Cabo san viejo case analysis

Please read the attached case and answer the below questions:

What are the characteristics of Cabo San Viejo’s customer base? How healthy is this customer base?
Should CSV adopt a rewards program?
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)?
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?For the exclusive use of A. Saffa, 2020. 9-506-060 MARCH 10, 2006 YOUNGME MOON GAIL J. MCGOVERN Cabo San Viejo: Rewarding Loyalty Cabo San Viejo seeks to help people unlock their hidden potential so they become healthy, happy, fully selfactualized individuals. — The Cabo San Viejo Mission Statement It was early February 2005, and Tina Reynolds, VP of Sales at Cabo San Viejo Health Resort, was strolling the grounds of the company’s flagship Palm Springs, California location. Everywhere she went, she saw happy customers heading to tennis matches, returning from spa treatments, enjoying gourmet meals, and sunning themselves by the pool. Since its inception in 1977, Cabo San Viejo had grown into one of the nation’s first and leading health and wellness brands, operating high-end destination health resorts and branded day-spas. However, the company was now facing mounting competition from an array of new players, including day-spas, health clubs, and resort hotels. To meet the competition and increase sales, Reynolds was considering whether to adopt a loyalty rewards program. Internal reaction to the idea was mixed. Some managers supported the idea, while others were philosophically opposed to designating certain guests for special treatment. If the company did adopt a rewards program, structuring it would prove complex. What sorts of rewards should the firm offer? Who should qualify? What sorts of partnerships should Cabo San Viejo form? Pondering these questions, Reynolds couldn’t help but reflect on a curious irony: The very company that had helped pioneer the health and wellness industry now had its own financial health to attend to. Company Background Cabo San Viejo was founded in 1977 by Dave and Florence Blumenthal on the site of a former peach orchard in Palm Springs, California. Inspired by Dave’s success in changing his unhealthy lifestyle, the Blumenthals sought to create a place where smokers, overweight people, and others could go to feel better and learn how to live healthier lives. Business was slow at first, as the national craze for fitness had not yet caught on. In 1982, however, a leading magazine journalist wrote a piece on Cabo San Viejo, billing it as the nation’s "premier total vacation/fitness resort,” and bookings took ________________________________________________________________________________________________________________ Professor Youngme Moon, Professor Gail J. McGovern, and Research Associate Seth Schulman prepared this case. HBS cases are developed solely as the basis for class discussion. The company mentioned in the case is fictional. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2006 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. This document is authorized for use only by Anita Saffa in CRM FAll 2020 taught by RAMANA MADUPALLI, Southern Illinois University - Carbondale from Oct 2020 to Apr 2021. For the exclusive use of A. Saffa, 2020. 506-060 Cabo San Viejo: Rewarding Loyalty off. In the late 1990s and early 2000s the company opened several smaller, branded CaboDaySpa sites that offered spa services without the overnight facilities. At its founding, Cabo San Viejo was essentially a “fat farm,” offering low-calorie diets and exercise regimens to a primarily female clientele.