negative option marketing direct mar com
TRANSCRIPT
Negative Option Marketing
Effective - But Not for the Squeamish
Jonathan Blaine, Direct MarCom, January 2006
Negative Option Marketing Introduction
Negative Option Marketing Definition: “the selling of a good or service
by automatically billing customers for that product unless they give implicit instructions that they do not want it”
Popular Examples: Music Clubs, Book Clubs, add-ons with Cellular Phone service
Negative Option Marketing Potential Pitfalls Treading on thin ice due to federal
government rules Class Action lawsuits Federal Trade Commission settlements of
$1 million due to “lack of adequate disclosure” of the terms and conditions
Negative Option Marketing Examples of regulatory and court findings: Mountain Bell (Qwest): wire maintenance
added to phone bills Oxmoor House: “free trial” books not really
free Experian / ConsumerInfo.com: not really
“free” credit check service
Current Examples Classmates.com
Current Examples Classmates.com
Current Examples Match.com
Current Examples Match.com
Negative Option Marketing Match.com
Negative Option Marketing Match.com
Historical Cases TCI negative option of Encore movie
channel In 1990, company attempted to add $1 to
customers’ bills before anyone had seen the product.
Huge customer, press and regulatory revolt. Plans cancelled. Result: Federal Regulations put in place.
Historical Cases TCI negative option of Encore movie
channel - WHY DID IT FAIL? Negative option marketing works best on tried
and true products that are already valued by the customer, and that have a strong perceived value.
The product must be proven, and desired by the customer.
Historical Cases First “expanded basic” tier of cable
channels in Canada (sports, music, etc.) • 90% penetration after campaign • previous $10.95 product offered at $2.50 • elimination of interfering technology (the set-
top cable descrambler) • community relations • The Secrets of Our Success:
Historical Cases First “expanded basic” tier of cable
channels in Canada (sports, music, etc.). 1. We whetted the customer’s appetites with
advertising and “free tastes.” 2. Product was already in 10% of homes. 3. Huge amount of advertising. 4. Community relations. 5. Direct mail that explained the offer…
Historical Cases First “expanded basic” tier of cable
channels in Canada (sports, music, etc.). 6. We knew the perceived value… and…
Historical Cases
Negative Option Marketing