Carnival Cruise Brand Effects – A Ripple Or A Tidal Wave?

Carnival FreedomBy now, most of us know about the cruise “mishaps” that befell Carnival and about eight thousand unhappy customers who had the misfortune of sailing on one of those ill-fated cruises during the last couple of months.

Carnival stepped up, offered refunds and discounts on future cruises. And they initially denied that there was or could be a systemic problem with their fleet of cruise ships. They promised to conduct a fleet-wide inspection to root out any issues that might include other ships that might have flaws that would make them “misfortunes in waiting.” The result was a dramatic announcement about a week ago that Carnival would spend about $700 million to address issues with its entire fleet. That amount represented about one half of their prior year’s earnings.

An article published in the online edition of the Miami Herald on April 17, 2013 talked about Carnival’s problems, and what they are doing to address them. It went on to say that some industry observers and a major cruise line industry association spoke well of Carnival’s actions to date and said that it evidenced Carnival’s commitment to make things right.

Senator Jay Rockefeller, a Senator from West Virginia had a view that was not complimentary, citing prior safety concerns that were not adequately addressed – until now. I was quoted in the article and stated that the situation raised a new question: “What systems and procedures did they not have in place to create a $700 million problem?”

But Carnival’s situation goes beyond systems and procedures. It talks to the issue of their culture. Make no mistake; operating a cruise line is vastly complex, high cost undertaking, requiring great skill and experience. There are thousands of elements and customer touch points dealing with safety and the quality of the cruise experience that can make or break a Brand and a company. Carnival is an industry leader, and a low price provider.

What Carnival’s customers expect them to deliver (their Brand) is an extraordinary experience of fun, adventure, romance – and flawless comfort and safety. Carnival must do all that while earning a decent profit and satisfying their shareholders.

It’s that flawless comfort and safety part that, in this latest series of incidents that calls into question how the Carnival culture has and will address that critical element of Brand strength and could very well impact their future. It’s the part that requires 100 per cent performance all the time. And I wonder if that’s a piece where people may have gotten complacent, perhaps taken some shortcuts, ignored some “minor” issues to save money, etc.

And it’s the part, going forward, that will either put Carnival on the path to regaining their Brand strength (the ripple) or cause some serious and costly long-term damage (the tidal wave).

The Lessons:

  1. Never, ever, ever forget what your customers expect you to deliver.
  2. Never take shortcuts that can or will ultimately derail your ability to deliver on your Brand promises.
  3. When bad stuff happens: get in front of the problem with your communications; be transparent about disclosing all the facts immediately; don’t just apologize for the event, apologize for your part in causing the event to occur; and fix it.
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