Wednesday, June 3, 2009
Cruisers are social animals by nature. They are joiners. For the most part, they belong to groups and organizations, and seek to meet new friends when they cruise. "Picture the best friend you've never met." That is the promise inherent in a cruise vacation...yet at the turn of the century - the cruise lines failed to understand it, or lead with it.
In 1999, I met with a friend from the airline industry who had recently become the President of a very large cruise line, who informed me over the course of lunch that he had just been on his first cruise. He went on to explain that he felt the need to have the ship’s communications department facilitate ship-to-shore communications capability just for him, so he could check his e-mail while at sea. I told him then and there that his company (and all other cruise lines) would be retrofitting their ships to facilitate the same connections for their guests that he demanded for himself – in every cabin. He told me it would never happen – as the costs were too prohibitive. I explained that his prospect’s communication needs were no less important than his own (from their perspective), and that he had just articulated a major cruise resistance factor that needed to be overcome. What he perceived to be a “cost,” was actually a huge (“wish you were here”) marketing opportunity, one that self-liquidates through use fees. The industry has subsequently proven me right, as every major vessel now offers internet capabilities to its guests.
Y2K And Beyond
B.I. (before Internet), booking a cruise necessitated the inclusion of a commissioned travel agent in the education/facilitation process (for an 18% fee). At the point where the Internet had achieved a 50% rate of adoption in the US, the developing cruise-specific social communities were facilitating Internet-enabled-word-of-mouth to such an extent that every question any prospect might have to achieve a comfort level sufficient to purchase a cruise, was easily answered by the community. Direct booking (by phone) was being facilitated by the conversations that were occurring online, saving the Contemporary cruise brands $180 per booking on average.
2002 – A Year Of Transition
If you’re reading this, you may well have been among the early adopters of online travel research and booking, for whom the Internet replaced the travel agent for all of your research and booking needs. A mindset developed among this cohort that they would no longer rely on travel agents. One problem. Cruises are a highly complex purchase, and fear of making the wrong decision was causing booking paralysis among this contingent. As a result, these would-be-cruisers were spending weeks and months on message boards, hoping to attain the knowledge and comfort level sufficient to book their first cruise. While the industry’s reseller channel was under direct attack, the cruise lines had yet to make the online tools available to facilitate the transaction in this new paradigm, for fear they would be perceived as cannibalizing those responsible for booking 95% of their business. While an industry struggled to maintain the status quo, the online cruise community blew right past them.
Cruises In Common
While most were conducting their research as a couple, these interactions led prospects to seek a connection with other couples who were already booked on the same cruise they were contemplating. This organic trend was witnessed in real time, in its infancy, by this author. The ramifications were tremendous, and would change an entire industry. The disintermediation of the reseller channel was occurring before my eyes, in a most compelling way. Not only were cruisers providing advice, they were actually involved in selling the product – for free.
“Join Us On Our Cruise!”
What cruise line marketers failed to understand is that people were at least as interested (if not more interested) in the types of people who would be on their cruise as they were in the brand, ship or itinerary. Marketers had no desire to help prospective cruisers answer that question in 2002, as their budgets and mindsets were all geared to “broadcast mode.” While marketers were proclaiming “We’re prefect for everyone!” – potential cruisers weren’t buying it, as evidenced by the fact that 90-plus% of Americans had yet to cruise – this despite a huge percentage who said they’d like to.
As was hammered home in my subsequent e-marketing consulting for the aforementioned cruise line President, “You’re in the friendship facilitation business, and your marketing department doesn’t know it!” While I was spending most days reading the thousands of message threads on sites like Cruisecritic.com, learning wants and desires, fears, resistance factors and all the rest, marketers in the industry scarcely knew of this community’s existence – and certainly did not see the powerful future of Social Media that I foresaw – as it exists today.
Only by sheer tenacity was I able to push through a first-of-its-kind program, whereby a Fortune 500 company embraced an online community, honoring their value to the company. As couples with a cruise in common formed their own vertical affinity groups, we implemented a program to acknowledge and reward their online interactions once they boarded the ship for their cruise. A special party for each group was planned on every significant sailing. The online community was delighted to know that one brand was listening to their wants and desires (knew them by their screen names) and rewarded their online efforts in the real world - enhancing their vacation experience. As they returned to their cabins in the aftermath of these parties, they'd report back to their other onshore cruise friends in the broader Cruise Critic community - from the ship: "Here's a picture of our group with the Captain!" Powerful stuff!
