Carnival Cruise Lines: Increasing Sales Team Efficiency Through Lead Scoring and IVR

Table of Contents Introduction 3 SWOT Analysis 4 Lead Scoring 7 Interactive Voice Response 8 Conclusion 9 References 11

Introduction

Carnival Corporation & PLC is the world’s largest cruise ship operator, comprised of 100 cruise ships representing 10 cruise lines. The combined companies serve approximately 10 million guests per year, with sailings from ports in North America, Europe and Australia. The largest brand under the Carnival Corporation & PLC umbrella is Carnival. Headquartered in Miami, Florida, U.S.A., CCL operates 24 cruise ships and is responsible for approximately 56% of the company’s annual revenue (Carnival Corporation, 2012).
Carnival Cruise Lines (Carnival) is a subsidiary of Carnival Corporation & PLC. As is the case for the cruise industry as a whole, Carnival’s bookings rely heavily upon the work of independent travel agents and agencies. The other major sources of bookings are Carnival’s team of telephone-based Personal Vacation Planners (PVPs), as well as Carnival’s website. Due to the worldwide financial crisis, increased competition within the cruise industry, and the sinking of the Costa Concordia cruise ship in January of 2012, Carnival has faced challenges in maintaining its annual revenue and sales. Since 2008, Carnival has gradually decreased its staff of PVPs, having 500 in 2008 but only 200 today (Garcia). The PVPs had previously been viewed as the future of the cruise industry, prompting Carnival’s top competitor, Royal Caribbean Cruise Lines, to create its own staff to mirror the work of Carnival’s PVPs. The value of the PVPs lies in the efficiency that having an in-house sales team affords the company. Carnival can reestablish the efficacy and value of the PVP team by improving its technological tools. This case will detail the strengths, weaknesses, opportunities, and threats of Carnival’s PVP team, as well as the benefits of implementing lead scoring and interactive voice response (IVR) technology into its PVP call center.

SWOT Analysis

The strengths of Carnival’s PVP team are the knowledge of the Carnival product that the PVPs have, the consumer good will fostered by the PVPs, and the relatively low commissions that the PVPs receive when compared to that of the travel agents and agencies.
Cruise vacations appeal most to travelers who prefer an all-inclusive experience. This preference lends itself well to the success of the PVP team. As demonstrated in the graph below, today’s fickle and demanding consumers are increasingly aware of the value that cruise vacations provide, when compared to other travel options (Merrihew, 2010).
(Merrihew, 2010)
(Merrihew, 2010)

