Permission Marketing by Seth Godin – Have your customers given YOU permission?

My Notes on “Permission Marketing” by Seth Godin:

My Summary:

Rather than write an advertisement in a feeble attempt to get people to buy (when they have never even heard of you before), simply ask them for permission to send them more information (a free report, a free sample, a list of “common mistakes” in your industry).

And in that information you send them, ask for permission to send them more.

After you build up a relationship in this way over time, then you can start selling.

5 Steps to Dating Your Customer

• Offer the prospect an incentive to volunteer
• Using the attention offered by the prospect, offer a curriculum over time, teaching the consumer about your product or service
• Reinforce the incentive to guarantee that the prospect maintains the permission
• Offer additional incentives to get even more permission from the consumer
• Over time, leverage the permission to change consumer behaviour toward profits

Permission Marketing Example: Summer Camp

Uses 2 inch square black and white advertisement.  The only goal of the ad and the trade show is to get permission to send a video and a brochure. The ad sells the brochure, not the camp.  The brochure is very well done, and the video is also the best in the market.

The only goal of the video is to sell a personal meeting, it doesn’t sell the camp.

Now, fully qualified, having seen the testimonials, the photographs, the facilities, the happy campers, the family is ready to be sold on the camp. And that’s done in person.  And because of repeat visits and more family members, the sale is worth nearly $20,000.

At each step, the only goal is to expand permission.  She interrupts to get permission to send a video using a small print ad, she uses the video to get permission to visit, she uses the visit to get permission to sell one summer, and she uses the summer to sell 6 more.

The 7 Levels of Permission

1. Intravenous
2. Purchase on Approval
3. Points
4. Personal Relationships
5. Brand Trust
6. Situation
7. SPAM

1. Intravenous

• Your Doctor has permission to put whatever he thinks is best in your IV bag
• A marketer is making buying decisions on behalf of the customer
• Eg: The Book of the Month Club. Their clever marketing and excellent taste earned them the right to chose, print, ship, and bill books to a public that was eager to read their selections.
• Eg: Magazine subscriptions. You pay for the issue before you read it. Why would anyone do this? Why give up so much control and allow someone else to profit from this level of trust? Reason 1: To save time – this is becoming ever more important. Reason 2: To save money. It may cost 3 times the price on the shelf. Reason 3: So they don’t have to make a choice. Fourth Reason: To avoid stock outs. The milkman and water cooler man makes sure we don’t run out.
• How can you extend the idea of automatic replenishment into your business?

2. Purchase on Approval

• If you don’t want this months item, you can just send it back. Eg CD of the month club.

3. Points

• Eg Rewards Cards, Airpoints, Frequent Flyer Miles, Coffee Cards, FlyBuys
• It’s another excuse to keep the conversation going
• Much more efficient than having sales and slashing profit (with no long term benefit), just give away more points
• Use sweepstakes
• Build a steep reward curve to ensure loyalty (eg no points to those who fly once very few months, but push the envelope a little further and the rewards kick in)
• But what does setting up such a programme cost you? Do the points you give out cost you cash? (Eg the airlines would be in serious trouble if everyone cashed in their Airpoints)
  • No one enters a promotion thinking he’s going to lose
  • No one quits a promotion when she’s tied for first place
  • 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
  • If the interactions are fun and good for the ego, it’s likely the consumer will continue to participate

4. Personal Relationship

• Doesn’t scale
• Completely dependent on individuals (eg Dentists don’t get much money for their client list because the clients might not like the new dentist)
• An extremely effective way to temporarily refocus his attention or modify his behaviour
• Slow and difficult to make deeper (years of golf, excellent products and focused selling to make more profitable)
• It is powerful if you can define your target market. Eg Can you list all your customers in a specific geographic area?

5. Brand Trust

• The mantra of Interruption Marketers
• Extraordinarily expensive to create, takes a very long time to develop, is hard to measure, and harder still to manipulate
• Brand trust leads to brand extensions
• Don’t be tempted to burn brand trust in exchange for short term profits. Eg AOL interrupted and annoyed users with pop up ads.

6. Situation

• “May I help you” in the store, calls to an 0800 number
• “Do you want fries with that?” are the  most profitable situational permission marketing words in history. With 100,000 employees repeating that mantra to millions of customers every day, McDonald’s has generated billions of dollars in incremental sales using situational permission.
• How can you use this level of permission to upsell to the next level? Eg Dentists sell a health maintenance plan

7. SPAM

• Most marketing is SPAM. TV is SPAM.
• Marketing messages are going to continue to get cheaper as the number of media channels increases. With an infinite number of websites and TV channels, there will be an infinite number of interruptive ads. And the Permission Marketers will win.
• Are you messages anticipated, personal and relevant?

10 Questions to ask when evaluating a Permission Marketing Programme

1. What’s the bait?
   1. Easy to describe, coveted by a large portion of your target market, economic to deliver, tangible enough so that the consumer will give up precious attention and privacy to participate, overlaps with your message
2. What does incremental permission cost?
3. How deep is the permission that is granted?
   • One catalogue? Then deliver only that. Be overt about what the customer can expect so there are no misunderstandings and no cancelled permissions
4. How much does incremental frequency cost?
5. What’s the active response rate to communications?
   • How many people write back? How many take action? How can you use a feedback loop to increase personalisation and relevance of the messages over time?
6. What are the issues regarding compression?
   • Do you have a feedback loop and technology in place to increase the bait as its effectiveness begins to tail off?
7. Is the company treating the permission as an asset?
8. How is the permission being leveraged?
   • When you have permission to talk with relevance and personalisation to a large number of people, you can piggyback new messages to the group and dramatically increase profits. Eg American Airlines does this with hotels
9. How is the permission level being increased?
10. What is the expected lifetime of one permission?