Seeing The Opportunities
Here we are all these years later, and corporate leaders and marketing departments are all abuzz about how to catch-up with this Social Media Tsunami and leverage it to their advantage. Here’s a little tip. It’s an art, not a science. Getting it wrong with heavy-handed offensive tactics can destroy your brand’s credibility among existing communities. Sensitivity is at least as important as creativity where friendship facilitation is concerned. What business are you in? What business could you be in? Are your marketers geared toward broadcasting - or are they listening, and then responding to delight your prospects in surprising new ways?
Customer Experience & Service
If your customer service department isn’t actively monitoring message boards where discussion of your product or service is concerned, you’re on the road to extinction. In the new world, customer service IS marketing, and for the most part, brand advertising is irrelevant. Community members who have legitimate complaints about products or services, and voice them online, should have an expectation of results. When you take steps to fix legitimate problems voiced within these communities, your brand’s critics can become your most ardent champions – and it can happen in real-time - to the boisterous applause of the broader community.
That said, there are one-hundred wrong ways, and one best way, to handle these matters. It’s not likely you have this skill set in-house. Sending in covert agents to infiltrate communities - or recruiting brand champions from within existing communities - will result in your brand’s public crucifixion (as occurred with my former cruise client when their marketers recently attempted this ploy). Treading lightly into these waters – with customer experience and customer service as your primary missions - will lead to brand loyalty, not as a direct result, but as an indirect byproduct of applied respect and common sense.
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Sunday, May 31, 2009
Wednesday, May 13, 2009
All Markets Are Conversations.
Your customers and prospects are talking about your brand online, right now. They’re having conversations all day, every day. Are you there, listening? You know you should be there in some capacity, but perhaps you’re uncertain what to do or how to start.
Your first and most significant barrier to social media entry may be internal. He/She likely owns stock in your company, and may hold a corporate title similar to “Sr. VP Marketing.” If yours is a Fortune 500 company, this person’s office wall may be adorned with awards and accolades for the millions of traditional (one-way) advertising dollars spent over the years through his/her office. As you look for ways to trim budgets in these tough times, you may encounter push-back from your highly-decorated marketing guru – as any reduction of his/her advertising budget is perceived as a reduction of their personal power and influence. This is old (and expensive) thinking, and must be overcome.
Back in the early days of social media adoption (nearly a decade ago), the President of an F-500 cruise line retained me to shake up his marketing department, to move the brand(s) online in a meaningful way, and in so doing, transform the culture. This went as far as the President reserving the Executive Board Room for a debate between myself and the Sr. VP Marketing about how to represent the brand(s) online and leverage the communities found there. I won, but not without a significant cost. That such an adversarial encounter was required to move the corporation into the future (to the benefit of the shareholders - including the Sr. VP himself), was unfortunate, and unnecessary. Your marketing department needs to come to the realization that it is their job to cut their own budgets (market more wisely) in order to help your company survive and retain their own jobs. The new paradigm involves marketing smarter, for less.
In Y2K, This Was The Reality:
A cruise is the most complex purchase made online or offline. The research time required is greater than that for purchase of a car, a house or any other researched-product (think weeks and months – if ever). It sounds absurd, but it’s true. As a general rule, cruisers require hand-holding (confidence building) prior to purchase. Cruisers fall into a cohort I broadly define as “Joiners” (as opposed to “Lone Wolves"), and this explains the significant third-party (travel agent) commission of between 15% - 18% required to facilitate the transaction. That translates to about $180 on an average ticket price of $1,000. At the time, fully 95% of cruises were purchased through the reseller channel.
The opportunity to disintermediate the purchase (enable direct purchase) obviously represented a “boat load” of money. The problem was that the cruise lines didn’t want to damage the relationships with their reseller channel, who at that time provided them with 95% of their sales. But the world was changing, and prospects who had yet to cruise were beginning to perform all of their travel research online, booking their flights, hotels and cars with ease, without need for third party assistance. Most came to prefer it, and swore they would never again rely on a travel agent to book anything for them.
Behold The Dilemma.
