Over the years, many people have asked how I can keep up with a weekly (or more frequent) column. I will admit there are challenging times when writer’s block (or a beautiful sunny day and a sailboat) will interfere; but many topics I discuss are not my own. I credit much of my ability to write to my colleagues and the questions they pose. So, this week’s hat tip goes to DCTravelAgent on the TRO Community for getting me to think!
Earlier this week, NCL released a S-1 form to the SEC in preparation for their Initial Public Offering (IPO) and Travel Weekly reported on some of the information which was included. Some of the more notable facts included that direct sales account for 27% of their cruise sales—a 103% increase in the past three years alone. Immediately following this fact, NCL admitted that they were going to concentrate on growing this segment of their business. And another statement, “Passengers booking directly with us tend to book earlier and in premium category inventory, which provides higher net yields,” should give travel professionals something to think about.
DCTravelAgent did and she took exception to that last comment.
This irks me. If it is indeed true, it means that we as Travel Agents could be selling higher revenue stock than we are! What do you all think?
After nearly 15 years in the industry, I can safely say that as a whole, travel professionals are mediocre to poor salesmen. Sure we know the products and the destinations. We might even know the thread count of the sheets at the latest six star property. But that knowledge doesn’t sell a customer. As a whole, we tend to sell to our own budgets and not the budgets of our customers. So, NCL is probably right. We can (and should) be doing a better job.
However, it is almost to be expected that their direct channel has more up-selling success. First, they are dealing with a singular product and likely know it better than anyone. Secondly, let’s face it, these suppliers have big bucks to develop scripts (and implement the technology) specifically to up-sell the client. And finally, they have a huge leg up on knowing what the client wants, based on technology.
When a client calls, emails or comes into an agency, very little is known initially. It takes time to determine the right match. But, when a client goes onto NCL.com they immediately know that they are interested in cruising. Depending on where they land, they may know a general destination. If the client looks at three villas and a suite in one online session, do you think that NCL is going to start talking about the advantages of an interior stateroom? The technology is there. And as for pricing, what happens if NCL sees a guest looking at a villa and has spent a decent amount of time on the casino and auction at sea pages. Do you think a price discount (or other amenity) might be in order to seal the deal knowing that they likely will be good onboard spenders in the areas where they make the most money? I would rather sell a villa for $5000 and have the chance to make $7000 on onboard revenue than to sell it for $10,000 and have to worry if the guests were hiding in the room on the last night so they could avoid tipping. Don’t kid yourself, NCL knows all of this. And then when you toss in some demographic or past guest information and they are quite literally fishing in a kiddie pool.
The other advantage that NCL has is that there is a perception that to get the lowest price, you go to the source. It is true in many cases, but for now, not with travel. Unfortunately, we have done a poor job educating the consumer that our prices are competitive with and usually equal to the supplier pricing. We can counter that advantage slightly by being able to offer competing products. While a older high-roller may be perfectly happy in a villa on NCL, perhaps they may be more happy on a Seabourn ship? That is something that NCL will never (absent a merger or takeover) be able to offer.
So, our mission is now twofold. First, we need to learn how to sell. Have you seen the Travel Agent Success Series? And second, we need to fight off the perception that suppliers are always the best value. We can sell our service, experience, and knowledge, but we also need to be mindful of price. Even our most wealthy clients are not looking for a bum deal. What are your thoughts? Do we do a good enough job? How do we kick it up a notch? Am I barking up the wrong tree? Please leave a comment!