​1.) Product – If needs and wants are simplifying, are you designing products and “curating” offerings to match up with this shift? Will people anchor their value around utility and safety instead of unneeded features - or even items - the way they once did? While the voice of the customer will still be prominent, product development cycles will likely be simplified and take on a more modular form. The focus will be on safety, reliability, and portability.

Also, supply chain disruptions have impacted product availability, and may lead to a re-thinking of future roadmaps, designs, and features & options. Flexibility with respect to procurement and production should also be given greater consideration.

Takeaway: Listen to your customers for a re-ordered set of desired attributes. Also, the procurement, production, and operational constituencies will have a louder voice in the process as well – agility will be as important as quality and scalability.

2.) Price – Fair and transparent pricing is more important than ever, because people will remember. Charge more only if people can clearly understand (and tacitly agree with) why it’s happening. If you are on the fence about trying to raise prices, then it’s probably not the right thing to do.

However, price elasticity will be tested and reset for many categories, as reductions may no longer be enough to spur demand (see airfares, cruises, hotel rooms, and luxury accessories). Conversely, will overpaying still be as much of a status thing?

The dynamics of volume pricing could also change, as bulk discounts may now apply more for some product categories (clothing & apparel) than others (toilet paper, vitamins & medicines, cleaning products).
Lastly, as delivery logistics systems hit capacity and cause delays, charging for reliable shipping & delivery for online purchases could make a comeback. Will the market accept paid shipping to ensure they receive needed items?

Takeaway: Understand how people value things and what they will pay a premium for. What pricing strategies (i.e. promotional, surge, etc.) will be effective in a more needs vs. wants-driven world? How will the “paradox of value” apply as consumers set new “anchors of value” in post-pandemic life?

3.) Place – E-commerce is now table stakes, and is a big part of the accelerated digital transformation discussed above. You need to make sure the user experience is state of the art. Relatedly, smooth & safe delivery and pickup logistics (variations on “BOPIS” - buy online, pickup in store) are the expectation in the new norm. As such, direct-to-consumer brands (typically digitally native) have a head start and are well positioned to take market share. The peak-and-decline of the direct-to-consumer e-commerce model – increasingly discussed prior to this crisis - will now look overstated.

As marketers think beyond the pandemic, how does one view retail’s ongoing existence? The implications for (already suffering) brick-and-mortar stores could be staggering. Do they remain, or evolve into showrooms and service centers? Retail spaces would probably need to de-clutter and open up in order to accommodate more social distancing. Perhaps “shopping” itself survives, but eventually becomes a purely leisure activity. In that case, merchandisers would have to play up the entertainment aspects of retail – of bonding with friends while on a treasure hunt of sorts to discover new products and bargains.

Another "place" consideration: brands’ ability to quickly shift product mix and distribution between B2C and B2B channels in the case of unexpected disruptions will be a strategic advantage.

Takeaway: Big changes to merchandising, with the digital transformation of retail condensed and accelerated. Companies who are behind the curve in embracing digital customer engagement and e-commerce will be at a distinct disadvantage. The notion of shopping will change, and traditional retail models will have to creatively adjust in response.

4.) Promotion – Advertising and promotion can make or break marketers in this environment, with audiences full of raw emotion and focusing on basic needs. Authentic is the word to key in on, and actions speak louder than words. Lead with compassion and empathy, as marketing exec Jeff Raymond aptly put in his Marketing Profs article on reassessing the 4P’s amid Covid-19: “As for what messages are being promoted… organizations should take care to blend commerce and compassion.” Be careful, However. Doing cause marketing campaigns in a contrived way could be called out by the public and backfire – as recently happened with Reese Witherspoon’s Draper James. Be ready to invest more time, thought, and specialized expertise to get it right to avoid the angry (virtual) mob.

This is when thoughtfully developed brand tenets come to the fore, serving as a foundation for engaging and inspired advertising & communication. Promotional activities are OK, if well planned out and they incentivize the right response for the right reasons. If the business needs to liquidate inventory – just say that, and find a way to demonstrate the “win-win” for the customers and downstream stakeholders. “We are all in this together” should be more than a promotional tag line.

Takeaway: There will be less room for error - in all phases of executing promotions and advertising. Not only will campaigns be scrutinized by management for ROI-positive performance, but they will also be checked by brand people, legal stewards, and most importantly customers - for clarity of intent and consistency between the values of the brand and the community of customers.

An Additional Takeaway: There is a 5th “P” to consider - Preparedness. This goes to how well your organization can rapidly and unexpectedly shift elements of strategy due to outside forces, constraints, market disruptions, or opportunities. This touches on process design, analytical capabilities, resource planning, technology infrastructure, organization culture (and morale), and management skillset. Do not neglect to think about this when setting your go-forward strategies.

