The cruise industry experiences a rise of complaints through digital arenas

Many customers complain in order to express their dissatisfaction or vent a frustration about a particular event or product. Homans (1961) state that individuals share information because they expect to get something in return. The expected return could be financial, materialistic, emotional comfort, or social rewards (Rui et al., 2014). In general, people simply tend to write a negative comment rather than a positive one as they already payed for having a “good experience”, unless the trip was way better than expected.

Complainers can be perceived as annoying but actually the dangerous clients are those who quietly dump the company and do only engage through negative word of mouth with a third party. The research firm ‘TARP’ says that for every person who complains, there are 26 who do not, which can end up in further consequences. How can a business know that someone was not happy if he or she doesn’t express that? Hearing the voice of dissatisfied customers can offer potential benefits to the firm by touching problematic areas and turn it into gold dust by using it as a basis for improvement.

Cyberspace seems to foster the online disinhibition effect where consumers “loosen up, feel more uninhibited, express themselves more openly” (Suler 2004, p. 321). The online world gives consumers the possibility to spread negative words without revealing their identity. CruiseReport, TripAdvisor, ConsumerAffairs are some examples of highly used websites with reviews on cruises, which became a great resource during the shopping process. Complaints through electronic media such as the Internet have increased dramatically and will most likely continue to do so in the future (Tripp and Gregoire 2011; Strauss and Seidel 2004).

Social media are a phenomenon where individuals share opinions about products in a group atmosphere (Bacile, Hoffacker, & White, 2014). Once a consumer posts a comment on social media, the information spreads to others, and users form opinions (Bacile, Hoffacker, and White, 2014). Facebook and other social media sites add another layer of complexity to the complaint management and resolution process; the potential impact of electronic word-of-mouth is enormous, with an average of “3.2 billion Likes and Comments generated by Facebook users per day during the first quarter of 2012” (Facebook 2012).  […] Consumers are able to influence literally thousands of purchase decisions with a few sentences posted online (Mangold and Smith 2012, p. 150).

Nowadays people feel the need to first look for reviews upon a certain product, brand or company. Consumers find reading product reviews valuable and credible in decision making (Hong & Park, 2012). Yet, it shouldn’t all be taken too seriously as a review is just a snapshot of time and every person has different needs and wants, emotions, expectation, within a different environment going on the cruise. Chris Dikmen (2015) states that even the weather and sea conditions can impact a guest’s impressions. Moreover cruise ships are very dynamic and change the guest mix and crew members from time to time. One should always consider the credibility of a reviewer and question its objectivity.

Unfortunately, complaints can cause major public crises that need to be carefully managed by the company (Laufer, 2010; Laufer & Coombs, 2006). Not handling the situation right can conclude in losing customers and gives competitors the opportunity to steel them from you. A cross-industry study revealed that 88% of consumers are less likely to buy from a company that ignores online customer complaints (Drennan, 2011). Additionally, consumers feel unimportant when negative comments are not responded to (Dekay, 2012). From another perspective: firms should defend themselves.

Brands should directly dive into the conversation and waste no time. By proving you are dedicated to address the issue, you are able to win their trust again (TheSocialHabit, 2014). Dekay (2012) found that marketers should post fun messages integrated with the marketing message to ensure there is a minimal amount of negative feedback. Furthermore communication should be done with a certain level of empathy and concern. The company should always be honest with credible sources; otherwise it looks like there is something to hide. To protect information from being misinterpret and losing the focus, it is advisable to only have one platform on which all the complaints will be responded to. Last, reacting aggressively is absolutely not done.

Overall, the existence of consumer and professional reviews helps to improve the quality of the cruise industry. Social media provide a way for organizations and consumers to build a stronger relationship with the opportunity of self-expression (Alamaddine, 2013).