The PVPs are trained in every aspect of advising a guest about a cruise vacation, with an exclusive emphasis on Carnival cruises. While travel agents may have extensive experience booking Carnival cruises, they usually book cruises for every line, so they would not have the same information access and breadth of knowledge on the Carnival product as would a Carnival PVP.
Further, PVPs are dedicated to their respective clients. If a traveler books a cruise through a PVP this year and calls again years later, that traveler would be routed to the same PVP who originally assisted them. Assigning one dedicated PVP per customer fosters a valuable customer relationship and encourages a high level of service from the PVP. The PVPs periodically send emails, holiday cards, and birthday cards to their past guests, which establishes the guest/PVP relationship and promotes consumer loyalty.
Another strength of the PVP team is ability to book cruises for guests while receiving as little as half of the commission paid to travel agencies. The relatively low commission structure is justified by the provision of advertising and leads to the PVPs from Carnival. Bookings through PVPs end up being much more cost effective for Carnival than those booked through travel agents.
The PVP team at Carnival also has weaknesses, when compared to the offerings of travel agents and internet bookings. The weaknesses of the PVP team are its fixed expense, its perceived lack of offering variety, and the perception that the PVPs are aggressive telemarketers.
The PVP team costs Carnival money, regardless of whether or not they generate bookings and regardless of whether or not the economy is in decline. Since its inception and until 2008, the PVP team was based out of a satellite office in Miramar, Florida (Garcia). Running this office required housing a management team, information technology, and advanced telephony. As the economy receded, bookings declined (Tunney, 2012) for travel agents and travel websites. While the travel agents and websites simply garnered fewer bookings for Carnival, with no additional expense, the PVP team continued to incur a fixed cost for the company. Carnival responded to the decrease in bookings by downsizing the PVP group and, like the airlines, adding fees to the base price of its offerings (Snider, 2012).
The PVPs also are subject to the consumer perception that their offering is limited in comparison to travel agencies and websites. Both travel agencies and websites offer consumers the option to book cruises or other vacations with different carriers. The PVPs have the often daunting task of convincing a potential guest that their offerings are the best available, without the benefit of substantiating this claim with a comparison.
Finally, the PVPs conduct all of their sales activity on the telephone. Many consumers have a negative perception of telemarketers and, when they receive a call from a PVP, they consider the call telemarketing. The PVPs are forced to overcome objections to telemarketing by establishing the justification for calling, such as the customer’s status as a past guest or, in some cases, by responding to a marketing piece that some guests have filled out.
Carnival’s PVP team has numerous opportunities for increased bookings and growth. Today’s consumers are well-informed and less loyal to any particular sales channel. While the propensity of consumers to switch channels has hurt the PVP team in the past, the PVPs can now use it as an advantage to acquire some of the market share currently enjoyed by travel agencies and websites. Carnival can take advantage of the extensive customer data that the company keeps and utilize data analysis tools such as lead scoring and predictive models to efficiently identify superior leads. Also, as the PVP department already has an advanced telephony platform, Carnival can implement an integrated voice response (IVR) campaign to handle inbound or outbound calls, which would help to sift out leads that are unlikely to make a purchase.
The threats that the PVPs face are the same threats that it has struggled with for the past several years. These threats include the weakening of the travel market as a result of worldwide economic decline, as well as increased competition within the travel industry. Travel destinations like Orlando and Las Vegas continue to expand their offerings and enhance their marketing activities. These destinations provide formidable competition in an ever-softening travel market.
Lead Scoring

Lead scoring is the process of analyzing consumer demographic and psychographic data and scoring each lead based upon the likelihood that the lead will make a purchase (Schnabel, 2008). Metrics that would likely factor into a lead scoring algorithm include, as follows: * Completion of contact request form on Carnival website * Previous purchase(s) * Abandoned website booking * Median income of zip code * Proximity of address to cruise port
At Carnival, the PVPs each manage a database of approximately several thousand leads. These leads are currently queued for outreach based solely upon a request for contact, the time since the last contact was attempted, or at the discretion of the PVPs. This method lends itself to inefficiency, as PVPs to evaluate the relative viability of thousands of leads with accuracy.
The lead scoring mechanism can consider many more factors than the PVPs and populate outreach queues with leads that are likely to make a purchase immediately. This gained efficiency will serve to not only increase sales to likely consumers, but also to avoid the neglect of leads who would not seem likely to purchase based upon extemporaneous and superficial human reasoning (Schnabel, 2008). The lead scoring system can be continually enhanced by analyzing the relevant metrics of the leads who actually book to determine if they were in fact the highest scored leads. This analysis will result in the adjustment of scoring metrics to improve the predictive model (Schnabel, 2008).
Interactive Voice Response Interactive Voice Response (IVR) technology is a telephonic tool used to handle the inbound and/or outbound calls of a call center by enabling the customer to self-serve until the point where they require or desire the assistance of a live agent. IVR systems are particularly effective in minimizing the total staffing and abandonment costs of a call center, which is an established need within Carnival’s PVP department (Tezcan & Bezhad, 2011).
A well-designed IVR system can provide valuable service to previous, current, and potential guests, such as providing automated information on cruises, sales, and even more innocuous information such as weather and sea conditions. Superior IVR systems can adapt to individual consumers and be viewed as a service and a tool with which they can help themselves (Tezcan & Bezhad, 2011). Carnival can strategically determine which moment during the IVR call when it would be most advantageous to transfer the call to a live agent. While this decision is delicate, when it is perfected, the PVPs will receive inbound call transfers connecting them to leads who are ready to make a booking. The key to having an effective IVR system is consistently reviewing and enhancing it (Dimension Data, 2012).
Outbound IVR campaigns can be more difficult, as consumers tend to dislike automated telemarketing. Carnival can avoid this perception by utilizing the IVR technology only for past guests or website users who opt-in. For example, the IVR system can provide a quick courtesy call to advise past guests of available past guest discounts. Another strategy that Carnival can implement is to desensitize guests with current bookings to the IVR system by providing them with updates and reminders about their current booking. An example of this would be a reminder of a final payment coming due for a cruise when the guest paid only a deposit at the time of booking.
Since the acquisition of new customers is much more costly than selling to previous customers, initiating a strategic IVR campaign for past guests and establishing a comfort level with Carnival’s IVR system amongst the past guests could foster a loyal consumer relationship that is fairly easy and inexpensive to manage.
Conclusion

