Hal Conick wrote an enlightening and useful article, How Marketing Can Make Mergers and Acquisitions Easy, in which he referenced the AOL / Time Warner merger.  According to Conick, Time Warner executive Ted Turner said the transaction was “better than sex.” We now know, of course, that this particular merger was not successful.

Marketing topics might not rise to the top of the list of issues entrepreneurs typically think of when negotiating acquisition terms. But discussing these topics before you sign on the dotted line increases your chances of a successful acquisition.

Branding and Product Portfolio

• Which brands should you keep as stand-alone brands? Which should you rebrand, or absorb into the acquiring company’s brands? What is the basis for this decision?
• What process should you follow to ensure an orderly transition? This needs to be driven by what prospects, customers and other stakeholders require.
• Which trademarks should you keep, sell or abandon?

Marketing Strategy and Planning

• What role will the acquired company play in the overall marketing strategy of the acquiring company?
• Will the acquired company continue to operate separately, or will it be integrated into the business operations of the acquiring company? If the latter, what will this transition look like?
• Who approves final strategy? What initiatives should you continue, reexamine and change, or stop? What is the approval process for individual initiatives?
• Who controls the marketing budget going forward?

Strategic Partnerships

• Which partners should you continue to pursue under the new ownership? Do any conflict with the acquiring company’s partnerships? And if so, how should you handle the situation?
• Which relationships will change, and in what way? How can you strengthen them?
• Who owns each relationship?

Marketing Team

• Who should you keep on after the acquisition, who will need to be managed out and what would be the fairest way to do this?
• How will you need to change the roles of the remaining marketers? What possibilities are there for them to grow professionally within the new company?  And what will be necessary to retain them?
• Which outside consultants and agencies should you keep?  How should their roles change? And which should be transitioned, when and how?

Announcing the Acquisition

• Who should you notify, and what is the right process?
• What messages must you communicate to all stakeholders, including employees, customers, partners, and investors? What’s in it for them?
• What tangible actions should the company take right away to show how the acquisition delivers value?

This is a partial list based on my experience working with startups and enterprises undergoing mergers and acquisitions. The main point is to have these marketing conversations up front, to improve your chances of a successful acquisition.

Look forward to your thoughts.

This post was originally published by the American Marketing Executive Circle.

(Main photo source: Unsplash.com)

Medify basically collects these databases in one place and allows people to search on the exact criteria they are looking for.

Source: Medify

Streat decided to go after the consumer market as a B2C play – the need was clearly there for patients and their caregivers. At that point the question became which medical conditions to focus on – such as Alzheimer’s, asthma, autism, breast cancer, kidney disease, leukemia and lymphoma – so they could build out their databases accordingly. Their VC was strongly encouraging them to focus on one of these segments as an initial target audience.

Startups have a particularly urgent need to get the target right for their innovation, because it affects how they build out their product or service, and they have to show results before they run out of money.

But sometimes its hard to evaluate which target is the most viable. There are often many to choose from.

A framework for thinking about targets

Here is a framework I developed with my various clients over the years to help startups assess the attractiveness of possible targets.

The high level criteria required for a viable target are straightforward:

The real power in the framework is that it allows you to build out each of these four buckets with further qualifying criteria to suit your business situation, as in this example.

When you find you have two or more equally viable targets, consider what the tie-breaker criteria should be. For startups, it’s often how quickly you can get to market. If you are concerned about showing traction to your investors, a medium-sized target that is willing to buy now is more attractive than a large target that requires a lengthy sales process.

In Medify’s case, once we spoke with the physicians, hospitals, insurers, drug manufacturers and advocacy groups who made up the health care ecosystem, and aligned our findings against this framework, it became clear which conditions – and therefore which target segment – had the most potential for their innovation.  Once they landed on this, they could solidify their value proposition and build out their product offering.

I look forward to hearing your thoughts.

This post was originally published by the American Marketing Executive Circle.

Macro trends are big social and economic shifts – technology, consumer demographics, culture, or historical turnings – that can reshape markets and create big new opportunities. When you pay attention to the horizon, you can see macro trends coming your way and have time to prepare for and capitalize on them.

In the natural world, scientists are making it easier than ever to tell if a tornado will hit.  The National Weather Service has an experimental strategy, Warn on Forecast, which allows forecasters to issue warnings before storms form, based on high-resolution satellite imagery, radar data and surface observations. This data is fed into a very high-resolution weather model that is run every 15 minutes for a period of time on storms of interest or for areas that could produce storms. The net benefit is that citizens have a lot longer time to respond.

