Digital Drums’ Steve Dunne says firms will need to redeploy ‘long-forgotten’ marketing techniques amid the cost-of-living crisis
As a young account manager in a marketing agency, there was one phrase that was drummed into me every morning by my boss.
“Look for the client’s hidden budget. Clients always have a hidden budget; your job is to find it and unlock it,” he would say. And he was invariably right.
Clients, I would subsequently discover, nearly always had a hidden budget. Despite telling you they had “limited funds” or “not a very big budget”, if you presented them with a compelling idea or showed them how extra budget would achieve impressive results, they would always find the funds.
I was reminded of my old boss and his hidden‑budget mantra this week as I read reports of travel companies announcing profit warnings and of forecasts about downturns in consumer holiday intentions and spending cutbacks for those booked to go away in the coming months.
And talking with my own travel clients, I got the distinct feeling that things, even after the ravages on the sector by the pandemic, are getting tougher. As one client said to me: “It feels like we are continually running up the down escalator, and it’s exhausting.”
Priority shift
It would be fair to say that over the past decade or two, selling travel was a relatively easy thing to do. The market was hungry to travel; cash and credit-rich consumers would say holidays were not a luxury but a necessity; and taking several holidays a year was, for many people, a reality rather than a wish.
But with the cost-of-living crisis, the economic downturn, rising inflation and increasing interest rates pushing mortgages and borrowing up, it seems that holidays have moved from being “a necessity” for many to a “nice to have” or even an “if only” for the vast majority of travel consumers.
Even “dependable sectors”, such as empty‑nesters and silver travellers, are impacted as they face the prospect of the end of triple lock pensions, rising inflation and falling property prices.
Granted, the luxury travel sector is still buoyant and will probably remain so. There will always be well-heeled consumers prepared to splash out in tough times. The problem is every travel brand knows that, and the luxury sector will become crowded and cluttered with players entering the field. The ratio of luxury customers to travel brands will reduce dramatically. In this new tougher era of travel sales and marketing, long-forgotten tactics and strategies will need to be taken out of the archives, dusted off and redeployed.
The lipstick effect
One of the earliest lessons I learnt when a student in marketing was the so-called “lipstick effect”. I don’t have the space to drill down into it here but, in short, it hypothesises that during tough economic times such as recessions or depressions, the sales of lipstick increases dramatically.
The concept points out that no matter how tough times are, everyone needs a respite. There has to be a light at the end of the tunnel, a reason to be optimistic; we all need a little self-indulgence, no matter how small – hence the lipstick effect.
And it strikes me that it is this thinking that could be the secret to success in the travel sector during austere times.
Instead of majoring on “Instagrammable views”, cultural experiences or bucket lists – all of which, in the mind of the consumer, can wait until the good times are back – we need to unlock those hidden budgets.
So what circumstances facilitate this? They’re usually reserved for those moments in life that we simply have to celebrate or mark, such as a milestone birthday, a life or relationship anniversary or a big family event. These are the moments that will never occur again, overriding the economic situation.
To focus in on this area, our messaging has to be different to cut through. Our messaging is no longer about inspiring or exploring. Now it is about deserving or honouring – not putting off the moment or leaving it for another time.
Sadly, there will be those who will see any type of holiday as beyond them for the foreseeable future, but they are not your market.
Our market for the time being is those with a hidden budget – and our job is to unlock it.