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THE MARKETING CRISIS
THAT MONEY WON’T SOLVE
YOU’RE NOT PAYING
ATTENTION. NOBODY IS.
It’s not your
fault. It’s just physically impossible for you to pay attention to everything
that marketers expect you to-like the 17,000 new grocery store products that
were introduced last year, or the $1,000 worth of advertising that was directed
exclusively at you last year.
Is it any wonder
that consumers feel like the fast-moving world around them is getting blurry?
There’s TV at the airport, advertisements in urinals, newsletters on virtually
every topic, and a cellular phone wherever you go.
This is a book
about the attention crisis in America and how marketers can survive and thrive
in this harsh new environment. Smart marketers have discovered that the old way
of advertising and selling products isn’t working as well as it used to, and
they’re aggressively searching for a new, enterprising way to increase market
share and profits. Permission Marketing is a fundamentally different way of
thinking about advertising and customers.
I remember when I
was about five years old and started watching television seriously. There were
only three main channels-2, 4 and 7, plus a public channel and UHF channel for
when you were feeling adventuresome. I used to watch Ultraman every day after
school on channel 29.
With just five
channels to choose from, I quickly memorized the TV schedule. I loved shows like
The Munsters, and I also had a great time with the TV commercials. Charlie the
Tuna, Tony the Tiger and those great board games that seemed to magically come
alive all vied for my attention. And they got it.
Growing up, it
seemed like everyone I met was part of the same community. We saw the same
commercials, bought the same stuff, discussed the same TV shows. Marketing was
in a groove - if you invented a decent product and put enough money into TV
advertising you could be pretty sure you’d get shelf space in stores. And if
the ads were any good at all, people bought the products.
About ten years
ago, I realized that a sea change was taking place. I had long ago ceased to
memorize the TV schedules, I was unable to keep up with all the magazines I felt
I should be reading, and with new alternatives like Prodigy and a book
superstore, I fell hopelessly behind in my absorption of media.
I found myself
throwing away magazines unopened. I was no longer interested enough in what a
telemarketer might say to hesitate before hanging up. I discovered that I could
live without hearing every new Bob Dylan album and that while there were plenty
of great restaurants in New York City, the ones near my house in the suburbs
were just fine.
The clutter, as you
know, has only gotten worse. Try counting how many marketing messages you
encounter today. Don’t forget to include giant brand names on T-
shirts, the logos
on your computer, the Microsoft start-up banner on your monitor, radio ads, TV
ads, airport ads, billboards, bumper stickers and even the ads in your local
For ninety years,
marketers have relied on one form of advertising almost exclusively. I call it
Interruption Marketing. Interruption, because the key to each and every ad is to
interrupt what the viewers are doing in order to get them to think about
Almost no one goes
home eagerly anticipating junk mail in their mailbox. Almost no one reads People
magazine for the ads. Almost no one looks forward to a three minute commercial
interruption on Must See TV.
Advertising is not
why we pay attention. Yet marketers must make us pay attention for the ads to
work. If they don’t interrupt our train of thought by planting some sort of
seed in our conscious or subconscious, the ads fail. Wasted money. If an ad
falls in the forest and no one notices, there is no ad.
You can define
advertising as the science of creating and placing media that interrupts the
consumer and then gets him or her to take some action. That’s quite a lot to
ask of thirty seconds of TV time or 25 square inches of the newspaper, but
without interruption, there’s no chance for action, and without action,
As the marketplace
for advertising gets more and more cluttered, it becomes increasingly difficult
to interrupt the consumer. Imagine you’re in an empty airport, early in the
morning. There’s hardly anyone there as you leisurely stroll towards your
walks up to you and says, “Excuse me, can you tell me how to get to Gate 7?”
Obviously, you weren’t hoping for, or expecting, someone to come up and ask
this question, but since he looks nice enough and you’ve got a spare second,
you interrupt your train of thought and point him on his way.
Now, imagine the
same airport, but it’s three in the afternoon and you’re late for your
flight. The terminal is crowded with people, all jostling for position. You’ve
been approached five times by various faux charities on your way to the gate,
and you’ve got a headache to top it all off.
Same guy comes up
to you and asks the same question. Odds are, your response will be a little
different. If you’re a New Yorker, you might ignore him altogether. Or you may
stop what you were doing, say, “sorry,” and then move on.
A third scenario is
even worse. What if he’s the fourth, or the tenth, or the one hundredth person
who’s asked you the same question? Sooner or later you’re going to tune out
the interruptions. Sooner or later, it all becomes background noise.
Well, your life is
a lot like that airport scene. You’ve got too much to do and not enough time
to get it done. You’re being accosted by strangers constantly. Every day,
you’re exposed to more than four hours of media. Most of it is optimized to
interrupt what you’re doing. And increasingly, it’s getting harder and
harder to find a little peace and quiet.
The ironic thing is
that marketers have responded to this problem with the single worst cure
possible. To deal with the clutter and the diminished effectiveness of
Interruption Marketing, they’re interrupting us even more!
Over the last thirty years, advertisers have dramatically increased their ad
spending. They’ve also increased the noise level of their ads-more jump cuts,
more in-your-face techniques-and searched everywhere for new ways to interrupt
Thirty years ago,
clothing did not carry huge logos. Commercial breaks on television were short.
Magazines rarely had three hundred pages of ads (as many computer magazines do
today). You could even watch PBS without seeing several references to the
As clutter has
increased, advertisers have responded by increasing clutter. And as with
pollution, because no one owns the problem, no one is working very hard to solve
In addition to
clutter, there’s another problem facing marketers. Consumers don’t need to
care as much as they used to. The quality of products has increased
dramatically. It’s increased so much, in fact, that it doesn’t really matter
which car you buy, which coffee maker you buy, or which shirt you buy. They’re
all a great value and they’re all going to last a good long while.
We’ve also come a
long way as consumers. Ninety years ago, it was unusual to find a lot of brand
name products in a consumer’s house. Ninety years ago, we made stuff, we
didn’t buy it. Today, however, we buy almost everything. Canned goods. Bread.
