What Are Customers Really Worth? Turning the ‘Customer Data’ Concept Into Something Meaningful

What’s the value of customer data? What is its value to our political aspirants, a value measured by many different and often conflicting metrics, not least of which is the power of the elected to change society for better or worse? And often, sadly, as we increasingly see around us, for personal economic gain?

The headline, “Legislation Would Force Google, Facebook to Report Value of Customer Data to SEC,” in the Media Daily News got this maverick marketer wondering just what kind of a gargantuan task it would be to try and determine the value of customer data.

Imagine what you would do if some legislation or only your boss asked you to put a rational price tag on the data in your company’s possession? The easy way, if you are a direct-to-consumer marketer, might be to add to your total year’s profit, a factor for the likely future profit contribution driven by your knowledge or assumption of the lifetime value of your customer base. Or you could offload the task to your bean counters and let them have a field day playing with the numbers, instead of doing something more useful.”

Searching for what the British call a “bargain,” or the price at which a willing buyer buys and a willing seller sells, can be said to establish real value. The traditional way of determining a bargain for the acquisition of a data-driven marketing business is to pay a negotiated multiple of the number of customers, times the best guess of discounted future revenue from these customers. From there on, it’s horse trading. The fact is, we all may have ideas (usually over-optimistic) about data value, but few if any of us know for sure what it is. And today’s “bargain” may not seem so attractive a couple of years down the road.

That’s why you have to wonder if the financing of our political election system has gone completely off the rails. According to the Wall Street Journal, “Political Ad Spending Will Approach $10 Billion in 2020.” That’s an increase of almost 14% over the last time, which is far greater than the population increase during the same period.

Political ad spending will total $9.9 billion in 2020, according to the latest U.S. advertising forecast from WPP PLC’s ad-buying unit GroupM. That would be up from $8.7 billion in 2018, when midterm congressional elections were held, and from $6.3 billion in 2016, when President Trump was elected.

The growth between presidential campaign years is accelerating. Political ad spending rose by $2 billion between 2012 and 2016, according to GroupM, and by $1.1 billion between 2008 and 2012.

If we look at this against the number of likely voters, we can estimate the spend for each one. The Census Bureau estimated that there were 245.5 million Americans ages 18 and older in November 2016, about 157.6 million of whom reported being registered to vote. Historically, about 60% of those eligible to vote actually show up to do their democratic duty in a presidential election. This means that the actual number expected to be voting is 94.5 million.

If the political marketers were able to target only those 60%, the cost per voter would be $38.07. Because that kind of tight targeting of marketing spend is almost certainly impossible, and we spread the total spend against all the 157.6 million registered voters, the cost per voter is only $27.86.

A maverick marketer’s fantasy view is that it might be more cost-effective to use the $27.86 just to buy those voters not already committed to one party or candidate or the other, just as long as you could determine who they were.

Only $27.86 or $38.07 per prospect? That’s more than consumer goods and services advertisers spend in a year, a lot more. Proctor & Gamble, one of the largest FMCG companies spent $4.39 billion last year ($13.43 for each member of the population) or less than half the estimated cost per voter, and AT&T spent $3.52 billion.

What does this tell us about the value of customer data? (Or, in this case, potential voter data?) What is its value to our political aspirants, a value measured by many different and often conflicting metrics, not least of which is the power of the elected to change society for better or worse? And often, sadly, as we increasingly see aound us, for personal economic gain?

One thing it certainly does tell us is that in our society, where more than three-quarters of the total wealth is owned by the top 10% of earners and the lowest 50% own only 1.2%, valuing each cohort is extremely difficult. Ironically, at least in theory, every vote — whether from the 10% or the other 90% of the voting population — has equal value.

That’s a big difference from the relative value of segmented cohorts of buyers and prospects who make up the Google and Facebook universe, buyers who can be valued based on past performance and prospects, whose value can be guesstimated — based on other characteristics.

Ask yourself, “How much am I worth? And please comment below on how you determined the amount. It should be fun to share the different answers.

Political Direct Mail for the Win!

During the 2016 election cycle, there was more political direct mail than ever before. The United States Postal Service and The American Association of Political Consultants (AAPC) wanted to see how people viewed political mail, so they did a study about direct mail and its impact on voters. There are so many takeaways that can help you create political direct mail to win.

During the 2016 election cycle, there was more political direct mail than ever before. The United States Postal Service and The American Association of Political Consultants (AAPC) wanted to see how people viewed political mail, so they did a study about direct mail and its impact on voters. There are so many takeaways that can help you create political direct mail to win.

In 2018 we often get asked, does direct mail still work? YES! Here are a few facts about direct mail to show you the power you can harness:

  • People check their mail at the first opportunity, which is nearly every day. You can reach your voters in a timely fashion without being forgotten.
  • 86% of people go through the mail and make sure that nothing of value is being thrown out.
  • 73% of people prefer direct mail over other marketing channels.
  • Mail may be the best way to share new information about you as a candidate or an issue.

Radio and television do not allow you to target your prospects effectively. Your message ends up in front of people who cannot even vote for you. With direct mail, you have access directly to people who are able to vote for you. Take advantage of it! You can segment them into types of voters, propensity to vote and so much more.

When sending direct mail to voters, include important information about the election, such as voting deadlines for absentee ballots. Yes, you can target people who vote absentee with a different message than people who vote at the polls. You can also provide registration deadline information. Of course, include in the mail piece who you are, what you stand for and why people should vote for you. People keep mail that provides important information; get your mailer to stick around longer.

When polled about political mail voters responded with:

  • 82% want to know where the candidate stands on issues
  • 74% want a contrast with an opponent on issues
  • 73% want to know a candidate’s voting record and any past statements made
  • 60% want to see a list of who endorses the candidate.

We suggest that you use large format mailers to grab attention. According to a DMA 2017 response rate report, oversized pieces have been shown to increase response rates by 10.4%, producing the best overall response rate. You need to keep your text concise and easily scanned. Use bold, color and contrast to draw the eye to your important content. The easier you make it for people to quickly understand what you are saying, the better you are able to get your point across. Direct mail is better understood, remembered and acted upon more than digital channels. Add direct mail to your marketing mix to harness the votes you need to win.

Want to increase the time people spend with your mail pieces? Make them interactive. Add elements such as video, augmented reality, die cuts or endless folds to engage people. Video allows you as a candidate to speak directly to each voter about how you stand on issues and how you are different from other candidates. You can add special coatings or textures to really enhance the sensory reach of your mail piece. There are so many fun ways that direct mail can stand out that no other channel can do.

Are you ready to get started on your campaign?