How the ALP violates the 22 Immutable Laws of Marketing (part1)

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Al Ries and Jack Trout wrote the “marketing bible” The 22 Immutable Laws of Marketing back in 1994, and it remains a marketing classic even today. These two renowned marketing consultants explained that successful marketing follows rules or laws that are violated at a marketer’s peril.

For over a decade, the Australian Labor Party has routinely violated many (most!) of the laws of marketing, and  has paid the price. Except for a brief period in 2007, when it got its act together in the lead up to the “Kevin 07” Federal Election, Labor’s record during this time has been one of systematically losing elections, losing “market share” (primary vote) and losing “brand advocates” (members).

This post goes through the first five “immutable laws”, briefly explains what it is and how the ALP has violated them. I note that some of the laws are followed (on purpose or inadvertantly), but they are the exception, not the rule. I will go through the other laws in later posts.

1. The Law of Leadership

It is better to be first than be better

The Law of Leadership is about convincing people that you are first in a particular market. This is because it is easier to persuade someone that you are first than it is that you are better. In marketing, the “leading” brand in a category is usually the first entrant into that category.

Because marketing is a battle of perceptions, people perceive that “if you are first, then you must be the best”. This is the case even if subsequent brands enter a category with a better product/service. Secondary entrants are seen as inferior, even if they are not.

The ALP and The Law of Leadership

In politics, marketing “categories” can be thought of as issue areas. Health, education, housing, climate change, national security, and gay marriage can be thought of as “categories”.

The ALP has historically been the category leader for many issue areas: workplace rights, health, education and so on. The traditional strong policy areas for Labor. Labor was founded on progressive outcomes on these policy issues. On these examples, the ALP follows the Law of Leadership.

However, the ALP has violated this law by trying to enter other categories and act as the “market leader” – such as on “economic management” and “national security” – issue categories where the Liberal/National Party are first. Beacuse politics is about perceptions, the ALP cannot be better at those issues because the Coalition was “first” — even if Labor has clearly better policies in these areas.

2. The Law of the Category

If you can’t be the first in a category, set up a new category that you can be first in

The Law of the Category relates to the concept in which the range of products or services are broken down into discrete groups of similar or related products/services. For example, the category of “computer” has sub-categories of “super computer”, “personal computer” “laptop” “tablet” “desktop computer” and so on.

Ries and Trout argue that if you can’t be the first in a particular category, try to find or create a new category. For example, in the category of “cars”, Toyota created a new category of “hybrid cars” in which it is now the global leader.In the world of marketing, “consumers” are always interested in what is new, not necessarily what is better. This is why a marketing strategy of producing a “better” product when you are the second entrant into a category is a failed strategy. It is very difficult to overtake the market-leader.

The ALP and the Law of the Category

I’ve already noted that categories can be seen as policy issue areas, and that the ALP is a leader in several established issue categories. A brief look at the Greens Party shows how political parties can create new categories and be a leader. While the ALP may own the general category of “equality and fairness”, the Greens Party have created a sub-category of “marriage equality” and become the market leaders. Even if the ALP supports same-sex marriage, the Greens Party were the first entrant in the minds of voters (this is not a reason for the ALP not to support same-sex marriage).

This is why the ALP should not talk about “green energy” or “green jobs”. It should create different categories of “clean energy” and “clean energy jobs” to own the issue category. The same goes for categories “owned” by other parties: “Accountability” = Democrats, “tough on border security” = Liberal/Nationals, “looking after forests” = Greens Party. It doesn’t matter how draconian Labor makes its refugee policy, voters will always perceive the Liberal/National Party to be the party that is “tough on boat people”.

The Law of the Category doesn’t mean come up with a new name for existing policy areas. It means thinking creatively about policy challenges and social pressures; the area and difference must also be meaningful. If the category is too small, it won’t matter.

3. The Law of the Mind

It’s better to be first in the mind than to be first in the marketplace

Marketing, like politics, is a battle of perception. While policies (and products) are important, how they are perceived is more important. The Law of the Mind is about getting your idea or concept into the mind of your target audience (or consumer). Once an idea is there, it’s almost impossible to change (unless there is some major shock or trauma).

For example, Xerox will always be a photocopier company (despite their attempt to make computers), Microsoft will always be a large, evil corporation and a Labor government will always be a “tax and spend” government. In order to change established perceptions, you need to “blast” your way in. For example, Apple managed to blast into our minds with their ipod campaign, which allowed them to transform from a computer company to a media company.

