Saga prepares to grow younger

Largely seen as a purveyor of sedate services for the elderly, Saga has revamped its comms strategy in a bid to offer its holidaymakers ‘more than just a view’. Hannah Marriott assesses the group’s image challenge

Saga has changed a lot since its inception in 1948. Back then it had one hotel and operated as the Old People's Travel Bureau. Now Britain's fifth-biggest tour operator publishes a magazine, runs three local radio stations and offers a range of financial services – turning over £383m in the process.

Its business is lucrative, not least because the over-50s now hold 80 per cent of the nation's disposable income. And the grey pound is becoming ever more profitable, with FutureBrand research suggesting that 50,000 more people a month join the 45-60 age bracket.

But for some potential customers, an invitation to sign up to a Saga product is still seen as a dreaded signal that old age has arrived. Last week, in order to tackle this perception problem, Saga took on Brighter PR. Its brief is to reposition flagship travel arm Saga Holidays to attract an increasingly adventurous clientele (PRWeek, 24 March).

Financial muscle
The problem is less keenly felt in Saga's financial services division – whereas the average holidaymaker is over 60, finance customers tend to be in their 50s. Financial Times personal finance writer Isabel Berwick says: 'People buy financial services based on price, and would be much less affected by any possible stigma. Lots of "silver surfers" search the internet for insurance quotes, for example, and will simply go with the best quote.'

According to Lansons MD Ian Williams, people also choose Saga
financial services for practical reasons: 'It's extremely difficult for older customers to find [low-cost] travel or car insurance, for example, but Saga does not have an upper age range.'

In fact, while holidays are where Saga's business started – and are the most visible expression of its brand – group head of comms Paul Green estimates that financial services make up 80 per cent of its revenues.

Given the increasingly aspirational quality of holidays, they are becoming a bigger challenge to sell. Today's increasingly healthy and image-conscious 50-somethings are the baby-boomers who, Green says, 'had their formative years in the 1960s and still have the same attitudes in life'. Many of these would shudder at the thought
of sharing a resort with the elderly, an image that might dominate their preconceptions about a Saga holiday.

The company is addressing the stigma head on. Last month, for example, Saga launched a range of volunteering holidays for people who want to 'give something back'. And with the recent launch of its travel website, it is reaching out to the youngest end of its customer base, because – as identified by Mintel in October 2004 – 65 per cent of 45 to 54-year-olds are online, compared with 51 per cent of those aged 55-64.

Much of Saga's success is down to smart database management – once a customer buys one product, he or she can be more easily marketed to for other products. Holidays are crucial to creating a feel-good factor – which leads not only to buying more Saga products, but also to word-of-mouth recommendation. However, Saga is not alone in attempting to win over the 50-somethings. The firm's competitors include Page & Moy, Travelsphere, Kuoni and British Airways Holidays.

Changing perceptions
Weber Shandwick, which held the Saga account for eight years, launched an over-50s division last December. Consumer MD Sally Ward argues that unlike the youth market, over-50s do not wish to be marketed to specifically: 'They would feel turned off, as if they were being told that they were over the hill.'

For Saga, Brighter will seek to convey a message of adventure. MD Steve Dunn says: '[Being over 50] is a cool age. You have your freedom back and your financial security. You owe it to yourself to enjoy it. There are lots of trendy people in their 50s, such as Mick Jagger and Kim Basinger – the type of people who we want to endorse the brand.'

Ward adds: 'For this marketing-savvy group, the medium is very important – they are keen on the endorsements of positive role models, rather than paid-for ads.'

Such endorsements will come from journalists and carefully chosen celebrities (catering for the Daily Mail and The Daily Telegraph, which have plenty of over-50s readers).

Charisma PR director of travel Julia Berg suggests that Saga should align its brand with niche publications in the arenas of health, wellbeing, the outdoors and cuisine. She adds that it should also target 'honeymoon magazines to exploit the increasing number of second-timers and the trend towards vow renewals'.

In a separate move to make the brand younger and more mainstream, Saga Magazine – which has 1.2 million subscribers – has undergone trials with John Menzies and could become available on newsstands. The mag's remit – with glamorous cover stars such as Catherine Deneuve and features on sex – is, says Green, to 'make 50 fabulous'.

For a firm that is so defined by the age group of its customer base, this will be the goal of the group as a whole.

Saga's story so far
1948
Sidney De Haan buys the Rhodesia Hotel in Folkestone, Kent.

1951
De Haan launches his first holiday exclusively for retired people. The Old People's Travel Bureau is born.

1966
The Saga Club is created, with members receiving Saga News.

1970
Destinations expanded to Romania, Spain and Yugoslavia.

1975
Cruising arm launched.

1979
Long-haul holidays to Singapore, Hong Kong and Bangkok.

1984
Saga Magazine debuts.

1987
Saga Services introduced, providing insurance, savings and investments.

1988
Saga Motor Insurance launched.

1998
Home, caravan and travel insurance, the Saga Visa Card, Health Cash Plan and Secure Savings Account are among new products.

2002
Second cruise ship is bought. Telephone service goes live.

2004
Third radio station begins broadcasting in Scotland. Saga undergoes a management buyout, led by chief executive Andrew Goodsell and backed by venture capital group Charterhouse.

2005
New ship, The Spirit of Adventure, is acquired to cater for 'adventurous younger customers'.

2006
Launch of sagatravelshop.com in conjunction with lastminute.com.

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