Perked coffee. Even water. As a result, we already have a favorite brand of
almost everything. If you like your favorite brand, why invest time in trying to
figure out how to switch?
We’re not totally
locked in, of course. It wasn’t too long ago that cake mix was a major
innovation. Just a few years ago, we needed to make major decisions about which
airline was going to be our supplier of frequent flyer miles. And today, if
you’re going to get health care, you’ve got to make a serious choice. But
more often than not, you’ve already made your decisions and you’re quite
happy with them.
When was the last
time someone launched a major new manufacturer of men’s suits? Or a large
nationwide chain of department stores? Or a successful new nationwide airline?
Or a fast food franchise? It can be done, certainly, but it doesn’t happen
very often. One of the reasons it’s such a difficult task is that we’re
pretty satisfied as consumers.
If the deluge of
new products ceased tomorrow, almost no one would mind. How much more functional
can a T-
shirt get? Except
for fast moving industries like computers, the brands we have today are good
enough to last us for years and years. Because our needs as consumers are
satisfied, we’ve stopped looking really hard for new solutions.
Yet, because of the
huge profits that accrue to marketers who do invent a successful new brand, a
new killer product, a new category, the consumer is deluged with messages.
Because it’s not impossible to get you to switch from MCI to Sprint, or from
United Airlines to American Airlines, or from Reebok to Nike, marketers keep
trying. It’s estimated that the average consumer sees about one million
marketing messages a year-about 3,000 a day.
That may seem like
a lot, but one trip to the supermarket alone can expose you to more than 10,000
marketing messages! An hour of television might deliver 40 or more, while an
issue of the newspaper might have as many as 100. Add to that all the logos,
wallboards, junk mail, catalogues, and unsolicited phone calls you have to
process every day and it’s pretty easy to hit that number. A hundred years
ago, there wasn’t even a supermarket, there wasn’t a TV show, and there
weren’t radio stations.
Technology and the
marketplace have also brought the consumer a glut of ways to be exposed to
advertising. When the FCC ruled the world of television, there were only three
networks and a handful of independents. Networks made a fortune because they
were the only game in town. Now there are dozens, and in some areas, hundreds of
TV channels to choose from.
The final episode
of Seinfeld made media headlines. Yet thirty years ago, Seinfeld’s ratings
wouldn’t have made Neilsen’s list of top 25 shows of the season. With an
almost infinite number of options, the chances of a broadcast, even a network
broadcast, reaching almost everyone are close to zero.
Even worse is the
World Wide Web. At last count, there were nearly 2,000,000 different commercial
web sites. That means that there’s about 25 people online for every single
website...hardly a mass market of interest to an interruption marketer.
Alta Vista, one of
the most complete and most visited search engines on the internet, claims to
have indexed 100 million pages. That means that their computer has surfed and
scanned 100 million pages of information, and if you do a search, that’s the
database you’re searching through.
It turns out that
in response to people who do searches online, Alta Vista delivers about 900
million pages a month. That means that the average page that they have indexed
in their search engine is called up exactly nine times a month. Imagine that.
Millions of dollars invested in building snazzy corporate marketing sites and an
average of nine people a month search for and find any given page of information
on this search engine.
This is a very,
very big haystack, and interruption marketers don’t have that many needles.
invested (and almost completely wasted) more than a billion dollars on web sites
as a way of cutting through the clutter. General Electric has a site with
thousands of pages. Ziff-Davis offers a site with more than 250,000 pages! And a
direct result of this attempt to cut through the clutter is the most cluttered,
least effective marketing of all.
A quick look at the
newsstand at Barnes & Noble will confirm that the problem of clutter
saturation isn’t limited to electronic media. There are enough consumer
magazines (ignoring the even larger category of trade magazines for a moment) to
keep a reader busy reading magazines full time, 24 hours a day, seven days a
Obviously, the mass
market is dying. The vast splintering of media means that a marketer can’t
reach a significant percentage of the population with any single communication.
That’s one reason the Super Bowl can charge so much for advertisements. Big
events are unique in their ability to deliver about half the consumers watching
TV, so they’re the perfect platform for Interruption Marketing aimed at the
Other than buying
even more traditional advertising, how are mass marketers dealing with this
profound infoglut? They’re taking four approaches:
First, they’re spending more in odd places. Not just on traditional TV
ads, but a wide range of interesting and obscure media. Campbell’s Soup bought
ads on parking meters. Macy’s spends a fortune on its parade. Kellogg’s has
spent millions building a presence on the World Wide Web-a fascinating way to
seen that a mass market broadcast strategy isn’t working as well as it used
to, especially when targeting the hard-to-reach upper income demographic. As
this lucrative audience spends less time watching TV, marketers are working
overtime trying to find media with less clutter, where their interruption
techniques can be more effective.
Catalina Corporation to print their coupons on the back of receipts at the
grocery store. They buy ads on the floor of the cereal aisle. There are ads atop
taxis in New York City and on the boards around the rink at the hockey game. Fox
even figured out a way to sell the rights to the small area over the catcher’s
shoulder, so TV viewers would see the ad throughout an entire baseball game.
The second technique is to make advertisements ever more controversial
and entertaining. Coca-Cola hired talent agency CAA to enlist top-flight
Hollywood directors to make commercials. Candies features a woman sitting on a
toilet in its magazine ads (for shoes!). Spike Lee’s ad agency did more than
fifty million dollars in billings last year.
Of course, as
the commercials try harder to get your attention, the clutter becomes even
worse. An advertiser who manages to top a competitor for the moment has merely
raised the bar. Their next ad will have to be even more outlandish in order to
top the competition, not to mention their previous ad, to keep the consumer’s
The cost of
making a first-rate TV commercial is actually far more, per minute, than a major
Hollywood motion picture. Talking frogs, computer graphics and intense editing
now seem to be a requirement.