Marketing has always been a tricky mix of science & analytics, business, psychology, and creativity. Radical shifts in consumer attitudes & behavior, as well as business best practices are only going to make marketing harder. But we can manage these complexities by breaking down them into models such as the 4P’s of marketing. Looking through this framework helps us adjust our mindset, prepare for the future, and orient around new strategies when plans are forced to change.

This is an impressive report - by Mary Meeker and team at Bond Capital, and provided by Axios - on the secular, scientific, and business trends occurring due to the COVID-19 pandemic. It's comprehensive, detailed, and data-driven, covering a range of topics in it's 29 pages. It's all the more impressive in that it has been created in near real-time.

See the report by clicking here.

One takeaway from the report that I have also been thinking about: the physical distancing mandates and lockdowns have shined a spotlight on companies' digital business capabilities. Organizational leaders are facing a rapid and unforgiving assessment by the market on where they are in their digital transformation process. How well prepared are they (in terms strategic planning, knowledge, resources, organizational culture, and customer engagement) to adapt to such paradigm shifts - in many cases on the fly?

Many companies in certain industries, who have downplayed the importance of engaging with customers in digital and mobile channels, and have not optimized their e-commerce capabilities, are now scrambling to catch up - just so they can survive an era when remote & contactless commerce is now table stakes. To complicate matters, they are having to carry out (or in some cases begin) this accelerated transition process in circumstances with dislocated teams, operational confusion, remote access to critical technology infrastructure, and severe financial constraints.

​As our collective shopping experience continues to migrate to a digital ecosystem - further supplanting visits to physical stores - buying behaviors are changing and evolving. Impulse buying – grabbing an unplanned item while on a planned shopping trip – is one of those behaviors. Most of us (80% according to Invesp) engage in some kind of spur-of-the-moment buying; studies show it happens on 3 out of every 5 shopping trips. The thinking, behaviors, and circumstances surrounding these (some say irrational) purchases are rooted in psychology and driven by emotion.
 
In aggregate, capturing revenue from impulse purchases becomes significantly important for some sectors. For many retailers and brands, their marketers labor over getting the right product in the right place at the right time. It has become part science and part art form – and been continuously refined over decades. The front check-out area of grocery, drug, convenience stores show how tempting guilty pleasures and new discoveries to shoppers’ baskets is a big deal. Discretionary packaged goods, beverage, and snack & confectionery companies now rely on these last-minute purchases for upwards of 15% of their revenue. But there is risk of losing these sales opportunities from the growing number of online purchases, which tend to be more pre-planned. 

​How can e-commerce marketers drive impulse purchases in an online setting; what tools and techniques can they use? I recently worked on a consulting project with a CPG company that examined this very question. We studied how to crack the code on what drives impulse buying online, and which marketing and merchandising tactics can evoke those buying behaviors. What key success factors, tools and techniques can best facilitate this outcome? How can we measure the success? Below I highlight 4 approaches to enhancing impulse buying in E-commerce:
 

1. Understand the Mindset

Understand what is driving your customer’s impulse buying in general, and how is it affected by a digital environment. This involves understanding who is doing the shopping, when, why, and their mindset and emotional circumstances surrounding the shopping trip. For example, a shopper who – at the end of a long work day – might be tired and in a vulnerable emotional state where “treating themselves to a snack” might be a deserving add the grocery list. Perhaps the ambitious, aspiring shopper is making a long-desired purchase, and celebrates the moment by giving a fun “gimmick” item a try. Study the shopping behaviors of your customer base, and understand how different items get into their basket - both planned and unplanned.
 

1. Merchandising, Messaging, and Motivation

While retail environments have limited merchandising opportunities to position upsells and impulse buys (i.e. the checkout line), online stores actually have several ways to dynamically put buying ideas and suggestions in front of shoppers – along with specific messaging, offers, and pricing. Examples include cart upsells, real-time offers on product pages, suggestions based on cart contents or bundle ideas based on other purchases. Another way is suggesting add-on items to hit the free shipping threshold. The capability to dynamically present and promote just the right product to match up with a shopper’s profile and particular shopping basket – is actually an advantageous marketing opportunity vs a brick-and-mortar environment, where a limited number of items can be presented at any one time.
 

1. Test, Learn, Repeat

This is where the ability to measure nearly every aspect of a digital shopping journey is really helpful, and having an organized and disciplined testing and data gathering methodology is highly important. E-commerce strategists can drastically speed up and replicate the trial-and-error nature of finding out which tactics work. We can look at the types of products added to the cart before checkout (and in which order), and study attach rates for items added during the checkout process. This can be especially effective with the help of machine learning, which can rapidly run multi-variate tests and optimize product offers in real time. One-to-one marketing strategies, which are heavily dependent on customer data, could also help identify a shopper’s propensity for impulse buys. These approaches can be very effective and allow for some creative and innovative marketing ideas.
 

