Oh Bother…
You know…it’s Super Bowl Week. I had every intention of posting Super Bowl stuff all week because the industry has been very quiet as late. Does the industry not realize my intention for the week?
Sigh…I guess not. ;-P
So, you’ve probably heard by now, and may be a little puzzled over Norwegian Cruise Lines (NCL) and YTB Travel Network (YTB) who have ended their relationship. I actually knew this was coming, and may be able to shed some light on not only why this happened, but fill in how this industry works. I found out last week the day it happened and have already done some research concerning this crazy industry. I only remained silent to see if there would be any type of “news” on this subject. While I knew it would eventually come out into the open, there are others who claim to be well connected in the industry and I set a timer to see how soon any of them would catch on.
As it turns out, it took an actual trade publication to announce more than a week later what happened. There really isn’t much fanfare about it, with the exception of a couple of critics who can now pound their chest after a 15 month long battle producing a measly 4 suppliers who have decided that they no longer book with the industries #26th Largest Seller of Travel, which will evaporate all travel suppliers in the year 3025.
You may be asking yourself just why NCL would discontinue it’s relationship? And my response would be, good question!
If you look at some of the news that has come out of NCL lately, they are definitely shifting their focus. The same day I found out about YTB’s relationship, NCL announced an on-line checkin system for passengers, and the next day they announced they would double winter capacity out of New York City. Even yesterday, we found that NCL felt pretty proud of the new Mega Ship being built, but with all that pumping, they never released any news about it’s relationship with YTB, and as of this writing still have not commented on it. (Although I found comments in the trades interesting concerning these three links and announcements.)
There has been some shuffling of late at NCL at the top, with Kevin Sheehan being appointed CEO, and Andy Stuart appointed as executive vice president back in November. Elizabeth Finn also serves as the liaison between NCL and its online and Home Based travel partners as of December. Often, a new executive team likes to make changes, and this was more than likely one.
Another more important issue that I believe was the catalyst that set things in motion was the decrease in commission levels by 40% to YTB more than a year ago. While NCL elected not to renew it’s relationship, NCL’s 40% decrease could have been an attempt to attract attention and salvage something. Unfortunately, that’s not what YTB has come to expect from our preferred suppliers. Even with the reduced rate, either YTB or NCL could have come together to possibly salvage the relationship and promote their ships more aggressively like Carnival, MSC, and Disney has with YTB.
Instead, neither side did much of anything in an attempt to save the relationship, and it very quietly ended.
I can only speak of my personal preference as a business owner and Travel Agent when I tell you that if I had an opportunity to sell a cruise to a client, with the possibility of making 40% more in agent commission over another, who do you think I would promote?
If you’re thinking or being told that either dropping commission levels or upping commission thresholds are new or reserved for certain MLM’s, I can tell you for certain they are not. I reported here on this blog back in June how Royal Caribbean thanked their “dedicated agents” by upping their commission thresholds which caused a huge uproar in the industry.
As a matter of fact, (not the spin or fiction you read about elsewhere) Royal Caribbeans separation from YTB has not been all that beneficial for the cruise line. I don’t know if anyone else noticed, simply because so much attention is spent barking at YTB, but Royal Caribbean’s earnings call comes out today. Barkley released news yesterday and “estimates the company [RCL] would become precariously close to facing liquidity issues”. Hendrix, the financial analyst for Barkley’s also stated in another article that “Carnival must access the debt markets for $1.5 billion in 2009 and 2010, although she said the company is not likely to be constrained by its debt obligations. She said Royal Caribbean, on the other hand, must raise $4 billion in 2009 and 2010.”
That’s a hefty chuck of change, and may be part of the reason why Royal Caribbean continues to slash expenses, cutting their cruise capacity by 1/3 in Alaska.
And because of that news, Royal Caribbean stock fell some 13% yesterday in anticipation of the problems to come.
Suppliers terminate relationships from time to time for various reasons. I’ve written about Joystars issues in recent days and weeks. One of the big names we heard about was the Intercontinental Hotel Group (IHG) and the commissions that were stolen by a Joystar Agent. Just cause to terminate a relationship wouldn’t you agree?
But how many of you know that this same company (IHG) terminated it’s relationship with another company you may have heard of before? Back in 2004 IHG removed it’s inventory from the third largest seller of travel back in 2004. Why did IHG make a move like this? Because like YTB, the industry was crying and wanted to take back the industry. Expedia couldn’t provide the service, they wouldn’t last, and they’re not a “real travel agency”.
Where have you heard THAT before?