 

Baer, J. (2008). Social media case studies. Retrieved October 12, 2016, from Convince and Convert, http://www.convinceandconvert.com/social-media-research/42-percent-of-consumers-complaining-in-social-media-expect-60-minute-response-time/

Bryce, K. R. (2014). The role of social media in crisis management at carnival cruise line. Journal of Business Case Studies (JBCS)10(3), 231. doi:10.19030/jbcs.v10i3.8713

Can the Cruise Industry keep up with Bad Cruise News? (2016). Retrieved October 12, 2016, from Cruise Law News, http://www.cruiselawnews.com/tags/crisis-management/

Grégoire, Y., Salle, A., & Tripp, T. M. (2015). Managing social media crises with your customers: The good, the bad, and the ugly. Business Horizons58(2), 173–182. doi:10.1016/j.bushor.2014.11.001

Pinto, M. B., & Mansfield, P. (n.d.). Facebook as a complaint mechanism: An investigation of millennials.Journal of Behavioral Studies in Business

PITA, & CruiseReport, L. owner of. (2016, August 9). Can you really trust cruise reviews? Retrieved October 12, 2016, from http://www.cruisereport.com/crBlogDetail.aspx?id=4203

Social media’s role in crisis management: A call for greater legal vigilance. (2015). . Retrieved from http://www.webershandwick.com/uploads/news/files/social-media-crisis-management-report.pdf

Wagner, D. (2015). Managing negative comments posted on social media. Retrieved from http://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=2555&context=dissertations

 

Advertisements

Listening to customer feedback is key to continuous improvement in the cruise industry

Feedback is crucial when controlling and measuring performance. Without truly listening to customer’s feedback, one will not be able to make the best or strategic decisions. According to Normann (2002) companies need to build strong customer relationships by listening to and acknowledging customer’s wants and needs.

To know what customers are thinking, ask them (Ben McConnell says).  Therefore, companies need to understand that it is all about reaching out in order to get an insight about how they really feel and what they think that could or should be improved.

Customer feedback can be obtained in many different ways, such as through surveys, focus groups, one on one conversations, observations, points of sale, E-mail and so on.  Another popular approach at the moment is a digital feedback screen in a certain public building, where guests can mention how they have experienced the service. There is no such thing as the “perfect method” but it is certain that with online tools as social media it is easier than ever.

By choosing a good feedback method in the cruise industry, age plays a major role. The older generation is unlikely to all have an email address, which is why several methods are automatically excluded. On the other hand, Fielding (2012) states that 86% of 55+ are now said to shop online regularly and while this does not necessarily mean they would prefer to complete an e-survey to a paper based survey it does demonstrate they are not necessarily technophobes. Yet, the gap between 55+ and 70+ is actually too big to make conclusions on.

Cruise companies suggest using electronic surveys rather than paper based and encourage effective customer feedback systems. To provide cruise companies with a high response rate, there are countless of those available on the internet. Many perceive this as the most logic approach. Objectives of implementing the electronic format are to become more environmentally friendly, to expand the survey only when the customer is willing to give more feedback and to capture detailed experience of the embarkation and disembarkation (Princess Cruises, 2010).

Luckily customers recognize the importance of giving feedback to a company. Nevertheless, many agree that questionnaires tend to be too long and are often distributed at an inappropriate time. The message when asking your customers for their input sends a powerful message in and of itself (Eric Engwall). Besides the opportunity to improve a product or service, it can also increase customer satisfaction, and retention. Customer feedback is a key driver of change and a rich source of market intelligence (Donovan & Samler, 1994). So, take advantage of it and turn feedgack into gold dust!

 

Beard, R. (2014, December 18). The simplest and most accurate way to measure customer satisfaction with client heartbeat. Retrieved October 2, 2016, from http://blog.clientheartbeat.com/measuring-customer-satisfaction/

Gibson, P., & Di Dino, F. (2012). Customer feedback systems onboard cruise ships. In Cruise Tourism and Society (pp. 101–114).

Khriyenko, O. (2015). Customer feedback system – evolution towards semantically-enhanced systems.Proceedings of the 11th International Conference on Web Information Systems and Technologies.

