Imagine a football game when the referee does not count the goals or a car journey when your speedometer is removed. Both situations are almost inconceivable.
From infant school we are encouraged to count. We measure our world to make sense of it. Objective comparison allows us to find our path. Indeed, a world without measurement is bizarre, random and even scary.
At school we are told that to succeed in business we must be decent at maths. Yes, we need the creatives, the communicators and technicians, but we must be able to measure our performance.
And so to marketing – the process of creating customers. In 1990, I fell in love. While studying my direct marketing diploma I fell “head over heels” for the idea that in the rather fluffy creative world of marketing there was something called direct marketing which seemed completely and utterly logical.
I bored my friends with the virtues of a database and the importance of measuring your actions so your marketing performance improved. And I read Database Marketing by Professor Merlin Stone who introduced the concept of Life Time Value (LTV). This common-sense marketing metric has since become universally accepted as a measure by which brands can calculate the value of a customer based upon the duration of that customer’s future relationship.
How things have moved on. In 1990, direct marketing was an “exclusive club”. Roll on 25 years to 2015 and we are all direct marketers. The Internet and the proliferation of consumer data means there is vastly more data, but also consumers are wary about giving consent to market.
Predictably, EU legislators are stepping in to change the rules of the game. The new marketing battleground is consent and the long-standing marketing metrics need updating to accommodate this new game.
While in 1990 it is was appropriate to ask: “What is a customer’s value?” in 2015 the question should be, what is their incremental permission value (IPV). In the same way that LTV calculations can drive marketing investment in the initial acquisition of customers, IPV can be used to objectively allocate budget to increase the marketing consent rate: the percentage of consumers who consent to receiving marketing communications.
Now it’s my turn to stand on a soap box and shout about the crucial importance of measuring the amount, rate and value of consent. The responsibility for building consent is negotiated between lawyers and marketers who each pull in different directions.
Without commercial measurement, consent is an unavoidable legal chore. With commercial measurement the implications of consent become commercial as well as legal and the performance of consent marketing programmes can be measured and improved. Indeed, consent without commercial measurement is bizarre, random and scary. Professor Merlin Stone, the author who inspired me 25 years ago, agrees: “IPV will become one of the most important marketing metrics of the next marketing era.”
If your interest has been aroused and you would like to calculate you brand’s IPV, you can use fast.MAP’s free IPV calculator. This will enable you to start viewing consent as a financial issue rather than a legal one.
And as DMA commercial director Gurinder Singh said: “Tone of voice, choice of words, media channel and language all form part of the conundrum of how to get opt-in rates as high as an aspirational 50%”.
Knowledge of your IPV is the starting point if you are to measure your success in improving your permission statements. All aspects of your current statements can be benchmarked against the fast.MAP Data Permission Benchmark to indicate where any problems lie.
David Cole is managing director of FastMap