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The Challenge: How to Fill a Cruise Ship

The Old Rules of Marketing Apply Online

Vol. 7, Issue No. 7 | May 3, 2011 By Denny Hatch
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IN THE NEWS

From               Subject                          Date   
Norwegian       Today only! Exclusive    6:44 AM
Cruise Line      Norwegian Epic Bonus

Club ABC         One-Day Sale! –            10:46 AM
Tours                Norwegian Epic

Denny Hatch’s Yahoo! Inbox, April 12, 2011


A number of years ago, we took a terrific Norwegian Cruise Lines tour of the Baltic—St. Petersburg, Tallinn, Stockholm, Oslo, Helsinki and Copenhagen. The company kept us on its roster of customers. We became “Latitudes Insider” members.

On her office computer a couple of years later, my wife Peggy received a last-minute “Latitudes” offer from Norwegian Cruise Lines at a time when we seriously needed a break. Clicking on the offer, she discovered not only a 7-day Bahamas cruise, but also an upgrade to a suite for very little additional money—tiny bedroom with separate sitting room and balcony. She booked it. If one of us wanted to read while the other slept late or napped, the layout was perfect. What’s more, Norwegian Cruise Lines treats its suite buyers to extra services: exclusive access to private dining areas, concierge service, mini-bar, etc. We returned to New York from the Caribbean thoroughly refreshed.

Over the years, we have booked Club ABC Tours, a company that can buy all-inclusive upmarket travel at very good prices and pass the savings on to its customers.

On April 12, I found identical offers four hours apart from both of these companies—a one-day sale for myriad cruises on Norwegian Epic.

Of course, I opened them.

The ABC offer was off the wall—gibberish.

I noodled around the Norwegian Cruise Line offer and felt the offers were so-so.

“The right offer should be so attractive,” said the great Claude Hopkins, “that only a lunatic would say no.”

I abandoned the hunt.

The Massive Challenge of Cruise Ship Marketing
Cruise ships are huge and costly. According to my arithmetic, the average Norwegian Cruise ship has a capacity of 2,394 passengers and an operating cost of $3.4 million a week.

The operating cost of Norwegian’s entire fleet of 11 ships—with a total capacity of 26,334 passengers—is an estimated $37.5 million a week.

That’s a lot of orders just to break even.

Let’s Dispose of Club ABC Quickly.
I clicked on the ABC offer and the landing page was exactly the same as the HTML email—a photo of Norwegian Epic and the promise, “Get $100 to spend on board plus reduced deposit.”

Takeaways to Consider

  • When you send an email offer, always have a dedicated landing page FOR THAT SPECIFIC OFFER. If prospects land on a general home page and are forced to rummage around for the offer they just read, they will be gone in a wink.
  • Online marketers, always remember: You are a mouse click away from oblivion.
  • I’m a very impatient guy with a poor attention span. When I click on a picture of the library at Ephesus and the caption “Eastern Mediterranean,” I want cruises to Greece and Turkey—not a pitch for a program that I am already a member of. The Web people created a disconnect. I zapped it.
  • For publication renewals, effort No. 1 should be the very best offer, and it should be proclaimed as such—with fanfare.
  • The reason: If the subscriber ignores the first effort and a better offer comes along later, it’s an excuse to wait and see if the offers keep getting better and better. In the world of magazine renewals, a certain number of savvy subscribers compare renewal offers and hang onto the best offer in the series (after all, they are still receiving grace copies, even though the subscription is up). When the magazine ceases to arrive, they rummage through the collection of letters and go with the best offer. Or they go online and see if they get an even better offer.
  • How many renewal efforts are sent? Quite simply, you keep sending them until either the customer tells you to stop or breakeven is passed and they cease to be profitable.
  • “The consumer isn’t a moron,” wrote the late David Ogilvy. “She is your wife.” And given this lousy economy, consumers are being very choosy.
  • “The right offer should be so attractive that only a lunatic would say no.” —Claude Hopkins
  • “Sell what you got.” —Franklin Watts
  • My advice to Web marketers: Hire some computer-savvy at-home folks and run your marketing efforts by them before going live. For example, they would have caught the Club ABC Tours screw-up and 1) very likely more than paid for themselves, as well as 2) saving Club ABC from looking like jerks.

