In 1999, a New York-based marketer and entrepreneur by the name of Seth Godin wrote a book entitled Permission Marketing. Soon he was being hailed as one of the most brilliant marketers alive (Business Week, to quote only one of many, called him “the ultimate entrepreneur for the Information Age”). Permission Marketing was soon followed by a string of New York Times best-sellers: Unleashing the Ideavirus, Purple Cow, Free Prize Inside, All Marketers Are Liars, Small Is the New Big and others. Permission Marketing was also very influential in network marketing circles, and in our second issue (way back in August 2002), we featured Seth as our lead story.

In this day and age, five years seems a lifetime, and we decided it was high time we had Seth back to talk with us about networking and the new media. When we called to make our appointment, Seth had just released his latest book,
The Dip. By the time we had our interview, the book had spent a solid month on The New York Times hardcover best-seller list. — J.D.M.

Before we start, I want to say, congratulations on The Dip!

Thank you, sir.

Seth, how do we use the new media to reach customers? Or is that putting the cart before the horse—do we first need to ask, who’s the new customer?

It’s not that you use the new media, it’s that the new media uses you. We can play all sorts of semantic games with that. But let me describe my outsider’s take on the way many network marketers approach their business.

You start with your friends and family, because they trust you and give you the benefit of the doubt. Then, move on to the vast wide world of strangers, preferably with referrals, realizing that there’s lots more people out there. If someone doesn’t buy from you, you can just move on to the next person.

This model is based on a funnel. Put lots of attention in the top of the funnel, try to perfect your offer, try to make sure you have the best product you can, and out the bottom of the funnel comes customers. If you are particularly enlightened, you figure out how to make sure that your word-of-mouth is excellent, so that those customers lead to new customers.

But basically, this is a hunting strategy. It’s about going to the woods and finding what you can catch.

New media requires a farming strategy. New media doesn’t reward someone with a funnel, because new media is the worst at interrupting people. Interrupting a stranger online is almost impossible. You can’t put yourself in front of somebody who doesn’t want to be put in front of.

The new media—blogs, podcasts, online (“social”) networking sites and so forth—are like a television with a billion channels. If somebody doesn’t like what’s on, they just click the remote and they’re on to the next thing. NBC runs bad commercials that get seen by millions of people. YouTube has more than seven million videos on it—but the bad ones are seen by no one.

If your goal is to interrupt enough people often enough so that a few will stop and give you money, what we have here is an interesting new marketing medium that really won’t work for you. What we have, in fact, is a medium that plays to the very best strengths of network marketing.

How so?

Network marketing—again, from my outsider’s point of view—involves buying stuff from people you know, not from some anonymous corporation. If that transaction is extremely pleasant and if the outcome is a product or service that makes you happy, you’re going to spread the word.

It’s important to note that your customers are not going to spread the word because they’re getting paid to, but because they want to. You might be pitching this herbal remedy because you’re getting a commission, but your customers aren’t going to tell their friends for that reason. They’re going to tell their friends because it made their life better.

That’s where the new media comes in.

In the old days, you would tell two people. Today, you might put it on your blog. That’s the difference between telling two people and telling 2,000 people. In the old days, you might call a friend. Today, you might put it on Twitter and tell 4,000 friends. In the old days, you might send a note to someone and let them know. Today, you put it on FaceBook and everyone in your circle knows about it.

But if you approach these new media with the old mindset, I guarantee you it won’t work.

The old mindset being, “How do I throw my net wide to catch lots of strangers and interrupt them at their tasks?”

That’s right. And then, how do I convert as many of those people into people in my downline, who will then go and do the same thing?

This would seem to be awfully good news, because it seems like whenever we used that old method, we left some pretty clumsy, destructive footprints.

Right—that’s why so many people don’t hold this profession in high esteem.

I’ve known network marketers who use direct mail strategies. They say, if you get a 2 percent response rate, that’s good—but to me, that sounds like I’ve just upset 98 percent of the people.

Exactly. It’s the only profession where you get a promotion for failing 98 percent of the time.

In the old days, we used to tolerate it; throwing out a piece of junk mail was no big deal. But if you send me an e-mail because you hit “reply all” in the office, I care about the fact that you just interrupted my day, and we’re not off to a good start.

So, I’m a network marketer, and I’m used to using the funnel approach: how would I use the so-called new media? Where do I start?

