Over the past few weeks, we've brought a stable of new voices to the Opower blog to talk about the future of the energy industry. Glenn Steiger shared how he's using technology to deliver better experiences for his customers. Vicki Campbell told us why she's going all-in on energy efficiency. Frank Luntz revealed surprising truths about what energy consumers actually care about. And Dr. Robert Cialdini explained how utilities can use behavioral science to transform their customer relationships.
All of them will speak at PowerUp, our annual utility innovation summit. So will Jim Messina — the visionary political strategist who used data analytics to fuel President Obama's landslide electoral victory in 2012.
We sat down with Jim last week to explore what data analytics can do for the energy industry. Here's what he told us.
Opower: As the mastermind behind President Obama’s 2012 re-election, you ran what Google’s Executive Chairman Eric Schmidt proclaimed “the best-run campaign ever.” Can you give a few examples of how data analytics fueled the campaign’s success?
Jim Messina: We had one unifying theory: that data was the empirical avenue to truth. We measured and tested everything: from how far the welcome reception desk needed to be from the front door to increase volunteer signups, to running 66,000 computer simulations of the election every night for 18 months, which allowed us to predict our final vote in every battleground state within 0.2 percent.
By the time we sent an email to our 13 million-person email list, we had tested various facets of that email (sender, subject line, incentive, where the ask was, color and size of donation button, and so on) to 16 different subgroups. This allowed us to increase open rates and donation rates by 79 percent overall from 2008. I would guess any business reading this would take a 79 percent increase in effectiveness with their customers!
O: You shook things up by bringing data science to the realm of political outreach. What advice do you have for other traditional sectors — such as utilities — on how they can use analytics to transform their interaction with customers?
JM: Look, I think it is absolutely essential. In the 2008 Obama campaign we had 12 full-time data scientists. In 2012 we had 100.
This famous "big data" era that the journalists are celebrating is really already over. We are now in what I call the "era of small or personalized data," meaning we can effectively predict individual behavior and give each customer a unique experience based on their needs. If your business can't do that in the next few years, even if you have an incumbent monopoly or built-in advantage, you will eventually lose the game.
O: Beyond being data-driven, what are some things that customer-focused businesses can learn from effective political campaigns?
JM: In 2012, we were given a 17 percent chance to win re-election based on historic and economic trends. We won with a comfortable 332 electoral votes. We did that by having the best candidate. But we also did it by effectively combining traditional outreach (door-knocking, phones, mail, and TV) with data and social media to create what I called the 24/7 campaign.
We had a saying: our job was to give our customers (Obama supporters) the best experience we could every day because we need them to do three things for us: donate money, volunteer and become an ambassador to their friends and family, and vote. Business has the same goals, you just call them different things. Everything we did was designed for those three things.
O: Opower has demonstrated how sending personalized communications to energy consumers can drive valuable outcomes, such as motivating electric and gas savings. Similarly, the 2012 Obama campaign used personalized communications as a strategy to mobilize voters. Why did you invest heavily in this approach and what was the impact?
JM: The average American sees 2 million ad images a year, most designed to spin you about something. Cynicism is at an all-time high. Folks are going through the biggest economic disruption since the industrial revolution because of technology.
To find a way through all that mess, people turn more than ever to their own social networks: their friends and family, neighbors, and co-workers to help them make their consumer and political decisions. That’s what Twitter and Facebook really are: you get to decide who to follow on Twitter, you decide to friend someone on Facebook.
Our research for a major Hollywood studio shows that this validation by your social network is now the most important factor in how we make decisions. Some call it social networking. Some call it peer pressure. Opower has called it neighbor comparison. I call it personalized communication, and I think it’s the most important goal of the next decade.
O: You’ll be giving a joint keynote presentation at PowerUp 2015 with fellow Opower Advisory Board member Frank Luntz — a stalwart republican pollster. In our recent chat with Frank, he said he learns more from you in five minutes than he learns “from most people in many hours.” On the flip side, what have you learned from Frank?
JM: Every single time I see Frank speak I realize how he is by far the smartest thinker on his side of the aisle. I think he is able to distill really complex concepts into understandable chunks to change behavior, and that really is the Holy Grail.
In addition, he doesn't join the lemmings in reporting what voters or customers are thinking; any pollster can do that. Instead, he spends his time figuring out why and, most importantly, how people make those decisions. And I rip off whatever I can from him every single time!
Image Credit: Obama for America
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