1. Facilitate Immediate Gratification with Quick and Seamless Order Fulfillment

Or as close to it as possible. Impulse buys are all about the desire for instant gratification, so the delay in getting them into the customer’s hands presents an inherent challenge for e-commerce channels vs. traditional retail. However, the rapid evolution of new logistics and delivery options are helping e-commerce sellers drastically reduce the potential fulfillment and delivery time. Same-day delivery is a growing feature – being led by none other than Amazon. Also, many retailers now feature “buy online, pick-up in store” (BOPIS) as a way for shoppers to quickly get their merchandise. Curbside pickup for groceries is a form of BOPIS that actually creates an opportunity to suggest adding impulse items to a customer’s basket. Geo-fencing technology can play a role in this as well – with mobile push notifications suggesting last-minute impulse items just as the shopper is approaching the store pick-up area. Lockers and drone deliveries are other examples of emerging ways to provide that rapid gratification for shoppers.
 
It’s essential for E-commerce retailers and brands – and their marketing teams – to be actively thinking about how to drive impulse buying online, as it represents a material source of revenue. The many factors surrounding the instance of an impulse buy (shopper psychology, product merchandising & placement, offer management, and speed of gratification) create complex challenges in an e-commerce environment. Developing ideas, strategies, and tactics around these topics I’ve described above will help us better understand how to preserve these valuable opportunities as shopping continues to migrate online.
 
Thoughts, feedback, or ideas? Please share in the comment section below.

As customer centric digital marketing has improved with the help of new marketing technologies over the past few years, an important trend taking place in e-commerce is the way that effective digital marketers create a self-sustaining ecosystem in which consumers can thrive. This approach, often oversimplified under the umbrella term “social media marketing,” underscores the evolution of the customer journey online, and the close relationships between consumers, their like-minded peers, and the companies they do business with. I am referring to the ongoing convergence of the “three C’s:” robust consumer-oriented content, the communities that form around this content (and interests), and the commerce that comes out of these content-enabled communities. When these three C’s are well executed and in sync, the resulting business performance and value creation is greater than the sum of the parts – i.e. a “flywheel effect” is created.

Content – Compelling and relevant content is where it all starts, and what creates stickiness between brands and their customers; it’s the glue that facilitates modern customer engagement. Great content is the key to drawing in consumers and holding their attention on a subject that interests them. Content is often assumed to be social media posts, but can also come in the form of articles, blogs, infographics, podcasts, videos, e-magazines, and other multimedia experiences. Content allows marketers to inform about products and services, and the problems that they solve, but does it in a way that follows a narrative; it tells a story. The content serves to educate while enticing, in a way that is easy to consume and leaves the consumer wanting more.

Community - Around relevant and well-produced content, a community can then naturally form. This is key, even though building and nurturing communities is often a step that is overlooked when creating an online ecosystem. Fostering a community of like-minded, engaged people not only drives return traffic, but also promotes discussion and advice sharing, sparks new ideas, and creates a supportive environment of camaraderie. With an engaged community, the brand engagement is not just occurring between buyer and seller, but amongst all constituencies in the value chain. This is the scenario where marketing programs can really build its own momentum and scale – bolstering the flywheel effect.  Most importantly, customers keep coming back to contribute user-generated content which helps build an ever-growing library of material, in turn helping with SEO. With this level of engagement, interest, and trust, the next natural step for the community is to consider buying appropriate goods and services aligning their interests. The buying experience just needs to be easy and consistent with the brand experience they have enjoyed thus far.

Commerce - The “store.” This is where it all comes together – where the community of customers with like-minded interests – having been informed and educated by the content provided on the site - happily and proudly make their purchases. Here efforts and resources that went into producing great content and nurturing a cohesive community are ultimately monetized. But beyond this, the commerce piece effectively completes and renews the cycle of engagement between brand and community members. Purchasers discuss their customer journey with the community, and provide reviews on their purchases – essentially becoming brand evangelists (if all goes well) and adding to the flywheel effect. Obviously, a great commerce layer requires intuitive UX, strong data security, and product merchandising that anticipates customer needs & concerns. Well-developed mar-tech helps make this happen more easily - putting the right product in front of the community at the right time – all while capturing essential data to improve and optimize the overall “ecosystem.” Also, the buying experience has to link back to the content and shared interests of the community. If executed well, this is the holy grail of brand-focused customer engagement. ​

​Effectively executing the “three C’s” of good personalized marketing can be a huge competitive advantage, as it can lower customer acquisition costs and improve long term retention – all of which increases customer lifetime value. It also can fuel rapid growth, as evidenced by the success of companies utilizing this marketing model: Houzz, Motoroso, Purch, and F+W Media. Placing the customer at the center of your e-commerce marketing strategy seems intuitive, but a good deal of thought needs to go into making it self-sustainable and work at scale – thus creating the flywheel effect.

