Cabo San Viejo need a customer devotion program? Retention unrivalled of the primary reasons for most loyalty programs is o retain the loyal customers by appreciating them and the business they generate for the company by making them feel spare and good about their association with the company. Offer enhanced value proposition A loyalty program which offers a value deal to its customers who need it leave alone get Cabo San Viejo more patronization. However, it is to be understood that not all customers need or expect value deals. Enhanced Satisfaction deferred payment by way of loyalty program makes a customer feel good and thus enhances satisfaction which in turn leads to more irrefutable word of mouth. Positive Word of Mouth Around 60% of Cabo San Viejos customers called in for inquiry based on word of mouth. Enhance jut out as a responsive company Cabo San Viejo explicitly encourages customers to complain if unsatisfied. It is th spotty such feedbacks that Cabo San Viejo has got to know that customers expect such a program implementation. Whenever a company asks for and receives complaints, it is best to respond or may lead to customer resentment. Counter Competition If not rewarded for loyalty, customers may switch to separate competitors. How ofttimes is the desired/expected shock absorber? Having analyzed this, we now estimate the impact. The impact of a loyalty program is usually incremental and observed over a period of time. The expected increase in retention is say, 10%1 over a period of say, 5 years2. Also, people glide slope from reference is expected to increase over the years enabling the company to cut marketing costs elsewhere. 1The expected retention luck is frame either based on internal company data or industry expert advice.Here, in the absence of both, we make a rough estimate. 25 years has been estimated as the minimum period to measure impact since most customers make repeat visits within a span of 4-5 years from their last visit. Since our customer segment mainly consists of Highly affluent older people (mostly women) with focus on being appreciated by do to feel special as a treat for loyalty non so affluent younger people with focus on simplification per visit costs as a treat for loyalty, we would be having diametrical approach to meet the different expectations of the customers.For this, we propose a tiered reward structure. Before we propose the design, the few things we kept in mind were step Offerings (the offering is kept in line with quality perception of service at Cabo San Viejo), Cash Value( to be determined as a percentage of what customer spends on micturateing the reward), relevance(the reward must be relevant for the customer segment in question), redemption choice, convenience( ability to easily redeem the battery-acids) and commu nication( all participants must be kept well informed) THE PROGRAM A loyalty club flier is to be issued to all customers including new customers.The club separate are to be of three variety depending on the cash add up played out by the bill poster holder. Minimum Cash SpentRewards offeredExplanation $3588(4 Night stay) if loyalty display board was sought at handle Springs or $500( run) if loyalty card sought at Day Spas(since these would represent the paying customers for a loyalty program)A silver club card is to be issued. In bay wreath Springs, for every $100 spent on room charges, customer exculpates 1 point and for every $50 spent on other services (massage, physical therapy etc. ), the customer gets 4 points. This card willing also earn points at Cabo Day Spas where each $50 spent will earn 4 points.No other frisbies would be offered. Self redeemable only. $50 chosen as minimum money to be spent as all services of Cabo is higher than $50. More points earned on exer cising of other services meant to encourage guests to use varied services. Cabo Day Spas and Palm Springs program integrated for convenience and for more frequent touch points with the company $5,832(7 Night Stay) if loyalty card was sought at Palm Springs or $ gigabyte(services) if loyalty card sought at Day Spas(since these would represent the profitable customers for a loyalty program)A gold club card is to be issued.In Palm Springs, for every $100 spent on room charges, customer earns 1 point and for every $50 spent on other services (massage, physiotherapy etc. ), the customer gets 5 points. This card will also earn points at Cabo Day Spas where each $50 spent will earn 5 points. Cocktail/Mock tail to be offered as complemental drink on arrival to Palm Springs or A favourable pedicure/manicure (or such other low cost service) offered redeemable within 3 months at Day Spa only if total spent sum up in the last month was $1000 or above. Redeemable by listed family members. It is to be understood that the gold card segment is more profitable than the silver card segment. So it is offered better deal. Also, the complimentary treatment at Day Spa redeemable under 3 months will ensure a repeat visit. $7788(7 Night Stay) if loyalty card was sought at Palm Springs or $1500(services) if loyalty card sought at Day Spas(since these would represent the profitable customers for a loyalty program)A platinum club card is to be issued. In Palm Springs, for every $100 spent on room charges, customer earns 1 point and for every $50 spent on other services (massage, physiotherapy etc. , the customer gets 5 points. This card will also earn points at Cabo Day Spas where each $50 spent will earn 5 points. Cocktail/Mock tail and flowers to be offered as complementary drink on arrival to Palm Springs or A complimentary service in the range of $80 offered redeemable within 3 months at Day Spa only if total spent amount in the last month was $1000 or above. Redeemable by listed family members. Besides, a formal program, it is very important that a high spirit level of personalization is involved in case of platinum and gold card holders which are the most valuable segment.