But we don’t have early warning systems in the business world (at least, not this accurate).  And not every macro trend we see in the business world requires a full-out corporate response.  As marketers we need to evaluate trends and decide what to do about them.

An approach I have found helpful is inspired by how communities respond to real tornadoes:  spot the trend, describe it, understand it, predict its impact, and act.

Ten questions to assess macro trends

1. Where do trends ultimately affecting my business tend to start? (spot)

If you track back previous trends that have had an impact on your business, you can to identify some of the sources of these trends.  What past trends can you trace back to their beginnings?  Is there a pattern?

2. What are the warning signs? (spot)

Consider what early signs you could look for and how to measure them, to get further ahead of what’s happening.  For example, if you want to know what’s coming to your grocery store in the next year or two you might want to attend the Aspen Food & Wine Magazine Classic.

3. What trend do we see on the horizon? (describe)

How would you describe the trend?  It might be expressed as a new interest, an emerging concern, or a major shift in consumer attitudes or behaviors.

4. What are the roots of this trend? (understand)

Consider the history of the trend and its causes or inspirations.  Is this trend sparked by a single event, or is it part of a major historical cycle?

5. How fast is it developing / gaining in popularity? (understand)

Are opinion leaders embracing this trend?  Does the trend appear “sticky”?

Diffusion of Innovations theory tells us that when about 16% of the population adopts a new innovation, it reaches a tipping point where people think “everyone is doing it” and adoption accelerates.

6. Who or what will be affected?  (understand)

Consider who, and how many, will be affected.  Will this trend impact your core customers?  What other important constituencies, such as strategic partners, will be affected?

7. What will happen – good or bad – when the trend does take hold? (predict)

Role play what would happen to those affected if the trend takes hold.  What’s the initial impact likely to be?  What follow-on impacts will this cause, in turn?  What scenarios can you envision?

8. What are the likely consequences? (predict)

What are the benefits or how serious will the negative consequences be if the trend takes hold on a large scale?  If they are significant and long lasting, the trend requires a response.

9. What to do about it?  (act)

There are four main strategies for responding to trends:  embrace, counter, deflect, or ignore.  If you believe the trend will stick, and your company is likely to benefit, consider associating with the trend and building products or services to further capitalize on it.  If the trend is likely to threaten your business you can argue against it (counter) or try to change the conversation (deflect).  But if your most important constituencies aren’t affected, consider masterly inaction (ignore).

10. How shall we do it? (act)

Once you decide on your overall strategy, now you have the task of forming a specific plan and assigning people and resources.  Even if you have decided to ignore at trend, you’ll still need to communicate your reasoning to your constituencies.

______________________________________

In the natural world, when a tornado hits, your range of actions is pretty limited:  hope it doesn’t touch your neighborhood, try to out run it, or retreat to your underground bunker.

In business, we have more options, as long as we take a careful look at the trends coming our way.  I hope the questions above will help you evaluate and respond more effectively.

What’s your process for evaluating macro trends?  I’d love to hear.

This post was originally published by the American Marketing Executive Circle. 

(Main photo source: https://weather.com/news/weather/news/experimental-model-weather-tornado-warn-on-forecast)

Amazon has been in the news a lot lately, and rightly so. It’s fascinating to be sitting in their back yard where I get to see some of these innovations for myself.

In early 2017 they announced an experiment with Amazon Go, a cashier-less store of the future which hasn’t opened yet due to technical issues.

(Source: Recode.net)

They are also experimenting with formats that allow customers to buy their items online, schedule time slots to pick them up, and drive to the pickup location where employees will deliver orders to their cars.

(Source: Seattle Times)

And in June Amazon introduced their Dash Wand with Alexa which lets you scan the bar codes for the items in your fridge, or just call them out – mushrooms! – to save to your shopping cart. It even helps you figure out what to do with the food you already have.

And when Amazon announced they would acquire Whole Foods for nearly $14B it sparked a whole lotta news.

Amazon’s latest acquisition of Whole Foods: a few industry perspectives

Local high tech publisher GeekWire’s story by Todd Bishop speaks to how the Amazon acquisition of Whole Foods grocery chain dramatically expands their physical retail footprint.