You start by realizing that if you overwhelm people with pleasant experiences and products that transform them in a way that had nothing to do with what was in it for you—and this is a big problem in some of my personal experiences with network marketers—then those people are likely to talk about it.

Here is the challenge: in an industry where the margins are very high, how do you create interactions with people that they feel are primarily beneficial to them?

And our typical training of “explain the benefits, not the features,” doesn’t do that?

Explaining the benefits is a worthwhile sales technique, but I don’t think it gets to the heart of a strategy that delights people. This idea of being remarkable, of delighting people, that’s what generates positive word-of-mouth. You can find prime examples of this in everything from restaurants to the iPhone, where something so delights people that when they see it, they feel compelled to tell others about it.

And here’s a key part of this: the best marketers today are not trying to please everyone, they’re just trying to please someone.

Chris Anderson’s “long tail” idea.

Right. If you are the best at what you do, it doesn’t matter if only a few people are interested, because on the web, you can find those people.

That makes so much sense, because in our model, all you need to do is find a few people who then turn around and find a few more people each, and so forth. But we seem to look for hundreds.

That’s right, because it’s easier. It’s easier to just write somebody off than it is to dig in deep.

It sounds like what you’re saying is, this is a recipe for getting more personal and going for the “delightful,” as opposed to getting more “effective” and going for numbers.

It’s a little like Hawaii. In Hawaii, people know they live on an island. They have a mindset that says, “We better not use these people up, because that’s all there are.” So they’re very friendly and respectful of each other.

And you’re saying that in fact, we all live on an island.

More so now than ever, with all this connectivity. It’s just not a geographic island. The island of people willing to buy a fitness device from a network marketing person is fairly small. You can try to persuade someone whose world view is opposed to that, but you’re wasting your time. You’re much better off finding somebody whose world view is in favor of that, and make yourselves both happy.

Here’s another challenge: just because a product is sold via network marketing doesn’t necessarily mean it’s better. But in this new media world, it has to be better.

I’ve had people come to me and say, “You must take this vitamin supplement. It will change your life.” No, it won’t. It’s a good vitamin supplement, but there are plenty of good vitamin supplements at the GNC down the street. There’s overhead associated with selling via network marketing, and if the product can’t make up for that overhead, you have a problem.

I think there are two solutions. One, make products that are actually worth selling this way. In every industry, half your products are below average; make yours way above average. And two, make the process of buying it worth something.

When you buy jewelry from a fancy jewelry store, you’re buying something that’s identical to the jewelry you can buy at half price down the street. So what exactly is the rational person paying for? They’re paying for the interaction with the clerk, for the box, for the atmosphere, for the way it makes their spouse feel when they walk into the store. And these are all things a network marketer can deliver.

And that’s not necessarily hocus-pocus, you’re saying there’s genuine value to that.

There’s nothing wrong with paying for that experience, for the way it makes us feel. Because, in fact, we already really have everything we need. Network marketers sell nothing that people need; they sell things that people want.

So as you put it before, make that process delightful.

If you’re going to do new media, that’s the price of admission. The environment itself requires you to be extraordinary. No one who has succeeded online has managed to do it without being extraordinary.

Can you explain the term “permission asset”?

Permission marketing means delivering your anticipated, personal and relevant messages to people who want to get them, as opposed to yelling at people who have never heard of you. In my book Permission Marketing, I argue that this is the only asset you can build online.

Amazon is worth billions of dollars, not because of their warehouse or because of their technology, but because they have permission to talk to fifty million book buyers.

If you’re a network marketer, here’s the question: who other than your family do you have permission to talk to? And how do you make that number bigger? Developing that permission base takes time and money and effort.

We often say, “Your most precious asset is your reputation.” This sounds like reputation, but a little more specific.

It’s not just about reputation, it’s about eagerly anticipating the next interaction. Let me give you an example: dating. You may have a fine reputation with someone you used to date, but she still doesn’t want you to come by on Saturday night.

Seth, what led to create Squidoo, and what is it?

Search is broken. If you go to Google and type in “vitamin C,” you find 33.5 million matches. At ten a page, that means you’ve got 3.3 million pages of matches.

If you sell vitamin C, or you have something to say about vitamin C, the chances of your being on the first few pages of Google are very small. So you’re invisible. And if you’re interested in learning about vitamin C, there’s no one page that gives you the big picture you’re looking for.

