Couples without children generally take longer cruises. // © 2013 Royal Caribbean International
Baby boomers, with their numbers, disposable income and inclination to travel, have long been the backbone of the cruise business, but younger cruisers are now stepping forward and represent a huge opportunity for travel agents who understand them. According to New York University’s Stern School of Business professor, Scott Galloway, Generation Y’s numbers now exceed those of boomers’, and the group is poised to take their place as the generation with the most spending power.
Exact definitions of the major American demographic groups vary, as do their numbers but, generally, the boomers are considered post-World War II (born 1946-1964) and there are around 78 million; Gen X (approximately 1965-1981) has been placed at approximately 40-plus million people; and Gen Y or Millennials (born 1982-1998) are estimated to be close to 80 million.
Researchers agree that the Internet is an important key for reaching both younger groups, though they use it very differently. While Gen X is information-oriented and needs a transparent and authentic approach by agents and suppliers, Gen Y is most inclined to use the Internet for blogging and social networking.
Gen X characteristically does a tremendous amount of independent research and is skeptical of salesmanship. Latchkey kids growing up in the 1970s and ’80s, Gen X was the first group to be deeply impacted by divorce, and it is also the most technologically inclined of the three groups, having seen the introduction of the home computer, the Internet, cable and satellite television and video games. All of these factors shaped an independent and resourceful set of consumers. A Forrester Research study, “The State of Consumers and Technology: Benchmark 2011,” indicated that 95 percent of Gen X owns mobile phones and 11 percent own tablet computers, and the group relies heavily on technology when making buying decisions.
In spite of this, direct mail, in combination with online marketing, is one of the most powerful ways to market to Gen X. According to a recent study conducted by InnoMedia, NuStats and Vertis, 86 percent of Gen Xers bring in the mail the day it’s delivered. Furthermore, 68 percent of Gen X retail direct mail readers have used coupons received in the mail, regarding 75 percent of received mail as valuable.
This group reached its highest earning potential during the recession and value is particularly important to them; even those with annual incomes of $150,000-plus are often in industries that have experienced layoffs and uncertain income growth. As cautious spenders, they are more apt to boast about what they have saved rather than what they have spent, and they communicate about where to find great deals.
Although Gen Xers can be hard to secure as clients, the effort is worthwhile, according to demographics expert Cam Marston, founder and president of Alabama-based Generational Insight.
“They’re the most loyal of all the generations,” said Marston. “It’s an extraordinary amount of work but, once you get them, they tend to stick around for a good period of time.”
Marston offers tips for attracting Gen Xers as clients.
“The more you shout about it,” he said, “and the more glitz, glamour and lights, etc., the more they’re skeptical of it.”
He urges the use of plain language to describe the services you provide and being very clear and direct about how you’ll meet their needs.
“Expect them to compare your products and services to others in the marketplace,” Marston said. “Show them what sets you apart from your competitors.”
He added that Gen Xers will use the available technology to double-check what you tell them, but you can impress them by giving them valid online resources. Finally, he suggests that agents include testimonials from past customers about value and strengthen their presence on websites such as Angie’s List or Yelp.
“Personalize any mailings with the recipient’s name — they want to believe that you’re specifically addressing them,” said Marston. “In your advertising, use pictures of families and children and emphasize the benefits of your services and products for the family.”
In fact, family may be more of a consumer differentiation than age, according to Carolyn Orff, assistant manager of Dugan’s Travels in Littleton, Colo.
“The important thing is not so much age, as whether they have families or not,” she said. “Without kids, they usually take longer cruises, multiple European vacations. With families, airlift is a very important factor — they don’t want to spend a day each way getting to and from the cruise.”
Nitsa Lewis, vice president of marketing for Crystal Cruises, also believes that straight demographics are not the deciding factor in vacation choices. She sees psychographics as more important. She said Crystal does an extensive modeling exercise about guest preferences and points out that many younger guests were introduced to Crystal while traveling with their families. Even World Cruise passengers are currently bringing children onboard and having traveled with Crystal, these youngsters are poised to cash in their loyalty points, which accrue at any age, when they are old enough to book their own cruises.
In fact, most cruise lines have carryover in their loyalty programs, either offering points to all cruisers, regardless of age or, in Royal Caribbean International’s [RCI] case, children enrolled in the loyalty program automatically attain their parent’s membership level. This presents a wonderful opportunity for the agent, who can combine birthday congratulations on adulthood with a reminder of what privileges clients have and what they mean along with an offer of assistance.
While Gen X consumers make their choices based on research, Gen Y is much more dependent on the opinions of their relatives and peers. Nelson Barber, associate professor of hospitality management at New Hampshire University, compared the buying habits of generations X and Y.
“For Generation X, marketing strategy should focus on providing product-related information that is verbally and visually rich and highly informative,” said Barber. “However, Generation Y looks to parents and peers for guidance and can be attracted through peer interaction.”
For millennials, websites should be optimized with social networking, blogs and live chat customer service.
Gen Y is racially and ethnically diverse with a third of its members either African-American or Hispanic. And they were taught by their boomer parents to be socially conscious; in polls, more than 90 percent of them support companies that contribute to good causes, and they demand custom products.
One millennial, quoted in Retail Customer Experience, captured Gen Y’s sentiments best: “I can tell you this: My attention is short, my demands are great and my purchases are diverse. I live in a day and age where social media apps, slogan tees and even Nike sneakers can be customized to fit my lifestyle.”
For agents working with this group, Vicki Freed, RCI’s senior vice president of sales, trade support and service, urges travel agents to be particularly careful when gathering information. She said that asking questions first is vital.
“Don’t just give them a snap solution; find out where they have thought of going and what matters to them,” said Freed. “Agents are not salespeople — the agent role is to help people make good buying decisions.”
She added that agents must articulate their value through social media and blogs where they demonstrate their expertise and willingness to work individually.
“Every agent should have a Facebook page,” she said. “Don’t talk about the lowest price, but about the best value. And make sure they understand that you can make the experience easy and save them time.”
Joni Rein, vice president of worldwide sales for Carnival Cruise Lines, agreed that both Gen X and Y are intensely focused on value, and educating them about the value of a cruise vacation versus a land vacation is very important. She also advises agents to be very clear about loyalty program benefits.
“We’ve become a nation of collectors — frequent flyer miles, bank perks, etc. — and these benefits matter,” said Rein. “It is also very important to speak in the client’s preferred method of communication. Fewer and fewer households have land lines — we’re used to calling and emailing, and younger cruisers text.”
Rein stressed the features cruise lines have brought onboard that are already a part of younger cruisers’ experience, such as Carnival’s Guy Fieri dining and George Lopez entertainment. Other companies also believe that younger cruisers respond well to name brands when onboard.
Camille Olivere, senior vice president, sales, Americas for Norwegian Cruise Line, pointed to the branded entertainment onboard Norwegian ships, from Second City to Blue Man. She added that, with less vacation time, the younger cruiser wants to pack as much as possible into the vacation, and having major entertainment onboard as well as port-rich itineraries gives them what they want. In Hawaii, she said agents should be sure to
emphasize overnights that allow guests to really get into the interior, while sampling several islands.
Dondra Ritzenthaler, senior vice president of sales for Celebrity Cruises, says the line is finding more young entrepreneurs arranging corporate and incentive cruises.
“They feel a relationship with the products that they regard as part of their lives, such as Celebrity’s extensive Apple connection,” she said. “It shows them that the cruise line values the same things they do.”
For travel agents who can extend this message of value to their younger clients, there is an even larger generation of clients waiting.