A side effect
of the focus on entertainment is that it gives the marketer far less time to
actually market. In a fifteen second commercial (increasingly attractive as a
cutting way to
interrupt people even more often), ten or even twelve seconds are devoted to
getting your attention, while just a few heartbeats are reserved for the logo,
the benefit and the call to action.
interruption challenge! Write down all the companies who ran commercials during
your favorite TV show last night. Write down all the companies that paid good
money to buy banners on the Web during your last surfing expedition. If you can
list more than ten percent of them, you’re certainly the exception.
The third approach used to keep mass marketing alive is to change ad
campaigns more often in order to keep them “interesting and fresh.” Tony the
Tiger and Charlie Tuna and the Marlboro man are each worth billions of dollars
in brand equity to the companies that built them. The marketers behind them have
invested a fortune over the last forty years, making them trusted spokesmen (or
spokesanimals) for their brands.
Nike, on the
other hand, just ran a series of ads without the swoosh, arguably one of the
most effective logos of the last generation. Apple Computer changes its tagline
annually. Wendy’s and McDonald’s and Burger King jump from one approach to
the other, all hoping for a holy grail that captures attention.
In exchange for
these brief bits of attention (remember the hoopla when they replaced Mikey on
the Life box?) these marketers are trading in the benefits of a long term brand
recognition campaign. It’s a trade they’re willing to make, because
Interruption Marketing requires it. Without attention, there is no ad.
The fourth and last approach, which is as profound as the other three, is
that many marketers are abandoning advertising and replacing it with direct mail
and promotions. Marketers now allocate about 52% of their annual ad budgets for
direct mail and promotions, a significant increase over past years.
Of the more
than $200 billion spent on consumer advertising last year in the US, more than
$100 billion was spent on direct mail campaigns, in-store promotions, coupons,
free standing inserts and other non-traditional media. Last year alone Wunderman,
Cato, Johnson, did more than $1.6 billion in billings for its clients (folks
The next time
you get a glossy mailing for a Lexus, or enter an instant win sweepstakes at the
liquor store, you’re seeing the results of this trend toward increased direct
marketing efforts. Advertisers are using them because they work. They are
somewhat more effective at interrupting you than an ad. They’re somewhat more
measurable than a billboard. Best of all, they give the marketer another tool to
use in their increasingly frustrating fight against clutter. After all, there
are only five or ten pieces of junk mail in your mailbox every day-not 3,000.
And another few feet of shelf space at the supermarket can lead to a dramatic
upturn in sales.
Even though they
work better than advertising, these techniques are astonishingly wasteful. A 2%
response for a direct mail campaign will earn the smart marketer a raise at most
companies. But a 2% response means that the same campaign was trashed, ignored
or rejected by an amazing 98% of the target audience! From the perspective of
the marketer, however, if the campaign earns more than it costs, it’s worth
Of course, just as
suburbanites learned when they fled the city to avoid the crowds, if a strategy
works, other people will be right on your heels. That bucolic countryside
rapidly fills up with other people looking to get away from it all.
Correspondingly, as each of these promotional media becomes measurably
effective, every smart marketer rushes to join in. Finding a unique approach
that cuts through the clutter is usually very short lived.
supermarket now charges a shelving allowance, for example, which manufacturers
pay for if they want more shelf space for their products. Every liquor store is
already jammed with promotions. Every mailbox in the country is brimming with
catalogs for clothes, gardening equipment and fountain pens.
are responding to this glut by using computers. With access to vast amounts of
computerized customer information, marketers can collate and cross-
reference a database
of names to create a finely-tuned mailing list, and then send them highly
targeted messages. For example, a direct marketer might discover that based on
past results, the best prospects for its next campaign are single women who are
registered Democrats, who make more than $58,000 a year and have no balance on
their credit card. This information is easily available, and marketers are now
racing to make their direct marketing ever more targeted.
Of course, database
marketing is a weapon available to any marketer, so like all trends in
Interruption Marketing, this one will soon lose its edge. When others jump in as
well, the clutter will inevitably catch up.
The last frontier
of Interruption Marketing appears to be exemplified by the movie Titanic. James
Cameron showed the world that outspending any rational marketer will indeed cut
through the clutter. Hollywood has jumped on this bandwagon with marketing
campaigns for Godzilla and other films that at first glance, can’t possibly
bring in enough ticket sales to justify the expense.
Nike uses the same
approach to sell sneakers, and now this radical overspending strategy is being
used by others, especially on the internet. The thinking behind it is based on
an all or nothing roll of the dice. Basically, because clutter is so pervasive,
anyone who can successfully break through and create a new mass market product
will reap huge rewards. And betting vast amounts of other people’s money on
that breakthrough is one way to play.
Of course, once
there’s a proven pattern that big spending can win, others in the category
will jump in as well. The bar will be raised yet again, and the only winners
will be the media companies that sell the air time and ad space in the first
What about the ad
agencies? With so many talented people, why aren’t they working to solve this
clutter wars are taking their casualties at the agency side as well. The big
agencies, the ones who could afford to take the lead in this challenge, are
faced with three dismal problems:
First, clients are giving the agencies a much shorter leash. Leo Burnett
used to keep clients for twenty or thirty years. Levi’s stayed at FCB for 68
years. That’s so long that not one person at either company was probably born
when the account work was started on Levi’s.
it’s not unusual for a marketer to change agencies after two or three years.
Companies that fired their ad agencies in the last year include Bank of America,
Compaq, Goodyear, and many more.
The second problem is that the stock market has been conducive to agency
consolidations. The best way to make money in advertising today is to buy ad
agencies and take them public. As a result, some of the best minds in the
business have been focusing on building agencies, not brands.
And last, the commission structure that every ad agency was built upon
has been dramatically dismantled. Traditionally, agencies were paid by media
companies. They got to keep 15% of all the ad money that the client spent on ad
space in the form of a commission from the magazines and TV networks where they
ran their ads. This meant that big clients could generate huge profits for the
ad agencies, which funded work on new approaches to advertising as well as the
innovative ads for new, smaller clients. But now the big guys have decided to
put a stop to this subsidizing, and it’s rare to find an ad agency who still
gets a straight 15% commission on media buys for their big clients.
