A resurgent cruise industry redefines the value proposition!
Originally Published – Packaging News Jun 9, 2022
PKN’s B2B advice columnist Paul Allen tells us why replicating the tiring of cruise ship value propositions won’t necessarily work for the packaging industry
Big passenger ships are back. Decks are being scrubbed, provisions are being loaded and a becalmed industry worth some $5bn annually to the Australian economy is preparing to once again set sail on the high seas.
As of June 2022, more than 14 cruise companies have announced dates for travel to, from and around Australia this year. Trip durations start at just three days and can extend well beyond three months. All it costs to walk up the plank is $350 and if you add two extra zeroes to that number, you’re guaranteed an experience that will make you never want to return to dry land.
And what about cabin choice? Well, if you read the carefully scaled Carnival Splendour brochure, you can choose from one of 13 different berth offerings on a cruise out of Sydney Harbour later this year. What’s more, each choice comes with an upgrade option, meaning there are 26 different deals on offer. Then there are the food and beverage categories, priority boarding, excursions, captain’s table event, and so on. It is a smorgasbord of choice that makes our traditional goodbetter-best offering look like an anaemic afterthought.
The hype and energy around this sector’s revival is unprecedented and a timely inspiration for all those in and around the packaging sector. Shipping is a capital-intensive business and operating at capacity, the essential profit driver. Sound familiar? Yes, says every packaging producer and associated supplier worth their salt. But replicating the tiering of the cruise ship value-propositions will not work. And here is why.
Cruise line companies dissect customer needs with exquisite precision. They understand the human yearning for status, priority, flexibility, repetition, reward, commitment… oh and price. The 26 different options for just one cruise are testament to that.
And yet, B2B businesses struggle to navigate this concept. Tied to a good-better-best or bronze-silver-gold service model, their range of options for customers is traditionally limited and often overshadowed by a fixation on price. But here’s the truth – packaging customers are not that different from cruise passengers. They know that what matters is how much they buy; how quickly they want it; how accurately they forecast; how promptly they pay; how long they keep you waiting to deliver; how regularly they purchase; and how exclusively they allocate their purchasing. They just don’t make a point of raising these non-price items. Which means you need to, or, you will end up providing them for free.
The bottom line remains give the customer what they want… on your terms (not theirs) and be sure to highlight in a glossy brochure or equivalent, all the other wonderful benefits you can provide (at a fee), that they claim they don’t want, just in case they change their mind, or run late, or forget their forecast. Happy sailing!
Packaging customers are not that different from cruise passengers… They just don’t make a point of raising these non-price items.”