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 & Communications Technology Database management marketing The Internet – Web sites – – 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 Requires Media Integration Role of “old” media and new Passive vs. interactive Future implications

Permission Marketing Requires Organizational 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?