To summarize the
problem that faces the Interruption Marketer:
Human beings have a finite amount of attention.
watch everything, remember everything, or do everything. As the amount of noise
in your life increases, the percentage of messages that get through inevitably
Human beings have a finite amount of money.
can’t buy everything. You have to choose. But because your attention is
limited, you’ll only be able to choose from those things you notice.
The more products offered, the less money there is to go around.
It’s a zero
sum game. Every time you buy a Coke, you don’t buy a Pepsi. As the number of
companies offering products increases, and as the number of products each
company offers multiplies, it’s inevitable that there will be more losers than
In order to capture more attention and more money, Interruption Marketers
must increase spending.
money than your competitors on advertising in a cluttered environment inevitably
leads to decreased sales.
But this increase in marketing exposure costs big money
marketers have no choice but to spend a bigger and bigger portion of their
company’s budgets on breaking through the clutter.
But, as you’ve seen, spending more and more money in order to get
bigger returns leads to ever more clutter.
Catch-22: The more they spend, the less it works. The less it works, the
more they spend.
marketing due for a cataclysmic shakeout? Absolutely. A new form of marketing is
changing the landscape, and it will affect interruption marketing as
significantly as the automobile affected the makers of buggy whips.
MARKETING-THE WAY TO MAKE ADVERTISING WORK AGAIN
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.
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.
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.
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.
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.
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.
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.
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.
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
Permission marketing is
anticipated, personal, relevant.
forward to hearing from you
are directly related to the individual.
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.
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.
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.
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
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
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
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.
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.
Five Steps to Dating
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
Offer additional incentives to get even more permission from the consumer
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
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.
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.
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.
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.
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.
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.
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
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?
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.
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
As new forms of
media develop and clutter becomes ever more intense, it’s the asset of
permission that will generate profits for marketers.
THE EVOLUTION OF MASS
CREATED MASS MARKETERS
One hundred years
ago, small companies ruled the earth. Virtually every retail dollar went to a
small, individually owned business. Local businesses were responsive, trusted
and capable. They had the infrastructure to deal with clients who didn’t have
credit cards, telephones or Federal Express account numbers.
Without a mass
communication infrastructure or the technology to expand, businesses stayed
small and local. It was impossible for them to imagine a nationwide advertising
campaign. New customers were acquired one at a time, usually by word of mouth or
by door-to-door canvassing.
exactly what a new client was worth, and they acted accordingly. A proprietor
would spend hours with a prospect, knowing that the individual interaction would
pay off many times over.
to this personal care and developed the expectation that they would be sold to
personally. The local bookseller would read a book before recommending it. The
local cheese merchant would happily offer a taste of a new flavor to a customer.
It wasn’t unusual for a shopkeeper to spend some extra time with a customer,
old or new, or for the merchant’s supplier to also be his neighbor. GIANT
BRANDS GAVE RISE TO INTERRUPTIBLE MEDIA Giant brands and multi-national
companies were created as the result of several interconnected
socio-technological changes that occurred simultaneously.
The first change
was the industrial revolution. Without the economies of scale that came from
building factories, there was no reason at all to get big. When everything was
handmade, having more craftsmen didn’t make your business more efficient or
Once there were
economies, though, businesses faced a choice. They could grow or they could
wither. Many entrepreneurs saw the opportunity that came from scaling their
businesses and raised the money to do just that.
development of the car and the truck made it possible to deliver things that
were made more than a few miles away. Suddenly, companies could buy things in
bulk, manufacture many items and then ship them around the country, and even
around the world.
As a result of
these investments, companies needed mass advertising. It did no good to build a
factory that was efficient at mass production if it was impossible to deliver
those goods to a larger market. And you couldn’t do that if you couldn’t
persuade consumers to buy them. Instead of relying solely on word of mouth and
personalized sales, big companies had no choice but to discover a way to get
lots and lots of people to buy the output of their factories.
The big surprise is
that it wasn’t factories or the car that caused the big increase in corporate
profitability. It was advertising. The economies that came from establishing a
product as the leading brand, the huge premiums that were derived by charging
extra for a trusted name, dwarfed the savings in production.
became the most profitable part of the enterprise. In the words of one pundit,
“everything else is an expense.” The ability to attract large numbers of
customers with advertising was a revelation to these new companies. First
enamored and then addicted, they based their entire business model and
organization around the ability to reach the masses.
In the 1920s,
advertising men were considered the saviors of industrialized society, the
sophisticated men who would harness the awesome power of the crowd to uplift
society. Advertising was credited with bringing the clean, the pure, and the
powerful to ordinary citizens, lowering prices and vastly increasing the direct
responsibility that manufacturers had over their products.
began to advertise, they discovered (some quite by accident) an extraordinary
truth: the more they advertised, the more sales they gained. And the value of
the sales exceeded the cost of the advertising! The perpetual motion machine of
commerce had arrived.
The development of
content-filled media to hold all this advertising was a direct consequence of
this discovery. Interruption Marketers needed something to interrupt, so
newspapers flourished and magazines were started by the thousands. Did
interruption marketing lead to the creation of mass media as we know it?
This evolution is
best summarized by the story of Crisco.
In 1900, the folks
at Procter & Gamble were heady with the success of Ivory soap. Ivory was the
first packaged, branded soap that was able to compete with handmade soap, or
unpackaged, bulk soap from the local general store. It was an insanely
profitable, fast-growing business for this young company, but Ivory’s success
quickly brought about a problem. There was a limited supply of cottonseed oil, a
major ingredient in the manufacture of Ivory.
Cottonseed oil was
produced by just a few tightly controlled trusts, and three huge vendors were
able to purchase virtually all of the oil on the market. P&G desperately
needed a product that would use lots of cottonseed oil. This increased
consumption would give P&G more clout and lead to more reliable supplies and
For four years,
researchers worked to create the ideal product that would use a lot of
cottonseed oil. Eventually, they created Crisco, a product designed to replace
lard just as Ivory had replaced homemade soap.
