Permission Marketing: Turning Strangers Into Friends And Friends Into Customersby Seth Godin
Permission Marketing challenges preconceived notions about marketing and advertising, showing us how it should be in the new networked world. Permission marketing involves sending marketing and promotional offers only to consumers who voluntarily accept them. This step-by-step guide will help you shape marketing messages that consumers will accept, promoting long-term customer relationships, brand awareness, and increased sales.
Permission Marketing – The Way to Make Advertising Work Again
“What if you could turn the clutter into an asset? What if the tremendous barriers faced by Interruption Marketers actually became an advantage for you and your company?”
Permission marketing is a fundamentally different way of thinking about your advertising and customers. Mass marketing is due for a cataclysmic shakeout as this new form of marketing changes the landscape.
Traditional marketing approaches rely on advertisements interrupting the viewers to grab their attention and get them to act. As the marketplace for advertising gets more and more cluttered, you will find it increasingly difficult to interrupt the customer.
Permission marketers turn clutter to their advantage and achieve profitable outcomes. Every marketing campaign improves when an element of permission is added. This can involve fundamental changes to your business model and profit structure or, at the very least, enable you to develop and launch marketing campaigns with greater insight and success.
Time is a scarce resource. In addition to the information overload we all face today, there is also a severe lack of attention. Consumers are willing to pay handsomely to save time, while marketers pay dearly to get attention.
Interruption marketing is the enemy of anyone trying to save time. The alternative is permission marketing, which lets consumers volunteer to be marketed to. This allows you to tell your story through a long-term interactive marketing campaign that rewards consumers for paying attention to relevant messages.
Permission marketing is anticipated, personal and relevant:
Anticipated – people look forward to hearing from you
Personal – messages are directly related to the individual
Relevant – marketing is about something the prospect is interested in
Securing solid, deep permission from targeted customers does require you to invest. According to their annual report, AOL has paid as much as $300 to secure a new customer. Amex uses sophisticated database management tools to track customer behavior to personalize offers.
Personalized, anticipated, frequent, and relevant communications have infinitely more impact than a random message displayed in a random place at an unexpected moment. Rather than simply interrupting the customer, your permission marketing campaign builds a personalized relationship over time, turning strangers into friends and friends into customers.
Permission marketing requires patience and a leap of faith. Marketing campaigns grow over time. They need infrastructure and a belief in the durability of the permission concept before you can reap the benefits. The more you commit to this process, over time, it will become an increasingly valuable asset.
Actions to take
The Evolution of Mass Advertising
“Mass advertising created mass marketers.”
The Industrial Revolution provided economies of scale in building factories and increasing production output. Developments in transportation enabled local, national, and global reach. Businesses could choose to either grow or wither and die.
Companies needed mass advertising to reach larger markets. Marketing becomes the most profitable part of the business when it establishes a product as the leading brand, as it commands huge premiums. Companies discovered that the more they advertised, the higher their sales and profit, so the cycle continued.
This discovery led to the creation of content-rich media to hold all the advertising. Interruption Marketers needed something to interrupt, so newspapers and magazines thrived. It was simple, scalable, predictable in cost and ROI, and profitable, so mass marketers optimized their organizations for it.
This focus on interruption marketing has allowed big brands to grow and dominate. This has two distinct implications. Firstly, their actions shape and direct the market. Secondly, virtually no first-generation marketers are employed at these companies who can provide new creative outlooks.
Essentially, big companies don’t hire people to reinvent their already successful marketing techniques. They prefer to stick to their existing marketing methods rather than take a risk or a leap of faith with permission marketing.
Actions to take
Getting Started – Focus on Share of Customer, Not Market Share
“Getting a new customer is expensive. You need to spend money to grab their attention, educate them and win their trust.”
The best way to keep more customers longer and increase revenue over time is by targeting a small percentage of existing customers rather than acquiring new ones.
This is a bit like returning to the old days when merchants had a limited supply of customers and tried to maximize revenue from each one. With technology, you can now combine this old-world thinking with the newer ability to grow your client base simultaneously.
Establishing a one-to-one marketing approach is a critical step. A major Telecoms provider, for example, needs to apply a one-to-one marketing approach to win a new long-distance customer who pays $20 monthly for their services. This is more cost-effective than seeking out a new customer with another outlay of hundreds of dollars.
Your one-to-one marketing approach should focus on increasing sales, retaining customers, expanding product offerings, and fully meeting your customer’s needs. It’s not easy, and it requires investment in scalable technology, focus, and commitment, but it is worth pursuing. This one-to-one approach can significantly increase profitability when considering the high cost of a sale and the customer's lifetime value.
Permission marketing necessitates looking downstream and upstream when getting new customers. Prospects follow a five-step cycle: Strangers, Friends, Customers, Loyal Customers, and Former Customers.
Many marketers don’t notice, track or interact with people until they are customers or loyal customers. Some even miss unhappy customers who become former customers. Due to the high cost of securing new customers, you must nurture strangers as soon as they indicate interest. Transform a stranger into a friend.