A few weeks ago, I attended the Silicon Beach Fest conference for tech businesses and start-ups here in the L.A. area. This conference, held over the three days at the Marina Del Rey Hotel, is produced by DigitalLA, and is now in its 15th year. This year I found informative content panels with interesting and knowledgeable people, discussing relevant topics and emerging trends. While not the largest conference around, it was a great way to assess the health of the Silicon beach start-up community, and understand the key developments and gain insights on the business climate here.

I came away from the conference with 4 key observations about what LA start-ups are experiencing:

1. L.A. startups are growing up and maturing – Based on the panel topics, comments and questions among panelists, and from my conversations with attendees, it is readily apparent that the key focus for many Silicon Beach startups are shifting. Whereas in previous years, when the focus was on engineering & design, product development, and go-to-market strategies, this year seemed different. Entrepreneurs were turning their attention to marketing, revenue & profit growth, and retaining talent - a great sign that businesses are gaining traction and maturing. This, in turn, helps the broader tech & startup ecosystem to solidify and grow.

 

1. Venture capital is expanding but still under-represented in LA – Although the venture funding environment is healthy right now, with over 200 funded deals totaling over $3B in 2015, access to venture capital for LA start-up still more than likely requires the founders and management to take a plane ride. This is especially true for later stage investment rounds, when many investors are coming from the Bay Area, New York and elsewhere. There are no doubt some strong LA-based VC firms that are supportive and well-known in the community (Upfront, Greycroft, Mucker, Crosscut, etc), but many other established firms are still reluctant to set up offices in SoCal. Angel investors and firms focused on early funding continue to be most prevalent. Experts at the conference don’t see this dynamic changing anytime soon.  
   
   
2. Drones, VR, and social influencers were hot topics of discussion – There was an entire VR lounge on display; The Huffington Post covered the conferences “future of VR” track; Prominent experts in drone technology predicted “Billions of Flights from Millions of drones” within 5 years’ time. The advances in drone technology as a business – as well as new FAA regulations - is of special interest to the L.A. tech community, given its roots in aerospace & defense (JPL, Lockheed, McDonnell Douglas, etc.).  Similarly, virtual reality sits at the intersection of technology, media and entertainment so it makes sense that I would be actively pursued by a number of SBF participants. And of course, LA’s fixation on beauty and celebrity means that the rise of social media and influencers’ impact on marketing in some industries – social commerce and related marketing models – was of keen interest.

 

1. Silicon Beach continues to build momentum. LA entrepreneurs and their companies continue to gain experience, garner attention, attract capital, and see positive results. High-profile companies - and successful exits – include Snap, Inc., Oculus, Maker Studios, Dollar Shave Club, and The Honest Company, with several others on the horizon. This brings more credibility to the community and confidence to its participants – that was certainly reflected at this year’s Silicon Beach Fest. LA continues to have a great setup for fostering start-ups: strong research universities, a diverse pool of business talent (attracted to a nice setting), support from the city, and an industrial heritage in entertainment, media, consumer businesses, and aerospace. The pieces continue to fall into place to make “Silicon Beach” (a moniker disliked by many here) a key ecosystem for new business creation, innovation, and economic growth. At last count, there were 1,113 start-ups on the startup map of the LA area, triple the number observed on the map just 4 years ago.

I look forward to continuing to observe (and contribute to) the advancement of the L.A. tech scene. Hopefully the success of L.A.’s start-ups – and its business conferences like Silicon Beach Fest - will generate even more confidence, and bring a larger spotlight on our market. This will, in-turn, attract talent, capital, and more entrepreneurial ideas that can be developed here and enjoyed around the world.

Thoughts about this blog post, or any others I’ve written? Leave a comment here or go to my LinkedIn Profile to share your feedback.

I am one of those people who actually reads the alumni magazine from their alma mater schools. I think you can often find interesting nuggets of learning in there. One such publication I recently read - Georgetown Business, from Georgetown University’s McDonough School of Business (where I earned my BBA), featured an article that compelled me to think more deeply about one area of my business expertise – e-commerce marketing – and how it could influence my future practices to maximize my business results.