In 1908 when
P&G introduced Crisco, there was no Time Magazine, and no General Hospital
on which to advertise. Without reliable mass media, P&G relied on permission
They started by
paying the train lines (the equivalent of today’s airlines) to use Crisco
instead of lard in the pies they served onboard (and to inform their customers
when it was served). They secured testimonials from doctors and even rabbis, one
of whom said that Crisco was, “The greatest advance for Judaism in 4,000
society teas in all the major cities, asking a leading citizen to invite the
leading ladies to attend. Of course, everything offered to go with the tea was
baked with Crisco.
introduced a series of free cookbooks. In a classic Permission Marketing
technique, P&G didn’t try to sell the product. Instead, they promoted the
free cookbook. Once a prospect raised her hand for this information, the stories
inside the cookbook taught her about the benefits of the product. The book
quickly became a “bestseller.”
succeeded. Crisco rapidly became a major profit center for P&G. It also
impacted grocery stores and changed the way people cooked.
But once the ball
began rolling, Crisco realized that Permission Marketing alone couldn’t expand
the brand’s popularity fast enough. So they took advantage of the lack of
clutter and switched gears to an Interruption Marketing campaign. Now that they
had a sales base, they wanted to expand it, fast. So they began buying
advertising anywhere they could find it. And because there was so little
clutter, the advertising popularized the brand quickly and cheaply.
Once the corporate
world caught a glimpse of mass brand advertising, mass marketers were hooked on
Interruption Marketing. The reasons were simple:
Marketing was easy. Build a few ads, run them everywhere.
o Interruption Marketing was scaleable. If you need more sales, buy more
ads. o Interruption Marketing was
predictable. With experience, a mass marketer could tell how many dollars in
revenue one more dollar in ad spending would generate.
Marketing fit the command and control bias of big companies. It was totally
controlled by the advertiser, with no weird side effects.
Marketing was profitable. The right product generated more profit than it cost
the company to advertise.
optimized their organizations for this approach. They created brand managers and
advertising agencies and measurement companies and focus groups and a myriad of
other techniques to institutionalize their attachment to Interruption Marketing.
This focus on
Interruption Marketing allowed the big brands to become even bigger and more
dominant. The top 100 advertisers account for more than 87% of all advertising
expenditures in this country. And more than 80 of these companies have been
advertising for more than twenty years.
This has two
important implications. First, behavior by these top advertisers dictates and
drives the market as a whole. Second, and more important, is the fact that there
are virtually no first generation marketers working at these companies.
To put it bluntly,
big companies don’t hire people to reinvent their already successful marketing
techniques. Instead, they hire and train people to do exactly what the last
advertising people did. They market Crisco the same way they did 80 years ago.
The Rice Krispies box hasn’t changed in years. Ford uses a marketing and
distribution network they built in 1920.
Second and third
generation marketers don’t want to rock the boat in which they’re sailing.
They may have noticed that their current marketing techniques don’t seem to
work as well as they used to, but they weren’t hired to demolish the
distribution channel or to question the very foundation of their marketing
Marketing represents a huge threat as well as a huge opportunity. Just as the
fax machine altered the landscape of courier services and Federal Express,
Permission Marketing will change the way companies market products.
Many of the big
companies will stick to their knitting and remain faithful to the marketing
methods that got them to where they are today. This creates mammoth
opportunities for new companies, for companies with nothing to lose, for
companies with the flexibility and initiative to try a very different way of
gaining and keeping customers.
ON SHARE OF CUSTOMER, NOT MARKET SHARE
FIRE 70% OF YOUR
CUSTOMERS AND WATCH YOUR PROFITS GO UP!
Five years ago, Don
Peppers and Martha Rogers wrote a book that changed the marketing landscape
forever. Titled The One to One Future, they proposed a radical rethinking of the
way marketers treat their customers.
Peppers and Rogers
presented a manifesto for how companies can increase their profits by selling
more things to fewer customers. In other words, they believe it’s wiser to
focus more on increasing sales to a smaller percentage of your existing
customers than it is to find new ones.
The thinking behind
their book is straightforward and it led directly to the agenda behind
Permission Marketing: Getting a new customer is expensive. It takes money to get
his attention and it takes continuing effort to educate him (interruption
marketing is expensive, and so is the process of winning a customer’s trust).
It’s also expensive for the customer, who has to spend time evaluating and
learning about the features and benefits of a product.
So, argue the
authors, instead of focusing on how to maximize the number of new customers, the
focus should be on keeping customers longer and getting far more money from each
of them over time.
It’s back to the
old days, when merchants had a limited supply of customers and worked to get the
maximum revenue from each one. Except now, with technology, companies can
combine this old world thinking with the ability to dramatically grow their
customer base at the same time.
If AT&T spends
hundreds of dollars to get a new long distance customer, and that customer pays
just $20 per month for AT&T’s services, then they have to be figuring out
other ways to generate revenue through their interaction with that customer, not
spending all their energy getting yet another new customer.
By selling cellular
phone services, home security services and an increasing array of other items,
AT&T can recoup the expense of obtaining these customers.
Levi’s has built
the single largest brand of women’s jeans in the country. And they’ve done
so without having any jeans in the store.
Instead, women have
their measurements taken by a trained specialist, who sends them to a
computerized factory. There, a semi-custom pair of jeans is made to order.
The shopper gets
custom fit for a fraction of the cost.
Levi’s has a huge
savings in inventory risk and advertising costs. And best of all, once a
customer has given her measurements to Levi’s, once she’s endured the hassle
of all that measurement-taking, once she’s worn a pair of custom jeans, would
she even consider switching brands to save a few dollars?
To elaborate a
little more on the one to one marketing approach, Peppers and Rogers would like
you to focus on four things when selling to customers:
Increase your “share of wallet.” Figure out which needs you can
satisfy, then use the knowledge you have, and the trust you’ve built, to make
that additional sale.
Increase the durability of customer relationships. Invest money in
customer retention, because it’s a small fraction of the cost of customer
Increase your product offerings to customers.
customer-focused instead of retail-focused, or factory-focused, a manufacturer
or merchant can widely increase its offerings, thus increasing share of wallet.