Permission marketing is known as the ‘cousin’ of one-to-one marketing. Permission marketing works to turn strangers into friends, then friends into customers. One-to-one marketing applies the same techniques with knowledge, frequency, and relevance to transform customers into super customers.
Permission marketing and one-to-one marketing are on the same continuum. Instead of acquiring new customers, the one-to-one marketer seeks to maximize value from existing ones. The permission marketer aims to convert as many prospects as possible into customers and then leverage permission on an ongoing basis.
When they hear about permission marketing, the first question most people ask is, ‘How do you get people to sign up?’ Each campaign and concept will be very different, but the process remains the same. The first step is still to interrupt your customer with an interest-inducing message. You can then start a rewarding information exchange that builds trust and leads to an ongoing sales relationship.
Actions to take
How Frequency Builds Trust and Permission Facilitates Frequency
“The unspoken secret that marketers are afraid to utter. WHERE DOES trust come from?”
Every marketer wants to know where trust comes from, as without trust, there are no sales. This is the stage where a prospect believes your product will solve their problems and if it will resolve any issues.
Building trust takes time and commitment. The starting point is to raise awareness: let people know who you are and understand your message. This breeds familiarity. The only way to do this is through advertising.
The most important tactic in transitioning awareness to familiarity is frequency: how often your ad is presented to a single individual.
If you only run a single ad, the response rate is likely to be pitiful, no matter how compelling and well-produced your advert is. It may be more expensive to run frequent ads, but it makes your message memorable to an increasing number of consumers.
Frequency leads to awareness, awareness to familiarity, then familiarity to trust.
Permission marketing is the tool that makes frequency work. Interaction creates more value than solving a consumer's problem in 30 seconds. If you can gain permission to communicate, you have just secured the right to frequency. If you embrace this, you will reap huge profits.
Actions to take
The Five Levels of Permission
“The goal of permission marketing is to move consumers up the permission ladder, transitioning them from strangers to friends to customers. Then to loyal customers.”
The permission ladder has five levels. At every step of the ladder, trust, responsibility, and profits grow. Here they are ranked in order of importance:
Intravenous Permission Level – The marketer makes the buying decisions for the customer. This is a huge privilege, but it is immediately canceled if a wrong decision is made or the permission is abused. Consumers award this control for saving time and money or avoiding making choices and ensuring zero stockouts.
Purchase on Approval – The second authorization level is required before the consumer is billed. This is a powerful form of permission as it provides a wide-open channel between you and the consumer.
Points Permission Level – Formalised, scalable approach to attracting and keeping the prospect’s attention via a points reward program. Points have a cost (the amount paid to earn them) and a result (spend more points, get more results). This currency has high consumer value but low marketing costs.
Personal Relationships – Using your relationship with an individual help refocus their attention or modify behavior, but this depends on the individual. It may be slow, difficult, and unscalable, but personal relationships are vital to building permission and moving prospects up the ladder.
Brand Trust Level – A vague, soft, and safe form of product confidence that consumers feel when interacting with a brand that has spent a lot of money on consistent, frequent, and interruptive messages.
Situation Level – This is usually preceded by the question ‘May I help you?’ Situational permission is granted when consumers make phone calls or seek advice on purchases. This is a great way to train frontline staff to maximize marketing opportunities.
Marketing messages will continue to get cheaper as media channels increase. In this environment of endless interruptions, Permission Marketers will win with their anticipated, personal, and relevant marketing messages.
Actions to take
Working with Permission as a Commodity
“ONCE YOU HAVE EARNED PERMISSION, you must keep it and attempt to expand it.”
There are four rules to securing a full understanding of the concept of permission:
Permission is non-transferable - Direct marketers buy the best mailing lists to increase response rates. This takes the consumer by surprise, voids permission, and increases fear as it is essentially like sending spam. A permission marketer will not give you their mailing list because permission rented is permission lost.
Permission is selfish – Permission marketing puts the consumer in control. Consumers care little about you, your company, your career, or your family. You need to give the consumer a reason to pay attention.
Permission is a process, not a moment – Well-managed relationships flourish over those that started with an interruption. A successful campaign requires patience, investment in the process, and testing results.
Permission can be canceled at any time – Consumers can cancel their permission at any time. Each communication must be crafted to ensure it is not the last one.
Actions to take
Everything You Know About Marketing on the Web is Wrong!
“How the Web is misused as an extension of broadcast media.”
Here’s what you need to know about marketing on the web:
Build traffic (hits) to your website – Generating traffic to your site takes time and money. Create a process that builds to a scalable mountain of traffic instead of relying on random hits. Spend your budget wisely (and test it) as with any other marketing expenditure.
Create great content – To establish a thriving content site, you need to offer fresh news or customized data that sets you apart from other websites.
Focus on selling your products or services - Channel your focus on selling and creating compelling online marketing campaigns over implementing cutting-edge technology.