The “Favor Request Effect”
This article, entitled “Favor Pitch – Georgetown McDonough Researchers Uncover a Surprising Negotiation Tactic,” reviewed a research project led by Georgetown University Marketing Professors Kurt Carlson and Simon Blanchard (along with Penn State University PhD Candidate & teaching assistant Jamie Hyodo); the title of the study, published in the Journal of Consumer Research is The Favor Request Effect: Requesting a Favor from Consumers to Seal the Deal. It describes a way for sellers of certain products to improve the outcome of negotiations with buyers. Their study revealed what they refer to as the “Favor Request Effect” – that under certain conditions sellers can achieve better negotiated results when they accompany a (modest) price concession with a request for a favor from the buyer.

According to Professor Carlson, with whom I spoke for this piece, the study focused in on negotiated transaction scenarios that met certain conditions needed for the effect to work. Such conditions being that the offer and request being made dynamically (or at least appearing so to the buyer), and the buyer and seller communicating one-to-one. If a discount offer and favor request is communicated to everyone, the effect will be diminished. Also, the favor requested has to be appropriate to the situation and not overly onerous; examples can include asking for a recommendation or endorsement, a customer referral, or providing certain customer information.
The article states that “The Favor Request Effect is found across multiple shopping contexts and multiple types of favor requests…”1. However, the study was conducted only in the US, and did not explicitly look at other countries or alternative sales channels such as telesales or e-commerce. (They are working on a new study, however, to see if the same principal applies if the seller refers the buyer to a competitor for a complimentary product).

The study’s (seemingly counter-intuitive) conclusions have received a fair amount of attention – even being covered by the Huffington Post - as it could have a meaningful impact on sales negotiation tactics going forward. 

See the article from Georgetown Business here: Favor Pitch – Georgetown McDonough Researchers Uncover a Surprising Negotiation Tactic 

See a Georgetown University press release regarding the study here:  http://msb.georgetown.edu/newsroom/news/favor-request-effect-requesting-favor-consumers-seal-deal 

Why Does it Work? What Are The Implications?
According to the article (and my conversation with Professor Carlson), the Favor Request Effect hinges on the premise that the asking of a favor drives a normally adversarial relationship between buyer and seller towards alignment by virtue of the requested reciprocity. A sales negotiation is typically a situation where buyers are trying to get the best price & value, but asymmetric information (around pricing, costs, and market factors) gives sellers an (at least perceived) advantage.

Professor Carlson explained that the seller offering a moderate discount, along with requesting a favor, sends a strong signal of value credibility - that the sellers bottom line price has been reached. This signal neutralizes the perceived seller advantage, creating buyer-seller alignment that a “win-win” has been achieved, and a deal can be done.

In other words, Carlson says “it’s an alternative to haggling – when the discussion is somewhat adversarial and each party seeks to only maximize benefit for themselves. The favor request effectively aligns the buyer’s and seller’s interest and creates an environment of reciprocity.” The study’s write-up also describes the effect of the seller’s signaling that the advantage has been neutralized:

“While a consumer may, by default, perceive a seller’s willingness to negotiate on price as a self-interested activity, adding the request for a favor should alter the consumer’s perception of this activity, causing the buyer to see it more as the first step in a reciprocal interaction.”2 

No doubt these observations must provide an encouraging new tactic for salespeople – who can now increase sales close rates and achieve better sales results, all while getting customers to do favors that will benefit the overall business. Seems like a “win-win,” and testing it would be a no-brainer.

The Favor Request Effect and E-commerce
However, it did beg a question: what if we were to apply this approach to an e-commerce context? If the right circumstances are presented to an online consumer, would the same effects occur – i.e. would it increase e-commerce conversion? Can a sense of reciprocity and alignment be created within online merchandising pages, in the cart, or in the check-out funnel? How closely would one need to simulate the conditions of the dynamic person-to-person negotiation?

In answering this, a good place to start would be an examination of what (if any) e-commerce techniques or scenarios are currently in use that simulate the favor request. Do these tactics in an online e-commerce situation improve conversion rates and product sales – by as much as 50% as the study found for live negotiations? If so, the implications for e-commerce marketing and merchandising could be huge.

Below I provide some examples of e-commerce tactics similar to a “favor request” in place today that may shed some light on the dynamic. Let’s examine…

Abandoned Cart Offer Coupled With Request For Social Referrals:
Getting customers to return to abandon online shopping carts and complete their orders is a nagging problem for e-commerce marketers, and seems like it would be conducive to the Favor Request Effect. The conditions seem appropriate: discounts or other incentives can be offered to the buyer on a one-on-one basis (albeit online). Such an incentive, coupled with a favor request, could possibly improve abandon cart conversions. In fact, there is currently an app on the Shopify e-commerce platform - Checkout boost by Beeketer – that seems to put this tactic into play. The Checkout Boost description says that it offers a discount to abandoned carts, coupled with a request for a social referral, to get consumers to complete their cart checkouts. According to the app’s reviews, abandoned cart conversion can increase as much as 50%, coupled with a noticeable increase in social traffic. This is a positive indicator that simulating the favor request can help close more online sales with hesitant customers.

