Customer Centricity : Permission Marketers: Did We Blow It?

Seth Godin is a bestselling author, entrepreneur and agent of change. He is also the author of six books that have been bestsellers around the world and changed the way people think about marketing, change and work. Permission Marketing was an Amazon.com Top 100 bestseller for a year, a Fortune Best Business Book and it spent four months on the Business Week bestseller list. It also appeared on the New York Times business book bestseller list.

Seth is a renowned speaker as well. He was recently chosen as one of 21 Speakers for the Next Century by Successful Meetings and is consistently rated among the very best speakers by the audiences he addresses.

Seth was founder and CEO of Yoyodyne, the industry's leading interactive direct marketing company, which Yahoo ! acquired in late 1998.

Check out Seth's website www.sethgoding.com


First published on 16th September 2001

Ten years ago this week, my colleagues and I launched GUTS, which, at least for me, inaugurated a new era online. For the first time, online services ( the world wide web didn't exist ) could motivate large groups of consumers to behave in a way that benefited both consumers and the service. Millions and millions of people played GUTS, and Prodigy ( remember them ? ) was able to learn a great deal about what people wanted and how to get their users to do stuff.

Over the next few years, you and I were all lucky enough to be around for the birth of a mass medium. It's only happened a dozen or so times in the history of civilization, so naturally, they were exciting times. Alas, I think with all the rushing around, our industry didn't take a deep breath and stop to think about how our decisions would influence this medium for years or decades to come.

Looking back, I think the industry blew it.

Short-term pressure led to bad decisions--strategies that seemed smart at the time, but led to dead-end outcomes. Just as PBS is sorry that they became addicted to on-air begathons, it's obvious that the Net will regret many of its short-term decisions as well.

Wall Street said, "If you make your content sites work like TV shows, we'll fund you." So content interrupted by annoying advertising became the standard. The venture capitalists kept their end of the bargain, but after the market crashed, these sites were left with nothing -- no cash in the bank and no big revenue deals on the horizon. Now, their only plan seems to be to make the advertising more annoying, more intrusive and less respectful. And still the big advertisers are staying away.

Wall Street said, "If you make your commerce sites work like Wal-mart, we'll fund you." So stores that carried everything and sold nothing were the order of the day. The venture capitalists kept their end of the bargain, but after the market crashed, these sites were left with nothing. Not enough traffic, too few sales per customer. Now, the only plan of the remaining online commerce guys seems to be to do more of the same and hope to last long enough to eke out a profit.

I was having lunch this weekend with an old friend. He told me that his company ( a top 10 internet site ) still doesn't measure which content and which promotions influence behavior. They basically guess, and after they run something, they don't bother to figure out whether it worked better ( or worse ) than what they did last week.

We could have built software that was organized around the user -- web sites that naturally changed based on what they knew about the user. Instead, most sites are static, showing a first-time user the very same thing that we show a loyal customer.

We could have built simple sites that were direct in their presentation and marketing. Instead, the standard is a complex mix of multimedia, site maps, fancy programming and little of value.

We could have stamped out spam forever five years ago by building accountability into e-mail, but we couldn't get a quorum to agree and we missed our chance. Is it my imagination or is it getting worse ?

We could have created web companies that understand why they're in business. "To make money for our advertisers !" Instead, we're stuck with "information delivery platforms" and "wireless portals."

We could have created online retailers that focus on finding products for customers. Instead, virtually everyone selling online offers catalog-ware, working overtime to find customers for products. Why do retail stores still exceed online stores in sales per customer ?

We could be measuring lifetime value of a customer, but we're still focused on traffic and ( god forbid ) hits.

We could be building remarkable products that follow a natural progression from unknown to ideavirus. Instead, we try to jury-rig "tell a friend" promotions on top of boring stuff that no one wants to share.

We could be building risky business models really cheap and seeing what works, but we're getting more and more conservative instead. You and your colleagues are working way too hard for anyone to settle for a mediocre experience.

In The Big Red Fez I tried to outline how the approach we take to building a site drives almost all of the poor results web sites are wrestling with. It's not that we're not smart enough to do it right -- the basic architecture fights against success ! The combination of software, funders, media, consultants and programmers that we work with seem to conspire against a desire to build simple, measurable, testable and effective sites. Sites that make users happy at the same time they earn money for the people who built them.

Is it too late ?

I'm not sure. Once the templates are set, most forms of mass media resist change. Radio and magazines, for example, have a business model and delivery mechanism that's the same as the one they had twenty or thirty or forty years ago. One ray of hope is QVC. Not only did they challenge the status quo of television, they are the single most reliable generator of revenue, profit and consumer joy on the air today. They test. They measure. They reject what doesn't work. It's a fascinating concept and it could even work online. Go figure !

I'm an optimist. I know that there are really cool technologies that embrace this thinking. That there are very neat ( and underfunded ) web sites that are going to bootstrap themselves to the top of the heap. I think it might not be too late. I hope we have the will to turn this medium into the commercial ( and useful ) success it can be.

Okay, I'm changing my mind. IT'S NOT TOO LATE. Ten years from now, this medium will still be here. It'll be radically different, unrecognizable in some respects. The pop up ad will be a dismal memory. The focus and hard work and insight of a small group of people who are working to change the Net into a viable commercial medium will have long-term impact. Don't give up... don't give in.


© Copyright Seth Godin, 2001

Photograph supplied by John Abbott

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