Wednesday, April 12, 2006

Lost Election Makes Man A Multimillionaire

The Toyota Way

John Zogby Story

In 1981, John Zogby, a 33-year-old history professor and founder of the Utica Citizen's Lobby, decided to add another credential to his resume: mayor of Utica, N.Y. Then a curious thing happened: He lost, but he knew beforehand how much he would lose by. He and his students had conducted a preelection poll that showed him getting 14% to 15% of the vote. And that, says Zogby, is exactly what he got.

As a smart guy who knows how to capitalize on success, Zogby gave up office-seeking and turned to polling. In the years following, Zogby International grew to an organization with 52 full-time employees, $5 million in annual sales, political and corporate clients of all stripes, offices in Washington, D.C., and Utica, and an international reputation fostered by the founder's knack for spotting opportunities, taking risks, and calling the cards right.

Zogby International is currently polling the 2004 presidential race for NBC News and Reuters and conducting statewide and national polls for the Miami Herald, the Toledo Blade, and the Atlanta Journal-Constitution.

Here is his story:

I truly backed into this business. I was a history professor and a liberal political activist. All that merged when I ran for mayor in the Democratic primary in Utica, where I was born and raised. After my loss there, I went to work for a national Arab American organization with my brother Jim. A number of us had some philosophical differences with the chairman of the board and were fired on September 10, 1984. Two days later, on September 12, I became an independent political and fundraising consultant with one client, a Forbes 400-type character from Boston named Sam Phillips. Ten weeks later, Sam Phillips dropped dead at the age of 54.

These setbacks reinforced what I had learned at home from my father, a Lebanese immigrant who worked with his brothers in their grocery store 7 a.m. to 7 p.m., six days of the week. He taught me that a man can do anything he wants to do. He also taught me that if the customer wants it, find a way to do it.

To survive I had to branch out into retail advertising, public relations, and nonprofit agencies. Then, in 1987, I made a momentous decision, though it may not sound like it. I decided to poll the households of Watertown, N.Y. The Army had decided to expand Fort Drum, moving in the 10th Mountain Division, which meant bringing 10,000 personnel and 20,000 civilians into a declining region. It was the most dramatic story in upstate New York in the 1980s.

The Fort Drum steering council, a public-private consortium, underwrote quarterly household surveys. We wanted to know whether the newcomers were voters, had ever marched in a demonstration. When they shopped, did they look for certain brands of cereal, soft drinks, detergent -- or did they buy on sale? I began doing studies for housing developers, shopping malls. There were plans to build townhouses, but that was a complete bomb. Our surveys showed that when people move to a place where there is a lot of land, they want a house with a yard.

I couldn't compete in Washington in the '80s, so I took the blue highways approach, going into local communities that had never done polling and capturing the imagination of the local media.

The next benchmark came in 1991 when we decided to launch -- out of pocket -- a statewide Zogby poll. Well, I say I funded the poll out of pocket, but I didn't have anything in my pocket. There was only one other statewide poll in the Empire State. The timing was perfect. Our poll in early December showed that President Bush would defeat Mario Cuomo, then governor, even in New York State. The poll came out the day before Cuomo's plane would fly him from Albany to New Hampshire to file. Cuomo decided not to go.

In 1996, after we got all the political primaries right, I got a call from Reuters. We went on to produce the Reuters-Zogby Poll. Now the whole world is watching, and we get the Clinton-Dole race right, with the least margin of error. We said Clinton would win by 8.1%. The actual margin ended up at 8.4.

In polling, you need to ask the kinds of questions that will determine what is important to people. In 2000, we were polling 10 states and the nation as a whole for Reuters and NBC. Whenever Gore would go up in the national, he'd go down in the battleground states. Same with Bush. Tim Russert asked me, "How can this be?" I had headquarters add a new question to the poll: You live in the Land of Oz. There is an election for mayor between the Tin Man, who has all brains and no heart, and the Scarecrow, who is all heart and no brains. The next day, Gore and Bush were almost tied. But, more importantly, the Tin Man and Scarecrow were tied, 46.2 to 46.2. That told me everything.

Most polling is still done by phone, but it's now taking a lot more phone calls to get a sample. The Do Not Call Registry doesn't affect us, but it's indirectly killing us. It emboldens people to hang up. For the presidential race we're going to do all 50 states interactively. By getting e-mail addresses of a representative sample of the electorate, we can invite 50,000 to 100,000 people to participate at once. In seconds, we can have 1,000 responses.

I want to be the Gallup of my generation, the household word, the generic. I have plans to make this a $40 million corporation, partly by pursuing licensing agreements with partners around the world. We're getting ready to poll Swaziland. We've completed Botswana and Malawi. Most of these polls are corporate-sponsored. We want to know the investment climate, the path to reform.

Once I was a very liberal professor activist, and I saw a political career for myself. But I managed to be cured of that disease.