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Marketing in a Post-Pandemic World - Viewed Through the Lens of the “4-Ps”

5/12/2020

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The last couple of months have turned many things on their head, and it’s a confusing time. In business, it’s no different. Disruptors are being disrupted. Hell, everyone is being disrupted. It can be hard to sort through the chaos, keep track of the rapid change, and anticipate the evolving sensibilities of the marketplace. In these situations it’s helpful to pull back and evaluate things through familiar frameworks (as academic as that may seem). For marketers, the “4P’s” model (Product, Price, Place[ment], and Promotion) can be one of these frameworks through which to assess new paradigms and figure out strategic direction.

New direction, both strategic and tactical, will need to respond to shifts brought on by the coronavirus - in economic conditions, consumer attitudes, and expected societal behavior. For instance, there have been numerous discussions and articles by thought leaders about businesses needing to embrace and accelerate their digital transformation in response to this crisis (such as this one by the World Economic Forum). The WEF article correctly points out that the stakes have been raised in this crisis: “One could see the current times as the first real test of the digital-first business mantras that have been extolled over the first part of this century.” Indeed, there is little time to waste in figuring it out: “This combination of scalable and agile capabilities is what will define the short and medium-term success of businesses, whether large or small.”

The key to this agility in times of crisis is understanding and responding to how people are assessing and prioritizing needs and wants in a different way. In my view, consumers will revert back to needs instead of wants (as in Maslow’s hierarchy), choosing to simplify their lives and place more value on family, friends, and community. Some may turn (or return) to spirituality and faith. With this more basic mindset, consumers will decide their “must haves” vs. “nice to haves.” They will more carefully consider spending and buying decisions, resetting what I call “anchors of value.” How does this affect our marketing approach? The 4 P’s can provide a lens through which to view and answer this question - let’s go through them.
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​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
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“SnapAd”: Monetization’s Newest Case Study

10/21/2014

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Snapchat is currently one of the hottest, if not the hottest, startup in Los Angeles’ “Silicon Beach” tech scene. The mobile messaging company whose platform leaves no text or image “paper trail” is very popular with younger users, as they feel secure in expressing themselves more freely. It was founded in 2011 by Stanford classmates Evan Spiegel, Josh Meyers & others. The popularity of the free app has certainly caught the attention of the tech and VC communities, as a recent $10 billion valuation (despite zero revenue) will demonstrate.

However, with this spotlight of attention and a huge valuation comes pressure – perhaps even a target placed on the company’s back. Snapchat’s Investors want to see some indication that the free service is more than just an easily accessible toy; they want line-of-site to eventual revenues and a business model that can support such a lofty valuation. There are numerous competitors in the free text messaging space – all with their own spin but each trying to capture the same pie of eyeballs and fingertips. Even the media and hacker community is setting its sights on Snapchat - embarrassing e-mails from CEO Evan Spiegel’s college days were made made public, and a recent hack that made thousands of Snapchat users’ photos viewable by almost anyone.

In short, Snapchat needs to (now quickly) evolve from a popular, rapidly growing fascination into a serious company that makes money. Previous predictions of an in-app purchase monetization strategy have not yet materialized. And so it was recently confirmed by Spiegel that Snapchat is planning to introduce paid advertising on its messaging app (see linked articles below). Although there were few details on how the ads will work or be presented, Spiegel did indicate that the ads will be essentially content based, and will involve “stories,” a content product of which Snapchat users view over 500 million per day.

Although this development is no surprise – most free social media and mobile messaging app companies reveal their “secret” monetization strategies to be some form of paid ads – the interesting thing here will be if Snapchat can somehow create a “game-changing” monetization system where the ad product is intertwined with great content and user-driven threads.  This element is critical for it to appeal to young users who are turned off by traditional display-based brand advertising. Yet as the below articles (from Ad Age and Adweek) on this subject hint, a good ad-based monetization strategy can still be a clever, creative, highly nuanced art form. It will have to be, seeing how the ads themselves will probably disappear as quickly as the messages – after about 10 seconds – not what you want if you’re an advertiser.

Clearly, Snapchat is highly focused on monetizing its platform: it has made some notable hires of former Facebook execs, one of the better examples of a company that has effectively monetized its user-generated content. Some say this new & evolving business model will require “brands..to figure out how to get super-creative” (Shafqat Islam, NewsCred), but I feel that the onus will be much more placed on Snapchat itself. It will need to create a killer advertising product that is deeply rooted in (disguised as?) engaging content that resonates with Snapchat’s millennial user base.

If that approach can be successfully executed (a big if…), major brands will follow and the business model will get real traction. Then the $10 billion valuation will quickly start to look very reasonable.

