How is the IT-Driven Concept of “Permission Marketing” Changing

the Way Companies Establish Customer Relationships Using “Old” Media as well as New?

By Janice Williams Donaldson

Major Changes

Technology enables interactivity and relationship marketing

Technology increases consumer concern and opportunities to misuse information

Permission decreases consumer concern and engenders confidence and trust

Permission marketing requires media integration Interactivity optimization requires organizational

change

What is Permission Marketing?

Consumer volunteers for marketing message Interactive relationship Rewards for participation Anticipated, personal and relevant

How is it Different?

Permission– Targeted– Interactive– Relational

Interruption– Mass– Passive– Transactional

Technology Enables Permission

Cost-effective Targeted Customized Dialogue vs. monologue Frequent

“Today, however, because of interactive technology, it has become cost-effective

once again to conduct individual dialogues, even with millions of consumers,

one customer at a time.” --Don Peppers

Godin, S. (1999). Permission marketing: Turning strangers into friends, and friends into customers. New York, NY: Simon & Schuster.

Information & CommunicationsTechnology

Database management marketing The Internet

– Web sites– E-mail– Consumer networks or communities

Personal or mobile communications

Technology Increases Consumer Concerns

Ease of collection, storage and exchange of personal data

“Cookies” and tracking software Notice and consent

Taxonomy of Privacy Concerns

Direct mailing Preference tracking Unwanted eavesdrop No opting-out Third-party distribution

Improper acquisition– Access– Collection– Monitoring

Improper use– Analysis– Transfer

Privacy invasion– Unwanted solicitation

Improper storage

Wang, J., Lee, M. & Wang, C. (1998). Consumer privacy concerns about Internet marketing. Communications of the ACM, 41, p. 65.

Reactions

Businesses– Standards– Trust Frameworks– Self Regulation– Infomediaries

Consumers– Anonymity– Encryption– Access Control– Filtering

Permission Decreases Concerns

Clear permission to use personal data Non-transferable permission Permission ladder/“permission creep” Relationship approach focuses on lifetime

customer value

Permission RequiresMedia Integration

Role of “old” media and new Passive vs. interactive Future implications

Permission Marketing RequiresOrganizational Change

Gamma-Level Change– Technology– Tasks– People– Structure

Outsourcing– Marketing solution providers

So What?

Advancing technology brings more interactivity Interruption marketing continues to decline in

effectiveness Measurable marketing results depend on

targeting, customization and relationship Access to information denied without consumer

confidence and trust

Challenge to Marketers

“To save relationship marketing, managers will need to separate rhetoric from reality … There’s a balance between giving and getting in a good relationship. But when companies ask their customers for friendship, loyalty and respect, too often they don’t give those customers friendship, loyalty and respect in return.”

Fournier, S., Dobscha, S., & Mick, D. (1998). Preventing the premature death of relationship marketing. Harvard Business Review, 76, 42, 46.

In Conclusion

Technology enables interactivity. Interactivity is fundamentally reshaping marketing

strategy using “old” media and new. Interactivity requires information. Information technology leads to privacy concerns. Permission mitigates consumer distrust. Interactivity optimization requires organizational

change.

ANY QUESTIONS?