Ries and Trout make the point that to get into the mind, it helps to have a simple product or service name. The simpler the idea is, the more understandable it is. In politics, “stop the boats” is more understandable than “regional processing”, and “axe the tax” is shorter and simpler than “the Clean Energy Future Act” or “carbon trading”.

The ALP and the Law of the Mind

The ALP is a serial offender against the Law of the Mind. While it is associated with certain categories (health, education, etc, as I’ve mentioned), it regularly wastes enormous time and effort trying to change people’s established perceptions. Similarly, it is “first” in people’s minds on a whole bunch of bad issues — like the knifing of Rudd or the “broken promise” on carbon pricing.

The goal of The Law of the Mind is to “own” a word or concept. At the moment, the Liberal/Nationals are trying to make Labor own the words “crisis” “incompetant” and “debt”. Similarly, the ALP is giving up its traditional ownership on words like “compassion” “equality” and “environment” — all to chase after the mind-share of concepts firmly embedded with the Liberals.

This is a classic problem that besets people who don’t understand how to use market research. Pollsters and focus groups would tell the ALP that they want a government that is “tough on boat people” and that ” marriage is between a man and a woman”. Labor’s response has been to “give the voter what they want”, as well as a shopping list of other attributes. This means Labor provides a draconian refugee policy, and Gillard’s pronouncements that she does not support same-sex marriage. Unfortunately, these concepts are already “owned” by the Liberal/Nationals. By chasing those concepts and that mind-share Labor is diluting its ownership over other words, allowing the Greens Party to snatch up the categories.

Additionally, Labor has missed the opportunity to capitalise on conceptual shocks that could have given it ownership over new concepts. The Global Financial Crisis was an opportunity for Labor to seize the mantle of “good economic managers” and how ruinous the Liberal/Nationals were. Instead, Labor spent the crisis talking about how close to ruin we came, then didn’t fight back against accusations of mismanagement (pink batts, school halls) and apologised for the debt. Now, three years later, Labor has yet again been sadled with the “debt” concept — and is reinforcing it by constantly talking about getting back into surplus (therefore highlighting that we’re in debt).

4. The Law of Perception

Marketing is not a battle of products, it’s a battle of perceptions

The quality of a product is not a determinate of how successful it will be in the market place. A good example is with smart phones. On every spec, the iphone has been outdone by one or more smartphones. Yet the iphone is still the most successful single model of smartphone on the market. Similarly, people take on associations with brands that no amount of marketing can change. When Coke famously introduced New Coke in the USA, market research and over 200,000 blind taste tests proved that it was a better product than Pepsi and “Coke Classic”. Despite a massive advertising campaign, New Coke was third, behind Pepsi and Coke Classic in first place.

The product itself is not central to marketing, it is the perception. Everyone knows that Volvos are the safest cars to drive. This is because Volvo owns the “safety” word, was the leader in the category of “safe cars” and because it has won the perception battle. Even when other brands like Toyota and Ford make cars that are safer than a Volvo, people will still associate Volvo with safety.

The ALP and the Law of Perception

Something I hear quite a bit in Labor is that “if only we had good policies”, then we’d be polling better. Or, “the problem is our bad/ill-conceived/left-wing/right-wing/etc policies”.

The Law of Perceptions means that how people interpret our policies is more important that the detail of the policy itself. This doesn’t mean that we shouldn’t have policies, and it certainly doesn’t mean we should hand over policy-making to marketers, pollsters and focus groups.

What is means is that policies that run counter to people’s perceptions won’t change their mind. They’ve already made up their mind. Our policies should be made within the framework of our values and principles — which means, the positive issue categories that Labor “owns”.

People think that Labor is “weak” on boat people. No amount of tough policies on refugees will change that, no matter how detailed or considered the policy is in reality. The reason that the Liberal/Nationals have such an easy time of talking about policy is because marketing doesn’t happen “in reality”, it happens “in the mind”. They “own” “good economic management” in the mind of the voter, so it doesn’t matter that their costings are missing $70 billion in savings. It’s a losing battle and Labor shouldn’t fight it.

Labor should fight on its strengths. A good example is during 2007 when Labor started talking about “working families”. While the commentariat and many Labor supporters tired of this, it is founded in excellent principles because it created a new issue category and a new word for Labor to own. When polled about “who could manage the economy the best”, most people answered “the Liberals”. When asked “who could manage the economy the best for working families”, most people answered “Labor”. This is because “working families” was a sub-category of “the economy” — Labor was first in the category and because it linked to other issue categories that Labor was associated with (workplace rights, fairness, justice, etc), it won the battle of perceptions. The Liberals can own “the economy” but that was irrelevant as long as the policy debate was about “the economy for working families“.

