Inside the Very Buoyant Mind of a Cruise Line Marketer

Cruise ShipOur Rick Steves’ Mediterranean Cruise Ports guidebook has been the surprise sales hit of our season. It’s currently our 5th-bestselling title, and in January, it was the USA’s 12th-bestselling guidebook by anyone, to anywhere. Popular as that guidebook may be, it sits lonely on my windowsill and needs a sister. So this fall we’re researching and producing a guide to Northern European Cruise Ports, for publication next summer.

I recently enjoyed a fascinating conversation over lunch with the CEO of a cruise line. A brilliant marketer who once sold children’s snacks, he explained how the impulse of a child to explore — as long as she has a safe home to return to — stays with us as adults. While travelers love to get out of their comfort zones, most have that strong, childlike need for a safe refuge or nest. His goal in marketing cruises is to provide a routine enabling people to get out and explore, but also to create a consistent welcome-home ritual when they are back on board. On my recent cruise, I noticed how ships do this expertly, with a welcome table with cold drinks at the gangplank and a friendly greeting as we boarded. And I even remember thinking, “Whew…we are safely back home now.”

I mentioned that cruise lines seemed less aggressive than I had anticipated in selling shore excursions, and that I was surprised how readily they let two-bit competitors organize and promote budget independent alternatives to their formal excursions. He explained that, for some cruise lines, shore excursions are not the main profit driver. People taking Caribbean cruises tend to lounge on the ship more. But people taking a Mediterranean cruise want to see and experience famous things on shore. The more they are able to do that on their own terms, the better. He acknowledged that, while excursions play a role in his profits, “for larger cruise lines, the real money is made between the steel” — that is, from purchases made by cruisers on board: eating, drinking, shopping, gambling, and so on. (I remembered how, even with my frugal approach to little extras on board, my tab was pretty substantial when that moment came to settle up at disembarkation.)

To make money, getting as many people as possible “between the steel” is top priority. He agreed with my hunch that the base cost of a cruise on large ship doesn’t have a lot of profit built in. Cruise lines manage prices so that all departures go full (offering deep discounts and creative incentives as necessary to fill the last staterooms). While discounting is big, marketers know that if you give cash back, customers pocket the cash. But if you give them a discount disguised as an “on-board credit,” they still bring and spend the same cash they would have without the credit: “No one takes a discount to the bank.”

Some cruise line sales departments are now morphing into “vacation-planning departments,” which sell not simply a cruise, but vacations that include a cruise. People generally extend a little before and after the cruise itself — especially in Europe.

I noted how, in my cruise experience, it was clear that marketing shaped the clientele, and the clientele shaped the experience on board. While some cruises specialize in an upper-crust ambience, others cast a wide net to attract a variety of socioeconomic backgrounds. He said that this approach can be tricky, as wealthier passengers can be uncomfortable mingling with people from a different socioeconomic class.

When I told him we were proud that more than half of our tour customers were return clients, he said, “Any niche company needs a 50 percent return clientele. It’s just too expensive to win first-time customers over and over, from a marketing point of view.” This explains the vigor with which cruise ships work to sell another cruise to people already on board — even before they finish the one they’re on.