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Welcome to the Marketing Evolution...Marketing Today (tm)

 

Permission Marketing
by Seth Godin


CHAPTER TWO

PERMISSION MARKETING-THE WAY TO MAKE ADVERTISING WORK AGAIN. POWERFUL ADVERTISING IS ANTICIPATED, PERSONAL AND RELEVANT.

What if you could turn clutter into an asset? What if the tremendous barriers faced by Interruption Marketers actually became an advantage for you and your company?

The truth is that even though clutter is bad and getting worse, Permission Marketers turn clutter to their advantage. In fact, the worse the clutter gets, the more profitable your Permission Marketing efforts become.

In this chapter, I'm going to outline the core ideas behind Permission Marketing. Every marketing campaign gets better when an element of permission is added. In some cases, a switch to marketing with Permission can fundamentally change a company's entire business model and profit structure. At the very least, the basic concepts of Permission will help you formulate and launch every marketing campaign with greater insight and success.

Interruption marketing fails because it is unable to get enough attention from consumers. Permission Marketing works by taking advantage of the same problem-there just isn't enough attention to go around.

WE ARE ALL RUNNING OUT OF TIME

Two hundred years ago, natural resources and raw materials were scarce. People needed land to grow food, metal to turn into pots, and silicates and other natural elements to make windows for houses. Tycoons who cornered the market in these and other resources made a fortune. By making a market in a scarce resource, you can make a profit.

With the birth of the industrial revolution, and the growth of our consumer economy, the resource scarcity shifted from raw materials to finished goods. Factories were at capacity. The great industrialists, like Carnegie and Ford, earned their millions by providing what the economy demanded. Marketers could call the shots, because other options were scarce.

Once factories caught up with demand, marketers developed brands that consumers would desire and pay a premium to own. People were willing to walk a mile for a Camel, and they'd rather fight than switch their brand of cigarette. When brands were new and impressive, owning the right brand was vital.

But in today's free market, there are plenty of factories, plenty of brands and way too many choices. With just a little effort and a little savings, we can get almost anything we want. You can find a TV set in every house in this country. People throw away their broken microwave ovens instead of having them repaired.

This surplus situation, or abundance of goods, is especially clear when it comes to information and services. Making another copy of a software program or printing another CD costs almost nothing. Bookstores compete to offer 50,000, 100,000 or even 1,000,000 different books-each for less than $25. There's a huge surplus of intellectual property and services out there.

Imagine a tropical island, populated by people with simple needs and plenty of resources. You won't find a bustling economy there. That's because you need two   things in order to have an economy: people who want things, and a scarcity of things they want. Without scarcity, there's no basis for an economy.

When there's an abundance of any commodity, the value of that commodity plummets. If a commodity can be produced at will and costs little or nothing to create, it's not likely to be scarce, either. That's the situation with information and services today. They're abundant and cheap. Information on the web, for example, is plentiful and free.

Software provides another example. The most popular web server is not made by Microsoft or Netscape. And it doesn't cost $1,000 or $10,000. It's called Apache, and it's created by a loosely knit consortium of programmers and it's is totally free. Free to download, free to use. As resources go, information is not scarce.

There is one critical resource, though, that is in chronically short supply. Bill Gates has just as much as you do. And even Warren Buffet can't buy more. That scarce resource is TIME. And in light of today's information glut, that means that there's a vast shortage of ATTENTION.

This combined shortage of time and attention is unique to today's information age. Consumers are now willing to pay handsomely to save time, while marketers are eager to pay bundles to get attention.

Interruption Marketing is the enemy of anyone trying to save time. By constantly interrupting what we are doing at any given moment, the marketer who interrupts us not only tends to fail at selling his product, but wastes our most coveted commodity, time. In the long run, therefore, Interruption Marketing is doomed as a mass marketing tool. The cost to the consumer is just too high.

The alternative is Permission Marketing, which offers the consumer an opportunity to volunteer to be marketed to. By only talking to volunteers, Permission Marketing guarantees that consumers pay more attention to the marketing message. It allows marketers to calmly and succinctly tell their story, without fear of being interrupted by competitors or Interruption Marketers. It serves both consumers and marketers in a symbiotic exchange.

Permission Marketing encourages consumers to participate in a long-term, interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages. Imagine your marketing message being read by 70% of the prospects you send it to (not 5% or even 1%). Then imagine that more than 35% respond. That's what happens when you interact with your prospects one at a time, with individual messages, exchanged with their permission over time.

Permission marketing is anticipated, personal, relevant. Anticipated-people look forward to hearing from you Personal-the messages are directly related to the individual.

Relevant-the marketing is about something the prospect is interested in.

I know what you're thinking. There's a catch. If you have to personalize every customer message, that's prohibitive. If you're still thinking within the framework of traditional marketing, you're right. But in today's information age, targeting customers individually is not as difficult as it sounds. Permission Marketing takes the cost of interrupting the consumer and spreads it out, over not one message, but dozens of messages. And this leverage leads to substantial competitive advantages and profits.