5. The Law of Focus

The most powerful concept in marketing is owning a word in the prospect’s mind

The Law of Focus challenges us to boil our marketing message down to just one idea. Ries and Trout use the example of Coke, which for generations owned the word “refreshment”, while Hoover owned the word “vaccuum-cleaner” and Heinz owned the word “ketchup” (this is an American book afterall).

A key element to the Law of Focus is to resist “line extension” — trying to associate your brand with multiple products in different categories. They use the example of successful companies that have encountered trouble due to line-extension, such as IBM. IBM was once associated with “computers” but extended its brand to many different products across multiple categories, including software, satelites, and so on. As a result, those lines largely failed and the core business, computers, was undermined. Similarly, when Coke tried to extend its brand into clothing and fashion, it worked for a few years, and then the market crashed overnight, saddling Coke with millions of dollars worth of unsellable stock.

In politics, the Law of Focus means staying true to the central tenents of your party. The Liberals for example are damaging their brand by proposing “big government” policies rather than free-market ones (for example, their paid parental leave scheme and their direct action climate policy). Labor damages its brand through a “tough on refugees” policy and (less recently) its indefensible support for the Australia-US Free Trade Agreement back in 2004.

The ALP and the Law of Focus

You can’t be everything to everyone. Branching out into different areas can be dangerous, as it weakens the brand (or in the ALP’s case, the party) as a whole. Ries and Trout say, “No matter how complicated the product, no matter how complicated the needs of the market, it’s always better to focus on one word or benefit than two or three or four.”

This means Labor needs to kill the long, detailed policy explanations and the “policy announcement a day” approach. This is where Labor is unable to communicate about what it has achieved because we’re all over the place.

During the last Federal Election, Labor would announce a new policy every day, and sometimes several policies a day. We had no focus. Although we have lots of great policies, we should concentrate our effort and what we say to one key idea. Less is more. Too much policy information, too many “new” policies, too many new announcements.

The most successful time for Labor was when it spent months talking about the same issue: Rudd rode high on the back of months of talk about the CPRS, climate change and Copenhagen (and was let down because of unfulfilled expectations). Similarly, when he was tanking in 2010 against Abbott, he turned perceptions around by spending a month visiting hospitals and talking about health reform. Because of the focus, the message got through and people started to listen.

While this may infuriate the Canberra Press Gallery, who will complain bitterly on Insiders and in the pages of The Australian, we know that messages become stronger when they are narrowed and repeated.

Some concluding thoughts

Marketing is a dirty word in some circles, but much of what Ries and Trout talk about is common sense, and if it were expressed without using the term “marketing” “segments” “products” or “brand”, it would largely be accepted as sound political advice.

(It’s worth acknowledging that although The 22 Immutable Laws of Marketing is a marketing classic, many contemporary marketers rail against it and consider many of the laws to be out of date or irrelevant.)

Reading books like Inside Kevin 07 and Looking for the Light on the Hill, which purport to be “insider” accounts of Labor from 2007 to 2010, it’s clear that Labor is trying to adopt modern marketing techniques. Unfortunately, while many of the methods of marketing have been adopted — direct mail, television advertising, market research and focus groups, the principles behind the marketing have not.

Because Labor’s membership has hollowed out, mass marketing techniques, branding, and positioning are all filling in the gap left by a once-active membership. Lots of active members serve as ambassadors and chamions for a cause, and ensure that internal forums and discussions are geniunely representative of the community at large. Market research can only go so far when, after the focus group is over, there is no one to champion the meaning behind the information and interpretation is left to party officials and ministerial advisors.

Labor, despite the fact that it regularly violates these laws, can turn itself around.

The discussion within Labor following the Bracks, Carr, Faulkner Review into the 2010 Federal Election has focused on rule reform. This is a red herring. Labor’s problem is not rules, or factions, it is that members don’t know what Labor stands for anymore. Because Labor has given up its issue categories, pursues ones that dilute its brand and has no focus. Strong values and a clear vision will assist with all five of these rules.

In the next post, I’ll cover more rules such as the Law of Exclusivity (why Labor can never own a Liberal concept) and the Law of Duality (why Australia will always have a 2 party system).