What can consumer marketers learn from political campaigns? Slate has an enlightening interview with Sasha Issenberg, author of the 2012 book "The Victory Lab: The Secret Science of Winning Campaigns," in which Issenberg discusses the current US Presidential campaign and how data collection and analytics may spell the difference between a Clinton or Trump presidency. The lesson for marketers: improvements in marketing efficiency are just as important as improvements in marketing effectiveness.
Here's the money quote from Issenberg:
"We know very well in a granular way what a get-out-the-vote programme can do. A certain type of direct mail when targeted at a certain type of audience can increase turnout among voters within that by a couple percentage points. All of the sort of sexy data and analytics stuff that I've written about is most valuable ultimately for finding efficiencies in money that you will already spend. Micro-targeting isn't going out and finding magical voters that nobody else knew about and magical issues to talk about with them, often ever, but it is quite good at making your direct mail budget 20% more effective by cutting out people who are highly likely to vote for you or never vote for you so that you're not wasting money trying to persuade them. If you are going to be running a billion dollar campaign with a $75 million direct mail budget and you can make it 20% more effective, you're saving $15 million and now you can reallocate to other mail or put it on TV or whatever."
I don't have to tell you how applicable this insight is to the multi-million dollar marketing operations of major consumer brands. Collecting customer data, analysing it for insight, and then using that insight to market to micro-segments of consumers not only improves marketing effectiveness; it also improves marketing efficiency. You can initiate a $20 million ad buy to send the same offer to every potential customer, for example, and see a predictable sales increase from the promotion. If you instead deliver personalised, relevant offers and messages to consumers based on their history, proclivities, and even psychographic profiles, you might see that same sales increase for only $10 million.
In the loyalty marketing arena, data analytics is so effective because the ability to correlate marketing expense to the behavior of individual customers helps you understand, often on a dollar-for-dollar basis, what return you're receiving from your loyalty investment. As Issenberg says, it's not about magically manufacturing loyalty out of customers who are otherwise uninterested in a relationship with you. Rather, it's about focusing on those customers who either already have a relationship with you, or who might be interested in one. The resulting focus stretches your marketing budget further, allowing you to do more for less.
That's the difference that a focus on marketing efficiency can make. If it can make a difference in choosing the next US President, it can certainly make a difference for your bottom line.
Read the full interview here.