So what did Expedia do? They didn’t complain, they didn’t file any suits, they didn’t do anything but walk the walk and prove to IHG and the rest of the industry that they are the a real force in this changing industry. IHG did come to it’s senses and realized the huge market shift Expedia created in the industry. Just a couple years ago both kissed and made up and today IHG and Expedia have a multi year deal.
IHG and Expedia is just one example of how suppliers and agencies fall in and out of love. It happens to the best of them. What I suggest you do however, is model your response the same way Expedia did.
It’s really up to you how you want to respond to it. Me…I’ll just keep doing what I do, and that’s sell travel with literally hundreds of vendors and suppliers through YTB. If you need some help figuring out just who and how many, log into your Travel Portal and click the Agent Booking Resources to see for yourself.
I promise, it will put it all into perspective.
Now back to our regularly schedule Super Bowl XLIII programing. Go Steelers!
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Tags: NCL, Norwegian Cruise Lines, Royal Caribbean, YTB Travel Network
January 29th, 2009 at 2:49 pm
The above paragraph speaks volumes on customer service.
I would suggest the writer read what the word “agent” means.
The service of using a travel agent or any sales agent is to provide the customer with a product that fits the customer needs first. Meaning you work for me and fill my needs. I am the customer; my needs come first that is why I would use the service of a professional sales person.
The sales person’s job is to listen to my needs and provide a product that fills my needs and wants. You are the expert that is why I come to you. If I know you are directing me to a product that provides you the most income but may not fit my needs, I the customer begin to question if you are the best person to develop a business relationship with. If a salesperson’s intent is to dig the biggest hole in my pocket and not fullfill my needs I need to move to another agent or business or handle the transaction myself somewhere else.
Owning several businesses we use promotions all the time, but the customer knows going in this is a promotion so there may be additional incentive to the sales person. But, I can assure you if any of my sales personal were found guilty of looking out for their best interest over my customers they would be looking for employment elseware. Customers needs and wants are priority!
January 29th, 2009 at 3:29 pm
Spectator;
Good to see you again, and I don’t necessarily disagree with you.
My parents booked NCL when they went to Hawaii because they wanted to experience the Freestyle Cruising. While other lines offer dining choices, that was the draw for them.
Based on my experience, most “customers” provide several options and want me to find them the best deal. With the promotions offered by our Preferred Suppliers, I can meet or beat any offer NCL had in the past, which saves my customer money and at the same time providing a better bottom line to me as a business owner.
PS – Sorry about your Eagles, would have been a much more popular Super Bowl!
January 29th, 2009 at 6:05 pm
What if your customer is loyal to the NCL product and doesn’t want to change?
I too am very experienced both, as a customer and dealing with customers for many years
Maybe I am an oddity but I value a salesperson that has a well-rounded knowledge of all products especially a travel agent who has a great understanding for my needs and wants. I rarely purchase on price but do base my purchases on value for dollar.
As for my customers with my business, they rarely purchase on price alone, but then we are not a price-based company. Finding show that those who purchase on price are not a valuable customer, in fact they are costly to a business. We also agree with those findings. A good example of this is Circuit City a company that was a company price driven, they never really figured out what kind of company they wanted to be, service was definitely not at the top of there list.
In my one business, our sales people close sales on average 70-80% of the time. They do this by providing good customer service over price, but it does not end there. The sales person is only as good as my company backing them with additional customer service. My company has an obligation to my salespeople which then goes down the line to the suppler, trickle effect. Granted, there are times, when we are forced into a price battle, but when that happens we know going into negociations with the client the closure rate on the sale will drop to 30-40% and all of us work much harder. At that point, a decision is made to move forward or cut and run. Most of the time we cut and run and in the end they come back after working with the other company, but when they come back it is strictly on our terms.
Question: What other cruise line do you recommend other then NCL that cruises only the Hawaiian Islands for 7-days. I have done this cruise with my family twice now, once on the old Independence and then on the Pride of America.
No problem I am a fan but not that big of a fan of the Eagles, it would have been nice to see two PA teams. Saw on the news yesterday, in the Pittsburgh hospitals they are wrapping the new born in Steelers terrible towels, to funny.
January 29th, 2009 at 9:00 pm
If they hadn’t gone bankrupt, I’d swear you worked for “Tweeter”. I know that Circuit City story, and not only understand, but know that client all too well. We use to wager who would be back and who wouldn’t. (Circuit City and Best Buy were right across the street.)
I think the point you may be missing however is that they look to you to advise them on the best value for their money. You do that with features, advantages, and benefits. It’s really not much different as a Travel Agent. If someone is set on a Sony HDTV, you sell them a Sony. Just like if you want a 7 Day Hawaiian Island, you sell them NCL.
But what if their HI-Def receiver only has an HDMI connection, and they want a Sony? Do you sell them another receiver with the Sony that both use DVI connections, do you use component cables, or do you sell them another Hi-Def Television with HDMI?