Squidoo is a platform in between all the pages and Google. We set it up so that anyone can build a page—we call it a “lens”—where they describe who they are, what they’re interested in, and more importantly, what they’re passionate about. They can say, “Here are the five best blog posts on vitamin C. Here are the three best places to buy vitamin C online. Here are the six warnings you need to know about, and here’s a medical web site that tells you why.” And this overview is all on one page.

You can make the overview extremely self-serving and promotional, in which case no one will believe you or point to you, and it won’t work. Or you can make it extremely generous, fair and objective, in which case it will become the most important page on that topic on the entire Internet.

If you go to Google right now and type in “laptop bags,” the number one match is one of our pages. This woman, Kate, has become the world’s authority on laptop bags. She sells more laptop bags than anyone else like her because that’s how people find her. She’s not getting a commission or kickback. She’s doing it because she loves laptop bags.

We now have 165,000 of these pages, built by 75,000 people, and it’s growing at about 40 percent a month.

You started this when, Seth?

We’ve been live for about a year and four months. It’s now about #400 in the most popular web sites in the world, which is pretty cool.

What are your most popular lenses like?

In the shopping section, we have lenses about why you should have a titanium wedding ring, not a gold one, about selling on eBay, about pirate costumes—the pirate costume one is actually very good. We have ones all about Crocs, those plastic shoes. One guy built one about Omega watches.

The top 100 include a page about polar bears, a page of fifty different birthday party themes for kids, including cake and cupcake ideas. We’ve got someone who’s writing about Coach handbags, someone who’s very into dragon tattoos, and it goes from there. Some of them are very serious and some of them are quite silly.

You can also include pointers to YouTube videos, Flickr pictures, Orbitz tickets, whatever. We pay a royalty equal to half our earnings to a charity in your name—or, if you want to change the settings, we pay it directly to you.

That’s an interesting policy! How does that work?

When we launched Squidoo, we said, “We really want to give the money to charity, but if you want the money, you can have it.” Now we hardly ever even talk about the money any more, because we discovered that the people who came in because of the money built the worst pages.

Now that’s a mouthful. Trace this for us: you say you give away half the profits you make to charity?

Here’s how that works. Every page has Google ads on it, and any page that wants to can include links, for example, to Amazon. If someone buys a book for $20 from Amazon, Amazon sends us about $1.50. If someone clicks on a Google ad, we might make 50¢ or a buck or two. We take that money and send 5 percent off the top to charity, then keep 45 percent to pay our expenses. That leaves 50 percent.

The default setting is that this 50 percent will go to a charity of your choice; if you don’t specify one, we have a default rotation of charities. Or you can say, “No, send it to me by Paypal, please,” and once a month, we will. If you build a lens that generates $100 worth of income, you can expect $50.

And historically, those people who have left the default in place and said, “Give it to charity,” have built better pages?

Yes. They’re really focused on giving, so they build a page to give away as much as they can. Those pages get more traffic and earn more money.

Now, to be really clear, there are plenty of people who are making money and building good pages, because they’re acting out of a passion that’s not in it exclusively for the money. It’s the people who come and try to hack our system and put in ebooks on forex [foreign exchange] trading options and this and that scam, to see how much money they can make in a shorter period of time, those people have no traffic.

Because people, contrary to popular belief, are not stupid.

Especially when they have a lot of choice.

Right. So many choices—it does make us smarter all the time, doesn’t it? So the people who come in to genuinely pursue their passion and want to share that end up producing the greatest traffic.

That’s right. Let’s say you are really passionate about canoeing. Go build the best canoe blog, the best canoe lens, and a FaceBook page all about canoeing. All of a sudden, you have hundreds or thousands of people who trust you and interact with you. Now, what would happen if you did that for a product you’re passionate about?

You might just generate the same kind of traffic.

And it resonates with people.

But where do you see this going, this direction in how products and the marketplace interact?

I think there’s plenty of room in the world for cars, hats and other stuff that sophisticated, well-off people in the first world need. Those things need to be sold in stores, and they will grow, slowly but consistently. Call that the old economy, if you wish. That’s not going to go away.

But I also think there’s this new frontier of stuff that we don’t need, but we want. That’s the stuff that has a story, that we like to talk about, the stuff that is going to grow fast—and that is friendly to this medium. Given the choice of where to invest my time and effort, I’d pick the second one.