On January 12th, 2017, in the presence of Bill Gibbons, Director of the British Discover Ferries organisation and Christian Totzeck, President of the German Ferry Association VFF, Pharos presented the key findings of a ferry travel marketing research conducted in late 2016 and early 2017.
The most successful companies excel in either :
– cost leadership, like Ryanair,
– product differentiation, like Color Line,
– or focus on just the one thing they’re best at, like Pharos, who focus just on B2B ferry distribution technology.
This focus has proven successful in countering the fundamental competitive forces:
The threat of new market entrants … industry rivalry… the threat of substitutes (low-cost air plus rental car is always a valid substitute to ferry) … the bargaining power of customers as well as of suppliers.
Every industry, including the ferry industry, is subject to global competition.
At any time for example a Chinese company could buy a small regional European ferry operator, provide it with brand new Chinese built vessels and pursue a pan-European marketing strategy.
For this reason a company with foresight will position their sales reach at global customers as well as regional.
Ferry operators segment their marketing by product and either sell those of their routes with global appeal to travellers around the world, for example routes connecting two exciting European capital cities.
Or they segment by market, when for example a ferry operator serving a network to the Aegean or the Northern Baltic region, sells their services right across Europe as well as to the local source market.
In both cases it is crucial for ferry operators to actually reach the travellers in the target markets – and that is usually far beyond the reach of any ferry operator website.
To ensure potential travellers around the world can find and book a ferry operator’s European services wherever they are looking for travel information and reservation is called Distribution. Only if the right product is sold through the right channel can customers buy.
To date B2C direct sales through a ferry operator’s own website is still a popular channel, but the limitations in reach are becoming more and more visible.
The foremost ferry operators have therefore started to treat three channels:
– direct to the consumer
– through a retailer network, especially in remote but huge and lucrative markets like China or North-America and
– through a Value-Added-Reseller like Pharos’ partner Hahn Air who can sell ferry to every travel agent in the world via all GDS (Global Distribution Systems). In this case the ferry operator only needs one contract with Hahn Air who ensure global distribution of foot-passenger services, such as mini-cruises.
To put markets in perspective, the global online travel sales market is worth $800 billion, but this is only a fraction of the total global travel sales market of $2.700 billion as quoted below by EUROMONITOR INTERNATIONAL .
Ferry operators that only sell via their own online channels accept that they have to spend a lot of money for excellent web design, conversion strategies and search engine optimisation and, while Google is the leading search engine in Europe, to reach Chinese and North-American travellers this effort needs to be replicated over other the search engines as well. And despite all these efforts the maximum they will ever reach is 25% of the total travel market – in China only 13% even consider using websites for travel bookings.
To maximise reach and grow sales volumes, ferry operators in 2017 must adopt all channels. They need to be available, sellable on B2B desktops like travel agency distribution systems, on B2C desktops, that’s the travellers’ own computer where they can find the ferry offering both through the search engine as well as on their preferred travel websites (Expedia, Lastminute, etc.), on mobile devices, where websites made only for desktop computers don’t convert. And now through personal voice assistants!
“Siri, how to I get to Sweden?” – “Echo, are there any short cruises in the Baltics?”
When the iPad first was introduced to the media most people said hardly anybody would ever use it. So don’t make this mistake now, don’t underestimate the huge potential of these personal voice assistants.
Already people can ask Amazon’s Echo “how can I take my camper van to Greece?”.
For an instant response Echo is not going to leave the Amazon empire, is not going to ask Alphabet’s Google search engine. This clearly is because only those suppliers who sell through the Amazon ecosystem will be considered. And this future has already started.
To tackle this future, this very near future
- focus on customers, use the right channels to reach each customer group.
- Win the ear of big data, just like Expedia is now doing with the Expedia+ loyalty scheme.
- Unlock the power of partnerships, use partners like Hahn Air to extend your sales reach to Japanese and Chinese travellers and gamblers.
- And master the entire customer experience.
Just a sales website isn’t going to do it.
So to summarise our research results, the three facts you need to know to grow ferry sales in 2017 :
Your own website can only reach 25% of your potential market
Selling through agents is not more expensive than optimising a website for all the search engines in Europe and around the world. Keep in mind the Greek traveller books via mobile (link); the Chinese book via WeChat (link). Let agents and value-added-resellers bring you global customers.
Closed ecosystems like Siri, Echo and others are on the rise. To avoid losing customers participate in these new ecosystems