The Granify E-Commerce Blog

The Secret Weapon of the eCommerce Negotiation

Andre Pavlovic is the VP of Product at Granify. Prior to that, Andre was most recently Senior Vice President of Product at Axiometrics, where he built and led their product management organization. Prior to Axiometrics, Andre was Senior Vice President of Product at Personify.

In any negotiation, the more information you have about the other party, the more power you have. When buying a house, knowing that the seller needs to close quickly as she has taken a job in another city would likely change your strategy when making an offer. When purchasing a new car on the last day of the month, knowing that the salesman is one sale away from achieving his bonus would be a great piece of information when haggling over price.

Information is knowledge and knowledge is power. This applies not only to traditional negotiations, but in the eCommerce space as well. However, in eCommerce, the seller is disadvantaged as they are not an active participant in the negotiation. The buyer has more information, and therefore, more power. For instance, a buyer can be price shopping other sites and you don’t know that price is a major driver for her. Another buyer may need to purchase something immediately, and if you have limited stock, they may forego price shopping other sites to ensure you don’t sell out. Price may be less of a driver for yet another shopper. She may be more concerned with the ease and cost of returning an item if she changes her mind after purchase. 

Unfortunately, most eCommerce professionals are left guessing when trying to optimize conversions. In pushing to increase your conversion rate, you may apply logic that actually creates a negative result. Even worse, the negative result may be masked as a success so you keep doing it! For example, you set a rule that triggers a 10% off coupon code if a shopper has visited at least 3 pages and parked on a page for more than 3 minutes without adding the item to their cart. You trigger a 10% coupon thinking that the shopper is on the fence when, in fact, they stepped away from their device for a few minutes. On a $100 sale, you just gave away $10 when you didn’t have to. Furthermore, you count that conversion as a success so you continue to do it, losing $10 each time.

A key problem with traditional conversion rate optimization is that you are basing an action on triggers that don’t account for the buyer’s intent. When it comes down to it, you can only influence a proportion of your shoppers. Some will buy or not buy regardless of your attempts to change their behavior. Being able to identify those that can be influenced is part of the problem. Once you have identified those who can be influenced, you are faced with another key problem: you have little information on what is really important to your shopper.

Data science and machine learning are revolutionizing how we can assess the intent and behaviors of your shoppers. By rapidly processing up to hundreds of data points per second for each and every shopper, you can quickly identify which shoppers are going to purchase something anyway. For these shoppers, you simply let them complete their intent...a full price purchase. When it comes to those that may need a nudge to complete a purchase, data science and machine learning can be leveraged to identify any behaviors that may clue you into what is important to them. For example, someone may not need a 10% discount as a trigger to influence a purchase, instead they may be concerned that the shirt they are considering buying may not fit. In this case, a simple notification on your ‘free returns’ policy can be enough to capture the purchase at full price.

Data science and machine learning can level the negotiating playing field in eCommerce. Recapturing unnecessary discounts and delivering triggers that align with your shoppers intent can make a major impact on your revenue.

If you'd like to chat with me more about machine learning's application and power in the negotiation between vendor and buyer, you can drop us a line and we'll set up time to talk!


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