First-time cruisers rave about the experience, and the satisfaction level (and likelihood to repeat) is exceptionally high. Tipping prospects (fence-sitters) off-the-fence to get them on a ship for the very first time is mission-critical, particularly as more and bigger ships enter the market. Yet in the year 2000, an entire cohort of prospects refused to use the industry’s reseller channel, and the industry was reluctant to provide all the online tools required to facilitate in-depth research or enable the conversations that could lead to direct booking (whether by phone or web).
The vast majority of the world’s population had yet to cruise, and a very high percentage proclaimed that it was something they wanted to do and could afford to do (intenders). The reality is that these prospects sought out the conversations that were occurring online about the various brands, ships, itineraries, activities, cabin classes, etc. in the hopes of educating themselves to enable a comfort level sufficient to pull-the-trigger and book a cruise directly with the brand of their choosing. While the travel agents hated it, and the cruise executives felt constrained to publicly embrace it, the world was changing, and the future of the entire cruise industry was (and remains) at stake.
This cohort of individuals who sought the advice of others flocked to a site called CruiseCritic.com, the largest community of cruisers online. Once there, they learned the basics about cruising by reading reviews initially, and eventually “lurked” within the real-time conversations occurring within the brand or topic-specific forums. These prospects - the most important potential market segment for the entire industry - were behaving in a way that the industry was not prepared to accommodate, and only reluctantly acknowledged (when I personally dragged them there). I literally spent months “lurking” within these message threads - came to learn who the most vocal leaders were, what their likes and dislikes were (about virtually everything), why they switched brands when they did, you name it. Literally everything a cruise marketer needed to know to connect with these individuals in a meaningful, contextual way, was at my finger tips. I was there listening and learning, but the marketing department wasn’t.
Armed with vastly more information about their actual customers and prospects than the marketing department could possibly know, I devised a defensible differentiation strategy for our brand(s). With the blessing of the company President (and against the push-back of the entire marketing leadership of the corporation), I flew to meet with the CEO of Cruise Critic and compelled her to provide us with a differentiated advantage on her web site that no other brand would enjoy for the duration of the contract. We leveraged that differentiation strategy into a new way to hook first-time cruisers on our brands, with the residual benefit of annual return visits within the same brand family, as cruisers repeated with the same groups that had formed online as a direct result of our Cruise Critic initiatives. As groups repeated, they grew both in terms of size and loyalty.
Prospective cruisers (those in the “Intender” category) could not picture themselves as “cruisers” for their own personal reasons. The resistance factor that mattered most from my own perspective was finding “other people like me” to cruise with. They were looking for a new way to research the exact vacation experience to suit their own personal preferences and desires. They were hoping to form new friendships as a result of their vacation selection. What they found were groups forming online, with a cruise already booked. Dozens of individuals, couples and families were getting to know one another online prior to meeting onboard - planning how much fun they were all going to have on their forthcoming cruise. These conversations were (and are) the market.
The Cultural Transformation.
The cultural transformation that needed to occur internally, did occur - though only through hard-nosed leadership and my own relentless determination to move an entire industry in a new direction. Is the marketing culture at your company capable of embracing a new way of thinking about your customers and prospects? Are they prepared to reside where your prospects actually conduct their research - seeking the word-of-mouth advice of the leaders of these online communities and others who participate at all levels of the discussion? Is your Customer Service Department prepared to lurk in these conversations? Are they empowered to act to resolve legitimate complaints in real time – to the delight and surprise of the community?
Are you willing to lead your marketers to stop “broadcasting” and start listening – I mean REALLY listening? Are you willing to help facilitate the conversation such that groups form around shared-experiences (and by extension, your brand)? Are you willing to accept that group loyalty leads to brand loyalty – and admit that cutting the marketing budget is in the best interest of the company? Are you ready to join the conversation?
About The Author:
Tom Martin is the Founder of MarketInSite.com and NewVentureStrategies.com. Look for him on Linked In, Facebook, and on Twitter at VentureStrategy. If you’re ready to start a conversation about moving your corporate culture in this new direction, or to improve your existing approaches if you're already online, drop me a note through my site and let’s talk about your goals. The conversation is free, and you won’t be disappointed. Check out the testimonials here, then introduce yourself:
Tuesday, April 21, 2009
Intelligent research is the first step to launching (or not launching) any new business venture. Thinking like the individuals you are most hoping to influence is the key to developing a successful business model.
