Yesterday, I was listening to the radio while driving and there was a commercial that caught my attention: “Book a vacation with XYZ now and save money!”. The more I think about this, the more I don’t get it. I can understand that some people like vacations and that other people like saving money. But both at the same time? It sounds like a miracle.
“and save money” is unrelated to the decision making process
What does this marketing slogan do? It encourages to take action (“book a vacation”), while providing you an additional reason (“to save money”) to do so. The problem is that these two are completely unrelated to each other, at least to me. Why should I book a vacation to save money? Either I book a vacation because I want to have a nice vacation, or I save money because I want to save money. But saving money will never become the goal of “booking a vacation”. You will never hear someone saying “..oh yes, glad you asked. I became a millionaire because I booked thousands of vacations with XYZ”. This is similar to the catch-phrase “Eat the diet burger and save calories”. Your primary aim is not to reduce your calorie intake, it is to eat because you are hungry. How much calories you are willing to consume is another decision you have to make, after you have decided to eat something. Not before. Thus, this additional argument in the slogan tries to bypass your decision making process, whether you want a vacation or not.
You don’t save, you spend
The value of this additional argument depends on the target audience. In case you already decided to book a vacation the price might play a role. Then, the argument “book with XYZ now and save money” seems to be more relevant. Once you decided to book a vacation, other factors will play a role. Price, for example. XYZ is probably stating that their products are cheaper than the ones offered by the competition. Thus, XYZ says that you’ll save some money. However that is quite untrue. You don’t save money, but you simply spend less. There is no “gain” taking place. Similar to sunk costs, which should not influence your decision making, such “sunk savings” should not influence your decision making either. I know that this marketing strategy is highly effective and they are behind every corner waiting there to ambush my wallet. However, if you hear the words “… and save money” related to a purchase, there should be some bells ringing in your head.
The most dangerous “and save money” situation
The biggest purchase people make, while rationalizing that they can save money, is a home. When you google “benefits of being a homeowner”, there is no site that doesn’t tell you that you can save a great amount of money on taxes (actually only 8 out of 10 of the first hits mentioned tax benefits, I checked them). I am not saying that homeownership cannot lead to certain tax benefits. They often do provide such. However, this is the point where it gets risky. The “and save money” argument can distract you from your initial goal and the consequence is that you can make a stupid financial move. Similar to the vacation and burger example: saving taxes must not be a reason to purchase a home. If you want to save taxes, you should save taxes and not buy a home. If you want to loose weight, you should loose weight and not eat a diet burger, right?
As such, the “and save money” argument is highly effective in distracting you from the initial decision making process. Be aware of that and look at the substance. You want to save money? Then save money. You want a nice vacation? Get yourself one. The form should not define the substance. It must be the other way around.
I tend to look at it from a market comparison perspective. Assuming you have two companies offering the same product and one of them is 10% cheaper than the other one, than this one is “saving you 10%”. While in this example “the other company” can be replaced by let’s say “the list price”, I don’t find it wrong at all.
Take for example energy efficient light bulbs. They “save you 20% of energy costs”. This automatically compares them to the standard product.
Technically I would say the term “preserving” might be more applicable to this but I don’t find saving all to wrong.
Hey Thomas, thanks for your comment. I agree, there is nothing wrong with saving as such. I just meant to say that such savings should not influence the decision whether you buy or not. I see these savings as positive “sunk cost”. They should be left out of the decision making process. Why should I buy something because it is cheaper than A. That is different to “I buy when the price is lower than €X.” I really like the example of the energy saving light bulbs. But that standard you mentioned changes over time and is an external factor. Why should I base my decision on that? Thanks for your comment, I really appreciat the input.
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