Book #1 – The Personal MBA Notes: Permission Marketing

Permission Marketing: Turning Strangers Into Friends and Friends Into Customers (1999) – Seth Godin

DEFINITIONS

Interruption Marketing: Marketing that requires the customer to be interrupted from what they’re currently doing in order to get them to think of something else. Examples: TV ads & Internet pop up ads

Permission Marketing: Marketing in which customers volunteer to be marketed to.

Intravenous Permission: When the marketer is making buying decisions for the customer. If the marketer guesses wrong or abuses it, the permission is removed. Example: Book of the Month Club.

Purchase on Approval: A type of intravenous permission, but not where the purchase in implicit but explicit. Example: Suggested products after purchase on Amazon.com

Points Permission: Utilizing the building of extra value after continued patronage of a business. Example: Credit card miles

Personal Relationship Permission: When a relationship is created due to intimate knowledge of each party. It is less valuable than points due to their lack of ability to scale. However, it is the most effective. Example: Doctors/Dentists

Brand Trust Permission: Less effective but popular with interruption marketers. Occurs when customers trust a particular brand and will then be more likely to trust new products or brand extensions. Example: Apple Ipod extending to Apple Tablet

Situational Permission: Occurs when there is a situation that a customer needs to act and reaches out to the marketer. Example: “Do you want fries with that?”

STATEMENTS/QUOTES

  • “Alta Vista…has surfed and scanned 100 million pages of information, and if you do a search, that’s the database you’re searching through.” pg. 30 (I found this hilarious, goes to show you that first to market isn’t everything)
  • Direct Marketing is more effective than ads, still a 2% response is considered a success.
  • Permission marketing encourages consumers to participate in a long term, interactive marketing campaign in which they are rewarded in some way.
  • Permission is an investment. It requires patience and faith as there isn’t normally immediate returns.
  • The concept to increase the share of individual customers is more important than market share was developed by Don Peppers and Martha Rogers in the book The One to One Future.
  • Starting on page 67, there is quite an amazing foreshadowing of Amazon.com embracing permission marketing. Not concerning themselves with the cost of acquiring their customers. We can see many ways that they are leveraging the value of customers that trust their name. One way is in Fulfilled by Amazon.
  • Interruption marketers are uncomfortable in the acts it takes to maintain a customer, even though it is less expensive. As it takes all the power away from them and gives it to the customer.
  • Some customers have negative value, once these customers are identified, it can be wise to get rid of them. This allows the marketer to spend more time on customers who have positive value.
  • In order to achieve the prospects permission, you still must interrupt them to acquire it. Interruption marketing still has a place.
  • The less you ask of the prospect and the larger the bribe during the initial interruption contact, the more effective it will be.
  • Before a marketer can acquire trust, they must breed familiarity by creating awareness.
  • The most effective way to create awareness, is via frequency.
  • With the need for frequency, marketers still favor the concept of reach. Is it better to reach 100 people one time or 25 people, four times?
  • An ad needs to be run 27 times towards a single individual before it has a desired impact. The math assumes that only one in 9 ads will be seen and then needs three views in order to sink in. (credited to the marketer, Jay Levinson)
  • The attempt to create new ways to advertise when customers need frequency is misguided. The only reason marketing attempts should be changed is once they cease to be effective.
  • If you create a points program you must give little benefit to infrequent customers, and great benefits to frequent or high value customers. The permission must be overt with an understanding how they will be tracked.
  • Marketers easily take permission for granted. The forget that the permission is a selfish act by the customer, the marketer must always keep the needs of the customer as the catalyst for action.
  • In regards to technology, customers prefer mastery of technology over cutting edge. Don’t make your customers feel stupid with utilizing offerings integrated with technology.

LISTS AND STEPS

Problems of Interruption Marketing

  1. Humans have a finite amount of attention
  2. Humans have a finite amount of money
  3. The more products that are offered, the less money there is to go around
  4. In order to capture more attention and money, you must spend more money on interruption marketing.
  5. The more money spent the less effective each dollar becomes

Permission Marketing Has Three Components, They’re:

Anticipated – Prospects look forward to messages

Personal – The messages are directly related to prospects

Relevant – The message is about something interesting to the prospect

How To Date Your Customer

  1. Must offer the prospect an incentive for volunteering. (Such as information, entertainment, sweepstakes or direct payment)
  2. Utilizing the attention by the prospect, the marketer must offer a curriculum over time to educate the prospect about what they have to offer.
  3. Reinforce the incentive. Over time incentives wear out. Because of two way communication, the prospect can assist in how to effectively do this.
  4. Encourage the customer to give permission to gather more data about themselves.
  5. Leverage your permission into a profitable situation.

