Customer, May I?
MOST MARKETING IS SPAM.
TV ads are spam (except for infomercials, surprisingly enough).
Direct mail to strangers is spam. So are radio ads and the king of all spam, junk e-mail.
Spam? The ubiquitous luncheon meat was immortalized in a Monty Python sketch about a restaurant that serves Spam with everything – Spam and eggs, Spam with bacon and eggs, even Spam with Spam. And like the Spam in the Python restaurant, marketers are deluging consumers’ lives with an almost insurmountable amount of clutter. They are unwelcome, unexpected, unproductive interruptions from what we set out to do in the first place.
What if the postmaster general called the folks at L.L. Bean and offered them free postage for a year? And then R.R. Donnelley called to offer them free printing as well? What would happen to their profits? Through the roof, they’d go.
But what if the postmaster general and Donnelley turned around and offered the same deal to every single catalog company? Suddenly there’d be millions of catalogs in your mailbox – every day. L.L. Bean would go out of business for lack of sales.
Marketing messages are going to continue to get cheaper. With an infinite number of Web sites and an infinite number of cable TV channels, there will be an infinite number of interruptive ads.
A couple of years ago, after forming a company – Yoyodyne – to build the technology and, more important, the techniques necessary to do successful Web promotions for the likes of AOL, Delphi, and Microsoft, I realized that my journey was a metaphor for what millions of marketers were doing, or were about to do. I’d gone from spending oodles of money in traditional advertising to building something completely different, vastly more efficient, and measurably more effective.
We’d honed the idea of Permission Marketing.
The highest level of permission The goal of the Permission Marketer is to move consumers up the permission ladder, from strangers to friends to customers. And from customers to loyal users. At every step up theladder, trust grows, responsibility grows, and profits grow.
There are five levels of permission, the highest being intravenous. The intravenous level is what you’ve got going when you’re in the intensive care unit with a needle in your arm and a bag of medicine dripping into your veins. Your doctor has your written permission to inject just about anything he wants into your IV bag. And he can charge you for the treatment and fully expect that you’ll pay for it.
A marketer who has achieved intravenous permission from his customer is making the buying decisions on behalf of the consumer. The privilege is huge, but the downside is significant. If the marketer guesses wrong or, worse, abuses the permission, it will be canceled in a heartbeat.
Why would anyone give up so much control? The first reason is to save time. Streamline, a pioneer in automated home delivery, would fail if America went back to having one spouse stay at home all day. Instead of paying Streamline to collect your groceries, dry cleaning, and photographs, you’d invest a few hours and save a few dollars by doing it yourself.
The second reason is to save money. A magazine might cost three times as much on the newsstand as it does by subscription.
The third reason is a little more surprising. Many consumers sign up for intravenous permission because they don’t like to make a choice. The Book of the Month Club virtually guaranteed that you’d be able to read what everyone else is reading.
The fourth reason is to avoid stock outs. The milkman makes sure we never run out of milk. Same with the guy who delivers water for the water cooler.
I wasn’t surprised to discover that Gateway announced computers by subscription. Instead of buying a computer and taking your chances, just pay them $49 a month and every two years they upgrade you to the latest and greatest model. Expect to see this happen in more and more industries.
Of course, there’s a second level of intravenous marketing called “purchase-on-approval.” Cendant makes a huge amount of money with buying clubs that individuals join by authorizing the automatic charge of an annual fee to their credit cards. With excellent marketing, they’ve attracted tens of millions of members. But instead of working hard to upgrade the permission at every step, these marketers often rely on the invisibility of the credit card payment to generate an annuity.
Amazon.com intends to build the next level of the business around purchase-on-approval. By understanding the needs and desires of their customers, they can use collaborative filtering – using a computer to figure out the likelihood that you’ll like something based on your past purchases – to alert you to a book you might want to try. They can even use (gasp) a human being to make recommendations!
In many ways, purchase-on-approval is the most powerful form of permission that many marketers will ever achieve. While it lacks the sexiness of full intravenous, it does provide a wide-open channel between the busy consumer and the marketer who needs to reach him.
The points permission level The next level of permission is points, a formalized, scalable approach to attracting and keeping the prospect’s attention. Remember S&H Green Stamps? What a great idea. Every time you purchased a product at a participating store, you got some stamps. Fill up enough booklets and you were eligible for a free gift. Even though Green Stamps aren’t around anymore, the concept is more valid than ever.
Of course, the more alert retailer would use Green Stamps to modify consumer behavior and, specifically, to reward consumers for paying attention. For example, it’s not hard to imagine offering bonus Green Stamps to anyone who buys Donna Karan shoes today. Even if I wasn’t about to buy a pair of shoes, I’m certainly likely to check them out if I’m collecting the points you’re offering.
Think about how much more efficient this is than putting something on sale. Instead of having to give a huge discount (basically a cash payment) and gaining no long-term benefit, the merchant can give away just a few of the points and not only get attention today, but build a program that’s even more likely to work tomorrow.
