Mobile Permission Marketing

All kinds of businesses are finding ways to make customers’ lives easier. With customers’ permission, several travel booking agencies, such as Galileo.com, TheTrip.com, Travelocity.com, and some airlines are now using instant messaging to upgrade confirmations and to notify travelers of their flight status, departure gate assignment, and weather conditions in their destination city.

This kind of mobile permission marketing goes far beyond airlines and travel agencies. More than 800,000 people have given permission to two shopping malls outside London to send personal messages and special promotional offers. Customers choose which stores they want to hear from and then notify the service when they visit one of the malls. Messages are sent to their handheld devices only when the customer is in the mall.

Similarly customers of ICA Ahold, the Swedish retail chain, have given the supermarket permission to contact them when they are in the store. Using their WAP-enabled mobile phones, customers can check their account balance, be notified of the store’s special offers—including personalized offers—and even pay for their purchases using their mobile.

Another interesting and fast-growing player in the permission marketing game is The Gator Corporation. Gator provides free software that automatically fills in online forms and remembers login IDs and passwords. In exchange for this service, users give permission to Gator software to display relevant and high-value pop-up advertising and promotions based on preferences of the individual user. These preferences are based on product or service choices the user made on previous Web visits. Gator is careful to respect consumers’ privacy and does not collect individuals’ names or any personal information. The service works like this: If a consumer uses the Web to research information about a product category, for example an SUV, Gator will offer special information about SUVs.

The Internet audience has voted and they prefer Gator to run-of-the-mill advertisers. As one writer said, “There are several million people out there who have decided that the normal advertisers out there, most of whom use advertising like a spray hose, aren’t as useful or interesting as those who sign on to Gator, which uses advertising more like a valuable solution dispensed from an eye dropper.” The few million people the writer mentions actually amount to 20 million unique users. The power of relevant messages sent with permission of the users is demonstrated by click-through rates ranging from 6 percent to 26 percent depending on the product category. (For those not familiar with Web advertising, this compares to a typical 0.5 percent expected from a typical successful Internet banner campaign.) An October 2001 Greenfield Online survey established that 76 percent of Gator’s active users are extremely satisfied or very satisfied with the software. The study also showed that an average user clicks on more than three Gator ads and offers a month. More than half said they saved money from Gator offers, with the average savings being $16.73. Gator is one of the first companies to achieve a mass scale of permission marketing and learning relationships using feedback, knowledge, and permission to individually customize offers. Gator’s enterprise clients include the leading Fortune 500 advertisers in automotive, travel, financial services, entertainment, retail, and consumer packaged goods.

This new form of communication, with the customer giving permission to the company and the company responding with customized personal offers, is changing many of our long-accepted marketing beliefs. As customers begin to direct the course of communication, engage in more self-service activities, and offer opinions and advice, customer are helping to determine the marketing tactics of the company—an upside-down value chain revolution.