Social Referrals, Social Sharing, and Social Proof:
Social referrals are fairly commonplace, and it has been demonstrated that they have a positive effect on e-commerce sales traction. This marketing and merchandising tactic is fairly well-known by e-commerce professionals, and in use on a number of landing pages and product pages of e-business sites. A favor request of a social referral would offer some of the strongest benefit that can help boost conversion on the immediate sale, as well as others down the line.

Similarly, social proof and social sharing (broadcasting a specific purchase or support of a site on social media) legitimizes the transaction and site in other’s eyes and is considered one of the “six pillars of persuasive marketing.” Requesting social proof has effectively improved conversion rates in studies (see link). Asking customers for social proof is common and not a big imposition, so it’s even possible to ask this favor for everyday low prices, while also reaping the other marketing benefits of social proof.

Requesting a Product Review:
Asking customers to write reviews is straightforward and common practice (as it was in the buyer-seller live negotiations). It’s well known that more customer reviews lend credibility to e-commerce sites and their product.  Reviews are a key determinant in search results on Amazon and Google, for example. Asking customers to write reviews makes sense, and gives customer a familiar and easy way to reciprocate for the discount. It may also prove to be quite an effective conversion boost.

Requesting a Site Registration Or E-mail Newsletter Sign-up:
It’s now commonplace for E-commerce sites to offer customers incentives for becoming “registered” customers or signing up for marketing e-mails. These incentives usually comprise of discounts on future purchases, gift cards, or other “preferred customer” perks. But what if the tactic were reversed and tried the other way? What if a small discount on the current purchase was provided to shoppers, in exchange for signing up to an e-mail newsletter? Would this increase conversion for the immediate transaction (due to the favor request effect), while also boosting e-mail address capture? Worth testing, it seems.

Asking to Accept Slower/Downgraded Shipping:
Asking a “favor” of accepting slower shipping (at the same price – or free) may be a lot to ask consumers, but it could be worth trying. Amazon has tried a form of this idea, with its “no rush” shipping program for Prime members. They have offered larger discounts on books, as well as a $1 discount on instant video service. However, I could not find any indication if this increased the conversion rate of these items. It could be worth testing, when tried in conjunction with a free shipping offer.

Has this ever been A/B tested? It should be…  It’s a low (or no) cost way to increase conversion and revenue, while also deepening customer engagement and potentially generating loyalty. 

Final Thoughts: Implications for E-commerce Marketers
Professors Carlson, Blanchard, and Hyodo’s study on the “Favor Request Effect” indicate that sellers asking for a favor from buyers in live negotiations can result in greater sales success. Even though the study didn’t explore whether the effect can work to positively impact e-commerce sales, it seems to me that the general principal can be applied to e-commerce carts, checkout processes, and merchandising. The examples of in-use favor request tactics I provided above indicate solid evidence that these principals are being successfully applied in e-commerce today, with encouraging results. I believe further testing and optimization of some of these ideas would be a worthwhile endeavor. I for one will vigorously test the favor request to boost conversion and accelerate revenue growth in the e-commerce businesses for which I consult and manage.

Thoughts, comments or questions? Feel free to reach out to me directly here at www.lukegrant.net.

1: Simon Blanchard, Kurt Carlson, Jamie Hyodo: “The Favor Request Effect: Requesting a Favor from Consumers to Seal the Deal” Journal of Consumer Research – Oxford University Press,
2: Bob Woods: “Favor Pitch – Georgetown McDonough Researchers uncover a surprising negotiation tactic,” Georgetown Business, Georgetown University Press, May 2016

While it's true that M&A activity comes in cycles, the reasoning for those cycles can vary - as can the impact it has on business strategy, market forces, and even product marketing. As Jon Swartz's article in the USA Today (see link below) states, there is a big push of tech M&A activity happening right now, and signals indicate that this could continue for some time.

http://www.usatoday.com/story/tech/news/2016/08/08/merger-mania-all-rage-tech/87914908/

One could argue that it was kicked off a couple years ago, when Dell was taken private by Michael Dell and SilverLake Partners (and continues with its purchase of EMC). This begs thoughts on why industry players and financial buyers alike are looking to buy companies rather than focus on growing top-line and profits organically.

However, Swartz astutely notes that "this time there's a notable difference [about the M&A activity]... companies are being scooped up for billions instead of being shuttered." But why is this the case? Why are acquirers paying large sums and full valuations for companies both young and mature? One could point to an iffy IPO environment that makes a company sale a more viable alternative; but that still begs the question of what id motivating the buyers? In my view, there is a race to build capabilities and scale to help shore up strategic "moats" in a time when customer preferences and marketplace paradigms are shifting around a breakneck speed. 

