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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Personal MBA – An Attempt to Read 99 books in Two Years

The Personal MBA was created by Josh Kaufman who compiled (updates periodically) a list of business books to mimic much of the knowledge learned in an MBA program. I attempted to start reading this list a few years ago but didn’t get through the first book. In high school and college I was an avid reader of business books, they had a great a effect of getting my mind running but I didn’t have an outlet for the ideas I would get from content. This ultimately drove me crazy and I stopped reading them.

I turned to biographies about political, business and entertainment leaders. I think it’s time to go back. With a year under my belt and looking for new inspirations to continue to build my business, I’m going to attempt to read all 99 books by the end of 2016. This is a tall order and it has a great chance of crashing down in the first week. I’m a strong reader but not particularly a fast one. I have a habit of taking notes as I’m reading which I end up placing in random places never to be seen again. What I’m going to attempt to do is read through the list and post in this blog my notes.

I’ll publish produce any ideas or concepts that the books use an apply them to arbitrage.

Book List (As published on the Personal MBA website)

Value-Creation & Testing

Go It Alone – Bruce Judson

The Lean Startup – Eric Ries

The Knack – Norm Brodsky & Bo Burlingham

Ready, Fire, Aim – Michael Masterson

Escape from Cubicle Nation – Pamela Slim

Bankable Business Plans – Edward Rogoff

Value-Creation & Testing

Rework – Jason Fried & David Heinemeier Hansson

The New Business Road Test – John Mullins

How to Make Millions with Your Ideas – Dan Kennedy

Marketing

All Marketers Are Liars – Seth Godin

Permission Marketing – Seth Godin – Notes posted February 1st, 2015

The 22 Immutable Laws of Marketing – Al Ries & Jack Trout

Getting Everything You Can Out of All You’ve Got – Jay Abraham

Sales

The Psychology of Selling – Brian Tracy

Pitch Anything – Oren Klaf

The Ultimate Sales Machine – Chet Holmes

Value-Based Fees – Alan Weiss

SPIN Selling – Neil Rackham

Value-Delivery

Indispensable – Joe Calloway

The Goal: A Process of Ongoing Improvement – Eliyahu Goldratt

Lean Thinking – James Womack and Daniel Jones

Finance & Accounting

Financial Intelligence for Entrepreneurs – Karen Berman and Joe Knight

Simple Numbers, Straight Talk, Big Profits – Greg Crabtree

The 1% Windfall – Rafi Mohammed

Accounting Made Simple – Mike Piper

How to Read a Financial Report – John A. Tracy

Venture Deals – Brad Feld and Jason Mendelson

The Human Mind

Thinking, Fast and Slow – Daniel Kahneman

Brain Rules – John Medina

Making Sense of Behavior – William T. Powers

Driven – Paul Lawrence and Nitin Nohria

Deep Survival – Laurence Gonzales

Productivity & Effectiveness

Getting Things Done – David Allen

The Power of Full Engagement – Jim Loehr & Tony Schwartz

StrengthsFinder 2.0 – Tom Rath

Bit Literacy – Mark Hurst

10 Days to Faster Reading – Abby Marks-Beale

Problem Solving

The 80/20 Principle – Richard Koch

Accidental Genius – Mark Levy

Learning from the Future – Liam Fahey and Robert Randall

Behavioral Change

The Power of Less – Leo Babauta

The Path of Least Resistance – Robert Fritz

Re-Create Your Life – Morty Lefkoe

Self-Directed Behavior – David L. Watson and Roland G. Tharp

Decision Making

Sources of Power: How People Make Decisions – Gary Klein

Smart Choices – John S. Hammond et al

Ethics for the Real World – Ronald Howard and Clinton Korver

Communications

On Writing Well – William Zinsser

Presentation Zen – Garr Reynolds

Made to Stick – Chip and Dan Heath

The Copywriter’s Handbook – Robert Bly

Show Me The Numbers – Stephen Few

Influence

Influence: The Psychology of Persuasion – Robert B. Cialdini

How to Win Friends and Influence People – Dale Carnegie

Crucial Conversations – Kerry Patterson et al

The 48 Laws of Power – Robert Greene

Negotiation

Bargaining For Advantage – G. Richard Shell

3-D Negotiation – David A. Lax and James K. Sebenius

The Partnership Charter – David Gage

Management

First, Break All The Rules – Marcus Buckingham and Curt Coffman

12: The Elements of Great Managing – Rodd Wagner and James Harter

Growing Great Employees – Erika Andersen

The Essential Drucker – Peter F. Drucker

Leadership

Tribes – Seth Godin

Total Leadership – Stewart Friedman

What Got You Here Won’t Get You There – Marshall Goldsmith

The New Leader’s 100-Day Action Plan – George Bradt et al

The Halo Effect – Phil Rosenzweig

Project Management

Making Things Happen – Scott Berkun

Results Without Authority – Tom Kendrick

Systems

Thinking in Systems – Donella Meadows

Work the System – Sam Carpenter

Analysis

Turning Numbers Into Knowledge – Jonathan Koomey

Marketing Metrics – Paul W. Farris et al

The Economist Numbers Guide – Richard Stuteley

Statistics

Thinking Statistically – Uri Bram

How to Lie with Statistics – Darrell Huff

Corporate Skills

The Unwritten Laws of Business – W.J. King

The Effective Executive – Peter Drucker

The Simplicity Survival Handbook – Bill Jensen

Hire With Your Head – Lou Adler

Corporate Strategy

Purpose: The Starting Point of Great Companies – Nikos Mourkogiannis

Competitive Strategy – Michael Porter

Blue Ocean Strategy – W. Chan Kim and Renee Mauborgne

Seeing What’s Next – Clayton M. Christensen et al

Creativity & Innovation

The Creative Habit – Twyla Tharp

Myths of Innovation – Scott Berkun

Innovation and Entrepreneurship – Peter F. Drucker

Design

The Design of Everyday Things – Donald Norman

Universal Principles of Design – William Lidwell et al

Consulting

Getting Started in Consulting – Alan Weiss

Secrets of Consulting –  Gerald M. Weinberg

Personal Finance

Your Money or Your Life – Joel Dominguez and Vicki Robin

The Millionaire Next Door – Thomas Stanley and William Danko

I will Teach You To Be Rich – Ramit Sethi

Fail-Safe Investing – Harry Browne

Personal Growth

Lead the Field – Earl Nightingale

The Art of Exceptional Living – Jim Rohn

A Guide to the Good Life – William Braxton Irvine