“Fifty is the new 40 and yet people are only starting to wake up to this age group,” says Saga group CMO Matt Atkinson. “Marketers have spent lots of time thinking about millennials and Gen X, Y or Z, but not baby boomers [who were born between 1946 and 1964]. There are 25 million boomers who make up a third of Britain. They hold 48% of consumer spending power and 82% of wealth.”
With 65 years’ experience serving the over-50s in insurance, travel and publishing, Saga is positioned to benefit from a group who are healthier, wealthier and more adventurous than ever. The company’s latest results prove it; pre-tax profit soared 55% to £176m for the year to 31 January 2016, up from growth of 9.6% in 2015, which Atkinson, who joined from Tesco last autumn, credits to better understanding the changing outlook of Saga customers.
He stresses that the aim is not to make Saga attractive to a younger audience, but to appeal to a 65-year-old who feels 35. “The way to do that is by reinventing your products and services, and communicating that change. It is also crucial to shine a light on what we are already doing,” says Atkinson, proudly referencing a cycling trip around Cambodia as an example of an innovative travel product Saga offers.
Older customers today boast a large disposable income and an increasingly demanding attitude in their relationships with brands. The concept of retirement is also becoming redundant, he notes, with many Saga customers considering it something “their parents did”.
The changing attitude of over-50s means Atkinson’s team has to adapt to a new set of customer demands, behaviours and expectations, a big reason why Saga segments by age but also behaviour and attitude.
He puts Saga at the beginning of a repositioning journey, capitalising on its well trusted brand to develop a communications strategy that reflects the changing demographic.
“We want to rediscover the customer centricity that was always at the heart of the business, but which is more relevant than ever in today’s world”
Owning the sector
Given the ageing population and its considerable wealth, Atkinson expresses “fascination” at the lack of demographic-specific competitors in the over-50s market, which only includes smaller-scale entrants such as travel and lifestyle website High50.
Atkinson acknowledges that there are a number of sector-specific competitors, such as LV, Aviva, TUI and Direct Line, but he sees Saga carving out a niche by combining its 65 years’ experience with a modern technology- and a data-led approach.
“I don’t see a big company competitor,” says Atkinson simply. “There’s no big version of Saga doing what we’re trying to do, in the same way that at Tesco I had Sainsbury’s, Asda, Aldi and Lidl.” (See How does Tesco compare with Saga, below.)
He does not shy away from competition in his personal life either and is training for an Ironman Triathlon, putting in two hours at the gym each day ahead of the event.
After five years at the coalface of supermarket retail Atkinson is no stranger to fierce competition. Having started his career as a graduate trainee at P&G, Atkinson spent two decades working across various agencies, including Havas and Saatchi & Saatchi, before entering the fray at Tesco in 2011.
Following CMO and chief data officer positions, Atkinson was appointed chief creative officer at Tesco in June 2014, a role that was axed following the arrival of CEO Dave Lewis
in September 2014.
His tenure at Tesco coincided with a period of turbulence when in 2014 the supermarket was forced to admit overstating its first-half profits by £263m.
The marketing division was shaken up several times during that period with Lewis cutting several senior marketing posts. Despite reports he was leaving the business, from December 2014 until his departure in September 2015 Atkinson worked in a consultancy role providing interim support to the marketing team.
Chief customer officer Robin Terrell is now the most senior marketer at Tesco.
High brand recognition
One similarity between Tesco and Saga is that both are companies with varied business portfolios. Insurance is the biggest part of Saga’s business, representing between 65% to 70% of trade, with the travel and cruise sector at 26% and emerging businesses, including personal finance, home care and publishing, at around 4%.
The company enjoys an enviable 97% recognition among the over-50s. However, of the 11.2 million contactable people on the Saga database, only 2.6 million are active customers, with an average of 1.7 products each, representing a strong opportunity to cross-sell.
To do so Atkinson recognises the need to join up the proposition and make sure Saga is delivering a good service so customers feel comfortable being introduced to other products across the portfolio.
Since his arrival from Tesco last September, Atkinson has endeavoured to get under the skin of the over-50s market through in-depth insight, analysing ethnography and semiotics to better understand the language being used throughout their different life stages.
Understanding today’s over-50s
To get to grips with the psychology of this changing demographic Saga is in the early stages of working with neuroscience-based research business TransgressiveX on the concept of System 1 and System 2 thinking. System 1 is the instinctive thinking that takes place on a non-conscious level, whereas System 2 is a rationalisation stage that requires cognitive processing.
As part of this process, Saga is analysing behavioural and psychological brand dimensions, as well as customer experience and data, looking beyond rational decision making to instinctive processes.
Atkinson is a big advocate of harnessing the power of psychology. “It’s very important as a marketer to understand the neuroscience of decision making and for brands to get a real picture of what their brand looks like across different areas of your marketing activity. That way you can measure what is really influencing your performance.”
Good results in Saga’s core insurance businesses, in particular the growing motor and home insurance arms, coupled with better performance in its cruise ship portfolio, are seen as key markers of its success over the past year.
The business benefited from 8.5% growth in its core insurance policies, with trading profit up 26.5% in travel, 17.8% in motor insurance and 3.2% in home insurance. Saga also grew tour operator customers by 9.9% to 189,000, with the company on track to launch its third cruise ship in 2019.
Looking dapper in a smart blue blazer and crisp shirt, Saga’s CMO sits back and considers the reasons behind the sharp increase in profits. Atkinson believes that gearing up to its initial public offering in 2014 the company was more focused on profit growth rather than customers. The flotation itself was considered something of a flop, with Saga being criticised for dropping well below its 185p issue price.
However, in the two years since Saga floated on the stock market the group has shifted priorities away from pure profit to customer growth, allowing it to better align with the needs of over-50s.
