Political Loyalty: What Politicians Can Learn from Retailers (Part 1)

The recent elections in France and Greece have been watched with great interest by both politicos and investors. These choices resonate loudly across the oceans.  “Political Loyalty” may sound like an oxymoron, or the punchline to a joke, depending on your cynicism level and the news headlines today, but it is real and it could have a major impact on the next electoral cycle. Two huge factors will shape the next several elections in the U.S. and beyond:

  1. The application of technology is accelerating. After precious little innovation from the 15th century to the 20th, successive escalations – TV, robo-calling, etc. are leading to attempts to micro-target messages. Engaging the Millennial population among not just voters, but also party supporters and campaign staff will demand a comprehensive approach incorporating mobile and social capabilities. Otherwise, voter turnout rates are doomed to continue their long decline.
  2. The game is more and more about the “middle:” the candidates’ polarizing rhetoric and policy mixes across spheres of social/economic/foreign policy have led to a dramatic increase in independent voters (known to political science geeks as NPP or DTS voters). Even here in California, with a lot of opinions flying around, self-identified independent voters are now over 21% of the electorate…

With all that said, let’s take a look at the landscape, what retailers can teach politicians, and how to address the two big challenges mentioned above

THE LANDSCAPE

The mechanics of the political process may seem very foreign to many who have spent their career in the commercial world. I, too, pursued a career in business, but grew up in a political environment, so I see the parallels. A political campaign is, at some level, a conversion marketing program: you try and deal with people along the full spectrum from “don’t like” to “don’t know” to “like,” “support,” “advocate,, “organize” and “fundraise”…and of course the goal is to move them from the former categories to the latter.

Edelman and other professionals in the public affairs business call the “don’t know” and “like” categories the moveable middle, and this is a major focus of almost all campaigns. That moveable middle is identified through a combination of public reporting (e.g. contributions databases), various value-added versions of the voter file (a primary example being that by PDI) and demographic profiling. Political consultants also develop their own “secret sauces” over a period of years to deal with the inadequacies of the datasets that they can access, and on occasion have some proprietary data.

Many issues arise here: just one example is that party registrations are over-evaluated as indicators of voter intent. There are a lot more moveable voters out there than those solely indicated by “No Party Preference” data, as the Reagan Democrat phenomenon taught us years ago. Furthermore, there is little deep understanding of the social networking phenomenon’s very real overlay on all those traditional media sources, and the leverage that it can give to a campaign in understanding or converting opinions. Simply put: a Facebook page for your candidate with 10,000 likes doesn’t tell you enough about true voter intent.

Also, many would-be politicians underestimate how much time they end up spending on fundraising; it turns out to be a huge amount. Right, wrong or indifferent, this matters for a number of reasons:

  1. No money means no permanent staff and no access to the information tools required to win.
  2. Time fundraising is not identical to time campaigning – in fact, it tends to take away time from the actions required to directly win votes
  3. It is a world with notoriously arcane regulations; it is crucial to know where you are – and be able to promptly report – relative to the various contribution limits. This was famously lampooned by Stephen Colbert and his SuperPAC.

WHAT MACY’S KNOWS THAT YOUR SENATOR DOESN’T

Consumer brands of all kinds, from retailers to sports teams, have a very good understanding of both customers’ prior behaviors and their current actions in the real and online worlds. They also know a great deal about propensities of individual customers, which product goes with what item already in your basket and what it would take to trigger incremental behaviors – right now. They know this because they can look at both data at rest (favorite shop staff, transaction history, etc.) and data in motion (what is on your online basket, items you have previously browsed) at a very fine grain, evaluated in real time to make instant decisions. They even know who you are online, on their site or on Facebook, or when you are on-premise at a store, so they can service your every need. Here is a good example of part of that equation.

The contrast with the political arena is palpable: the data sources they have are fundamental and offer high value already (particularly those with some post-processing applied), but they are not clean, normalized and correlated appropriately, so you can’t easily see that “Maria Lopez” really is “Maria L. Sanchez,” who was recently married. Furthermore, the demographic data is very 20th-century and over-reliant on housing value – itself based on ZIP+4 and other similarly crude measures.

On the other hand, commercial customers can pull data such as realtor MLS filings, trulia.comzillow.com and housingmaps.com to get values for that specific address. They understand what you tweeted about your last experience with their brand, if you are a veteran… they may even know which newspaper you subscribe to and they probably have your credit file. How much influence do these items have on voting patterns, too? As it turns out, a lot!

The tempo of these organizations has also changed materially; not long ago it was defined by the rhythm of daily mainframe batches, brochures mailed to your home, and quarterly sales. The metabolic rate of the modern retailer is driven by real-time updates of inventory, offers pushed to your mobile device before you leave the aisle and an intelligent conversation about your known preferences with a member of store staff you may never have met before. The political arena is still grappling with the problems of the poll cycle (define-design-target-run-collect-analyze… and publicize if it helps your cause) and largely manual methods; in short, there is much transferable knowledge here, from which politicians of all stripes can benefit.

Check back on Monday for thoughts on negative campaigning!