Papathanassis, A., Lukovic, T., & Vogel, M. (2012). Cruise tourism and society: A Socio-economic perspective. Retrieved October 1, 2016, from https://books.google.be/books?id=fJBbtVw6UOQC&pg=RA1-PT137&lpg=RA1-PT137&dq=customer+listening+cruise+industry&source=bl&ots=5nQFXHl_jg&sig=4BMVZKYU2hZBjleCl9E8K3mMw5w&hl=en&sa=X&ved=0ahUKEwjX_POP-7vPAhWsJsAKHRA9D-sQ6AEIKDAC#v=onepage&q=customer%20listening%20cruise%20industry&f=false

No customer within the cruise industry is the same and they should therefore all be valued differently

Customer value can be interpreted in different ways. The customer’s point of view refers to their desired value in a product or service, and its perceived value, which is the benefit a customer actually received after it was purchased. The industry’s point of view, on the other hand, is about how much a company values its customers. Conceptually, the value of a firm’s customer base is the sum of the lifetime value of its current and future customers (Gupta, Lehmann, & Stuart, 2004). These two are closely related; if you value a customer in the right way, that person will probably also value the product more. Therefore, customer satisfaction is partly achieved by giving them honest attention and appropriate service.

Yet, according to Reaves, defining your customers by being satisfied or dissatisfied is not enough. He believes there are six types of customers: the ‘endorsers’, who tell other people about your company in a positive way – the ‘buyers’, who will probably keep buying from you, but no longer endorses the business – the ‘satisfied mutes’, who are quite and ok with how the business is doing – the ‘dissatisfied mutes’, who aren’t that positive anymore – the ‘Grumblers’, those who perceive everything you do as wrong because they have already experienced too many negative incidents. Last, the ‘complainers’: telling everyone how bad your company is.

Which group of customers deserves most value? Or better, which group needs the most value in order not to lose them? Reaves states that the endorsers need to be capitalized on as they are the best customers and they should stay that way. The dissatisfied mutes and grumblers have lost faith in the product and the industry should stop them from moving to business elsewhere. The complainers are deadly for the company and there are many positive incidents necessary to satisfy them again. Looking to the customer pyramid, these customers can be called ‘Lead’ or ‘Iron’ from the least profitable part. Are they worth all the time and money?

All customers have their own unique set of needs, desires, experiences and expectations and it is difficult to focus on all of them. In the cruise industry there are many customers nowadays that want a more unique and special experience with extra good attention, known as a premium experience, and they are willing to pay more for it. If the business values these customers more, the relationship and bond between them will get stronger. As well it could come with customer loyalty and eventually benefit with an increasement in sales and profitability. Customers can demonstrate loyalty to price, brand, company, and other customers (Zikmund, 2002). Those customers, that are most profitable are called ‘Platinum’ because they spend more and will probably also spread a positive word of mouth. They do cost a lot of time to maintain but in the end it will all be worth it for the cruise industry.

thisone

Figure 6.4 Zeithami, V., Bitner, M. J., & Gemier, D.  (2012) The Customer Pyramid

Gupta, S., Lehmann, D., & Stuart, J. A. (2004). Valuing Customers. Journal of Marketing Research,41(1), 7–18.

Magatef, S. G., & Tomalieh, E. F. (n.d.). The Impact of Customer Loyalty Programs on Customer Retention. International Journal of Business and Social Science6(8),

Peelen, E. and Beltman, R. (2013) Customer Relationship Management. 2nd edn. Pearson Education Limited.

Reaves, ????  – Six Types of Customers

Zeithami, V., Bitner, M. J., & Gremier, D. (2012). The Customer Pyramid. Services marketing: Integrating customer focus accross the firm (6th ed.). McGraw-Hill / Irwin. (Figure 6.4)

 

How important is customer knowledge to provide great customer experiences in the cruise industry?

Knowing your potential customer is of major importance as it gives businesses the opportunity to approach them in the right way; with the right offer at the right time. Having a good customer database increases the response rate, the effectiveness of acquisition, customer retention and could make it easier to develop a relationship (Peelen and Beltman, 2013). Therefore, information about the customer is a deciding aspect of Customer Relation Management. Without this knowledge, the relationship will lack substance, customisation and focused communication based on customer profiles will be impossible.

