Tuesday, March 24, 2009

permission marketing revisited

I enjoyed this thought provoking aricle; Why Advertising Is Failing On The Internet - by Eric Clemons, on techcrunch this week.
'Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites. This is particularly true when the consumer knows that the sponsor of the ad has paid to have this information, which was verified by no one, thrust at him.'

Clemons argues that advertising fails for 3 main reasons:

1. Consumers do not trust advertising
He quotes from Dan Ariely's Predictably Irrational - a firm fave at Boat HQ...
'messages attributed to a commercial source have much lower credibility and much lower impact on the perception of product quality than the same message attributed to [non-ad sources].

Neilson's assertion that 78% of us trust peer recommendations above all other media backs this up. I use that chart in just about every presentation.

2. Consumers do not want to view advertising
I'll come back to this point in a minute.

3. And mostly consumers do not need advertising
No arguments there.

As it goes, Ive been re-reading Seth Godin's Permission Marketing in the last week or so while developing some ideas for a client eCRM programme and these two strands seem to intertwine.

To recap on Seth's premise, and I paraphrase...

The effectiveness of marketing directly corresponds to the level of permission the customer has given to receive the communication.
The level of permission we have - Combined with knowledge of customer and relevance of messaging - allows us to deliver 'anticipated, personal and relevant' messages to people who 'actually want to receive them.'

We don't start by asking for sales at first connection. We earn the right, over time, by developing our knowledge of the customer and increasing the relevance of our communication.

3 Steps to leverage permission
1. Offer the customer an incentive/reward to opt-in
2. Using the attention offered by the customer, inform about your products/service and build a relationship.
3. Over time, leverage the permission to influence customer behavior.

One of the key benefits of a permission approach is the low cost of getting information to the people who want to receive it. Email, RSS and social platforms mean we can treat customers as individuals, and it means we can let them choose what they receive and in which format.

It is more effective because the person is more receptive to marketing that they have chosen to participate with and more cost-efficient because the prospect has already identified themselves, and the data we have tells us know which level of permission we have to talk to them.

note: see Clemens' point above about 'push'.

Seth's Five Levels of Permission Marketing

1- Intravenous.
This is the ultimate level of permission. The brand who has this level of permission can make buying decisions on behalf of the customer.

2. - Personal relationships
When we have a personal relationship, we have an ongoing dialogue. We have permission to ask more personal questions, recommend other products, even offer products or services on ‘approval’

3. - Loyalty/Points.
Air-miles and Nectar points are examples of this level of permission People opt-in to these programs because of the benefits to them. They offer their personal data to allow us track their purchase history and to send them related offers and information.

4. - Brand trust.
This is the level of trust that traditional marketing aspires to. Brand trust is fickle however, and is hard to measure. You can use brand trust to create brand extensions, or cross sell other products.

5 . - Situation.
This is the most basic form of permission. A customer has initiated an interaction by purchasing a product or making an enquiry. Employees who deal with customers and prospects are the tool to use for situational permission eg ‘Do you want fries with that?’.

I've switched points 2 and 3. Since 1999 when Permission Marketing was first published I think the developments of the social web etc validates moving Personal relationships up the ladder.

So, in a Permission based programme every contact with the prospective customer, should seek to move them one step further up the ‘permission’ ladder.

In many of the subsequent writings following the publication of PM it has been alluded to that their still requires that first 'interruption' to kick start the journey up the permission ladder. Generally that would be the role of some form of advertising.
It does not have to be in the form of an interruption though.

Going back to Clemons' statement that 'Consumers do not want to view advertising' I would argue that this is potentially a bit bold.
Advertising that someone has chosen to view (or participate with) is then permission based. It's how that advertising is distributed that is key.

And as Uncle Bert says: doing the same thing over and over but expecting a different result - is insanity.

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