A few weeks ago US venture capitalist Bill Gross - backed by
home-shopping tycoon Barry Diller - got himself a lot of publicity by
offering free PCs with free internet access in return for the right to
display advertising on the screen.
To get the PC, people have to fill out a questionnaire about their
income, tastes and education. On the face of it this looks like a great
marketing gimmick. But look a little deeper, and it could be one of
those seminal moments in company/consumer relationships. Why?
Because this becomes what could be called permission marketing:
companies have to get an agreement from individuals to look at the
What this shows is just how dynamics of the marketplace are
Consumers can easily operate in an ad-free zone. It’s not just about
zapping past the television ads: they are increasingly voting with their
feet across the board.
Over 450,000 of them in the UK have joined the Mailing Preference
Service to stop unwanted direct mail. About 350,000 of them have signed
on to the parallel telephone scheme.
But it gets worse for marketers. Not only can individuals choose what
they want to be told about, but they realise that when they do allow
themselves to be marketed to, any information they give in return about
themselves has realisable value. Yet what do most companies currently
offer customers in exchange for information?
An avalanche of unwanted mail. Some discounts on their shopping - spend
pounds 100 and save pounds 1 - a magazine that looks like every other, a
small - read cheap - gift.
That’s why the free PC is so clever. Even if this venture doesn’t take
off - although more than a million people have applied for one - no
marketer can ignore it.
It’s what one-to-one guru Don Peppers calls an explicit bargain: people
know what they are getting into in being exposed to advertising and give
Even more compelling is the way the company uses the thorny issue of
privacy as a prominent part of the deal. It promises that no one,
including the advertisers, will be able to identify any individual,
although they will know, for example, if someone is looking for a new
This turns the one-sided deals most companies offer into a true
relationship, with loyalty given and accepted on both sides. It
acknowledges that information is critical and valuable, and that it will
be treated with care.
This is attractive: a recent survey conducted in the US shows that
Americans are becoming far more concerned about the use of their private
information, with eight in ten respondents believing that they have lost
control over how companies collect and use their personal data.
US consumers want to know about products they are interested in. What
they don’t want is to be hit by an avalanche of ’rewards’ that bear
little relevance to them.
Consumer goods companies were always seen as the universities of
Nowadays they could learn a lot from those in business-to-business
In business, it’s no longer a question of ’I want to buy and you sell to
me after we have haggled about the price’. Instead, it’s about acting as
partners for mutual benefit.
This will be a very hard lesson for all those marketers
who want to pay lip-service to issues of customer satisfaction and
loyalty without honouring their side of the deal. But it’s one that they
are going to have to learn.