Ask For Permission And Keep Your Customers
By Duane Lyons and Web Fletcher, Braun
Where can you find the leading edge of multi-channel, permission marketing? Maybe you should start with your favorite fishing products supplier.
Seems like an odd place to look. But after a friend recently gave me a
gift certificate for this niche retailer, I dialed the toll-free number to
place an order. At the end of the transaction, the customer service
representative asked if I would be interested in receiving promotional
e-mail messages in the future. I agreed, and several days later I received
an extremely relevant and personalized e-mail, and I found myself making an
online impulse buy.
The experience was painless and rewarding. But as most companies know,
this seamless chain of events masked a vast web of complex organizational
and information management challenges.
On its surface, permission-based marketing does appear simple. It's
marketing to those customers who have given consent to be marketed to,
either online, offline or both. It's about contacting individuals with
targeted offers or messages in an agreed-upon format at agreed-upon
intervals. Beneath that veneer of ease, however, it can also be quite
tricky, because permission marketing requires a two-way, give-and-take
relationship which can end abruptly. Customers can 'unsubscribe' anytime
they want to stop hearing from you. They often do.
Permission-based marketing has become a fundamental element of nearly
every business' marketing mix. In fact, some would suggest that
permission-based marketing is a cost of entry for doing business online. At
the same time, many companies are beginning to realize the increasing
complexity and risks involved in effective permission marketing and are
becoming more sensitive to the trade-off between potential revenue and
E-mail marketing, in particular, has emerged as a hot topic for
businesses and customers alike. U.S. newspapers ran more than 4,500 stories
about e-mail privacy in 2001 alone. Meanwhile, comprehensive federal and
state legislation looms just over the horizon. To further complicate
matters, the proliferation of innovative enabling technologies '
Internet-enabled cell phones, wireless PDAs and digital TV, to name a few
' is bringing the issues of permission marketing to entirely new channels
In this fast-changing and increasingly complex environment, many
companies are attempting to develop a strategy for permission marketing that
is consistent with their customer management goals. They face tough
What is the financial value of customers who welcome unsolicited e-mail
messages and begin to purchase products from your company? What is the
financial impact of customers who will never purchase products from your
company because they feel an unsolicited e-mail message is a violation of
their privacy? What is the financial impact of negative publicity resulting
from your failure to comply with accepted permission-marketing protocols?
If customers choose not to be contacted by e-mail, do they believe they
also won't be contacted via direct mail? What does your marketing
If customers grant permission to contact them, do you know when it was
Do you know when or why customers change their permissions?
If customers provide their permission preference, do you know through which
channel they provided it (call center, retail location)? Do you know which
employee captured it? Do you or the customer know for sure which channel or
channels it applies to?
If the permission was obtained on the Web site, can you tell the
difference between an opt-in or opt-out permission?
Do you know the precise wording of the policies used to obtain
permissions from your customers? Are they the same or different across all
your channels (Web site, call center or retail location)? Can you really
fulfill the commitments these policies make?
Which of your business groups or functions e-mail your customers? How
often are those campaigns coordinated and sequenced? How many e-mails do
your best customers receive from your company in a given month? Are e-mail
campaigns integrated with direct mail and OBTM campaigns?
Who is responsible for managing customer permissions and privacy? Where
are those data stored and how are they monitored, managed and accessed?
Although opinions about the impact of permission-based marketing on ROI
vary, few compelling case studies that address these questions exist. While
many companies understand permission-based marketing on a conceptual level,
operationalizing this concept can be difficult. In short, getting
permissions is much more complicated than creating a 'my profile' page
on your Web site. It requires an overall strategy that looks across your
organization and includes significant process, organizational and technology
To maximize the impact of permission-based marketing programs and ensure
a positive impact on revenue and customer loyalty, diligent marketers need
to focus on five core elements of effective permission marketing:
- Integrate the channels,
- Give customers what they want,
- Understand what's really going on below the surface,
- Don't neglect the 'hole in the bucket,' and
- Get the organization aligned.
Key Success Factors For Effective Permission-Based Marketing
Although the complexity and pitfalls of permission marketing will
continue to grow, companies can effectively navigate these turbulent waters
now, all while enhancing customer loyalty and marketing ROI. These five core
principles offer a measure of guidance on that journey, allowing companies
to strengthen their relationships with current customers and build
relationships with new ones.
Integrate Your Channels
Companies have been struggling for years to coordinate and integrate
their channels and reduce the mixed messages, inconsistent information and
dropped hand-offs that plague their customer interactions. Permission
marketing brings all these issues to a head, driven by customer demand and
growing legislative efforts.
Legislative efforts, in fact, are a primary driver behind the application of
online data practices to offline practices. In December 2001, the Federal
posted on a company's Web site as 'in force' for offline data
result, many companies have been updating their privacy policies to reflect
the differences between offline and online data collection practices.
retroactive. Companies must ensure effective coordination and communication
as these policies are updated.
Customer demand is another factor fueling this shift. Customers want to
be in control of how and where their personal data are being used. A recent
study revealed that 94 percent of all respondents want the ability to give
permission before their personal data are used for any purposes other than
the reason for which the information was originally solicited. After
experiencing best-in-class service from companies that communicate with
their customers effectively across multiple channels, more and more
consumers will stop tolerating the frustration and poor service that channel
confusion creates; instead, they'll simply migrate to competitors that are
often only a click away. Companies must ensure that their policies,
language, practices and information are consistent and coordinated across
all the points that touch their customers.