Read these pieces (links below) describing Snapchat’s first advertising strategies; let me know if you think they are on the right track.

Ad Age  article: http://adage.com/article/digital/snapchat-ads-coming-ceo-spiegel/295345/

Adweek article: http://www.adweek.com/news/technology/snapchat-will-reportedly-debut-ads-and-videos-159605
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Galaxy Note, iPhone 6 and Emerging Phablets: What’s Old is New Again

9/24/2014

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Earlier this month Apple unveiled their new iPhone 6 and iPhone 6 Plus to much fanfare (10MM sold in the first weekend) and strong reviews (for the most part) The most notable design feature about these devices is their larger screen size relative to previous models – the iPhone 6 Plus in particular has a 5.5 inch screen.  This puts it squarely into the “phablet” category – a crossover between smart phones and small tablets that could be used as either. Other models that have steadily caught on over the past year are the Samsung Galaxy Note 3, with its 5.7 inch screen and the LG G3 with a “5.5 screen – both of which still have a phone as a key feature. These products have been held up as differentiators in the ongoing mobile device wars between these two tech giants and others.

 These phablets have been getting increasingly glowing reviews, press, and buzz, as the 2000’s trend of the smaller-the-better phones continues to reverse itself in this decade.  In her review of the iPhone 6, Re/Code’s Lauren Goode wrote: “…I have to admit it: I’m tempted. I really like this phone. And people who actually prefer huge smartphones: you’re going to like this phone, too.” Similarly, Engadget’s James Trew loved the Galaxy Note 3: “The Note remains unchallenged in its category. Excellent battery life, a brilliant display and top performance make it an excellent all-rounder…”

These companies should be hailed for their innovation and for knowing the desires of the market, right? Sure, but I do find it interesting how fickle the electronics consumer can be, especially when they first encounter a truly innovative product for the first time - especially when the company that releases it lacks pedigree in that particular market.

Case in point: The Dell Mini (later renamed Streak 5). This was one of the very first “phablets” – before the term was even coined. It was released by Dell way back in early 2010 in an effort to get a let up in mobile devices, but its 6-inch size was met with derision and poor reviews that called out the “awkward” screen size. In fact, Engadget had this to say about it: “Dell's puzzled the world for quite some time with its outlandish Mini 5 / Streak -- at first glance it's just another Android-based MID, but a quick fiddle with it reveals the full-fledged 3G phone inside. So will it fit in a pocket? Can we carry it around like a normal phone?”  Hardcore techies were intruiged and looked past some of the early software bugs and flawed features, but the broader market didn’t know what to make of it and thus it garnerd only tepid sales. Seems like Dell, a company not known for innovation or smartphones, was a bit ahead of its time perhaps?   

 So why is the phablet now considered a brilliant and celebrated form factor? It’s a good question and a key example of how product development and marketing need to be aligned for a successful new product launch. The voice of the customer needs to be a part of the vetting process, and the benefits of new features & form factor needs to be clearly and repeatedly communicated. Proper pricing is also required: too pricey and it will not be quickly adopted, too low and “cheap” will overshadow “new & innovative.” I’m happy the phablet is finally gaining mainstream traction (and Dell deserves some credit for its pioneering try), but hopefully there are some lessons learned about what’s “old” being “new” again.

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A Few Thoughts on This Year’s IRCE Conference

6/17/2014

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Last week I attended the 10th Annual Internet Retailer Conference & Expo (IRCE), one of the leading e-commerce conferences that draws around 10,000 people to Chicago each year to explore the latest trends in online retail. This is the third year I have attended, and each year I have come away more impressed with the speakers, the discussion topics, and the level of sophistication permeating today’s e-commerce techniques. And although it seems like each year’s unofficial theme is “Amazon is at the center of the universe” (it’s not), I wanted to share a few thoughts that I took away from the three days.

  • Strong Keynote Addresses. This was refreshing to see, as I find that Keynotes can be hit-or-miss, with some downright hollow and simplistic. Not this year.  Ebay CEO John Donahue kicked things off with a very applicable address about getting as close to your customer as possible. He was absolutely right in saying that people “just want to shop” and they don’t think in terms of channels or devices - It does not occur to them. It is the job o the marketer and the UX expert to “put the customer in the middle” and make cross-device interactions a seamless and intuitive experience. Wikipedia founder Jimmy Wales reminded us that his online community of information seekers is one of the most heavily-trafficked sites and can play a huge role in shaping an online brand. Day 2 featured Niraj Shah of Wayfair and Sukhinder Singh-Cassidy of Joyus – both of whom again reiterated the notion of a customer-centric focus for their business. Mr. Shah described a strategic shift at his company that consolidated the websites under one brand and significantly beefed up content marketing in order to strengthen the bond with its customers. Joyus, as Ms. Singh-Cassidy described, also uses content as its primary lever with customers, as the entire business model hinges on engaging, educational, and simple videos; video is clearly a rapidly growing and evolving tool in e-commerce.