While your competition continues to interrupt strangers with mediocre results, your Permission Marketing campaign is turning strangers into friends and friends into customers.

The easiest way to contrast the Interruption Marketer with the Permission Marketer is with an analogy about getting married. It also serves to exemplify how sending multiple individualized messages over time works better than a single message, no matter how impressive that single message is.

THE TWO WAYS TO GET MARRIED

The Interruption Marketer buys an extremely expensive suit. New shoes. Fashionable accessories. Then, working with the best databases and marketing strategists, selects the demographically ideal singles bar.

Walking into the singles bar, the Interruption Marketer marches up to the nearest person and proposes marriage. If turned down, the Marketer repeats this process on every person in the bar.

If the Marketer comes up empty-handed after spending the entire evening proposing, it is obvious that the blame should be placed on the suit and the shoes. The tailor is fired. The strategy expert who picked the bar is fired.

And the Interruption Marketer tries again at a different singles bar.

If this sounds familiar, it should. It's the way most large marketers look at the world. They hire an agency. They build fancy ads. They "research" the ideal place to run the ads. They interrupt people and hope that one in a hundred will go ahead and buy something. And then, when they fail, they fire their agency!

The other way to get married is a lot more fun, a lot more rational, and a lot more successful. It's called dating.

A Permission Marketer goes on a date. If it goes well, the two of them go on another date. And then another. Until, after ten or twelve dates, both sides can really communicate with each other about their needs and desires. After twenty dates, they meet each other's families. And finally, after three or four months of dating, the Permission Marketer proposes marriage.

Permission Marketing is just like dating. It turns strangers into friends and friends into lifetime customers. Many of the rules of dating apply, and so do many of the benefits.

THE FIVE STEPS TO DATING YOUR CUSTOMER

Every marketer must offer the prospective customer an incentive for volunteering. In the vernacular of dating, that means you have to offer something that makes it interesting enough to go out on a first date. A first date, after all, represents a big investment in time, money and ego. So there better be reason enough to volunteer.

Without a selfish reason to continue dating, your new potential customer (and your new potential date) will refuse you a second chance. If you don't provide a benefit to the consumer for paying attention, your offer will suffer the same fate as every other ad campaign that's vying for their attention. It will be ignored.

The incentive you offer to the customer can range from information, to entertainment, to a sweepstakes, to outright payment for the prospect's attention. But the incentive must be overt, obvious and clearly delivered.

This is the most obvious difference between Permission Marketing and Interruption Marketing. Interruption Marketers spend all of their time interrupting strangers, in an almost pitiful attempt to bolster popularity and capture attention. Permission Marketers spend as little time and money talking to strangers as they can. Instead, they move as quickly as they can to turn strangers into prospects who choose to "opt-in" to a series of communications.

Second, using the attention offered by the consumer, the marketer offers a curriculum over time, teaching the consumer about the product or service he has to offer. The Permission Marketer knows that the first date is an opportunity to sell the other person on a second date.

Every step along the way has to be interesting, useful and relevant.

Since the prospect has agreed to pay attention, it's much easier to teach them about your product. Instead of filling each ensuing message with entertainment designed to attract attention, or with sizzle designed to attract the attention of strangers, the Permission Marketer is able to focus on product benefits -- on specific, focused ways this product will help that prospect. Without question, this ability to talk freely over time is the most powerful element of this marketing approach.

The third step involves reinforcing the incentive. Over time, any incentive wears out. Just as your date may tire of even the finest restaurant, the prospective customer may show fatigue with the same repeated incentive. The Permission Marketer must work to reinforce the incentive, to be sure that the attention continues. This is surprisingly easy. Because this is a two-way dialogue, not a narcissistic monologue, the marketer can adjust the incentives being offered and fine tune them for each prospect.

Along with reinforcing the incentive, the fourth step is to increase the level of permission the marketer receives from the potential customer. Now I won't go into detail on what step of the dating process this corresponds to, but in marketing terms, the goal is to motivate the consumer to give more and more permission over time.

Permission to gather more data about the customer's personal life, or hobbies, or interests. Permission to offer a new category of product for the customer's consideration. Permission to provide a product sample. The range of permission you can obtain from a customer is very wide, and limited only by its relevance to the customer.

Over time, the marketer uses the permission he's obtained to change consumer behavior, that is, get them to say, "I do." That's how you turn permission into profits. After permission is granted, that's how it becomes a truly significant asset for the marketer. Now you can live happily ever after by repeating the aforementioned process while selling your customer more and more products. In other words, the fifth and final step is to leverage your permission into a profitable situation for both of you. Remember, you have access to the most valuable thing a customer can offer - attention.