Give Customers What They Want
Multiple studies have shown that consumers are ready and willing to
provide customer data and permission if it benefits them and is used
appropriately. Highlights from recent surveys include statistics such as:
- 'Fifty-one percent of respondents are willing to provide personal
information for a truly personalized online experience and/or targeted
marketing messages that are relevant''
- 'Of those willing to provide personal data, 95 percent are willing
to provide e-mail addresses if offered a personalized/customized
- 'Seventy-three percent of respondents see it as helpful when a Web
site remembers basic information''
Assuming that customers trust how their data will be used, the first step
to getting permission is to offer a compelling value proposition to the
customer. The value proposition can come in the form of a personalized
experience at the Web site and/or other touch points; targeted marketing
messages that are relevant to the customer; or informational outbound
After establishing a compelling value proposition, the next step is to
ask for permission. Simply having a 'my profile' page on the Web site is
not enough. Permission should be requested every time an interaction occurs
with the customer, clearly putting customers in control of the interaction.
Customers are willing to engage in a more robust and profitable dialog with
the companies they prefer, but only when they are given meaningful choices
for how and when those exchanges take place.
Understand What's Really Going On Below The Surface
Whenever a customer unsubscribes from future marketing messages, it has
a measurable impact on the bottom line. Losing permission limits your
ability to market your products or services to the customer. It also limits
your ability to manage the relationship with this customer. We call this
dynamic 'permission churn.'
The first step in minimizing permission churn is to create the ability to
measure it. A lot of companies know how many customers they have permissions
from at the end of each month, but they do not know the difference between
new, 'permissioned' customers versus customers who unsubscribed.
For example, in a one-month period, a popular Web site may experience an
aggregate increase in the number of permissioned customers of more than a
million. Unfortunately, without knowing the details, it's possible the Web
site may actually have gained 3 million new customers with permission that
month, while losing 2 million customers via the unsubscribe process. On an
annual basis, this represents an annual loss of 24 million prospective
customers! If even 10 percent of the unsubscribers can be retained, perhaps
through analytical techniques and testing, that represents 2.4 million new
Don't Neglect 'The Hole In The Bottom Of The Bucket'
After developing the ability to measure permission churn, the next step
is to develop and test strategies to minimize it.
First, implement a contact plan that establishes how frequently customers
should be contacted. Unfortunately, this 'one-size-fits-all' approach
doesn't recognize the inherent differences in customers. As a result, many
companies are starting to investigate more complicated strategies. Two
distinct approaches that have emerged, depending on the sophistication of
firms' marketing analyses, include: 1) allowing customers to control the
frequency they receive marketing messages; and 2) using analytical
techniques to predict how often a customer is willing to receive marketing
The advantage of the first approach is that it places the control in the
hands of customers, allowing them to specify the frequency at which they
receive marketing messages. Unfortunately, though, the process for providing
permissions becomes more time-consuming for customers. Luckily, there's an
alternative, hybrid approach that can work effectively.
- When obtaining permission from new customers visiting the Web site,
make the process as streamlined as possible without asking for frequency
or similar details,
- Provide an 'advanced options' sub-menu on the 'my profile'
page that allows existing customers to select and change their
- When customers decide to unsubscribe, offer them an alternative; for
example, allow them to reduce the frequency of marketing messages or
alter their channel preferences.
By understanding and focusing on the permission churn going on below the
surface in the customer base, companies can create significant improvements
in 'permission loyalty' and subsequent revenue potential. Giving
customers the flexibility to define the nature and intensity of their
communication with the business is a critical element in maximizing that
Align The Organization
The power of permission marketing ' and perhaps its biggest challenge
' is that it touches customers across all their interactions with the
company and is not isolated to one channel or functional group. Permission
marketing and the overlapping issues of customer privacy are critical
customer management concerns that span marketing, customer service and IT.
High-performing, customer-focused companies have thought hard about these
issues, have analyzed the processes, touch points and potential breakdowns,
and have made investments to ensure there is clear understanding and
accountability for providing customer management that drives revenue and
loyalty. Unfortunately, most companies have not yet made these investments,
and like most cross-functional, channel-spanning issues, permission and
privacy often fall between the cracks of the organization. The inevitable
result is high customer frustration and defection, inconsistent messages and
procedures across channels, and incomplete and inconsistent information
about the business. Companies dedicated to high-performance customer
management must make the investments to understand all the places permission
marketing touches their customers and their organizations, and develop the
processes, roles, responsibilities and data management structures that
Permission-based marketing is no longer simply about users checking off a
box to receive information from a company. In fact, it's becoming a
necessary component of all direct marketing strategies. At its essence,
permission-based marketing is about collecting as much information about
customers' preferences as possible, and using this information judiciously
to add value to their interactions and enhance their loyalty.
There are no shortcuts in permission-based marketing, and when companies
get it wrong consumers will end up buying less. As such, savvy marketers
need to think about how they acquire ' and keep ' customer permissions
to ensure the long-term success of their marketing efforts.
Duane Lyons is a senior manager within the Customer Solutions practice
of Chicago-based Braun Consulting. He can be reached at [email protected]. Web
Fletcher is a vice president of the Customer Solutions practice of Braun
Consulting. He can be reached at [email protected].
Headquartered in Chicago, Braun Consulting, Inc. is a professional services
firm that delivers customer-focused solutions to FORTUNE 1000 and
middle-market companies. Founded in 1993, Braun provides solutions to
integrate strategy with technology and optimize the relationship between
supply and customer demand.
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