Reasons Interruption Marketing Is Effective In A Low Clutter Environment

  1. Ease of use; create ads and run them on a wide scale
  2. Scalability; the more ads created, the more sales acquired
  3. Predictability; had the ability to determine how much more in sales every dollar in ads would generate
  4. Command/Control bias; the advertiser could control all of the messaging
  5. Profitability; good products generated more profits than the cost of advertisement

Focal Points In Peppers and Rogers Book

  1. Increase your “share of wallet”
  2. Increase the durability of customer relationships. Invest in retention.
  3. Increase product offerings to customers by being customer-focused.
  4. Create an interactive style. Acquiring more information will lead to new product offerings.

Problems With Frequency-Related Marketing

  1. Ads that do not run with frequency are ignored.
  2. Due to the need to interrupt the customer, ads need to have a lot of attention grabbing aspects, which leave little room for messaging.
  3. New concepts are misunderstood, due to being overwhelmed with new data.
  4. Frequency is expensive.
  5. Running frequent ads is boring.

Five Levels Of Permission

  1. Intravenous (purchase-on-approval model)
  2. Points (liability and chance model)
  3. Personal Relationships
  4. Brand Trust
  5. Situation

Types of Points Based Models

  1. Point Liability Model – Where each point has a stated value that is guaranteed.
  2. Point Chance Model – Where there isn’t a guaranteed reward, but the chance to win a reward

Four Rules of Permission

  1. Permission is nontransferable
  2. Permission is selfish
  3. Permission is a process, not a moment
  4. Permission can be canceled at any time

How To Evaluate a Permission Marketing Program

  1. What’s the bait?
  2. What does an incremental permission cost?
  3. How deep is the permission that is granted?
  4. How much does incremental frequency cost?
  5. What is the active response rate to communications?
  6. What are the issues regarding compression?
  7. Is the company treating the permission as an asset?
  8. How is the permission being leveraged?
  9. How is the permission being increased?
  10. What is the expected lifetime of one permission?

CASE STUDIES

  • Proctor & Gamble introduced Crisco in 1908. Due to the lack of reliable mass media (a requirement for interruption marketing) P&G relied on permission marketing. Such tactics used were:
  • Paying train lines to use Crisco instead of lard in pies served on board. (made end user aware of this)
  • Held society teas in major cities. All items offered with the tea were made with Crisco.
  • Introduced a series of free cookbooks. They promoted the cookbook, not the product. (Crisco was a ingredient in all recipes
  • Camp Arowhon has the oldest summer camp in North America. They utilize interruption marketing not to sell but to get permission.
  • They advertise at fairs and in magazines
  • The advertisement does not attempt to sell the camp.
  • The goal is to get permission to send a video/brochure. (via phone)
  • The goal of the video is to get permission to have a meeting.
  • At the meeting, the camp is finally sold the camp.

IDEAS/APPLICATIONS

  • Information incentives on Instagram, Twitter or Facebook. Value added content regarding brands or players. (for sports memorabilia/apparel)
  • In terms of marketing on Instagram, it would be unwise to build followers using tactics such as “follow for follow”, when potential customers see marketers using this, it demonstrates that the number of people following them is a lie and that they are untrustworthy themselves.
  • A great example of frequency is Kars4Kids and their horrible jingle on the radio. While it’s awful and the charity is suspect, most of us know, not only the song, but the phone number (if we sing the song in our head).
  • Cash back or discounting is referred to as a “crude way of applying a points program”. It may make more sense to create rewards that are special to just those who acquire certain goals. For example, what if Sony offered special edition Playstation’s not to the general public, but, to those who have been members of the online community the longest. Or those who purchased the most additional content.
  • What if there wasn’t a structured program but surprise rewards? By keeping track of repeated buyers, surprise them with an upgrade that wasn’t part of an explicit program.

The above notes are supposed to be an aid to be used after reading the book. This is the format I’ve written my notes since High School. I’ve found them easy to use when you need to find specific information at a later date. Please feel free to comment any ideas you’ve acquired from reading Permission Marketing.

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One thought on “Book #1 – The Personal MBA Notes: Permission Marketing

  1. Pingback: Personal MBA – An Attempt to Read 99 books in Two Years | Arbitrage: A Database of Knowledge

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