The balance of power has shifted: Consumers have put a premium on their time. Inundated with countless marketing messages competing for their attention, the American public has expressed its displeasure through its demand for Do-Not-Call and Can Spam legislation. Moving forward, successful marketers will be those who embrace the principles of permission-based marketing and begin to court consumers’ favor by building relationships.
Break Through the Clutter
“The days when all can graze cattle on the village green are gone,” says Don Peppers, founder of the Peppers & Rogers Group and co-author, with Martha Rogers, Ph.D., of a series of international best sellers on relationship marketing. Peppers believes it is going to get harder for direct marketing as an industry because “interruption” marketing creates a village green dilemma. “There is no penalty for soliciting someone’s attention, but the more it’s done the less inclined someone is to give that attention,” he explains.
The solution to this dilemma: permission marketing.
Coined five years ago by Seth Godin in his groundbreaking book “Permission Marketing,” this type of marketing is based on the premise that you have to get consumers to raise their hands and begin a dialogue with you. Once they’ve initiated a conversation, marketers must work to build and grow that relationship. Unlike traditional or interruption marketing, permission marketing, in the words of Godin, is about “turning strangers into friends, and friends into customers.”
More Legislation Is Probable
With so many messages fighting to get noticed, Peppers says he sees “a real consumer backlash against giving away their attention” and predicts it is only a matter of time before the Do-Not-Call Registry extends to the fundraising and political arenas. Unfavorable consumer sentiment also will eventually trickle down to mail, Peppers says, either by legislation or some other mechanism.
The need for marketers to embrace permission marketing is clear.
“We have all had the Scrooge-like luxury of peeking into a permissionless future and nobody liked what they saw,” says Michael Mayor, president and COO of NetCreations. Mayor, a pioneer of double opt-in e-mail list building, says, “Spam is the best argument for permission because [spam] is anti-marketing. It’s also anti-relevance, anti-targeting and anti-respect. Consumers remember the brands that treated them with respect, and they definitely remember the ones that didn’t.”
So how can you get consumers to raise their hands and begin a dialogue with you? Here are six ways you can begin to build permission into your marketing program.
1. Develop a communications framework.
Permission-based marketing requires marketers to establish a thoughtful communications strategy. According to Don Neal, chief marketing officer at Marsh Consumer, a risk and insurance services firm, this involves the careful planning of a series of communications that educate and/or entertain consumers, and builds trust. “Before you invite consumers to begin a conversation, you better had planned what you are going to say. It’s a back and forth, give and take dialogue,” Neal says.
2. Extend an invitation.
To build relationships with consumers, you must first get them to begin a dialogue with you. While at Internet-based marketing company Yoyodyne, Godin made games and sweepstakes a popular method of gaining consumer attention. Placing banner ads on specific Web sites is one example. Yoyodyne clients persuaded consumers to give their permission to communicate with them by e-mail for a chance to win a prize.
While Godin proposes marketers use mass marketing and word-of-mouth advertising to gain attention, other marketers prefer a more pragmatic approach. “Reach out to customers, preferably by mail, and explain that you’d like to stay in touch with them,” suggests Len Ellis, executive vice president of enterprise marketing with Wunderman New York, a marketing communications agency. “Ask them how they would like to be contacted, what they would like to be contacted about, and when they’d like to be contacted.”
An example, shares Ellis, is a computer software giant that mailed a direct mail piece to its customers asking them to visit a specific page on its Web site where they could indicate their preferred channel of communication and select offers they are interested in. As an incentive, visitors were entered into a contest.
Above all else, “don’t tie response to permission,” cautions Jon Hamilton, principal of JHA Telemanagement, a call center and telemarketing consultancy. For example, if you mail a CD with free software, don’t make permission a condition of software registration. Give consumers access regardless of whether they give you permission.
3. Provide value.
“Consumers have to receive something of value; you have to inform or entertain them,” says Peppers, who advises marketers to take a lesson from Sales 101, and bring a “gift” to the homes they visit. “By that I don’t mean direct marketing will get more expensive,” Peppers explains, “but it will have to become more value oriented. There must be an intrinsic appeal.”
What’s in it for the consumer? Marketers need to impress upon consumers that the relationship is a quid pro quo. Surveys asking, “How are we doing?” don’t get to the issue, says Neal, because they don’t offer value to the consumer.
Michael Pridemore, CEO of Socketware, an e-mail solutions provider, suggests providing consumers an exclusive invitation or special discount for e-mail registrants. Informational products such as newsletters and white papers are popular with B-to-B mailers.
4. Be relevant . . . always.
Don’t ask for permission unless you have something relevant to offer—now and in future messages. For example, Hamilton suggests a collectibles marketer might mail its lapsed buyers and ask permission to call when products similar to those they’ve purchased in the past are made available. This strategy has several advantages. Not only can you call customers who give permission, but those customers will be better-qualified prospects who are more likely to buy.
Peppers uses a customer’s experience with a financial services firm to illustrate the cost of irrelevance. The firm had a good reputation; it was highly recommended. It used this fact as a selling proposition. However, in interviews with customers, Peppers learned that many who’d previously recommended the firm to friends had stopped. Why? Because the firm started sending offers that had no relevance for these customers. While they still use the firm, these customers no longer refer friends. Curiously enough, this firm now pays a bounty for referrals.
Says Peppers: “The cost of over-solicitation is that the lifetime value of customers has decreased.” This decrease in customer referrals has eroded the firm’s asset value, which probably is not measured or tracked. “Marketers need to determine a metric to measure this cost the same way they measure profit,” he adds.
5. Be specific.
“The biggest mistake many marketers make is to try and get broad permission,” Mayor laments. By requesting permission for specific types of communications, Mayor suggests marketers will improve both the number of consumers who give permission as well as response rates.
Hamilton concurs, and advises marketers doing outbound telemarketing campaigns to not only be specific about the products they’d like to call them about, but also to be specific about frequency. If you market auto insurance, for example, Hamilton suggests mailing consumers and asking permission to call them twice a year with a quote that will save them money. “Give them control,” says Hamilton. “Ask what day of week and time of day is most convenient to call.”
Pridemore concurs: “Tell them what you will and won’t do with their information, and give them control. Let them change the flow of communications or stop it altogether. This goes a long way toward building trust.”
Consumers have spoken, and the cost of ignoring them is clear. “Legislation is really backing direct marketers into a corner,” says Neal. “It’s going to take a shot over the bow and more legislation for marketers to accept that the balance of power has shifted to consumers,” he adds, while emphasizing that the real advantage will go to those companies with the foresight to embrace permission now.
Ellis agrees: “Marketers will adopt permission because legislation will require them to do so, but they will embrace it because it allows them to become more efficient.”