Why do incumbents have an advantage

Donators prefer to donate to campaigns they think will win. Incumbents have the added advantage of drawing money from Washington-area donors. Maine candidates have shown the ability to raise large sums of money, Powell said, referring to the election when Michaud and Kevin Raye both raised more than a million dollars in their campaign for an open House seat. Apply to our Programs. Follow Us On Instagram. Like Us On Facebook. Post was not sent - check your email addresses! Macmillan and Selden recommend a disciplined process that sounds obvious but that few companies orchestrate well.

Mine your customer data to identify segments based on profitability and needs. A cement company did this by finding out which customers would pay what for different formulations of ready-mix concrete greater strength versus faster pouring and different services including design advice.

By tailoring its offerings for each segment, it substantially increased profit per ton of concrete. Group similar individuals into segments, using behaviors and characteristics most associated with profitability in your most profitable cohort and with unprofitability in your least profitable group.

Identify what benefits each segment wants, and what each is willing to pay for them. A cement company had developed an additive for ready-mix concrete. The more additive used, the cheaper the concrete and the greater its strength. They wanted the faster-pouring mix, and were willing to pay extra for it. Identify actions reconfiguring offerings, modifying delivery, altering price that can prevent defections of your most profitable customers and reduce losses incurred by profit-eating customers.

The cement company customized its ready-mix formulas for its two segments, charging a bit more to workability seekers. A distribution company found a large group of unprofitable customers: small contractors who took months to pay because they had to wait for their own customers to pay them first.

The company cut a deal with the contractors: a higher price in exchange for delayed payment, and a significant discount for early payment. CEOs of large companies often complain to us about how hard it is to grow profits organically. That kind of thinking is ludicrous—and strategically myopic. Market-leading companies can grow simply by tapping into and exploiting their current customer information, which already includes data about pretty much every kind of customer there is.

The problem is that nearly all companies focus their strategies on defending products and territories rather than on what most successful invaders actually attack: customer segments. If you run a market-leading company, you should never be blindsided by an invader.

The source of that advantage is threefold: First, you should have deeper insights into the various needs of the customers you serve than any potential invader does. Second, you should better understand the profitability of serving them and, therefore, be in a stronger position to invest resources to capture and retain the best of them.

Third, and perhaps most important, your knowledge of the needs and profitability of your customer segments is far less susceptible to imitation than are the features and functions of your products. Specifically, you must view needs-based customer segments, not products and geographies, as the basic building blocks of your strategy—and you must have an accounting system that reports profitability accordingly. Why should you start prospecting in uncharted areas while leaving the gold on your own territory for others to mine?

It demonstrates how successive refinements in customer-needs segmentation clarify sources of profitability, creating a virtuous circle in which the incumbent makes ever more targeted investments of scarce corporate resources that simultaneously increase profits and raise entry barriers for potential invaders. Then we outline a systematic, discovery-driven approach to creating a customer-centric information base. We also explore how to organize business units so that they focus not on products but on the customer segments and subsegments where opportunities for your company—and for current rivals and would-be disrupters—truly lie.

Here we explore an example based on our research at CEMEX, which as a producer of commodity building materials might be considered an unlikely candidate for our approach. Zambrano, from a regional Mexican cement manufacturer to a global behemoth. In our simplified example, a company we call Mix C-Ment has developed a unique and patented additive to ready-mix concrete that allows the company to produce a more durable, lower-cost product than its competitors do.

The more additive that is used, the cheaper the concrete and the greater its compressive strength. The more cream and sugar that a dairy puts in its ice cream, for instance, the greater the fat and calorie content but the better the flavor and texture. Trade-offs like these are opportunities for differentiation. However, in our example, Mix C-Ment is not in a position to uncover them because its mind-set is rooted in conventional cost accounting.

In traditional product-oriented fashion, the company tracks data about the expenses associated with the production of different types of ready-mix concrete.

In effect, it prices a single good to sell to the broad market. First, it needs to invest in research that exploits its unique access to its customer information. The process of discovering this kind of information is not trivial, and we will discuss it in more detail later.

Mix C-Ment has not yet looked beyond the product needs of its customers and is simply allocating the marketing, service, and other fixed costs of the two segments according to tons sold.

Suppose that the strength seekers are happy to pay roughly the original price to get the right-strength concrete and need only modest marketing support. The research reveals that the workability seekers, by contrast, need greater marketing support—to help them translate the improved workability into better construction bids. If those needs differentiate customers into, say, high- and low-service categories, four subsegments emerge: high-service strength seekers builders of load-bearing columns for buildings and bridges , low-service strength seekers those who construct roadbeds , high-service workability seekers builders of staircases in buildings or walls for dams , and low-service workability seekers those who lay road pavement and floors.

The company has learned that high-service seekers will pay for that level of service and that low-service seekers are happy without it if they get a modestly lower price. Mix C-Ment could segment still further.

It might, for instance, delve more deeply into the technical-service needs of its workability and strength seekers and find sub-subsegments that require, say, design advice for complex projects such as dams, underwater seawalls, and structures that bear heavy loads. It could, therefore, offer hyperservice to customers with highly complex design challenges, enabling them to avoid significant exposure to expensive design and rework flaws. Such customers would be delighted to pay a premium for ready-mix concrete to get such a vital service.

But how far is it wise to go? Another important factor is the power of seniority and experience. Almost invariably in campaigns that feature a congressional veteran against an upstart challenger, the incumbent stresses the importance of his seniority and experience in Washington.

This is a powerful argument, for it is certainly true that seniority in Congress results in more power, better committee assignments, and greater ability to get bills passed—or greater ability to stop unfavorable bills.

All this can translate into a larger voice for the state or district being represented by the incumbent. In the unlikely event that the challenger wins, she is going to be a freshman with little experience and no seniority. Essentially what we have in recent House reapportionment schemes are majority parties in state legislatures drawing boundaries that favor members of their own party.

A direct result of this is the decline of competitive House seats. A safe seat is one that is securely in the hands of one party as long as that party puts forward a reasonable candidate. Candidates in safe seats win with 67 percent or more of the vote in the district. Nine months out from the House races, the Cook Political Report listed seats as solidly Democratic and seats as solidly Republican.

This means that roughly 80 percent of elections for seats in the House of Representatives—i. Incumbents benefit greatly from name recognition and positive media coverage. Incumbents usually enjoy a name recognition advantage over their challengers. Any incumbent who manages to stay out of scandal is virtually guaranteed positive coverage in the local media.

This is especially true of local television coverage, which tends to focus on staged events at which the incumbent appears at events such as a local conference on aging, a local pro-am golf tournament, or a construction ground-breaking for which the incumbent helped secure the funds.

Rarely does local media focus on how incumbents vote on key issues and how those votes affect real people. Representatives and senators are given allowances every year to cover their expenses.