Create an interactive relationship that leads to meeting more customer
needs. It’s a cycle. By constantly incenting the consumer to give more
information, the marketer can offer more products.
This series of
techniques isn’t easy, nor is it free. If it was, everyone would do it. It
requires a huge investment in scaleable technology, along with the focus and
commitment to do it right. It puts a lot more pressure on your organization, as
well, because as each customer becomes worth more, the cost of losing one
Don Peppers and
Martha Rogers opened the eyes of many marketers and got them to look downstream
after the first sale was made. By recognizing the huge cost of getting a first
sale and the very high lifetime value of a customer, the one to one philosophy
can dramatically increase profitability.
Marketing demands that in addition to looking downstream, marketers now look
upstream. The challenge facing most companies is that they notice people too
The process of
getting new customers needs to be reengineered. Like caterpillars turning into
butterflies, prospects go through a five step cycle:
marketers don’t notice, track or interact with people until they are a
customer. And some don’t even pay close attention until the consumer becomes a
loyal customer. Unfortunately, a few don’t notice their customers until they
become disgruntled former customers.
given the high cost of talking to strangers, that marketers move their focus of
attention up the stream. They need to have a process in place that nurtures
total strangers from the moment they first indicate an interest.
At that moment, a
suite of marketing messages must begin to be applied. The goal is to teach,
cajole and encourage this stranger to become a friend. And once she becomes a
friend, to apply enough focused marketing to create a customer.
Do you know how
your company does this now? Most marketers have no idea. They rely on a
hodgepodge of randomly delivered interruptions and hope that from this
primordial soup will rise a fully formed customer.
Permission Marketing can change that.
You can now choose
who you reach. When you reach them. The order of the messages. The benefits
You can create
dozens or even hundreds of paths for an individual to follow from the first
contact until the highest level of permission is granted.
If the marketing
messages you send are anticipated, relevant and personal, they will cut through
the clutter and increase the prospect’s knowledge of the benefits you offer.
An organization that is focused on this process early on will always outperform
one that isn’t.
As you’ve seen,
Permission Marketing is the cousin of one to one marketing. Where Peppers and
Rogers begin the process with the first sale, Permission begins the process with
the very first contact.
Marketing works to turn strangers into friends and then friends into customers.
One to one marketing uses the very same techniques, incorporating knowledge,
frequency, and relevance, to turn customers into supercustomers. One to one
doesn’t compete with Permission Marketing. It’s part of the very same
continuum. The one to one marketer takes the permission that’s been granted
after someone becomes a customer and uses that permission to create even better
The better the
permission, the more profit created.
The one to one
marketer works to change his focus from finding as many new customers as he can
to extracting the maximum value from each customer.
marketer works to change his focus from finding as many prospects as he can to
converting the largest number of prospects into customers. And then he leverages
the permission on an ongoing basis.
You can’t build a
one to one relationship with a customer unless the customer explicitly agrees to
discovering a shoe size to building mutually dependent computer systems with a
major vendor requires an overt agreement from both sides.
By measuring the
depth of permission you have with each customer (one may allow you to send
merchandise “on approval”, another may let you call them when a new product
comes in), you can begin to track the benefits of your investment in Permission
Marketing. By focusing on how deep your permission is with your existing
customers, you can begin to recognize the value of your permission asset.
Frank Britt and Tim
DeMello run a company called Streamline that is at the vanguard of the junction
between Permission Marketing and one to one marketing.
capitalizes on the technologies and social shifts that are changing our lives,
and they are building a fantastic business that serves as a model for the
They offer to save
customers hours and hours of time each week by doing virtually all of their
A call to
Streamline leads to a customized sales pitch by a trained Streamline sales rep.
And in a surprisingly high number of cases, that sales pitch leads to a first
sale. Then Streamline comes to your house and installs a large wooden box and a
refrigerator in your garage. Next, they ask to come into your house so they can
scan the UPC codes on every item in your fridge and food cabinet. They take down
the name of your pharmacy and where you like your clothes dry cleaned. Talk
Then, using the
Web, you log on each week and tell Streamline what you need. You fill out a
pre-automated shopping list. They pick up dry cleaning and prescriptions and
photos as well. Then, while you’re at work, they do all your errands, pick up
what you need, and drop it off at your house.
this for about $30 a month. And the more services they offer, the more
permission they get from customers. In a single year, the average customer
places 47 orders and spends more than $5,000 with them.
Multiply that by
millions of potential customers and you see the size of the opportunity! As the
company gains more permission, it’s not hard to imagine them branching into
house cleaning, house painting, gardening and a huge range of home care and home
permission to market new services, and by using one to one techniques to know
and remember your preferences, Streamline is creating a mega-business for the
next century. They’re building an asset that has nothing to do with brand and
everything to do with their relationship with you.
find competition? Without a doubt. But once they’ve established permission
with their customers, it will be extremely difficult for a competitor to
A more familiar
example is Amazon.com. Ask most sentient humans and they’ll tell you Amazon is
a bookstore on the Web. Analysts will tell you that they’re one of the biggest
Yet if Amazon is
determined to be a bookseller, they’ve got big troubles. First, they pay far
more for books than Barnes & Noble because of their smaller scale. But even
if they overcome that disadvantage, other online sellers, like the new online
service from Bertelsmann (the largest publisher of books in the world), will
doubtless be able to compete on price.
So why is Amazon so
busy building its customer base, losing money on each customer and trying to
make it up in volume? Why does their prospectus claim that they’re losing
money and see no end in sight for the losses?
Amazon appears to
be building a permission asset, not a brand asset. Amazon has overt permission
to track which books you buy and which books you browse. They have explicit
permission to send you promotional e-mail messages. They are building special
interest communities in which Amazon and its customers will be able to talk with
each other about specific genres of books. Why?
The payoff comes
the day Amazon decides to publish books. This is where the profit lies and where
Amazon is best able to leverage their permission asset.
