What CMOs Can Learn From The Election
Just days after President Obama was re-elected to a second term, media outlets seemed somewhat surprised by the record turnout of Latino voters and the impact that Latinos had on this year’s presidential election. No doubt, it was an amazing, eye-opening, historic moment for all of us. After all, the Hispanic population is a formidable U.S. demographic segment: 50 million + or (23 million eligible voters) with a purchasing power of $1.5 trillion. In fact, a newly released study published by Pew's Hispanic Center underscored two facts that speak to the size of the voting opportunity:
• There were an estimated 12.5 million votes cast by Latinos this presidential election -- with 23.7 eligible Latino voters
• U.S. Hispanics will account for 40% of the growth in the eligible electorate in the U.S. between now and 2030, at which time 40 million Hispanics will be eligible to vote.
Similarly, leading marketing organizations understand that targeting the U.S. Latino demographic drives their growth in sales -- including McDonald's, Coca-Cola, Procter & Gamble, General Mills, and most recently, Walmart. Days after the election, the media discussions took a demographic and geographic focus: Where do Latinos live? How many are there? By state? By county? By age? By language?
But unlike our politicians, corporations are at a great disadvantage. Leading CMOs have all sorts of valid demographic, psychographic and behavioral data about their consumers. Describing and understanding their users is usually not an issue. Measuring their ROI as it relates to their brand, however, is the issue. In fact, measuring ROI for the ethnic population is the single biggest challenge facing corporate America, today and in the future -- as echoed in Isabel Valdes’ fifth marketing book, WIN! The Hispanic Market: Strategies for Business Growth.
Here is why: CMOs rely on syndicated consumer purchase data to measure how much of their product is being bought by a given demographic group. When it comes to Latinos and African-Americans, the data is not very reliable -- because there is a significant “undercount of the data.” By data undercount, I mean that transactional data in key channels for Hispanic and African-Americans are not accounted for. No scanner data exists.
In fact, in some categories up to 30-60% of transactional data is not tracked. In other words, companies ship their products to retail locations, but they don’t know who is buying the product! Can you imagine a political system in which candidates were running for office with insufficient data? I can’t! So why should we allow this in the business sector? Writing to your elected official will not solve the data undercount issue. The solution lies in the hands of corporations -- which need to come together and demand change to a measurement system, which has hurt the bottom line of organizations -- far too long.
Will we see change in four years? If enough companies stand up to the data undercount issue, everything is possible.