Business Insights from 2016 Campaigns


The 2016 U.S. election provides critical lessons for business leaders, and none of those lessons involves public policy issues or candidate qualities. Instead, the raucous campaigns that (finally!!!) ended this month offer painful examples of failed strategies for sales and marketing.

Reflecting this marketing chasm, the Wall Street Journal reports today that major ad agencies are looking at the election results and, “reflecting on whether they are out of touch with the same people—rural, economically frustrated, elite-distrusting, anti-globalization voters—who propelled the businessman into the White House.” Clearly, the similarities between election failures and business failures are all-too real.

To translate the political circus into a business model, think of an election as a shopping mall that will be open for essentially one day.  In advance of the opening, every store in the mall invests heavily in sales and marketing initiatives, hoping to draw the most buyers to their locations and outperform their competitors. Revenues are critical, of course, but margins are more so. Selling more products might or might not lead to outperformance. Getting the right mix of sales (as is the case with the Electoral College) is key to success.

Most of the roughly 20 competitors at our imaginary mall failed to connect with customers and ran out of funds before the mall was open. As is the too-often the case in business, the store owners believed they were selling the right product and that they just needed to tell people about it. They didn’t adjust their approach effectively to competitors’ offerings or make a strong case for the product differentiators that their targeted customers would reward.

In several cases, the store owners were deserted by long-time customers who grew weary of the same sales pitch and wanted something that resonated more closely with their new drivers. Stores that had relied on one customer demographic or another suddenly found that those customers had stopped listening, or had opted for another vendor. Many customers, it might be argued, no longer believed that the stores offered a real value for them, and they expressed that view by not bothering to show up at the mall.

Whatever one thinks of the parade of candidates who offered their services to voters during this election cycle, the simple truth is that most of them failed to connect with their customers in a productive, profitable way. As business leaders look to prosper in 2017, here are a few warning questions to ask about our campaign messages:

  1. How are our customers changing their priorities? The past decade has brought a major financial meltdown, college graduates moving in with mom and dad, a shift in emphasis from owning to renting, and pretty much everything being accessed via mobile devices. How is all of this changing the way our customers see us and make decisions about staying as customers?
  2. Which customers should we be pursuing? Which of our customer groups is no longer profitable, or in a declining profitability trend, and which customers should we be courting more aggressively? Who is profitable today and who is likely to be the foundation of our business into the future? Are we paying good money to court customers who won’t actually show up and buy from us, or who will buy only the lowest-margin products?
  3. Are we sending the right messages to the right customers? Are we selling with messages that actually undermine our value proposition or our credibility? Are we talking to customers about topics they care nothing about, while ignoring their most pressing needs? Are we using a one-size, fits-all approach in a truly fragmented space?
  4. Why are customers, or should-be customers, responding to our competitors and not to us? It’s easy, inside the company, to dismiss the appeal of competitor offerings that might not be as good or as inexpensive or as long-lasting as ours, but we don’t have 100% market share. Clearly, some customers see a value in what the other guys are doing, and it’s dangerous for us to simply assume those customers are too stupid to know any better.
  5. Where should we direct our marketing budget to gain the most sustainable profitability? Are we investing in the wrong messages or talking to the wrong audiences? Are we promoting products and services that are not really aligned with our strategic investments?
  6. Are we compensating our sales team to achieve our strategic goals? How are we ensuring that our sales reps reach out to the right people with the right offerings? Should we be changing commission rates or other financial rewards?

Whatever one’s party leanings, and however one feels about any specific candidate, it’s relatively easy to find a dozen examples of competitors who answered these questions incorrectly—or failed to ask them at all, during the run-up to November 8, 2016. The “stores” in our imaginary mall were open for only one day and all but one of them is closed now. Unlike them, our businesses can recover from the gaps of the past and change our results going forward.

All that’s needed is better insight into the customer’s priorities—as they see those priorities, not as we assume they do or believe they should.  After we gain those insights, the path becomes clear.









Written by Michael Rosenbaum on November 21st, 2016. Posted in Performance Improvement, Strategic Insights

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