It’s all how you qualify your clients.
By the way Hawaii has not been all the kind to us. My brother and sister-in-law got stuck out there during 9/11. My parents narrowly escaped the Norwalk Virus on the Wind in 2006, and a large group we book on a land tour last year was very labor intensive. (Although it went off without a hitch.)
January 30th, 2009 at 9:49 am
Your comments
I did not miss the point at all, that is why I posted to you to begin with, re-read my original post it was about the customer. The two paragraphs above are quite different then your first post. Your first post was all about lining your pocket as a sales person by moving the customer to a different product to increase your income.
Using your quote again:
I hope none of your customers or employees read this blog for you are indeed sending mixed singles to both.
On a side note since you where talking about TV’s and advising on best value for money. I can understand why people walk out of the chain stores; they do not know how to qualify the customers. When I wanted to purchase new High Definition TV’s I went to Circuit City, Best Buy, Costco and some others. Circuit City and Best Buy sales people never qualified me as a customer. All they told me about was features for gaming. If they had qualified me, they would have known I do not know how to do gaming on a TV and I think gaming is a big waste of time. Even though I looked at Costco, they did not get the business, as I did not want to lug the stuff home and install it. A local shop received all the business, there sales people qualified me first. The end result for there professionalism. A 50”-HD, a 42”-Plasma, a projection unit and Bose surround sound equipment. The projection unit they did not handle but did special order it for me, again matching need with client.
99% of the time price is not the determining factor on any purchase. If it where everyone would be driving the same cheap car.
January 30th, 2009 at 9:52 am
For some reason your blog omits things written at times.
This was to be included in using your quote again.
January 30th, 2009 at 9:53 am
I can only speak of my personal preference as a business owner and Travel Agent when I tell you that if I had an opportunity to sell a cruise to a client, with the possibility of making 40% more in agent commission over another, who do you think I would promote?
January 30th, 2009 at 2:14 pm
Spectator,
Re-read the above comment and understand the difference between “sales” and “promotion”.
I’m not asking who you should “sell”, I’m asking for a choice of who you would “promote” as a business owner. And there is a big difference; that’s why they combine the two with the word “and” in the middle. It’s not just “sales”, it’s not just “promotion”, it’s “sales AND promotion”.
Take a look at this post. Is that sales? Or is that promotion?
Take a look at this post. Is THAT sales or promotion?
Understand the difference?
When you’re a business owner, you have to make choices of who you’re going to “promote” not just sell. You can only make a sale if people actually know you have a product to offer via “promotion”. And yes, you need to consider margins and commission percentages when promoting a product to make a living.
Since NCL only offered 10% commission, you don’t find any posts or “promotions” here on this blog. But you will find plenty promotions for Carnival, a product I not only like, but make more commission for promoting.
Again, it’s not that I disagree with you about your sales technique. It’s very good and exactly what I would do. But you need to promote in order to have the opportunity to sell something.
January 30th, 2009 at 5:01 pm
I’m getting very confused with your logic especially when you use the term agent. Why would anyone use the title “agent” if your priority is not in the clients best interest? Agents work on behalf of a client.
It seems like your taking a salesperson role and weaving it into the description of an agent role without understanding the role of an agent.
January 30th, 2009 at 11:05 pm
You simply don’t understand the difference between “promotion” and “sales” as an Agent.
It would be impossible for me to even have clients to sell or service as an Agent, without first promoting a product to attract a client. You have skipped that step, which is what I was alluding to in the quote about choosing a product to promote. You have moved right into the sales role as an Agent as if you magically appeared without first knowing I exist.
Since you are currently at that step, I will state once again that I agree with you concerning what an “Agent” should do in the sales process.
January 31st, 2009 at 8:35 am
Unfortunately, I do not think you understand your role as an Agent to the customer. Actually, I should rephrase that to say client. You are missing the Agent/Client relationship completely. I do agree promotion is a very important part of any business but you are skipping right over the title you placed on yourself that being the role of an Agent for the client.
I think we are back to square one; you look at it as a sale without qualifying. Once the sale is completed, and your pocket is lined with that higher commission when you swayed the customer to a specific product vrs what they really wanted and you think all things are fine. However, are they really? If you pushed, the customer into a product there not happy with for self gain you not only lost the customer but you begin to develop an unfavorable reputation.
Developing a relationship with a customer is much more valuable then once and done. Always, remember someone else can always sell a widget cheaper then another if person is price driven.
January 31st, 2009 at 10:17 am
I disagree; “square one” Spectator is promoting a product to actually draw in a client. Without a client sitting in front of you to qualify, the entire client/agent relationship, service, and support is moot.