A book costs about
$2 to print and $20 in the store. A huge gulf! But most of that money disappears
in advertising, shipping and especially in the shredding of unsold books. What
if you could remove all of those?
Amazon.com sends a note to each of the one million people who bought a mystery
novel from their site last year. (It costs them nothing to do that, of course,
since e-mail is free). In the note, they ask if you’d like to buy the next
Robert B. Parker novel, a Spenser mystery, which will be available exclusively
from Amazon. And let’s say a third of those customers respond and say,
Now, Amazon can
make the following extraordinary offer to Robert B. Parker. “Write the book.
We’ll edit it and typeset it and ship it directly to the 333,000 people who
have pre-ordered it. We’ll deduct our costs and still have a million dollars
left over to pay you.”
That’s a lot of
money for a mystery novel. And yet Amazon still will earn more than 4 million
dollars in profit from just one book.
scenario by 100 or 1,000 books a year.
Amazon can fundamentally reconfigure the entire book industry, disintermediating
and combining every step of the chain until there are only two: the writer and
That’s the way to
visualize the power of Permission.
marketers to have a perfect memory, and provides them with the ability to
customize correspondence on the fly and deliver it for free via e-mail. Combine
that with a database of customers who expect to receive marketing messages from
you because they gave you their permission, and most industry book chains should
begin to see a looming threat.
By moving strangers
up the permission ladder, from that very first interruption until the moment
when the consumer gives you the permission to actually purchase products on
their behalf, marketers are able to optimize their entire marketing process. The
results can be fantastic. By dramatically increasing the measurability and
efficiency of your marketing system, your company can multiply its profits.
and marketing involves increasing market share, which means selling as much of
your product as you can to as many customers as possible.
One to one
marketing involves driving for share of customer, which means ensuring that each
individual customer who buys your product buys more product, buys only your
brand, and is happy using your product instead of another to solve their
problem. The true, current value of any one customer is a function of the
customer’s future purchases, across all the product lines, brands and services
offered by you.
When you have a
constant stream of strangers walking through the door as a result of
Interruption Marketing, you don’t have to worry as much about protecting your
existing customers. Even though it’s more profitable to cater to those
existing customers, many marketers are uncomfortable with the shift in power it
e-commerce story makes that lesson very clear.
A consumer ordered
several items from a small merchant selling CDs online. The consumer’s credit
card was quickly charged, but after three weeks, nothing had arrived.
The consumer sent a
polite note to the customer service e-mail address. No response. Another note.
So, after four
weeks, the consumer wrote to the President of the company.
He wrote back the
next day. His note consisted of just three words: “Get a Life.”
Did he burn a
customer? Of course. That was his intention. But what he hasn’t learned yet
(and soon will, or he’ll be gone) is that the act of dismissing that customer
didn’t cost him just one sale. It cost him the loss of permission to sell
products to this woman for the rest of her life.
Think about it. He
had her in a dialogue. He had her credit card number. He knows what CDs she
likes. If he had treated that permission with respect, it could have easily led
to $1,000 or $5,000 worth of CD sales over the lifetime of the relationship. But
because the merchant was a physical retailer, accustomed to the anonymity and
unpredictability of walk-in trade, he figured he was losing a $10 sale. Big
Compare this to the
true story of a similar customer at a similar merchant, also online. This time,
the complaint about slow delivery ended when it reached the customer service
desk. The customer got a response within five minutes. The response was factual
(the CD was misaddressed and had been returned) but the letter was apologetic.
AND the e-mail announced that to make up for the inconvenience, another CD by
the same artist was going to be sent along for free.
Which merchant is
most likely to earn a few thousand more dollars in incremental business due to
the level of Permission earned? Customer service has always mattered. But now
that power has shifted to the consumer, it matters a great deal more.
Based on these
stories, however, there’s no way to know what type of customer, or future
revenues, she represented. But given our vastly improved ability to “know”
customers at an individual level, it’s important to recognize that some
customers carry a negative value, and it’s sometimes wise to get rid of them.
The reward comes to the marketer in the form of an increased ability to
concentrate on nurturing the customers who represent the quality permission
candidates for future business.
This means that
sometimes you have to endure the entrepreneur’s nightmare—you must fire a
customer. In view of optimizing customer service, sometimes that’s what it
takes. A customer that distracts you, or one that cherry picks your line of
products, or one that requires a disproportionate percentage of your company’s
time and resources, for example, is going to cost you money. Of course it
matters how you fire a customer, too, and telling a customer with a valid
complaint to “get a life” obviously falls short of wisdom.
the first question most interruption marketers ask when they hear about
Permission Marketing is, “How do you get people to sign up?”
Because they were
trained in the art of getting momentary reactions from large numbers of people,
this part of the process is the most familiar to them.
Marketing almost always follows the same simple steps. Each campaign is very
different, but the concepts behind each step remain the same. Simply stated, you
interrupt the customer with a message designed to get them to raise their hand.
That’s the way they volunteer, or say “yes” to begin a rewarding exchange
of information accomplished over time, which builds trust that you can leverage
into a sales relationship.
But the first step
is still to interrupt the consumer. That’s one reason there will always be
socially acceptable interruption marketing media. We need to get that initial
lucky enough that a stranger comes to you of his own accord. There will always
be a few people who straggle onto your web site, for example, or potential
customers who call your toll free number or walk into your store. These are the
freebies. Most of the time, however, you’ve got to use the tried and true
interruptive techniques to reach large numbers of people.
techniques, marketers can choose television, radio, print, direct mail or
electronic media to grab the attention of consumers. But without some way to
grab the attention of a stranger, the permission process never starts.
Joanne Kates is the
third generation owner of Camp Arowhon, the oldest coed summer camp in North
America. With a 70 year history, great word of mouth and a solid backlist,
acquiring new customers is not her highest priority. Nonetheless, Arowhon needs
a process to turn strangers into campers.
The camp uses
permission marketing to accomplish this.
The first step is
to advertise at camp fairs and in magazines that feature groups of ads from
summer camps. But unlike virtually all of her competitors, Joanne isn’t trying
to sell her camp. She knows that no one chooses a summer camp for their children
on the basis of a two-inch square black and white advertisement.
