Founded in 1848, Ipswich, Suffolk-based Fred. Olsen Cruise Lines has a reputation for relaxed and luxurious voyages aboard ships that are smaller and more intimate than the norm. With some extremely loyal customers, until recently the U.K. firm required little in the way of marketing to fill its cabins.

But increasing competition from the likes of P&O, Cunard and Carnival, and the launch of the company's larger Braemar ship in 2001 — adding 50% more capacity to the crowded cruise waters — has changed that. With another two ships in the water — Black Prince and Black Watch — the company is ramping up the intelligence of its targeting to maximize returns from both new prospects and existing customers.

“We want to place as many bookings as early as possible,” says marketing services manager Richard Adams. “A price message is the last resort. If they are buying solely on price, they are buying for the wrong reasons.”

Alongside press and trade journal advertising, direct marketing is used extensively for recruitment while direct mail is the mainstay of retention and other communications with previous customers. The company's customer database has been hosted and maintained by Broadsystem in London since 1999 and is accessed remotely by company staff in Suffolk. Updated monthly and held on a smartFOCUS platform, feeds come from Fred. Olsen's in-house reservation system, the 8,000 member Oceans membership club and e-mail response data. As well as customers, it also holds prospect data in the form of brochure requesters (piped from a third-party fulfillment house) as well as the cold lifestyle lists bought in annually.

If they are buying solely on price, they are buying for the wrong reasons.”

Alongside press and trade journal advertising, direct marketing is used extensively for recruitment while direct mail is the mainstay of retention and other communications with previous customers. The company's customer database has been hosted and maintained by Broadsystem in London since 1999 and is accessed remotely by company staff in Suffolk. Updated monthly and held on a SmartFocus platform, feeds come from Fred. Olsen's in-house reservation system, the 8,000-member Oceans membership club and e-mail response data. As well as customer information, it holds prospect data in the form of brochure requesters (piped from a third-party fulfillment house) as well as the cold lifestyle lists brought in annually.

Fred. Olsen typically targets older passengers and operates cruises to more than 200 ports year-round with itineraries running to the Mediterranean, the Baltic, Norway, the Canary Islands, the Caribbean and the Amazon.

Extensive profiling over the last three years has honed list selection. Targeting prospects through lifestyle variables related to interest in cruising works best for the company, along with customer lists from its 140 top U.K. travel agents and other sources, such as the Air Miles database.

“We know they're looking for holidays or indeed a cruise,” says Adams. “We can identify the type who responds to an early offer and purchase lookalikes. We buy based on our experience, age and lifestyle indicators, rather than socioeconomic indicators. Those who have done it before are far better than those who indicate an interest in the future.”

To help target communications appropriately, Fred. Olsen uses a segmentation based on classic recency, frequency and value scores, with the first two variables the most important. “We have a hard core of regular cruisers with a high ‘F’ score,” states Adams. “Yield per booking isn't quite so important at the moment.”

With four bandings for recency, three for value and three for frequency, the database is split into 36 different cells; movement among them is monitored by Broadsystem and reported on monthly to help evaluate marketing effectiveness. “If they go more frequently, earlier and book again, that is what we are trying to achieve,”he says.

Though this segmentation has worked well and indeed is basic by the standards of sectors like financial services, it is seen as too complex to be easily actionable. “We're looking to simplify the RFV model,” Adams says. “We feel that 36 is too many to have a pertinent strategy for each cell of that model.”

Mass-market advertising such as television, radio and print is tracked by media code on the database to monitor its effectiveness. This is not judged on straightforward response; brochure requesters are tracked to conversion and RFV score to accurately assess the value of each publication's readership using the true cost of acquisition. Broadsystem does the same for direct channels, pitting e-mail against direct mail, and again reports on this monthly.

The annual brochure campaign is the biggest initiative of the year. The most likely buyers receive a brochure directly while the rest get a card that they can return to request one. Oceans Club members are dealt with separately, receiving the brochure before everyone else to give them a head start on bookings, along with a personalized cover letter based on the individual's buying history.

