Trying to maximize their marketing dollars amid a dramatically
changing distribution system, two niche cruise lines have quietly
eliminated or reduced their field sales staffs.
Seattle-based Cruise West has eliminated its five-person staff
of district sales managers and Lindblad Expeditions cut its field
sales staff by two-thirds. And while the major cruise lines say
they are keeping their sales reps on the streets, they too are
tweaking their sales structure to focus more attention on big
producers.
Cruise West President Jeff Krida said the decision to eliminate
the field sales reps last month does not indicate a lessening of
support for travel agents, who sell 92 percent of the company’s
product.
Cruise West had five sales reps; two were in the West, based in
Los Angeles and Phoenix.
“The funding to support those positions was redirected to
increase services to top-producing agents around the country in
terms of marketing support,” Krida said.
About half of Cruise West’s departures are sold through its
Small-Ship Partners 1,600 agents with training on the niche line’s
soft-adventure product and through affiliated consortia including
AAA, Virtuoso and LTG. The sales reps covered large territories,
visiting Cruise West supporters as well as agents who had no
interest in selling the niche product.
“We constantly found ourselves out there trying to convince
agents that it is wise for them to become a niche or small-ship
specialist and engage in proactive marketing to the right
customers,” Krida said.
“But in many cases, we are coming up against agents who prefer
to remain involved in selling mass-market product. It’s not a good
way for us to keep spending money.”
Krida said consumer advertising will be increased in hopes of
sending more new customers to the Small-Ship Partners.
Lindblad reduced its field-sales force from nine to three in
late March, said George Johns, vice president of sales and guest
services. Today, the sales force is composed of Johns and reps in
Seattle and Charlotte, N.C.
“We are definitely not eliminating our outreach to the retail
travel community but we are focusing it,” Johns said. “We need to
focus our sales resources toward our producing agents and on those
interested in being producing agents, and that is a very small
universe of travel agents.”
Cruise West and Lindblad both say they are eager to work with
new agents or those shifting their focus toward niche cruising.
More sales information will be added on upgraded company Web sites
and from increased inside sales and reservation staffs.
“We’re going to make it easier for agents to take the Small-Ship
Partner course,” Krida said. “We’re happy to see that list grow,
but we need to see some initiative on the agents’ part before we
invest in them.”
Some industry consultants see the logic in reducing field sales
staffs. “They’re not walking away from the distribution system;
they’re just addressing the 20 percent of the agents that give them
80 percent of their business,” said Larry Dessler of Dessler and
Associates, Seattle. “Rather than spread the money around to every
place, they try to target the people who will make the best use of
it. And it’s not a bad strategy.”
The major players such as Royal Caribbean Cruises Ltd. are
keeping their field forces, but changing sales efforts to meet the
demands of the shifting agency community.
Still, the basic sales structure is not that different from 25
or 30 years ago, said Rod McLeod, senior vice president of
travel-industry relations for RCCL. “On the other side of that
coin, there have been tremendous changes in the distribution
system. We’ve counted 13 different pipelines that make up the total
channel of distribution for cruises in North America, including
cruise-only agencies, chain-based, affiliated, tour operators, host
agencies, home-based.”
In addition, communication methods have also increased.
“There needs to be a better understanding of how to relate to
this new retail distribution landscape,” McLeod said. “We’re still
using our father’s Oldsmobile.”
For example, how does a Royal Caribbean International rep
communicate product updates to an agency that has 20 independent
counselors who might be scattered around the county or the
continent?
“It’s not like going in, bringing some bagels and doughnuts and
doing a morning seminar,” McLeod said. “It’s not as simple as it
used to be, calling at ABC Travel at the corner of Main and Elm
with two oak trees and a fire hydrant out front.”
RCCL has revised its sales structure to include key account
managers, who represent perhaps 20 agencies averaging $2 million a
year, McLeod said. That leaves the DSMs with something like 100 to
120 agencies in a territory. Agencies who sell less than $50,000
with an RCCL brand can get sales support from the inside-sales
representatives, McLeod said, or from the agency Web site
CruisingPower.com.
Reaction from agents about the changes, and the cuts at Cruise
West, were mixed. Kathy Hollister, a Small-Ship Partner who owns
Hollister Travel in Longmont, Colo., planned to ask her rep to
speak at a presentation for clients later this year.
“I don’t know who to turn to now,” she said.
Janice Ricker, a cruise specialist at All Horizons/A Cruise Loft
in Los Altos, Calif., has been a Cruise West specialist for about
five years.
“I feel a kind of a loss because my rep was always so helpful to
me,” she said. But Ricker was also philosophical about the change:
“They have always been very supportive of us and we have of them.
As long as we still have the support, we’ll be OK.”
Virtuoso, the powerhouse consortium of luxury-travel sellers,
said Cruise West remains a committed partner.
“Cruise West’s decision to reorganize its sales department must
have been a difficult choice to make, and I don’t see this as a
trend in the industry,” said Ann van Leeuwen, Virtuoso director of
supplier relations.
Virtuoso said its Cruise West sales so far in 2003 have
increased 18.4 percent over the same period last year.
Krida and Johns both vowed that the support will be there, but
it will more often be offered over the phone lines or Internet
instead of over a cup of coffee.
“Certainly that face-to-face contact is worthwhile, but it’s not
the only way to provide excellent customer service,” Johns said.
“We just produced an extraordinary DVD presentation of some of our
trips that will be an amazing sales tool. Our primary agency
partners can spend a half hour viewing this DVD and the training
would be better than anything a sales rep could do. Just the
doughnuts are not included.”