  • Customer-centric Merchandising and Personalized Service. I mentioned it above as a theme in the keynotes, but it reverberated consistently throughout the entire conference.  Video is becoming a hot trend in the world of e-commerce & omni-channel. The convergence of entertaining content and clever merchandising is allowing niche brands & marketplaces (i.e. The Grommet, Houzz, and The Children’s Place) to thrive in the face of Amazon, because the experience is memorable and forms a strong bond with customers. Similarly, highly responsive and personal customer service is back at the forefront of the minds of online retail execs. Social media and always-on smartphones have raised customer expectations, as well as the negative consequences if companies do not follow-through on their value proposition. It’s now table stakes, but not everyone can execute properly – I heard this everywhere – from the panels to the lunch line. 

  • E-mail Still Matters. New technologies and big data are driving a resurgence of e-mail in a big way, as well as the ability to view it on a mobile device (what push notifications?). E-mail can still drive up to 40% of a site’s traffic, so it is imperative to get it right and stand out in today’s crowded inbox. New developments discussed included algorithmic platforms that allow 1-to-1 e-mail personalization at scale, email retargeting, frequency-adjusted drip campaigns, win-back campaigns and opt-down preference settings. This, coupled with novel A/B testing techniques allow faster learning cycles and can lead to conversion increases of up to 25%.   

  • Big data – As In Big and Scary. This has been the buzzword for a few years now. But now it is really here and retailers – especially the smaller nice ones – need to get their arms around it to leverage its power. Everyone knows the amount of customer data will not be getting smaller, and ignore the fast-paced developments at your own peril. Luckily a few firms emerged at the conference as thought leaders in helping growing e-tailers tackle this large, complex, and potentially resource-draining opportunity. These firms included AgilOne, GoodData, RJMetrics, and SpringMetrics.

  • Good M-commerce Apps a Key to Winning. Shoppers using mobile devices may have widely varying objectives for a session: to make a purchase, to research, to kill time, to socialize, or to check on an existing order. Discussions about mobile commerce (still in its infancy in my view), all focused on this scattered set of needs. This served to drive home the notion that a shopping app has to perform really well, or the customer will not return. Specifically, it was called out that an app must be a simple but useful tool that drive customer engagement and are easy to use. They must be fast and reliable (1-3 second load time with only a 1% crash rate). Lastly, they must be easy to find and download – across multiple mobile O/S’ as needed. Achieve these goals and shoppers will find and use your app to shop.

It was a tiring but eye-opening week at IRCE 2014; I never seem to be able to get to see everything I want. I will look forward to returning once again next year to see what creative new evolutionis taking place in the industry – and hopefully I can be the one speaking about some of it.


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Microsoft Buys Skype - Smooth Move or Just Skhype?

5/25/2011

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Microsoft's recent purchase of Skype for $8.5 Billion raised some eybrows, not only for it's lofty price (70% of Skype had been purchased by Silver Lake Partners for only $2.5 Billion back in 2006), but also because pundits were wondering what the heck would a Windows software and video game console company do with essentially a VOIP services provider?

While the debate rages on, there could be some excellent possibilities here for Microsoft. The concensus is that Microsoft wanted access to Skype's 600 million users - not an insignificant number - for the ability to cross-sell products and online services that the company is developing.  Also, according to tech site Gigaom, Skype instantly boosts Microsoft's position in the online communication and collaboration market.  This is an area where Microsoft leaders Steve Ballmer and Bill Gates see future growth and development possibilities - especially leveraging off of the X-box, Windows Mobile and Outlook platforms.  This peer-to-peer connectivity will deliver a cohesive user base to which Microsoft can use to develop new social networking applications, offer cloud-like services based on it's Windows and Office software, and lock up tons of inventory for its Double-click display advertising business (some say this could generate over $350MM in incremental annual revenue.)  The deal will also give Microsoft more leverage with wireless providers and mobile technology companies such as Nokia - a key requirement for boosting it's struggling mobile business.

Given the number of new users that Microsoft just acquiredm, as well as the number of strategic options that Skype provides, I feel that this purchase was well calculated, bold, and will ultimately be a long-term winner.
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    Luke Grant is an experienced marketing and business development executive, with over 15 years of experience in e-commerce, marketing technology, mobile and consumer electronics.

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