Responding to its latest results, Saga group CEO Lance Batchelor emphasised this renewed focus on customer and the further development of the Saga brand, admitting more could be done to build stronger relationships.
There is scope for further business expansion, especially as the over-65s are spending £1.3bn more on travel than they did a decade ago. Under 35s, meanwhile, are shelling out £920m less, according to Experian Marketing Services data.
Older people are also spending more time on tablets than millennials, according to research from the IPA, which shows UK adults aged over 55 increased their use of tablets by 84% in 2015, compared to growth of 43% among those aged 15 to 24.
Putting the customer first
As part of this drive to understand its audience, the company has created a new sector of the business focused on customer management. At present, it is in the process of implementing Adobe’s analytics, retargeting platform and campaign customer relationship management software. Atkinson hopes the move will give the team a single customer view and allow it to create complex individual or segment-based customer journeys.
He admits that this multichannel approach might be more akin to businesses such as Tesco.com or Expedia, not necessarily a company historically rooted in an offline, direct marketing world like Saga.
The implementation of cloud-based technology is being combined with a refreshed content strategy, introduced by Atkinson at the beginning of the year. The aim is to evolve Saga Magazine into a fully-fledged “multichannel content business”, bringing the print product and website closer together.
The strategy appears to be working, with the number of monthly unique visits to the magazine site rising 300% in five months from 250,000 to one million. The CMO credits this increased engagement with the fact Saga is seen as a sector expert among a consumer base increasingly hungry for content.
“If we’re clever, we enrich that experience using an optimised search strategy so that when [consumers] start to search for a service online Saga shows up in the right place,” he adds.
Ultimately, Atkinson sees greater value in taking advantage of its content strategy than focusing on performance marketing techniques. “If you have a content channel you can use to attract a higher quality conversation into your business, I would rather be doing that than spending lots of money on real-time bidding and programmatic.”
As well as having a large disposable income and being increasingly tech-savvy, today’s over-50s are also highly politically engaged. A recent Saga Populous Poll shows nine out of 10 plan to vote in the EU referendum today (23 June), though one in eight are undecided. To reach this highly political demographic, prime minister David Cameron discussed the key issues of the Brexit debate in the June edition of Saga Magazine, ranging from pensions and house prices to the cost of elderly care.
Although the outcome of the vote is yet to be confirmed at the time of writing, Atkinson is relaxed about the referendum. “We’re not a political business and most of the organisation is UK-based,” he reflects.
“Whereas when I was at Tesco we spent a lot of time talking about Scottish devolution and the issue of Europe, as that’s where we were buying goods and services. At Saga, we don’t do so much of that. After all, people will still want to travel the world and that won’t change because of Brexit.”
As for the future, Atkinson’s focus is firmly centred on developing Saga’s multichannel marketing strategy and transforming its data capability to enable the business to engage with consumers and use this insight to adapt the product portfolio to appeal to the next generation of over-50s.
“We want to enrich our portfolio so that it is relevant to today’s customer,” Atkinson says with conviction. “We want to rediscover the customer centricity that was always at the heart of the business, but which is more relevant than ever in today’s world.”
How does Tesco compare with Saga?
“I worked at Tesco for a long time, but I was there in the most turbulent period of its history when we were trying to do lots of things to change the performance of the brand, its position in the market, product range and multichannel offer,” says Saga CMO Matt Atkinson who joined from Tesco last September.
Despite the drama, Atkinson reflects fondly on his time at Britain’s biggest supermarket. “I loved my time at Tesco. It was unbelievably fast-paced, working with exceptionally talented people. I loved our ability to make things happen quickly and create physical things that people put on their dinner plate.
“Saga is very different, because you’re not trading on an hourly, weekly, toe-to-toe basis with really aggressive competitors. Although insurance and travel are highly competitive businesses, it felt like Tesco was always in competition – every moment, every day – so in that sense there is a lower level of intensity at Saga.”
Atkinson recalls feeling a strong sense of responsibility towards the 300,000 Tesco workforce and a real desire to bring the once successful business back to its best.
“Having been an amazingly successful business, I always felt a big sense of pressure to get it back on an even keel,” he says.
This feeling of accountability has migrated with Atkinson to Saga, where after a 55% profit boost the pressure is on to maintain this level of success.
“I feel the same sense of duty as I felt at Tesco, but the expectations are very different. There is a massive expectation about where we are going to take the brand and the business, and I also feel a responsibility to champion the new life of the over-50s.
“That is the thing that attracted me to Saga and I am excited about how we can evolve.”
The varied role of the CMO
From managing the roll-out of new technology and devising talent development plans to working on design concepts for the launch of a new cruise ship in 2019, the scope of Matt Atkinson’s role at Saga is varied.
He is responsible for a 140-strong marketing team with an average age of 35, and sees his team as representing the changing nature of marketing and the wider role of the CMO.
“We encompass customer, propositions, insight, creativity and how you organise the business around a multichannel journey,” says Atkinson. He believes the shape of marketing teams will change radically over the next five years.
“Whereas for decades marketing departments were focused on planning the next campaign, teams are changing and we are going to see the rise of journey planners whose job it will be to obsess about the customer journey from search to buy.”
2015 – present
Group CMO, Saga
2014 – 2015
Chief creative officer, Tesco
2011 – 2014
CMO & chief digital officer, Tesco
2008 – 2011
Global CEO, Havas Euro
2004 – 2008
Group managing director, Havas EHS
2001 – 2004
Global director of integration, Saatchi & Saatchi
1995 – 2001
Managing director, Tequila
1990 – 1995
Various roles: graduate trainee scheme, P&G; junior planner and account director, Y&R Group; regional account director, Grey