A-Clue.Com
by Dana Blankenhorn
Volume III, No. XXX
For the Week of July 26, 1999

This Week's Clue: Summer Reading

This Week's Clue: Summer Reading

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Re-Reading "Permission Marketing."

Clued-in, Clueless

(Note: My first business was @Have Modem, Will Travel, and for the next two weeks my modem's on the road. But fear not - I left you something worth reading - I hope.)

Most books on e-commerce aren't worth your time, let alone your money. This year there are two exceptions, and I didn't write either one of them.

The most important book for you to take to the beach this year is Evan Schwartz' "Digital Darwinism." Thanks to the success of his first book, "Webonomics," , Evan Schwartz has won the extraordinary luxury of talking truth to power, and he's used this liberty wisely.

Schwartz' take is part John Naisbitt, part George Gilder, and part working reporter.

Like Naisbitt, he tracks what has been going on in the recent past and extrapolates it a bit into the future. Like Gilder he can turn a phrase, identifying the big trends from a mass of evidence. Like a good reporter, he does his homework and doesn't pretend to be more than he is. (Next to Naisbitt and Gilder, this makes him a real breath of fresh air.)

Unlike James Naisbitt, Schwartz is not turning his research style into a "Megatrends" business , confusing method with results. Unlike George Gilder, who has used his reputation as a futurist to become a caricature of himself, Evan Schwartz doesn't appear to be drunk on his own ego (the drug of choice for the Clueless everywhere). Instead he has produced a form of Roto-Rooter for the Executive Mind. It should be just the start of a journey leading to where you want to go. That's a wonderful achievement. 

Getting past the conceit of the title (you've got to have a hook, and evolution is as good as any) Schwartz offers seven basic business strategies that you can use to make money now. And while he's describing these strategies, he isn't afraid to dump on some of his sources. He has some harsh words for Peapod and NetGrocer, for botmakers and Amazon.Com, for Netscape and Slate, and for a number of others. This shows independence of thought, and it's something I've seldom seen in the business press.

The seven strategies are, put most simply, solution branding, auction-based pricing, affiliate marketing, bundling, custom production, cyber-mediation, and integration between the Web and real stores. But, because Schwartz has researched and written well, I am giving nothing away in telling you this. I found a few places where this book could have used closer word editing (especially in the "Executive Survival Guides" closing each chapter, which could be punched-up), but when you're looking at this kind of quality on this kind of deadline that's a minor quibble. I also resented (somewhat) the lack of links in the book, but I suspect that was the idea of Schwartz' editor so I won't belabor it. (Besides, most of these sites can be found simply by putting a .com after the company names, and the rest can be found by simply "doing a Yahoo.") 

When it comes to business books, to paraphrase James Carville, "it's the content, stupid." If you want to understand how the Internet is changing the facts of business life, buy this book. Then don't just read it, but re-read it several times, think about it while you're doing something else, and find ways to apply these lessons to your current business. You will not be sorry. 


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You can now get your Daily Clue at ClickZ, putting a "clued-in" spin on the day's news. I'm also a semi-regular on TechEdge Radio and I'm continuing monthly columns for  NetMarketing, Boardwatch, and  Intellectual Capital. I'll also begin work soon with the IC folk on a book project concerning politics and the Internet, which will appear first on the Web. A-Clue.Com is also the Monday e-commerce column of Andover.News. Buy my book now. Subscription instructions are at the bottom of each issue.

Remember that it's still journalism -- checking the news, calling people, listening carefully and writing on deadline -- which keeps the Clues coming. If you're looking for excellent work, give me a call at 404-373-7634. Now back to the show...


Re-Reading "Permission Marketing."

Since its publication just a few months ago, "Permission Marketing" by Seth Godin has already journeyed from concept to buzzword to cliché (which should tell you something about the ruthlessness of "Digital Darwinism.") It's time you gave this "classic" another look.

About 90% of the people selling you "permission marketing" solutions are missing Godin's point. The point can be summarized in one word -- trust. Gaining trust, building on that trust, and expanding that trust is what "permission marketing" is all about. It's not about giving someone permission to spam you.

When "Permission Marketing" is done right, it's the most ethical kind of marketing you can have. Godin assumes you offer a good product or service, one that is worth the price people pay for it. If you don't have that, "Permission Marketing" will kill your company faster than any other form of marketing, since it's based on renewing your company through the people it's already sold, and if they're unhappy you have no field to plow.

The bottom of the pyramid involves getting permission to make a sales pitch. That's the only place that might smack of an interruption, and the aim of the interruption isn't to sell, but to get permission to try and sell. (That interruption will be paid for, which is another reason why even this contact must be carefully targeted.) Once a sale is made, permission marketing tries to make the sale automatic in some way. (The highest level of trust goes to your electric company, or your surgeon - it's called "intravenous permission.") Once your customer trusts you to offer them products automatically, you try to expand that permission into other product areas. At each stage, from the first pitch, you're giving something away (a coupon, a bargain, a sample) to win and maintain permission. (If your sales to a prospect are getting easier, you can live with smaller gross margins.) At no point do you take the relationship for granted. You don't sell your customers' names, you don't offer products unrelated to what you know of the customer, and you certainly don't serve them through a third party.

A lot of this has been lost by Godin's own company, Yahoo, in presenting its new marketing partner, MessageMedia. MessageMedia has made its name by taking Masayoshi Son's money and rolling-up a bunch of e-mail marketers, including Revnet. The deal with Yahoo, announced June 30, will assign MessageMedia the job of sending e-mails to Yahoo's database of e-mail addresses, with "special offers, promotions and discounts," in a variety of formats. MessageMedia will handle all the back-end work of list management, bounce processing, customer service and reporting.

MessageMedia calls this "permission marketing." It is not - it is e-mail marketing. That can be the first step in a permission chain, but it is only the first step. True "permission marketing" can be done only to your customer list, based on an intimate knowledge of your database, along with a steady renewal of that permission and an effort to expand trust. Someone in Boulder needs to read Godin's book, and stop taking its Clues in vain.

Clued-in, Clueless

Clued-in is Earl Shorris' "A Nation of Salesmen: The Tyranny of the Market and the Subversion of Culture." Written by a former N.W. Ayer executive at the dawn of the Web age, this apologia has a lot to say about our culture, insights you can use to expand your Web of knowledge and make real money.

Clueless is Paul Andrews' "How the Web Was Won." The subtitle is "From Windows to the Web," and it paints Bill Gates as leading a "band of Internet idealists" who "transformed a software empire." This one belongs in the fiction section. Microsoft has a long way to go before it's transformed, and most of the transformation that's taken place so far involves the same old extend-and-crush they've been involved in for a decade. (An exception has been MSN, which is Gates' form of casino gambling - throwing money at rich people while calling it an investment.)


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