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itsmeagain

Reference points by Michael Bayley

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Here is part of an story from business insider, talks about Royals pre cruise thoughts on getting the add-one:

 

Michael Bayley, the CEO of Royal Caribbean International, uses reference points to increase how much money customers spend on the company's cruises by emphasizing pre-trip purchases. The idea is that spending $100 on a drink package, for example, will seem less expensive if you by it alongside a $1,500 cruise ticket.

If your reference point for what that cruise should cost is $1,800, then buying the drink package to make your total pre-cruise expense $1,600 still feels like a deal. And once you're on the cruise, you're less likely to consider the cost of the drink package when buying other items, meaning you're likely to spend more overall.

"What we found is if you spend $100 before you sail, that's spent and gone - you don't even put it in your budget for when you're on vacation," Bayley told Business Insider during a 2018 interview. "So every pre-cruise revenue dollar that we generate will often generate 50% more onboard revenue for that customer."

The strategy worked, and it was one of the reasons Royal Caribbean doubled earnings in the three years after Bayley became CEO at the end of 2014.

 

 

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Just use crazy math and put on endless sales where the end price is always the same or more.

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Except that does not work when you have an $1100 cruise (taxes and fees included) and the drink package for 2 with VOOM is over $1200. 

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I wonder if RCL will go the way of NCL and just start adding the cost of a drink package into the cruise fair.

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What? You don't want the CEO of your company that you hold stock in not finding creative ways to increase the value of your company?

 

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4 hours ago, Drock20J said:

I wonder if RCL will go the way of NCL and just start adding the cost of a drink package into the cruise fair.

 

Sure if they think it will increase their profit.

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