I’ve saved clients millions of dollars over the years by identifying critical threats (competitive, legal, moral, etc.) to their proposed new venture, simply by putting myself in the shoes of their target audience, and behaving as they would when presented with the new option being offered. In some cases, I’ve identified far better business models to pursue and directed my clients accordingly. But in many case, I’ve advised existing or prospective clients not to pursue the new venture at all, for reasons discovered through my intensive due diligence process.
Around Y2K, a top cruise industry executive asked my opinion regarding how I might rebrand their primary cruise line to better articulate their marketing message. The first thing I did was search the web to see how all other brands were attempting to sell me on the idea of a cruise, and how they claimed to be different from every other option available of the eighteen or so to select from. I quickly discovered that virtually every brand was claiming to be just perfect for me, without knowing anything about me or other people like me.
Every brand was speaking to me from their own perspective (selling me on their brand), while my own personal concerns centered around whether I would even enjoy cruising at all, regardless of brand. I decided that I might be compelled to cruise if it were with a ship full of other people like me, who I might most enjoy partying with for a week. I also quickly noticed that no cruise line gave me the option to search for cruises based on the types of people I might like to cruise with enough to tip me off the fence to pull the trigger and actually book a cruise.
While every brand in the industry was touting their destinations, size of ship, amenities, service, price, etc., the one thing I was most interested in - cruising with a bunch of other people that I would actually enjoy spending a week with - was not a searchable option. When every brand in an industry tells you they are just perfect for everyone, the entire industry is actually telling you that they don’t know you or care about your wants and desires.
So there it was – the reason why more people weren’t cruising was staring me right in the face, and the ramifications of this revelation were not only significant for the single brand for whom I was consulting, but for the entire cruise industry. An industry that was accustom to broadcasting their marketing message in one direction was about to be confronted with a new paradigm, the requirement for a cultural shift toward two-way dialogue as a marketing necessity.
Under my guidance, the results of these early revelations led to a cultural transformation not only at this Fortune 500 cruise line, but across the entire industry as their competitors responded to our online initiatives. Consumers had found their voice through online social media, and began configuring their own cruises not around brands or itineraries per se, but around groups formed online by others like themselves. We eavesdropped on their conversations as the groups were forming online, anticipated their wants and desires, and delighted them once on board, by honoring their group with a party and memorializing their time together in pictures.
My theory went as follows: Once groups form, and vacations are enjoyed, they plan another cruise, together, with even more of their friends. As the trend develops over the years, groups will double in size each year, and eventually grow large enough to charter entire ships (saving the cruise line 15% on travel agent fees and 100% on marketing costs), and they won’t even care what brand name is on their ship.
As group leaders emerge and find their voice, they may select a different ship or different itinerary for the group’s next cruise, but it was highly unlikely they would opt to switch brands – as such a move is too disruptive to the group. Brand loyalty is a happy byproduct in this case - not as a result of the superior service delivered, but because the switching cost (disruption and angst within the group) is simply too high. As “the group becomes the brand,” the industry can spend less on brand marketing (reduce or eliminate television advertising), and more on delivering the experience at a better value to these devoted groups.
The world of information is at your fingertips, provided you bother to commit the time and effort, and ask the right questions. Before I embark on any new concept, whether for myself or my clients, I've been known to spend several days with as many as 15 Google tabs open at one time, in search of total information awareness on all aspects related to the target concept. Every Google search can open a door to new elements that may not previously have occurred to you, many of which are critical to understanding whether your new venture is actually going to be perceived by the market in the way that you think it will be.
Unless and until you are willing to step out of your own shoes and into those of the people you are most trying to influence (at every level of the value chain), you can’t really know whether your product/service, messaging, price point, delivery method, etc. is truly going to result in the only thing that matters, profit.
New Venture Strategies is a Fort Lauderdale based consultancy focused on helping entrepreneurs and executives ensure the success of any new venture or initiative. Headed by longtime social networking guru, Tom Martin, areas of expertise include: in-depth research, strategic business planning, segmentation and targeting, social media and networking, public relations, e-marketing, media production and product launch.