Once you actually have a client to sell too however, I have stated over and over that I do agree with you about how an Agent needs to service a client, and how important the client/agent relationship is during the sales process.
Tell you what…think of a product, learn all the in’s and out’s, know everything there is to know about it. Become an expert in it’s features, advantages, and benefits.
But here’s the catch. You can’t tell a single solitary sole about the product or service you have.
See how many “clients” you get. ;-p
This my friend is the biggest problem most Network Marketers have when it comes to failing in any MLM. They simply sit on the duffs and hope someone stumbles upon them to make so they can make a sale. They think people should be able to walk up to them and say “You just started a Travel Agency didn’t you?”
January 31st, 2009 at 12:32 pm
You see, I completely disagree and you being in the mlm business model should too. In fact you sell yourself daily to your mlm partners, this is what your blog is trying to do. You could be making $10.00 a year in the mlm program or you could be making thousands. The key is no one really knows for sure reading the blog all they ever see is what is written and the lure to wealth and riches. They never actually see the wealth if any.
What is the first and foremost lure into any mlm program?
The lure and promises of riches, that is the sales technic it is never about the product, they sell themselves first. They promote the product secondary. You understand this being in the mlm model. It is all about success as the lure which hooks a fine catch. The product comes secondary it doesn’t matter if the product is good or not once you are hooked your in for a time. In fact many don’t even know what the prduct is going into a mlm presentation.
Any “agent” be it travel, talent, business agent, always sell themselves first unless they have no interest in developing a relationship with the client. I’m completely suprissed you don’t understand this being in the mlm business. You are selling yourself daily to keep your downline interested.
In fact I’ve noticed from reading your blog every now and then you make purchases yourself this way. People are selling themselves to you all the time. All you need to do is recap your list of favorite readings. Everyone of those self-help books to riches/success are people selling there wealth as the lure for you to make a purchase from them.
I can’t beleive you missed this and beleive you need a product to sell yourself.
January 31st, 2009 at 3:33 pm
Not missed at all spectator, and please don’t assume about me.
If you are selling yourself, what are you doing?
Promoting. ;-P
February 1st, 2009 at 12:58 pm
Well Duhhh
, you’re the one who said you need a product to sell not me.
(and please don’t assume about me.) – You have made quite a few assumptions about me just re-read your posts. Not that I care just making a point.
Good luck today – Hope they have a great day in Tampa!
February 1st, 2009 at 2:26 pm
Spectator,
Can I suggest either dictionary.com or possibly a hard or soft cover of Websters?
The word “promote” turned into “sell”…
Now the word “opportunity” turns into “need” and you’re still stuck on the word “sell”.
Maybe if you understood the English language better, you could understand my logic?
Just a thought.
February 2nd, 2009 at 10:07 am
No reason to comment anymore when you start stuff like this.
February 2nd, 2009 at 7:52 pm
And what have we learned here? You can dish it out, but certainly can’t take it.
If you want respect, you first need to give it Spectator.
You see here, I hold commenter’s responsible for what they write, and many don’t like that. My words and comments are all too often twisted and misrepresented on the internet and there’s not much I care to do about that. But here, you will be held accountable.
It is my blog.
If you have any further questions about what is required here please refer to the Rules Section posted here.
February 3rd, 2009 at 8:00 am
Yea LOL,
What did we learn, hummm sounds like a father talking to a son.
- Do as I say, not as I do. I’m glad for you that you know everything there is about everything, that must be a powerful place to be.
One thing though. You can never stay on topic and then become upset as the discussion goes on after all your twists and turns.
But as you say, thanks for sharing
February 3rd, 2009 at 3:21 pm
Sigh…
So much for not having a reason to comment any longer, but here you are again Spectator, with yet another attempt to tell me that I’m wrong and you’re right.
Here’s the quote again for your reference.
“I can only speak of my personal preference as a business owner and Travel Agent when I tell you that if I had an opportunity to sell a cruise to a client, with the possibility of making 40% more in agent commission over another, who do you think I would promote?”
So now you’ve replaced “I can only speak of my own personal preference” with “I know it all”??
You replaced the word “promote” with the word “sales”?
You replaced the word “opportunity” with the word “need”?
If you have to change words in a quote in order to make it mean what YOU want it to mean then maybe, just maybe, the reader not the author is the one who has fallen short in it’s definition.
Yet when the twisting, turning, and spinning is pointed out, you feel like a child.
You just couldn’t leave it alone…could you?
June 11th, 2010 at 7:07 am
[...] everyone understands “business” however, and I went round and round in the comments section of this post with a commenter who just couldn’t grasp that concept because it’s MLM, not traditional [...]