The Carnival PVP team does struggle to overcome book cruises, despite the weakness in the economy and increasing competition. Nevertheless, the benefits of selling cruises through an internal channel makes it worthwhile to implement systematic enhancements. By establishing a lead scoring mechanism, the leads queued for PVP outreach can be optimized to dramatically increase the efficiency of the PVP department. As time considerations can be factored into the lead scoring, the telephony system can distinguish between leads that are likely to book a cruise immediately and leads that are likely to book a cruise at some time in the future, without completely neglecting to work a viable lead. Also, an IVR system can help to queue leads that are actively pursuing booking information, compensating for the decrease in the number of PVPs available.

(Swyzzle, 2010)

The graphic above illustrates the flow of a lead from prospect to sale. Lead scoring, integrated with an IVR system, can qualify a sales lead and establish the opportunity, allowing the PVPs to efficiently and effectively concentrate solely on closing the sale.
With these tools in place, Carnival can rebuild its PVP team to be more efficient and effective and allow it to once again dominate the internal sales market of the cruise industry.

References

Brooks, C. (2012). The best way to book a Carnival cruise. USA Today. Retrieved from http://traveltips.usatoday.com/way-book-carnival-cruise-37761.html
Carnival Corporation & PLC. (2012). Carnival Corporation & PLC. 2011 Annual Report. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=140690&p=irol-index
Dimension Data South Africa. (2012). Self-service in need of some self-help: Organisations starting to track performance against the ‘voice of the customer’ [Press release]. Retrieved from http://www.itweb.co.za/index.php?option=com_content&view=article&id=59707:Self-service-in-need-of-some-self-help&catid=69
Garcia, Nancy. Owner of Cruise Planners Miami. Personal interview. 24 Nov. 2012.
Gershik, Steve. (April, 2006). How to get started with lead scoring. In The Innovative Marketer: Thoughts from a marketing practitioner and demand generation expert [Web Log post]. Retrieved from http://theinnovativemarketer.blogs.com/ideas/2006/04/how_to_get_star.html
Merrihew, Lincoln. Consumer perceptions of travel value not promising. (2010, June 18).
Complete Post. [Web log post]. Retrieved from http://blog.compete.com/2010/06/18/consumer-perceptions-of-travel-value-not-promising/

Schnabel, W. (April, 2008). Lead scoring by the numbers. Direct Marketing News. Retrieved from http://www.dmnews.com/lead-scoring-by-the-numbers/article/108820/Snider, Susannah. (November 5, 2012). New fees on cruises. Nasdaq. Retrieved from http://community.nasdaq.com/News/2012-11/new-fees-on-cruises.aspx?storyid=187048#.ULlqfobnH9U
Swyzzle, LLC. (2010) Retrieved from http://www.swyzzle.com/multimedia-marketing-platform/lead-scoring/
Tezcan, T., & Bezhad, B. (2011). Robust design and control of call centers with flexible IVR systems. Retrieved from http://tolgatezcan.simon.rochester.edu/IVRpaper.pdf
Tunney, Donna. (November 5, 2012). NACTA survey finds independents thriving. In Travel Agent Issues. Retrieved from http://www.travelweekly.com/Travel-News/Travel-Agent-Issues/Nacta-survey-finds-independents-thriving/