This is a critical component of a points system and one of the reasons this level of permission is so exciting. It’s almost impossible to quantify the cost (and value) of a TV campaign. Putting products on sale or paying salespeople a spiff may indeed move more product, but it’s essentially impossible to determine exactly how much currency you need to spend to get what you want.
Points solve that problem. Spend more points, get more results. And that changes this from a spin of the wheel to a predictable, testable science.
In Yoyodyne’s Web-surfing promotion, Get Rich Click, the average consumer visits more than five Web sites that we select for them. In EZSpree, our shopping promotion, the average consumer visited six stores, clicked through on more than 20 percent of them, and a full 14 percent of participants made an online purchase through the promotion.
These numbers are orders of magnitude higher than other consumer behaviors on the Web, and the reasons are simple:
1. No one enters a promotion thinking he’s going to lose.
2. No one quits a promotion when she’s tied for first place.
3. The fear of losing because you don’t have enough points outweighs the cost of attention that comes from performing in the way the marketer asks.
4. If the interactions are fun and good for the ego, it’s likely the consumer will continue to participate.
The personal relationship level Surprisingly, personal relationships rank behind points in the permission hierarchy. Why? Because they don’t scale.
Personal relationships in the business world are slow and difficult to make deeper. It might take years of golf and excellent products and focused selling and word of mouth to make a relationship more profitable.
Think about your Rolodex for a second. You could probably divide it into three groups: highly permissioned contacts (individuals you have permission to call and sell to at will); somewhat permissioned individuals (folks whom, because of word or mouth or previous contacts, you have the right to at least try to market to); and finally strangers you know about where you have to start from scratch to get permission.
I love my Palm Pilot organizer. It allows me to carry 2,000 contacts with me in my pocket. If someone stole it, would it do him any good? What is he going to say? “Hi, I stole Seth Godin’s Pilot, I got your number, and I’d love to come meet with you tomorrow?” Of course not. The data’s worthless. The permission is priceless.
The brand trust level Much lower down the permission list is brand trust. This is the tried-and-true branding that is the mantra of most Interruption Marketers. It is the virtually unmeasurable but oh-so-fun way to be in the marketing business.
Marlboro communicates brand trust. So do Ivory and Campbell’s and Starbucks. It is a vague, but soft and safe form of product confidence that consumers feel when interacting with a brand that’s spent a ton of money on consistent, frequent interruptive messages.
It’s extraordinarily expensive to create, takes a very long time to develop, is hard to measure, and is harder still to manipulate. Yet it is the most common way marketers practice their craft.
Brand trust leads to brand extensions. If people trust Ivory soap, then by extension they’ll trust Ivory dishwashing liquid. When the new product reinforces the brand trust of the original, the permission is enhanced. On the other hand, a brand extension that fails can do significant harm to brand trust.
Bell Atlantic is a prime example of a company burning its brand trust in exchange for short-term profits. A few years ago a letter from them meant you were getting a phone bill. You opened it, read it, and paid it. Then an eager marketer discovered that putting an offer into a letter that looked like a phone bill led to a large number of people opening it and reading it. Two or three times as many people sign up for call waiting when the offer comes in an envelope that looks likea bill. For a while.
Of course, Bell Atlantic isn’t leveraging their brand trust. They’re ruining it. The envelope/bill connection is no longer sacrosanct. It is no longer clear to the consumer that he must open the envelope. Bills won’t get opened so quickly or paid so fast. And when Bell Atlantic speaks, the customer won’t be so quick to listen.
Over time it gets harder and harder to raise the level of brand trust a consumer has. Is it possible to have a significantly better opinion of Campbell’s or the New York Yankees or Bell Atlantic?
The situational level The last useful level of permission is situational permission. This is very time sensitive but also very useful. When a consumer calls an 800 number, she has given situational permission. When you stop to ask for directions, or to ask a store clerk for advice on a gift, you’ve given situational permission.
The consumer has initiated the particular interaction, so there is no question of appropriateness. There is either money on the table right now or in the near future, or the consumer wouldn’t have initiated the dialog. This is an opportunity for almost any marketer. However, it must be treated properly or it evaporates.
Because there are millions of potential customers, your marketers are your front-line people – the folks behind the cash register or answering the phones. So the first concern revolves around leveraging this large and generally untrained group of marketers. There’s a reason why they wear those uniforms at McDonald’s – it’s the easiest way to mandate a level of quality. “Do you want fries with that?” are perhaps the six most profitable situational permission marketing words in history.
The second concern is that this level of permission is so temporary that if it isn’t handled quickly and well, it disappears.
So where are your prospects on this five-step ladder? Is the world divided into two groups, with your customers on one side and millions of strangers on the other?
The challenge as we move forward in our totally wired, supersonic world is to develop techniques to turn those strangers into friends, and then transform those friends into customers. The best time to start is today, before your competition does.
In order of importance, here are the five levels of permission marketers can expect to get from consumers.
1. Intravenous
2. Points
3. Personal Relationships
4. Brand trust
5. Situational