Felix Richter’s article in Statista speaks to the opportunity for Amazon to use Whole Foods’ distribution and procurement network to boost its online grocery offerings, to further penetrate the U.S. online grocery market – currently the ecommerce market for fast-moving consumer goods (FMCG) sales in the U.S. is only 1.4%, compared with 16.6% for South Korea.

A recent NYT article by Claire Cain Miller speaks to the acquisition signaling the end of the line for many cashiers.

And the Harvard Business Review article by Bill Taylor on Amazon, Whole Foods, and the Future of the (Old) New Economy offers a very thoughtful look at what the deal says about the future of an approach to business, branding, and organizational culture that Whole Foods and Amazon have come to represent.

I think all of these perspectives are valuable, but so far I have not seen anyone comment on what all of this means for the customer experience. As marketers I imagine we are all thinking about this question. So here is my take, and I welcome your thoughts:

4 marketing strategies Amazon seems to be following: a consumer perspective

The Amazon mission statement makes it clear what drives them – it’s serving consumers:

“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

I’m seeing this mission statement brought to life in a few ways:

1. Making Prime more valuable so more people sign up

Just as Gillette once priced their razors low so they could make money on razorblades, Amazon is looking to drive penetration of Prime membership so they can make money on what customers order. Part of the way Amazon markets Prime is by making this membership simple to get. But they are also working to make Prime more valuable, for example, if you sign up for Prime you’re the first group to get access to just about every new device or service they offer.

This includes getting Whole Foods products delivered to your doorstep.

Grocery is not in itself an attractive category – the margins are terrible. But offering grocery as a new category for home delivery increases delivery frequency, and once customers are ordering groceries regularly they’re also throwing in other products, which is attractive.

2. Lowering costs to consumers

When Amazon got into the e-book business they dropped the price to such a low level it put at least one publisher out of business.

Some analysts are already talking about the possibility of Amazon doing this for Whole Foods products.

3. Eliminating friction from the buying process

Consider everything Amazon has pioneered or pursued to make it as easy as possible to buy something from them online: low prices, one-click shopping, easy checkout, easy returns, free shipping.

In store they are experimenting with skipping the cash register entirely. With the Amazon Go app you’ll no longer need your wallet.

With the Dash Wand with Alexa you don’t need to write down your shopping list.

It wouldn’t surprise me if Amazon closes deals with smart refrigerators using Internet of Things (IOT) to automatically reorder your groceries for you, through Amazon of course.

What this eventually all adds up to …

4. Eliminating thinking altogether?

Every marketer works hard to build top of mind awareness and strives to get into the considered set. Amazon is working hard to become the only company you think of when you buy anything.

As a Prime Member, I now default to Amazon when it comes to buying online. After all, I have already paid my $99 for “free” shipping. No matter that this is a sunk cost: psychologically, I’m still trying to get more return from that investment. Amazon is happy because I’m finding new things to buy. I once used my Prime Membership to buy potting soil.

Yes, Amazon sent me dirt.

If you’re not at the table, you’re on the table 

So what does this mean for marketers? Here are 3 resources to help you understand Amazon and what it might mean for your business:

1. John Rossman’s blog is a great place to get a former insider’s perspective on Amazon’s strategy. In talking to him my sense is that he still has a great finger on the pulse of how this company thinks.
2. To stay on top of what Amazon is doing, a great resource is GeekWire.
3. To see what Amazon is about to do, a great resource is CB Insights, which uses their patents search engine to track Amazon’s intellectual property efforts.

While every situation is different, here are 3 strategies to consider if your company lies in the path of Amazon:

1. Hunker down. Prepare for the long haul. Right now Nordstrom, after taking a beating from Amazon, is talking about going private. My guess is, they expect a battle and don’t want to be distracted by pressure to make their quarterly numbers.
2. Double down. Amazon can sell a lot of things to a lot of people, but they can’t sell everything to everyone, much as they would like to. What is it your company does better than anyone else, for a particular audience? How can you become the top of mind choice for this group?
3. Reconsider your options. What business are you really in? Look at this not from the perspective of what you’re selling (buggy whips: product – oriented) but from the perspective what people are buying (transportation: customer – oriented). Ted Levitt’s famous Marketing Myopia article is even more relevant today.

I look forward to hearing how you will be responding!

This post was originally published by the American Marketing Executive Circle.

(Main photo source: Geekwire)