Greater>Than Clothing

I have a lot to learn if I’m going to bring a company into existence. My plan is twofold: A) Read lots of books. B) Maintain a grateful attitude towards anyone who is willing to teach me something. If you can think of a book that a new entrepreneur should read, please leave suggestions in the comments or e-mail joey [at] greaterthanclothing.

Seth Godin has long been considered an authority on marketing in the internet age. He founded a pioneering online marketing company and sold it to Yahoo! before writing Permission Marketing in 1999. That makes this book fairly ancient by internet standards, and it does show its age at times (he gushes about My Yahoo!, which isn’t exactly groundbreaking any more), but I was actually surprised at how relevant the message still is. There certainly are companies that have yet to adjust their marketing to take advantage of the opportunity represented by the revolutionary change in the nature of communication (or, more fundamentally, information) over the last decade.

Godin starts by describing the late 20th century’s dominant paradigm, which he dubs “Interruption Marketing”. He’s referring to the mass broadcast commercial, junk mail, spam, and all other forms of marketing that are a mile wide and an inch deep. Response rates for this type of message are very low, but with enough resources it has been possible to make up for that with volume. He makes a great point about how traditional media and Interruption Marketing are mutually reinforcing. They can’t exist without each other.

As programming choices multiplied and new media started vying for the consumer’s time, attention became a scarce commodity, which put new constraints on the efficacy of Interruption Marketing. I’d argue that the fragmentation of the entertainment landscape has only accelerated since 1999 (this was before YouTube, before blog readership gained any momentum, etc.). The internet, part of the “problem” for traditional marketers, provided tools that made another form of marketing, “Permission Marketing”, much easier to scale.

Permission Marketing seeks to cultivate and maintain opt-in consumer consent to be marketed to. The goal is to rise above the background noise by offering valuable, relevant, personal and expected marketing messages. Thus the marketer can earn the right to communicate with the consumer frequently, and has a reasonable expectation that his message will be absorbed each time, leading to higher response rates. Electronic communication options like e-mail allow this frequent communication to be executed with much lower overhead than a mass advertising or direct (snail) mail campaign.

For example, let’s say you were a marketing manager for Velveeta. You could spend significant time and money creating a single ad and spend more money purchasing airtime for it. Then, as it is shown repeatedly it must create awareness, desire and follow-through. The response rate for the single ad must be great enough to pay back the initial investment. Several factors work against you. People ignore ads (or skip them with Tivo), next-day recall is very low for the vast majority of ads that are seen, it is very difficult to target your ads, so many impressions are wasted on consumers who are unlikely to buy the product under any circumstance, etc. Even if you are great at creating compelling ads, this is a difficult task.

Imagine, on the other hand, if your initial message asked something less of the consumer and offered them something in return. “Log on to our website for great recipes and money-saving coupons”. At the website, you provide an opportunity for the end-user to submit their e-mail, in exchange for which you will send more recipes and coupons every couple of weeks. Now you have begun to cultivate a real asset that can be leveraged over time: permission to send marketing messages along with the promised and anticipated content.

This is a lower-volume communication than the ad, but the response rate should be much higher. Thus, Seth argues, you can extract maximum value from the relationship with the consumer. This is where I think the book could have gone a bit farther. I am a huge believer in the value of a true dialogue with the consumer, and that’s not what the book advocates. The examples of Permission Marketing are all series of one-way communications that the consumer either accepts or rejects. Sure they are more targeted, and the value to the consumer is taken into consideration, but if you’re going to go to the effort of building a relationship with your consumer base, why not give them an opportunity to tell you what they think (or better yet, ask them directly)? To put it another way, instead of simply asking for their permission to talk to them, why not give yourself permission to listen as well?

E-mail marketing is built for testing, which requires a steady stream of new ideas. You could leverage this relationship, which happens to be with your most engaged consumers, to feed new ideas into the testing framework. Perhaps the consumer really wants a different type of coupon or recipe, and going with the suggestion could increase response rates significantly. Further, why not take the opportunity to gather feedback on the product itself. If you can show that you are really interested in what consumers have to say, I’m sure they will invest more in the relationship. This can create a positive loop, and then you would really have an asset.

All in all, I’m glad I read this book, even if it shows its age at times. If it seems trite at times it’s at least in part because the ideas it introduced have been so widely used over the past seven years. It includes some great tools that I will be sure to use as I attempt to mold Greater>Than into an organization that understands the value of the relationship with the customer.