Preaching CLV and CRM

Costumer Relationship Management has been discussed here, and will continue to get its proper due in this spot. In order to compete as a major commercial organization it is essential to employ a strong, granular, customer and contact tracking system.

The idea is basic. Know your customer's history. Know the type and number of products purchased. Know the number and nature of billing disputes lodged. Know (and document centrally so that it's readily accessible) anything that can possibly improve the relationship with the customer. This is the objective of 21st century customer service, and applies directly, perhaps even more appropriately, to political campaigns.

There is an increased focus in the commercial world on the idea of achieving the greatest possible Customer Lifetime Value (CLV). The concept of CLV should be the heart of a coordinated political fundraising effort. Finite time and regulated limits allow for specific goals to be incorporated into political fundraising CLVs. The emphasis on fostering loyalty is extremely important to any politician who's in it for the long haul.

CRM software provides the ability to relate to each voter or donor as an individual, based on a real history. It also enables a campaign to track macro trends across all voters or donors that it comes into contact with. This is crucial in quickly identifying and responding to common problems and complaints.

Sign Up Here!

There is a clear distinction between official activity and campaign activity, or at least that's the way it is supposed to be.

Electronic communications have changed the way political and official activity interact with one another and the voters. Websites are undoubtedly marketing tools for an incumbent's accomplishments or positions. Email newsletters allow incumbents to reach directly to constituents (and voters) with issue messaging.

In late 2003, the House amended its official regulations to address and define the acceptable use of email newsletters. These regulations apply permission-based marketing concepts and allow legitimate email communications to those who have solicited them.

In the Senate the rules are more restrictive, to the point of not allowing websites to be updated 60 days in advance of a primary or general election (with certain exceptions).

While cost is not a barrier to political competition as it relates to email newsletters, access to data is. To that end, incumbents have a huge advantage based on their ability to gather high quality email address data from interested constituents (or, again, voters). Rules prohibiting personal attacks and political activity still govern the content of all official communications, but the ability to reach potential voters by use of targeted email newsletters in a clear advantage of incumbency.

Is It Such an Inconvenience to Skip Over or Delete?

Nielson's analysis of Bush and Kerry's email newsletters is interesting, though it does lack some of the macro level, results-oriented reporting that would really tie together an understanding of email newsletters. Many of Nielson's detailed critiques are completely worthwhile as a set of do's and don'ts when devising an email newsletter strategy.

I would challenge Nielson, however, to tie his research on the frequency of email newsletters to actual voter behavior. I think that the American public generally accepts the temporary nature of political campaigns, and as a result understands that for a brief period of time every couple of years, they are going to have to tolerate the marketing efforts of political candidates entering their TVs, radios, and email boxes.

The frequency graph is telling. It indicates that the Bush team had a frequency strategy, while the Kerry team was a little more chaotic.

With email newsletters the topic of focus this week, there are a number of other things to consider that may help fill in the forest for anyone stuck in Nielson's trees, including the role of official newsletters in benefiting incumbents, CRM systems, privacy, and microtargeting.

Emoticons

The internet can be used to inspire. Can it engulf with emotion? Peter C. made the point in one of our earlier classes that the prevailing advantage of television advertising is its ability to evoke emotion.

It's tough to get away from the perception that the internet is a medium that conveys the message by text and the emotion by emoticons. The growing access to broadband has made multimedia distribution more realistic, with music, video and animation all working together through the internet to make an impact on the end user. Soon, multimedia will bring the internet to parity with television.

The real potential for the internet to exceed the emotional power of television is through interactivity. A give and take process, run against dynamic scripts, can build a crescendo of emotion that each member of the target audience is individually invested in. This would be a major new shift in the ability to connect with voters.

Globalization?

527s, created by the need for soft money to find a home, played a highly influential and involved role in the 2004 Presidential campaign.

Foreign contributions have long been prohibited by the regulatory apparatus that shapes American political fundraising activity.

There is an understanding (reflected in pending legislation banning donations by foreign nationals to 527s) that the law needs to be consistent in its prohibition of foreign influence on political activity.

The Clinton scandals of the late '90s were appalling examples of foreign involvement in our campaign process. It isn't the only recent example, as MoveOn.org and Wesley Clark were each briefly embroiled in controversy in 2003.

But is it advisable in today's networked world to firewall foreign contributions? Is it even possible? Global challenges inspire global passion. Is it right to exclude foreign nationals as well as foreign Nations?

For a country that largely believes in free trade, and was built on the free exchange of ideas, it is an interesting dilemma. Global terrorism, poverty, HIV/AIDS certainly pay no attention to borders.

Watch Carefully

Last week, the House passed out of Committee campaign finance-related legislation. Interesting provisions include a ban on donations by foreign nationals to 527 organizations, new reporting requirements for 527s, and a clarifying definition of "public communication".

The bill applies much needed sunshine to 527s and their contributors, and makes a clear prohibition on foreign donations. But it leaves the influential groups free to operate as is their right under the first amendment. Progress.

The provision of greatest impact applies to the internet. In the definition of "Public Communication" under governing law, the bill adds: "Such term shall not include communications over the internet." Broad. Definitive. The kind of language that, if signed into law, will allow the internet to be the alpha medium of political activity.