Beyond Passive Permission to Active Opt-In Marketing

Consultant Ernan Roman had some harsh words for direct marketers. “This is one of the few industries where throwing out 99% of the work is considered a good day,” the president of Ernan Roman Direct Marketing said during a presentation at the DMA’s Digital Marketing Days conference in New York this month, referring to the standard 1% response rate for direct mail.

And while marketers have expanded into multiple channels to reach potential and current customers, he said, by and large they’re simply using these additional channels to continue their “spray and pray” tactics.

One problem, according to Roman, is that few marketers differentiate between permission and opt-in marketing. The former is typically a matter of requiring a consumer to take an action if he does not want to receive materials and messages. It’s passive, and as a result there is generally little engagement with the brand on the part of the consumer.

Opt-in marketing, by contrast, is active in that the consumer is encouraged to take control of his relationship with the brand. For instance, a marketer might ask what sort of information a consumer wants to receive and via which channels.

Some marketers, Roman said, fear that moving from permission marketing to opt-in engagement will alienate customers, who might find requests for information intrusive. But citing research his company has done on behalf of dozens of companies, Roman said that b-to-b and b-to-c consumers alike expect a “reciprocity of value”: People are willing to share profile information if they trust the brand and expect to receive pertinent information in return.

In fact, consumers have an “insatiable hunger for information,” Roman said. Online, this translates to the desire for “three-dimensional Website experiences.” These provide access to peers, for trusted, impartial information (hence the surging popularity of user reviews and recommendations); access to relevant experts, such as via blogs and editorial content one-commerce sites; and easier, faster access to the corporation, which is why blogs and letters from company executives as well as easy-to-find contact information is critical.

To determine exactly the sort of information your audience hungers for and what sort of value it puts on the information, Roman suggested conducting “voice of customer relationship research”—in-depth interviews with active and inactive customers in which you ask point-blank what they want from your brand.

Richard Bonfiglio, director of customer marketing for MSC Industrial Direct, implemented this sort of research in order to find out if the recession had changed how its customers, 70% of whom are manufacturers, viewed the company. The initial 50-60 twenty-minute interviews validated what MSC had suspected: that customers’ purchasing patterns, not their opinion of the brand, had changed.

The research also showed the specifics of the changing purchase habits, which Bonfiglio said provided MSC with a “huge opportunity” to speak to customers in a more relevant manner. For instance, many customers were making more frequent but smaller orders so that they would have less inventory on hand, which encouraged MSC to emphasize its high fill rates and speedy turnaround times in its communications.

“We were not necessarily trying to fix something broken,” Bonfiglio said, noting that MSC already offered high service levels that met the changing requirements of its customers, “but instead we were trying to make what’s good better.”

To that end, MSC several years ago began testing a “new customer onboarding program.” After their initial purchase, some customers are interviewed by a customer service representative regarding their needs and preferences in relation to MSC. This takes the relationship from one of permission marketing to opt-in marketing. Those customers who were profiled and subsequently received communications tailored to their preferences have a 20% higher response, Bonfiglio said, than those who were not.