Instead, her only
goal in the ad, and at the trade show, is to get permission to send a video and
a brochure. The ad sells the brochure, not the camp. Call the camp’s number
and her staff will immediately qualify your interest and then send a video
(perhaps the best produced camp video in the market) and the brochure (also
The only goal of
the video is to get permission to have a personal meeting. It doesn’t sell the
camp. It sells the meeting.
qualified, and having seen the testimonials, the photographs, the facilities and
the happy campers, the family is ready to be sold on the camp. And that’s done
Once a camper
attends for a summer, odds are that he or she will stay for more summers and
bring a brother or sister as well. Which makes the sale worth nearly $20,000. By
using Permission Marketing, Arowhon is able to make these significant
step-by-step sales, with a very high efficiency.
At each step, the
only goal of the next step 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 six more.
By focusing media
on getting permission instead of making the ultimate sale, marketers are able to
get far more out of their expenditures. The response rate to a free sample or an
affinity program or a birthday club might be five or ten times the response rate
of an ad asking for a sale.
This is a critical
distinction. Step two in the process, after the consumer has been interrupted,
is to make an offer and ask for volunteers. The offer should provide selfish
motivation and offer virtually no downside.
consumer is in no hurry to send you money or promise to invest a lot of time. An
interrupted consumer won’t fill out a long demographic form or get in his car
to drive down to your automall. The less you ask of the consumer and the bigger
the ‘bribe’, the more likely the consumer will give you permission. The
permission won’t be broad or deep. But it will guarantee that your next
interaction will be significantly more impactful.
When Hooked on
Phonics ran nationwide radio advertising that helped them grow from zero to a
hundred million dollars in revenue, they didn’t try to sell anything on the
radio. They didn’t even mention the price. They sold the benefits by asking
potential customers to call (800) ABCDEFG and get free information on how to
help your kids. Free information. Help your kids. No downside. No money. This
offer enticed millions of concerned parents to give permission to learn more
about the product.
Hooked on Phonics
gets far more attention from a completely qualified audience by using this two
step approach. Imagine how much harder it would have been for them to generate
the same level of sales if they had tried to make the sale on the radio.
In order to make
the marketing messages you send relevant and personal you need to get some data.
Permission marketers are totally obvious about their objectives with the
consumer. They make it crystal clear what they will be doing with the data they
collect, and exactly why it’s beneficial to the consumer to give this data.
Consumers who visit
a web site are sometimes asked to give their phone number. But what’s in it
for the consumer? Without a specific reason for the consumer to behave, without
a reward or a benefit, the overwhelmed consumer will refuse.
The reward you
offer a consumer must be obvious and simple. To dramatize the importance of this
stage, to make it crasser than it needs to be, I call it bait. No one would
argue that when you go fishing, you ought to use the most effective, most
obvious bait you can find. The same is true when you try to attract consumers.
interrupted, engaged in a bargain, and exchanged data with the consumer, now you
need to teach, and eventually leverage the permission you’ve obtained.
If you’re in a
medium where frequency is cheap (like the Net), take your time. Build trust
Patiently tell your
story to each consumer who is willing to participate in the exchange.
Be personal. Be
relevant. Be specific. And always be anticipated. Anticipation, of course, is
even better than expectation. Without surprising the consumer, gradually raise
the level of permission you extract.
Then, by constantly
raising the magnitude of rewards you offer the prospect, you can fight attrition
and compression and keep them interested (compression is the tendency of rewards
to become less effective with repetition). By continuing the dialogue, you can
teach the consumer until a stranger becomes a friend and then a friend becomes a
Of course, the
process doesn’t end with the first sale. It just becomes one to one marketing.
Using the permission already granted, you then work hard to expand the share of
wallet and build a permission asset that is ever deeper and more powerful.
customer to raise their hand takes planning and capital Interrupting strangers
and getting their attention in the first place is the glamorous part of
marketing. Marketers and their advertising agencies live and die by the sizzle
they create. They invest millions of dollars in a one minute commercial, just to
maximize the effectiveness of the execution.
A copywriter can
make his career with a clever ad. In fact, a thirty year old clever campaign for
the Volkswagen came back from the dead to generate millions of dollars in new
Beetle sales for VW in 1998.
At the same time
that interruption marketers are arming themselves with these killer executions,
they’re backing them with huge media budgets. Media budgets that often dwarf
the cost of inventing or even manufacturing the product in the first place.
All of this time
and money is spent with one goal in mind: interrupt people. If they remember the
interruption the next day, even better. An interruption marketer who does a good
job and boosts their direct mail response rate a tenth of a percent, or boosts
morning-after recall a bit, is a hero. The entire point of the ad is to do that.
Wouldn’t it be
great if we could eliminate this incredibly wasteful part of the process?
Unfortunately, Permission Marketers cannot ignore the interruption part of the
process. They can’t walk away from the cost of getting strangers to raise
their hands. But they CAN leverage the expense of that interruption across
This is the big win
here. By leveraging one interruption across numerous communications, the
Permission Marketer has an unfair advantage. One message becomes six or ten or a
hundred. A momentary interruption becomes a dialogue that can last for weeks or
specific and compare a marketer who had to make a single ad pay off with one who
has the luxury of using Permission. The Interruption Marketer must earn back the
entire cost of the ad after just one viewing. So, if it costs $2 to get one
person to pay attention to the ad, it only pays off if, on average, it generates
more than $2 in new business profits per viewing. If the impact is equal to or
greater than the cost, go ahead and run the ad.
Running the same ad
with frequency dramatically increases the amount of payback required. The
marketer has to hope for $6 in new profits as a result of putting this ad in
front of a prospect three times. If the third ad can’t generate enough impact
to make it worth running, it doesn’t pay for itself.
is free in an online Permission program, and much more effective offline, the
marketer has the luxury of riding the impact curve up without a matching cost
curve. Once the initial toll is paid, in other words, the rest of the ride is
close to free.