------------------

[sidebar]

Five Steps to Dating Your Customer

1. Offer the prospect an incentive to volunteer

2. Using the attention offered by the prospect, offer a curriculum over time, teaching the consumer about your product or service

3. Reinforce the incentive to guarantee that the prospect maintains the permission

4. Offer additional incentives to get even more permission from the consumer

5. Over time, leverage the permission to change consumer behavior towards profits

--------------------

PERMISSION IS AN INVESTMENT

Nothing good is free, and that goes double for Permission. Acquiring solid, deep permission from targeted customers is an investment.

What is one permission worth? According to their annual report, AOL has paid as much as $300 to get one new customer. American Express invests nearly $150 to get a new cardholder. Does American Express earn enough in fees to justify this expense? Not at all. But the other benefits associated with acquiring the permission to market to a cardmember outweigh the high cost. Amex sells its customers a wide range of products, not just an American Express card. They also use sophisticated database management tools to track customer behavior so they can tailor offers to individuals. They leverage their permission to increase revenue.

One of the leading brokerage houses on Wall Street is currently paying $15 in media acquisition costs just for permission to call a potential customer on the phone! Yes, it's that expensive, and yes, it's worth even more than that. They've discovered that the yield from an anticipated, welcomed, personal phone call is so much higher than a cold call during dinner that they're willing to pay handsomely for the privilege.

While these (and other) marketers have discovered the power of permission, many interruption marketers have found, to their chagrin, that the cost of generating one new customer is rapidly approaching the net present value of that consumer. In other words, they're close to losing money on every customer so they try to make it up in volume.

Permission Marketing cuts through the clutter and allows a marketer to speak to prospects as friends, not strangers. This personalized, anticipated, frequent, and relevant communication has infinitely more impact than a random message displayed in a random place at a random moment.

Think about choosing a nice restaurant for dinner. If you learn about a restaurant from a cold-calling telemarketer, or from an unsolicited direct mail piece, you're likely to ignore the recommendation. But if a trusted friend offers a restaurant recommendation, you're likely to try it out.

Permission Marketing lets you turn strangers, folks that might otherwise ignore your unsolicited offer, into people willing to pay attention when your message arrives in an expected, appreciated way.

An interruption marketer looks for a job by sending a resume to one thousand strangers. A Permission Marketer gets a job by focusing on one company and networking with them, consulting for them, working with them until they trust him enough to offer him a full time position..

A book publisher who uses interruption marketing sells children's books by shipping them to bookstores, hoping that the right audience will stumble across them. A Permission Marketer builds book clubs at every school in the country.

An interruption marketer sells a new product by introducing it on national TV. A Permission Marketer sells a new product by informing all her existing customers about a way to get a free sample.

Interruption Permission
Anticipated No. Yes.
Personal Not usually. Yes.
Relevant Sometimes. Yes.

PERMISSION MARKETING IS AN OLD CONCEPT WITH NEW

RELEVANCE

Permission Marketing isn't as glamorous as hiring Steven Spielberg to direct a commercial starring a bevy of supermodels. It isn't as easy as running an ad a few more times. It isn't as cheap as building a web site and hoping that people find it on a search engine. In fact, it's hard work.

Worst of all, Permission Marketing requires patience.

Permission Marketing campaigns grow over time-the opposite of what most marketers look for these days. And Permission Marketing requires a leap of faith. Even a bad Interruption campaign gets some results right away, while a permission campaign requires infrastructure, and a belief in the durability of the permission concept before it blossoms with success..

But unlike Interruption Marketing, Permission Marketing is a measurable process. It evolves over time for every company that uses it. It becomes an increasingly valuable asset. The more you commit to Permission Marketing campaigns, the better they work over time. And these fast-moving, leveragable processes are the key to success in our cluttered age.

So, if Permission Marketing is so effective, and the ideas behind it not really new, why was the concept not used with effectiveness years ago? Why was this book just published?

Permission Marketing has been around forever (or at least as long as dating!), but it takes advantage of new technology better than other forms of marketing. The internet is the greatest direct mail medium of all time, and the low cost of frequent interaction makes it ideal for Permission Marketing.

Originally, the internet captured the attention of interruption marketers. They rushed in, spent billions of dollars applying their interruption marketing techniques and discovered almost total failure. Permission Marketing is the tool that unlocks the power of the internet. The leverage it brings to this new medium, combined with the pervasive clutter that infects the internet and virtually every other medium, makes Permission Marketing the most powerful trend in marketing for the next decade.

As new forms of media develop and clutter becomes ever more intense, it's the asset of permission that will generate profits for marketers.

CLICK HERE TO READ CHAPTER THREE

Copyright 1999, Seth Godin. All rights reserved.

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Permission Marketing : Turning Strangers into Friends, and Friends
into Customers

by Seth Godin

Seth Godin is a very important  voice in the marketing field. Permission Marketing is  must reading for every marketer who plans to succeed in information age. A significant concept that will be more relevant as interactive  technology impacts marketing.

CLICK HERE FOR MORE INFO OR TO BUY: Permission Marketing at Amazon.com