RDO7: Cruise sets sail towards younger customers
The issue of aging customers was one of many hot topic at timeshare industry conference RDO7, and one specifically addressed by a presentation by Andrew Stuart, president and COO, Norwegian Cruise Lines.
Stuart joined the cruise operators in 1988 and, although the Boomers were great cruisers, they were an aging customer base he revealed. “We needed younger customers. The industry had to reinvent itself,” he told delegates at RDO7. The words probably resonated with the timeshare resort developers in the room, as they are in the same space.
Andrew Stuart, President and COO, Norwegian Cruise Lines at RDO7
Stuart found the profile demographic of Norwegian Cruise Line’s (NCL) customers was 50+ median age; 75% were married, with many having a household income of more than $100,000 – very similar to timeshare customers. Stuart did his research and discovered that Millennials – 18 to 34-year-olds – were a good fit for his new customer profile and product. Of his Millennials’ survey sample:
- Over 15% earned more than $100,000 per year
- 57% were married or engaged
- 90% were new parents
“Millennials are teaching every other generation how to shop and how to buy,” he said. “They will become the most powerful force in the economy and by 2017 will eclipse the Baby Boomers as the largest spending consumer segment.”
Millennials, one of the most research and surveyed customer segments, are known to like freedom, travel, control, value for money, a good deal. They are active, excited and affluent explorers, active family groups. “We spent a lot on looking at what they love, and the décor on Norwegian Cruise Line ships was not it. The industry had a long way to go,” Stuart explained.
Where did NCL go?
In response to its surveys on what Millennials wanted out of a holiday and as lifestyle options, the cruise line introduced a range of exciting activities to its ships, making them every bit as much a destination as their ports of call. Branded restaurant dining, free-style dining, the latest shows from London’s West End, climbing walls, bowling alleys, giant water slides… a carting track is the next new activity to be incorporated on NCL’s newest vessel.
“It is so unexpected on a ship,” Stuart said. “It will surprise and entice, and guests will be saying ‘Wait a minute, this really is different’. It will excite and attract a different customer than cruise is known for.”
Added to the extensive menu of on-board activities, Stuart’s product development team introduced tiered cruise packages, bringing in The Haven package for free-spirited, affluent cruisers with a taste for the luxury lifestyle.
Greater privacy with private key card areas and 5,000 sq. ft. suites, a concierge service and a highly personalised service, a private courtyard with pool and hot tubs, restaurants exclusive to Haven passengers, were just some of the exclusively accessed privileges on offer as part of the new upmarket cruise product. Haven passengers are, however, free to dip out of the private haven and experience any of the other options on offer as part of the big ship experience, before retreating back to their luxury enclaves.
“The Haven cruise product really is a ship within a ship. It lifts the whole brand in the eyes of the consumer,” said Stuart. “We have quick dining options for kids, longer more relaxed ones for families, great shopping and spas on board.”
Keeping your customers on board
NCL is now taking its brand experience from ship to shore, as it has begun an investment programme that sees the cruise operator building destinations in selected ports of call that may be short of visitor attractions. And Haven guests get to access the upscale experience in the NCL shore destinations as well.
Harvest Quay in Belize, South America is one such NCL shore experience, and it has also just invested $40 million in the Bahamas. There are many activities at the newly developed port destinations but the brand experience from ship to shore, in Stuart’s words “seamlessly moves together as one experience”.
By 2017, Millennials will have become the largest spending consumer segment
Moving with the marketing times
Debating the issues around marketing platforms that are effective today, Stuart pointed out that in the 1960s, 75% of the US population tuned into I Love Lucy on TV; while today, only 9.5% of the US population watch the Big Bang Theory, one of today’s top ranking TV programmes. Many also watch TV on catch-up channels that allow viewers skip the advertisements.
“Even with TV, how many customers are you really reaching?” he asked. “Fragmented marketing channels today make it extremely difficult.”
User generated content (UGC) on whatever channel was highlighted as being the most effective. “The Cruise critic is our TripAdvisor; 44% of those in our survey were aware of it, and 42% use it in making a cruise holiday decision,” he added. “Rankings, referrals – it’s what’s below the water line that carries you today. As the price goes up, consumer reviews are more widely read and we are working really hard on how to deal with what’s below the water.”
For NCL that means customer blogs and how to engage and stay with customers on social media throughout their holiday experience, from planning to returning from holiday and sharing the experience. As many as 59% of Instagram users go online to view Instagram every day, Stuart told delegates.
“Engage online, especially with your ‘super fans’, to build a very powerful story,” he said. “The industry is moving from the elderly customer to the younger more affluent one. We fill every bed we bring into the industry by building exciting experiences.
“But nothing is changing faster than how we reach out customers – it is definitely more difficult today than running an ad on I Love Lucy!”