I see this race being driven by 2 key forces:

1. The need for tech brands to gain access to complementary product lines and services - preparing them for potential changes in market dynamics.  Swartz alludes to this often, citing examples of Oracle and IBM needing to gain expertise in cloud-based computing (the opposite of their legacy product philosophies), and hardware companies moving into media content, tools, and services to make sure they provide end-to-end solutions for their customers.

2. The need to build scale on a global basis - accelerating the ability to acquire new customers (and the accompanying data), and to solidify brand engagement in a time when brand identities can drown in a sea of 24-hour media cycles and un-intended social media narratives. Talent acquisition also plays a role here. But this trend drives some smaller brands into the arms of financial buyers (i.e. private equity firms) if they feel that their ability to compete as a publicly scrutinized company is too challenging. Dell, Rackspace, and even Yahoo are examples of this. 

 As a business strategist and technology marketing, I find this trend to be not only interesting to follow, but also important to factor into business decision-making. With complimentary products being brought into the fold, its hugely impactful to market tech-infused brands as a solutions to the inevitable challenges that emerge in a constantly evolving world. Additionally, it underscores the need for marketers to understand the needs of and forge close relationships with their customers. Scaling a business through acquisitions can backfire on a company if their customers don't understand why it is happening and what is in it for them. When not integrated well, brands have created confusion and lost touch with their loyal customers along the way.

M&A always makes for exciting and intriguing news, and the current flurry of deals is no exception. But experienced leaders and strategists need to know the "why's" behind the what, and also know how to mitigate the potential pitfalls after the excitement when the dust settles.

There are lots of ways to shop nowadays. In addition to just going to a store and making a purchase, there is e-commerce, mobile commerce, social commerce – all in an effort to conveniently place brands, retailers and direct marketers where consumers conduct their digital lives. Now, there is yet another newly emerging commerce model gaining traction – called “Conversational Commerce.” If the term conversational commerce is new to you, it was coined in early 2015 by Uber lead engineer Chris Messina, but it’s being talked about as a way to more effectively serve busy shoppers and deepen relationships between customers and brands.

Conversational commerce is an offshoot model that combines the best aspects of the three fastest growing digital trends right now: e-commerce, mobile transactions, and messaging apps. Specifically, it is the practice of brands or vendors initiating, completing, and servicing business transactions over messaging applications, such as Facebook Messenger, WhatsApp, WeChat, or Slack. It’s “conversational” because the experience is carried out as a conversation – either with a live agent or through an automated but intelligent "bot" -  kind of the way a natural conversation would happen in a retail store environment – except this is done in the digital realm without ever leaving the messaging app being used.

Here are 4 key things that I thought make conversational commerce an exciting trend to follow:

1.)  The convenience factor – Always-on threads allow for customers to pick up on conversations where they left off, potentially eliminating the need to re-explain your wants, needs, and problems. Combine this with the fact that messaging apps are about 75% penetrated with internet users globally (messaging apps recently surpassed social media networks in terms of daily active users), and the convenience of shopping right from your messaging app is hugely appealing. No more clogging your phone interface with dozens of distinct apps for each vendor/brand you connect with.

2.)  Intuitive navigation through the purchase funnel – you can ask questions and get the information you need as you shop, personalizing the shopping experience on a one-to-one basis. Also, today’s conversational commerce platforms can accept payments and complete orders, which is a game changer. And it avoids the dreaded call into a phone queue (which is a foreign concept to millennials anyway). This is where the interaction with humans and bots comes into play. Much is being written about the developing capabilities of bots powered by artificial intelligence; it will be a lynch pin for ensuring a positive customer experience as scale.

3.)  The collection of precise shopper behavior data – millions of customer exchanges captured, combined with the capabilities of big data to gain insights on shopper behavior and preferences, means the level of consumer knowledge and insight will be unprecedented. Analyzing consumer trends and shopping behavioral patterns will allow for smarter product planning, better pricing, and more effective execution of the shopping experience. For businesses this will drive higher conversion rates, better retention, and lower customer acquisition costs. For consumers, it will lead to making purchases faster, better, and cheaper. A win-win for all sides.

4.)  Integration potential with the Internet of Things – The potential here is very exciting. Combining conversational commerce with IoT devices opens up possibilities to serve customers in new scenarios and create incredible linkages between customers and brands. Think of a smart home AC system connected to a Nest Thermostat, telling you when it’s time to change the filters in your house. Don’t know what type to buy or where to get them? Simply send a message through the interface and the proper filter is ordered and on its way at the best possible price.  The popularity of Amazon’s Echo device is partially due to the exciting possibilities here – you can order any number of products from your Amazon profile simply by voicing commands to Echo. Digital commerce that is “conversational” in the truest sense of the word.