At the core of any good customer experience is knowledge. This means that any effective customer experience strategy will focus on facilitating the fast, consistent, and accurate delivery of knowledge where and when it is needed (Oracle, 2012). Designing such resources costs money and time, and needs continuously investments. It is a complicated process and many problems can occur, such as  too many data with no value, or employees with no access to the information they are seeking.

The cruise industry has known a dramatic growth and is still rapidly growing. This mainly happened because of growth strategies, new ships, more local ports, more destinations and on board activities matching the demand of consumers. Nowadays it can be said that the ship is the destination. They offer designer shops and Broadway productions, to golf courses, water slides an bumper cars, delicious food and exceptional service. In these times of high competition, one can make a difference by offering a unique customer experience, and exceeding customer’s expectations. Therefore the cruise industry does extensive customer research in order to be able to satisfy all of their clients. It has shown that the desire for luxury continues to grow, and more and more young people are interested in going on a cruise. Cruise companies are now designing to satisfy every age, and to appeal and customize all cultures. Customisation has become possible and staff tries to engage connect with people, as an individual, and how that particular customer wants to be treated. Other aspects that help to satisfy customers are the way staff handles complaints, and the speed of doing this. As well their attitude is of major importance.

If you want to develop a bond with a customer, you must be  interested in the story behind the event and person (Magazine for Marketing, 2001) Yet, in order to make conclusions, they should understand the environment in which that customer operates, as human behaviour is often context driven. A previous survey has revealed that some biggest-spending customers wanted a more premium experience, and were willing to pay for it. The industry could focus on giving them what they want, but should find a balance with the those who do not like to spend that much.

 

Customers knowledge is necessary to provide a good customer experience, and customer Experience is key to lasting success.

Peelen, E. and Beltman, R. (2013) Customer Relationship Management. 2nd edn. Pearson Education Limited. (Customer Knowledge Strategy, pp. 93-116)

Huizingh, K. R. E. (2001). Customer Knowledge: the story behind the data. Tijdschrift voor marketing (CRM Illustration, pp. 102)

An oracle white paper. Eight steps to great customer experiences for government agencies. (2012). . Retrieved on October 5, from: http://www.oracle.com/us/products/applications/8-steps-cust-exp-gov-wp-1560471.pdf

Testa, M., & Sullivan, K. (2002). Customer Satisfaction, Quality in Cruise Industry. Hospitality Review20(2),

 

Is the physical environment as important as other arenas for the cruise industry?

Attracting new customers and maintaining them is most likely the main objective of every organization; however in practice it is not as easy as it sounds. Though studies revealed that the physical environment, also identified as ‘atmospherics’ (Ryu & Han, 2011), has an immense impact on maintaining customers, therefore it is quite interesting to take a closer look into that arena.

Since the rise of social media and digital technologies businesses tend to put more focus on those aspects which could lead to a lack of focus on the physical environment. Nevertheless digital technologies definitely have made our everyday lives easier such as the ability of booking holidays online, shopping online, and much more, however it is only a part of creating an incredible customer experience.  Nowadays customers still appreciate affection and the personal touch cruise companies could implement in their business (Keightley, 2016). Moreover Chen et al. (2013) confirms that personal interaction a vital and tremendously important factor is in regarding to customer loyalty.

Customers spend a relatively long time on a cruise ship during their holiday; therefore it is quite easy to assume that the physical environment plays a big role in customer loyalty and customer satisfaction. The physical environment and physiological images are a significant factor for customers to choose which brand or which sector they want to go for according to Hye-Koung & Park (2015).

figure1
Figure 1: the conceptual model (Chen et al., 2013)

According to the conceptual model of Chen et al. (2013) the physical environment and personal interaction have a great influence on customer loyalty and satisfaction. The physical environment refers to equipment, atmosphere, décor and design, and personal interaction quality refers to employees knowledge and employees problem-solving skills. Another model from Ryu &Han (2011) confirms that all the aspects which are connected to physical environment could eventually lead to customer satisfaction and customer loyalty if all those aspects are fulfilled in the customer’s point of view.

figure2
Figure 2: the proposed model (Ryu & Han, 2011)

Not a lot of specific research has been done yet in how the physical environment impacts the cruise industry and their customers, yet research has verified that certain specific factors can make a tremendous effect in the customer satisfaction and loyalty in any industry. The cruise industry should carefully look into these factors as the physical environment is the best way for a customer to look for an experience and feel excited (Chapman, 2016).