Develop your website to be user-friendly - Consumers prefer easy, fast, and simple solutions when visiting your site. If your site makes people feel stupid, it will fail.
Experiment and continually monitor performance – Experiment, test, and monitor your website's performance to see what works and doesn't, and make adjustments as needed.
Your site should be a complete online experience. Larger organizations create portals that offer everything an online user could want in one central ‘place.’ Most companies cannot afford to do this portal strategy properly. It wipes out the budget you could be using to promote yourself correctly.
Reward customers for giving up their online anonymity – The net is fundamentally an anonymous medium. Permission marketing encourages individuals to give up their anonymity and rewards them for it.
Actions to take
Permission Marketing in the Context of the Web
“The Internet is the greatest direct marketing medium ever invented. It is not TV.”
The Web changes everything! There are six key benefits the Web offers to direct marketers:
Stamps are free!
The speed of testing is one hundred times faster.
Response rates are 15 times higher.
You can implement curriculum marketing in text and on the Web.
Frequency is free: you can identify and quickly talk with individuals over and over.
Printing is free.
We now need to look at the Web through the prism of permission marketing. There are five simple steps to any permission marketing campaign in the context of the Internet:
The marketer offers the prospect an incentive for volunteering,
Banners can be used to interrupt consumers gently, and you can offer them an opportunity to opt into a marketing program.
Using the attention offered by the consumer, the marketer teaches the consumer about the product or service over time.
Once a consumer has opted in, you can use email to remind the prospect to return to the website.
The incentive is reinforced to guarantee that the prospect maintains the permission.
The cost-free communication infrastructure in place via the Internet allows a two-way dialogue for you to ascertain if the consumer is paying attention.
The marketer offers additional incentives to get even more permission from the consumer.
Customizing marketing campaigns means you can deliver direct rewards to the consumer to inspire participation and ongoing content rewards.
Over time, the marketer leverages the permission to change consumer behavior and turn it into profits.
Personalizing a list of hundreds or millions of people who want to hear from you about a specific purchase is priceless. A permission approach increases your marketing campaign's frequency.
Many marketers decide to skip the first (opt-in) step and instead rent or buy an email list. But this is spam, and it will destroy your business. Consumers may boycott you, blacklist you, clog your mailbox, file complaints, or speak ill of you. The damage that can be done to your brand and company is huge.
The law of permission is simple: ‘To maximize the value of a list, you must maximize uniqueness, anticipation, and overtness.’ The more unique the audience, the more anticipated the messages, and the more overt the opt-in (permission), the more valuable the mailing list.
Actions to take
How to Evaluate a Permission Marketing Program
“If you measure it, it will get done.”
There are ten questions to ask when evaluating any marketing program:
What’s the bait?
What will the selfish consumer respond to? Offering better ‘bait’ will attract more consumers.
What does incremental permission cost?
How much does it cost to get one more person to sign up to participate?
How deep is the permission that is granted?
If someone has permitted you to send a catalog, this is all the permission they have given you.
How much does incremental frequency cost?
How much does it cost to send one more marketing message to one more person?
What is the active response rate to communications?
How can you use a feedback loop to increase personalization and message relevance over time?
What are the issues regarding compression?
If it costs considerably more to attract a new customer, investing a small amount in anti-compression rewards is worth it in retaining a client.
Is the company treating the permission as an asset?
Measure your permission base in terms of exactly how wide and deep this permission is.
How is the permission being leveraged?
You can piggyback new messages to the group and increase profits when you have permission to talk with relevance and personalization to many people.
How is the permission level being increased?
Focus on earning more trust with the prospect.
What is the expected lifetime of one permission?
For example, grocery stores use loyalty programs to turn one-time purchases into long-term relationships.
Actions to take
The Permission FAQ
“The most frequently asked questions about Permission Marketing.”
The top four questions about permission marketing are:
Does permission marketing work only with consumers?
Business-to-business (B2B) opportunities are just as compelling as offerings to consumers. The challenge for B2B marketers is the high cost of prospecting. You need to budget money to attract the prospect's attention and then leverage that money over time using permission techniques.
How does power shift when permission marketing becomes more prevalent?
Permission is a powerful asset that can be leveraged. As the ‘clutter’ increases, permission is worth getting more and harder. In every market segment, only a limited number of companies will be able to secure permission.
What should we do with our existing website?
Stop wasting time and money and move it. Create a small, fast, and simple website for new prospects to collect email addresses in exchange for a benefit promise. Once you collect data, upgrade your customer website.
What are the biggest stumbling blocks companies face?
There are three key areas:
-Organizational – You are probably not organized for permission marketing, so you must overcome the many entrenched special interests in your way.
- Greed – Once the seeds of permission are planted, there will be pressure to harvest the results. Patience is crucial in developing these programs.
- Foresight – Your organization has to plan and be disciplined so that you can execute the permission approach correctly.