 
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COMMENTS

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Most Recent Comments:
Richard Pearlman - Posted on May 03, 2011
Hi, Denny, One thing was left out on your cruise ship article: negotiating. I'd have been on the phone naming the price I wanted. They do have those empty seats to fill. I proved this to a travel agent who said it couldn't be done. That time it involved a hotel. I picked up her phone, called and got a rate 25 percent less than the "best" available. BTW--ask for the assistant manager, not the manager. When Airline A advertises a deal, say $129 LA-Chicago, they will be mobbed with reservations. Other airlines whose prices are higher won't be busy. So...call airlines, B, C, D, etc. and ask if they will match the fare offered by Airline A. They virtually always will--they just don't want to advertise that. A friend, more gutsy than I, even negotiated prices on clothes at a major NY department store. So, negotiate (with your usual courtesy) and enjoy the results! Best, Richard Pearlman
Carolyn - Posted on May 03, 2011
I'm leaving for that Transatlantic cruise on the Norwegian Epic on Friday and I can't wait. Now I wonder how long we should have waited to book! (BTW, the plane ticket coming home cost more than the 11-day cruise. No wonder we hate airlines.)
John Fabian - Posted on May 03, 2011
Denny, As a long-time direct marketer professional for the luxury cruise industry (I've done work for 7 different cruise lines at one time or another), I found your analysis quite interesting. Three issues with your recommendations: 1. Passengers on cruise ships talk to one another (and, heaven forbid, actually compare what they paid for the same cruise). Last minute discounts can create real ill-will among long-time, loyal passengers who paid more for the cruise because they planned ahead. (Yes, I know, airlines do the same thing. However, airline travel is a commodity product and most people have to fly. Luxury cruises are not a commodity product and the purchase is strictly discretionary) 2. When people buy because of a steep discount, they only come back if they get the same steep discount. So, generally speaking, you aren't building a base of loyal customers with last-minute deals. You're simply training consumers to wait until the last minute. 3. You may also, based on my experience, be attracting a type of passenger who doesn't really "fit" the profile of your loyal customer base. Since cruises are a social experience, this can create further ill-will onboard. Bottom line: while last-minute discounting may help a cruise line meet its short-term sales goals by filling cabins that would otherwise sail empty, it is actually counter-productive in the long-term. Unfortunately, most cruise industry marketing people are under tremendous pressure to bring in the numbers, especially in a challenging economy.
Click here to view archived comments...
Archived Comments:
Richard Pearlman - Posted on May 03, 2011
Hi, Denny, One thing was left out on your cruise ship article: negotiating. I'd have been on the phone naming the price I wanted. They do have those empty seats to fill. I proved this to a travel agent who said it couldn't be done. That time it involved a hotel. I picked up her phone, called and got a rate 25 percent less than the "best" available. BTW--ask for the assistant manager, not the manager. When Airline A advertises a deal, say $129 LA-Chicago, they will be mobbed with reservations. Other airlines whose prices are higher won't be busy. So...call airlines, B, C, D, etc. and ask if they will match the fare offered by Airline A. They virtually always will--they just don't want to advertise that. A friend, more gutsy than I, even negotiated prices on clothes at a major NY department store. So, negotiate (with your usual courtesy) and enjoy the results! Best, Richard Pearlman
Carolyn - Posted on May 03, 2011
I'm leaving for that Transatlantic cruise on the Norwegian Epic on Friday and I can't wait. Now I wonder how long we should have waited to book! (BTW, the plane ticket coming home cost more than the 11-day cruise. No wonder we hate airlines.)
John Fabian - Posted on May 03, 2011
Denny, As a long-time direct marketer professional for the luxury cruise industry (I've done work for 7 different cruise lines at one time or another), I found your analysis quite interesting. Three issues with your recommendations: 1. Passengers on cruise ships talk to one another (and, heaven forbid, actually compare what they paid for the same cruise). Last minute discounts can create real ill-will among long-time, loyal passengers who paid more for the cruise because they planned ahead. (Yes, I know, airlines do the same thing. However, airline travel is a commodity product and most people have to fly. Luxury cruises are not a commodity product and the purchase is strictly discretionary) 2. When people buy because of a steep discount, they only come back if they get the same steep discount. So, generally speaking, you aren't building a base of loyal customers with last-minute deals. You're simply training consumers to wait until the last minute. 3. You may also, based on my experience, be attracting a type of passenger who doesn't really "fit" the profile of your loyal customer base. Since cruises are a social experience, this can create further ill-will onboard. Bottom line: while last-minute discounting may help a cruise line meet its short-term sales goals by filling cabins that would otherwise sail empty, it is actually counter-productive in the long-term. Unfortunately, most cruise industry marketing people are under tremendous pressure to bring in the numbers, especially in a challenging economy.