Sources:

Chapman, M. (2016). Retailers must reinvent to survive. Retrieved from http://raconteur.net/business/retailers-must-reinvent-to-survive

Ryu, K., Han, H. (2011). New or repeat customers: How does physical environment influence their restaurant experience? International Journal of Hospitality Management, 30(3), 599-611.

Hye-Koung, M., & Park, J. (2015). A study on the effect of the physical environment in an airplane on customer loyalty. Journal of Airlines & Airport Management, 5(2), 81-100.

Keightley, N. (2016). The personal multi touch experience. Retrieved from http://raconteur.net/business/the-personal-multi-touch-experience

Chen, C. M., Chen, S. H., & Lee, H. T. (2013). Interrelationships between physical environment quality, personal interaction quality, satisfaction and behavioural intentions in relation to customer loyalty: The case of Kinmen’s bed and breakfast industry. Asia Pacific Journal of Tourism Research, 18(3), 262-287.

 

The significant change of branding in the cruise industry through the introduction of technology.

Branding is not just a way to attract customers and make them buy a specific product or book a certain cruise, it is all about creating a unique image which customers keep in mind (Blain et al., 2005). Hereby it is important to build brand engagement whereby a company is distinguishing one product or service from another (Gunelius, 2015). By giving customers a reason to engage with their brand, more loyalty from the clients will be provided in the future (Keller, 2001). Branding is usually done by keeping the same theme so customers will be reminded to the brand time after time.

Before the time of social media, was the cruise industry mainly reliable on television and printed advertisements when promoting their brand. Nowadays with the introduction of social media like Facebook, YouTube, etc., a connection can be made directly with the customers, whereby  more focus can be put on their  personal wishes instead of generalizing it to a complete audience (Cole, 2013). In order to realize this a well thought-out multichannel strategy is needed as it is nowadays also for customers way more easy to expose a bad service of a certain company to a wider audience (Peelen & Beltman, 2013).

The ‘evolution’ of branding entailed several changes. Brands are not working on persuading customers anymore, but they want to work together with them in order to provide experiences through co-creation like Google for example. Besides, brands nowadays are often shared with stakeholders like for example Android does. With the emergence of virtual reality technology (VR) not only a story is told to the potential customers anymore but the story can also be showed (Case3D, 2015).

A cruise line who is working very intensively on this new way of branding is Disney Cruise Lines. For their 20th anniversary they created an app where customers could find tips for planning their holiday; a customised area where the customers could upload their own photos; games and a virtual countdown until the holiday starts. Furthermore they used social media to tell a story which fits to the image of the brand and they used this tool to tell news to the customers. Interaction was held with the customers by asking parents to send via social media action photos of their kids and to share ‘virtual postcards’ of their dream holiday. Last of all Disney Cruise Lines created brand awareness by asking 3 professional bloggers to stay on their cruise ship and record their experiences which they would broadcast over several social media platforms.  With this action they reached out to over 1 million people worldwide (Cole, 2013)!

Besides Disney Cruise Lines who came up with some great inventions, there are and will become way more ways of branding in the future. Think of a 360 degrees representation of the cruise ship whereby potential customers get  an idea of how the cruise ship looks like from the inside(Case3D, 2015). Hereby one can also think about VR headsets that can be used on exhibitions whereby the potential customer even gets a virtual 3D image that really gives you the feeling of being on the cruise ship. With the advent of new technologies branding is evaluating to a complete new level whereby customers can feel even more connected to a certain brand than ever before (Benady, 2014).

 

 

 

 

Bibliopgraphy

Benady, D. (2014). How technology is changing marketing. The Guardian. Retrieved on October 6, 2016 from https://www.theguardian.com/media-network/media-network-blog/2014/sep/29/technology-changing-marketing-digital-media

Blain, C., Levy, S. E., & Ritchie, J. B. (2005). Destination branding: Insights and practices from destination management organizations. Journal of travel research, 43(4), 328-338.

