My Aunt can’t stop talking about Saga (a UK company servicing senior citizens, www.saga.co.uk). She’s just turned 65 and apparently they have changed her life. She’s going on holiday with them. She’s taken out life insurance with them. She’s even met a new boyfriend through Saga.
I was shocked. Not just because she’d found a boyfriend, but also because I thought that Saga only offered coach tours for old ladies. But it turns out they actually offer “an array of products and services exclusively for over 50s”.
There’s innovation learning here. Over the years Saga have managed to expand beyond their original coach tour business by balancing 2 dimensions: Permission and Transformation. Permission is about making sure you gain the buy-in of your consumers to extend. Transformation is about making sure your organization evolves to be able to deliver new products and services
It looks like Saga have done a great job of both.
In terms of Permission, they’ve got their consumers to allow them to develop a broader positioning by building trust and credibility. This has been done slowly and carefully; they haven’t rushed to roll out new products and have only done so when they are confident that (a) there is a genuine unmet need, and (b) consumers are ready for a new Saga offer. They started with holidays, then launched a magazine, then moved into care and have ultimately been able to add insurance, money, legal and health to their portfolio.
In terms of Transformation, they realized that in order to truly extend into the areas mentioned above they would need to evolve their organization. In some cases this meant building new internal capabilities; but actually most of their transformation has involved creating joint ventures with partners who have specialist expertize. Their financial products, a key part of their offer, are a great example of this; delivery is outsourced (it’s a complex, regulated industry and capability would have been highly inefficient for them to develop themselves) but they are marketed and guaranteed by Saga.
So what does this all mean? To get started, here are 2 interesting questions:
1. What can companies/brands do to systematically increase their permission with consumers, thereby paving the way for expansion?
2. What is the best way for leaders to persuade their organization that they need to transform? Buy-in is almost always the biggest barrier.
And of course the most important thing is that now my Aunt has a new boyfriend. So everyone’s a winner*.
*Except those that got it wrong. Like under ambitious Kodak who had the permission but not the ability to transform. Or Virgin Cola who suffered the reverse. So in fact not everyone is a winner. I guess that’s just life