This might mean emphasizing the limited number of cabins on board their favorite ship, a new destination or a themed cruise, such as an “Archers” cruise featuring cast members of the popular British soap opera. Holidays offering activities such as golf, bridge, dance, drama, wine and music also are extremely popular. Individual preferences for these are again logged on the database with a separate segment for members of the ArtsClub or the Flagship Golf program. “We need to combine these messages early on to drive an early booking,” says Adams.

Other activity takes place after the main brochure mailing goes out, making the most of the rich data held. Every week, prices are set for late offers. These depend on vacancy levels and the time remaining to start of the cruise, and are generally sold through travel agents and, increasingly, via e-mail. A mailing selection then is made depending on the type of cruise, ship and destination; previous interest in late bookings is logged on the database as well. “We're aiming to segment into groups to be contacted early or late for bookings,” says Morgan Goford, an account director with Broadsystem. “We import an interim file to suppress those who have booked since the last mailing.”

A current focus is to drive more business through travel agents. “We can identify the best travel agents in terms of the types of customers they bring in,” says Jane Stacey, account director at Broadsystem. “Then we can find lookalikes to contact.” This summer for the first time, by selecting on the basis of the Association of British Travel Agents code logged in the database, previous bookers who had bought through travel agents were mailed the brochure with a cover letter that used their particular agent's branding. “There's a better chance of success if it's from a tried and trusted travel agent,” notes Stacey.

Geographic analysis has helped pinpoint areas to target, while also indicating where coach pickups may be needed to deliver tourists to their ships on the South Coast. “We identified the Northwest and around Cardiff, [Wales], as hot spots that needed their own pickup,” adds Stacey. “We have also selected catchments around travel agents to target by direct mail. If they run a ‘cruise evening,’ then we can do a targeted mailing to publicize it.”

Possible attendees of exhibitions such as the London-based Destinations trade show are also selected by location and other criteria, and mailed or e-mailed free ticket offers, depending on their location. E-mail recipients click through to the offer page on the Web site where they can submit their details.

Though the average age on the database is 67, e-mail and the Web are becoming more and more important. “Every call to action we put out has the Web site address on it,” says Adams. Postal and e-mail contact details are captured on the site, from brochure requests and the reservation systems; currently 196,000 e-mail addresses are held, around 10% of the total number of customers on the database. “The older demographic is surprisingly Internet-savvy,” says Goford.

Inbound e-mail is handled in house with Broadsystem dealing with the outbound work. These days postal and e-mail communications are sent at the same time, with a definite lift seen over direct mail alone. An extensive program of e-mail follow-ups to brochure mailings is set to begin soon. Segmentation strategy is the same for both e-mail and direct mail.

The company runs two interactive TV campaigns a year, with data collection the main aim. Brochure requesters' names and addresses are logged as usual on the central database along with an interactive TV channel code. “This helps us to position ourselves in the right channel,” says trade marketing manager Philip Taylor. “We can now fulfill these requests immediately with an e-brochure if they give us their e-mail address.”

With the range of media now available, recording channel preference is essential; the customer's inbound choice governs which medium is used for outbound, at least initially. “If they come through the e-channel, fulfillment by e-mail will be the first choice but the postal option is always available,” says Taylor. In the future, customers will be able to update their own preferences, including contact channel, online. “We find some customers use the site but still want traditional postal communications.”

A new Web site (www.fredolsencruises.co.uk) went live in January. “We're not as integrated as we'd like to be at the moment,” says Taylor. To improve this, the new site works directly with an extract from the central customer database to allow segmentation codes and other preference data to be used to target returning customers with cookie-based personalized offers on the home page.

Though the company already keys in data from post-cruise questionnaires, another goal of the site is to gather additional personal attributes each time a customer visits and also to perform short research surveys. “The new site hopefully will give us a deeper understanding of why people are responding,” says Taylor.