Case3D (2015). Virutal branding – what can VR do for your brand? Case3D. Retrieved on October 4, 2016 from http://www.case-3d.com/virtual-branding-what-can-vr-do-for-your-brand/

Cole, S. (2013). Cruise industry sailing the seas of social media. Cabi. Retrieved on October 3, 2016 from http://www.cabi.org/leisuretourism/news/23466

Genulius, S. (2015). How to build brand engagement – Part 1. AYTM. Retrieved on October 6, 2016 from https://aytm.com/blog/research-junction/how-to-build-brand-engagement-part-1/#sthash.ovmOnqPF.IEq5plgH.dpbs

Keller, K. L. (2001). Building customer-based brand equity. Marketing Management, 10, 15–19.

Peelen, E. & Beltman, R. (2013). Customer Relationship Management. Harlow, England: Pearson.

 

The vital strategy in the cruise line industry: ‘Segmentation and selection’

With an estimation of 24.1 million cruise ship passengers by 2018 it is very difficult to meet the wishes of every passenger without knowing anything of them (Cruise Market Watch, 2014). A good approach for such a large industry to attract and keep customers is by segmentation and selection.  Studies of Marti (1991) even stated that segmentation is the vital strategy in the cruise industry in order to increase the market share.

In general a market can be categorized on endless different ways; based on age, income or even based on a favourite movie. In order to make a good and useful segmentation a guideline of the segmentation process is written by Kotler and Keller (2008). The segments have to be measurable, substantial, accessible, differentiable and actionable. With segmenting it is important that every customer is placed in only one group whereby there is no overlap in the different segmentation groups.

When profiling a segment both internal and external sources can supply data to make the segment more specific (Peelen & Beltman, 2013).  Specification will eventually improve the client’s satisfaction as there are really focussed on their wishes. Mr. Cana-Lopez, chief of data communications (2016) once said: ‘knowing your customers inside out has always been vital to success in business’ hereby it does not matter if an industry is dealing with only a few customers or with hundreds or thousands of them, like the cruise industry.  Moreover, facts like household profile and the social class are also surveys of an enormous help as the company really gets to know how the client feels, what the client wants and what his/her buying behaviour is (Peelen & Beltman, 2013).

In the cruise industry the typical used segments are: singles, seniors, disabled, family and romantic & honeymoon cruises (Bhadauria et al., 2014). Research showed that for passengers on a family cruise and for passengers on a romantic cruise, dining is the most important attribute during their trip.  However for seniors on the other hand are the cabins and the service more important. In order  to strive for a more precise segmentation within these groups, the cruise industry often looks at criteria like loyalty, price sensitiveness and the perception of the cruise line’s reputation (Bhadauria et al., 2014).

The goal of segmentation is to approach each homogeneous customer group in the exact way that they would like to be  approached. When a company anticipates on the feelings or needs and wants of a certain customer group this leads eventually to more satisfaction whereby the customer often becomes loyal and are willing to spend more money with this specific company in the future (Peelen & Beltman, 2013).

 

 

 

 

Bibliography

Bhadauria, A. , Bhatnagar, A. , Ghose, S. , (2014). Demographic segmentation of the cruise industry. Global Journals of Management and Business Research: E-Marketing. Retrieved on September 28, 2016 from http://journalofbusiness.org/index.php/GJMBR/article/viewFile/1435/1342

Cruise Market Watch (2014). Market share. Cruise Market Watch. Retrieved on September 28, 2016  from http://www.cruisemarketwatch.com/market-share/

Kotler, P. and Keller, K. (2008). Marketing Management, 13th edn, Englewood Cliffs, NJ: Prentice Hall.

Marti, B. E. (1991). Cruise ship market segmentation: a ‘non-traditional’port case study. Maritime Policy & Management, 18(2), 93-103.

Matthews, D. (2016). How connected data is targeting consumers. Raconteur. Retrieved on September 27, 2016 from http://raconteur.net/business/how-connected-data-is-targeting-consumers

Peelen, E. & Beltman, R. (2013). Customer Relationship Management. Harlow, England: Pearson.