In a way, it seems like what is old is new again – the notion of having a conversation (i.e. personal interaction) in the process of making a purchase or using a service. Indeed, the concept is not entirely new – there have been online chat features on e-commerce websites for years, and businesses have been using text messages and push notifications increasingly in the recent past (not to mention telesales transactions). But the fact that the process is being consolidated within widely used messaging apps, combined with the use of more effective automated bots, opens up huge possibilities for this newest model of commerce - by applying technology to make shopping more seamless & intuitive.

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The latest obsession among modern marketers is the notion of content marketing – also known as native advertising. It is considered a more engaging and memorable way to familiarize target customers with your products and brand and stimulate a response; it is growing very rapidly as a marketing channel. Yet, reaching and engaging with your customers through posting content on social media outlets still takes up a huge portion of marketing teams’ attention, effort and budget.

The question I think about is “what’s the difference?” Is posting on social media content marketing by another name? Do the social posts, the videos, the discussions and the announcements – meant to entertain, inspire, educate, and build interest and loyalty for a brand – impress upon consumers in the same way as content marketing? Well, the short answer is yes – sort of. Content marketing, at its core, is intended to do the same thing. It’s supposed to feel like anything but advertising – you’re expected to want to read it like as you would an interesting article, or funny comic, or a great editorial that has generated strong reaction.

It’s no wonder that the top content marketing firms and platforms also run social marketing programs. These firms work hard to generate memorable – and brand friendly – content, which can then be broken down into bite size pieces that are then posted, tweeted, pinned, or even snapped. This is not only highly accessible to consumers, it educates and engages followers by teasing them to get curious and dig deeper – i.e. move further down the marketing funnel. Plain and simple, social media is legitimate content – just in its own unique and easily distributable format. Can one conclude then, that social media marketing is content marketing, just in shorter bursts and in real time? Sharing bits of content on social media has become so mainstream that it is not even questioned, yet it takes skill, patience and a good sense of timing.

In contrast, native advertising is less well known and more seldom done by marketing teams (although growing fast). Content marketing is typically longer form prose, video, or image-driven infotainment that essentially utilizes storytelling techniques. The reader delves into deep details on a topic, and it is generally the objective to educate and develop a new appreciation for a common interest, a brand, a product, or an industry. In this way is a very effective form of generating high quality leads for considered purchases and does subtly engender brand loyalty.

So, when comparing social media marketing and content marketing, make sure you look at the programs as two sides of the same coin. Make sure that topics, discussions, and conclusions can be easily adapted and modified for the formats of both social outlets and long-form native ads. You want to have a consistent point of view within the two mediums, and each can serve to reinforce the other – as if working in tandem. If handled carefully and executed well, you will see that 1 social + 1 content can = 3 customer engagement.

Which of the #Superbowl advertisers do you think will get a strong ROI on their $5 million investment? The one that is funniest? Most dramatic? Most shocking? Or even most "talked about?" It can be hard to measure, but one critical factor these days is social engagement, during and - even more importantly - after the game. Some companies even weaved a social engagement angle into the ads themselves (such as esurance with its re-tweeting sweeps concept).

Measuring the momentum built - and building on - social platforms is critical to maximizing the ROI outcome. Superbowl ads are designed to be memorable, impactful, and entertaining... But they still have to communicate a brand's value proposition and get the viewer want to take action - to know more about that brand or product.

This is especially true for the increasing number of emerging start-up brands that took the risk of running a Superbowl ad this year (SoFi, Dollar Shave Club, Apartments.com, Wix.com). In order to justify the $5MM cost to their execs and investors, marketers for these companies need to prove value beyond just "making a splash" and generating a day's worth of water cooler talk. That quickly fades, but getting customers to engage via social platforms, and keeping them engaged through content marketing, drip campaigns, product trial, and ongoing CRM techniques can be a winning strategy.

The article I have linked below does a good job of explaining how the goal of Superbowl ads is evolving over time - and how the new tactics can (and should) measure their success in new and broader ways.
http://www.adweek.com/socialtimes/super-bowl-ads-and-the-roi-gap-how-social-activation-measurably-grows-business-outcomes/633750 

Obviously the debate among marketers of whether Superbowl ads are a worthwhile investment is not new. But it gets much more interesting when you broaden the analysis beyond the spot itself and include the new technologies and practices that can turn that "splash" into a lasting wave that continues to build over time.

Leave a comment and me know what you think; which brands and companies successfully leveraged social engagement in their ads? What can they do beyond the ad itself to generate interest and brand engagement with their target audience?