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Thursday, January 20, 2005

What’s Wrong With B-to-B Media (And how to fix it)  

We kick off this blog with a short piece we created three years ago, as the media economy wended its way through its most recent recession. And while things are better now, we think this remains a valid analysis of the (often self-created) problems that b2b media continues to wrestle with.

We’ve almost killed b-to-b media, and we have no one to thank but ourselves.

This last recession has been nothing short of a depression for b-to-b media companies. In the tech sector, magazines are 20-40% short on pages from the prior year. In other sectors, the story is nearly as dire.

Our advertisers are fleeing—and many of them may never return. Controlled circulation requalification rates are down—and it’s become more and more expensive to maintain a decent level of requester circulation. We can’t even give our stuff away anymore.

Why? Because we give lip service to the power of our media to connect buyers and sellers, but we’ve forgotten how to make the connection with our own readers and advertisers.

1. Publishers spend too much time managing expenses, and not enough time talking with customers.

2. Our idea of creativity is to encourage our customers to invest in their future through advertising, while we cut our budgets, trim our staff and more. When was the last time you saw a b-to-b media company really advertise its wares?

3. It’s not a numbers game. The numbers—the profits—follow from connecting with readers and delivering a targeted audience to sellers.

4. There are costs that can be cut—useless expenses, overheads, senior managers. And there are costs that cannot be cut: operating people, content.

5. There are too many useless sales reports out there. You know the kind—call reports. Busy work. Reports created because management suspects that salespeople aren’t making enough calls. The problem here is it’s not the quantity of calls, but the quality of the call which makes the difference, which leads us to the next point.

6. There are too many useless salespeople out there--salespeople who need to be tracked with useless call reports, who live comfortably on their bases salaries, and who don’t really understand their customers or their marketing needs. “Wanna buy an ad?” types of people. And these folks are on the front lines, representing b-to-b media as an option to advertisers. No wonder we’re losing the business.

7. There are too many useless sales managers out there--sales managers who confuse creating reports with managing salespeople.

8. Publishing is not the same kind of business as manufacturing, and the financial wizards who own most b-to-b companies don’t understand this.

9. Business to business media requires strong editors who are given the ability to serve their readers. We aren’t catalogs and we’re not junk mail—at least, we’re not supposed to be.

10. Bankers should not own media companies. But given the fact that most media companies are owned by bankers, these same bankers should try to understand what they’ve purchased. If they bought a monthly magazine, for example, they haven’t bought a “product.” They’ve bought 12 products a year—each one is new, and each one has the opportunity to attract and repel readers and advertisers. (Hey bankers—multiply that by the 47 magazines, 34 trade shows, 19 conferences and 12 directories you own!)

Herewith, we offer a few thoughts on how to fix b-to-b media. Who are we to think we can do this? Well, the senior partners in GRID Media LLC have a combined 80 years invested into their b-to-b careers. We have made a lot of money for the companies which employ us, and have made a pretty decent living as a result. Basically, we think we know what we’re talking about.

1. Rebudget the business from the ground up. With a blank sheet of paper, create a realistic revenue budget, and then a realistic expense budget—include everything you absolutely need, and eliminate everything you don’t. Deduct the latter from the former, and you have your baseline contribution.

2. If that baseline contribution can’t service your debt, get rid of the debt. If it can service your debt, great, go out and build revenues.

3. Go see all of your top customers, in person. Listen to their plans and their problems. Avoid the temptation to sell them an ad or a booth. Rather, build them a solution to their problems (said solution may include ads and booths, but should also include other approaches).

4. Have your editors see their top readers immediately, in person. Go with them.

5. Invest in marketing your product. Avoid hypocrisy and practice what you preach. Advertise.

6. Have every sales executive on your team write a business plan for his or her territory. What’s the goal? (revenues/pages/marketshare) How will it be accomplished? What tools will be needed? (T/E budget, marketing). Review each business plan carefully. Accept those that need accepting. Eliminate all useless busywork reporting for those who have an accepted business plan. Give them the tools they need and let them sell. Replace the salespeople who can’t write and execute a territory business plan.

7. Hire better salespeople. Pay more, demand more. You want front liners who can sell your product and your medium AND your industry (which is business-to-business media).

8. Hire better sales managers—get people who know how to manage and motivate salespeople. Fire all sales managers who manage upward. Revere sales managers who develop salespeople one at a time.

9. Pay more attention to circulation marketing. You need to attract new eyeballs, but it ain’t free. You don’t need the biggest circulation, but you do need a good one. Pay for it.

10. Pay more attention to editorial quality. After that, pay even more attention. Read your own publications and attend your own trade shows, and then comment on each to the respective editor and trade show manager. Let them know you care.

11. Cut corporate reporting and paperwork as much as possible. Focus the majority of your publishers’ time on customers. Same with salespeople. Same with editors. Time spent reporting why things aren’t working is time taken away from fixing them. And if you don't trust your people, either get people you can trust, or learn to trust the good people you already have.

12. Commit to presenting a new and creative idea to your readers and advertisers EVERY issue. On the editorial side: add a new column, create a better web-based feedback loop, break a story…anything. On the advertising side: create a supplement, build a newsletter, create a conference, do a piece of research. Every month, show your readers and advertisers why they need you.

13. Commit to growing the topline. Yes, there’s still a recession [at least, as of this writing] out there for us in media (no matter what the Fed says) but you can grow your revenues, even if you only do it a customer at a time.

14. Have a vision. And maybe a bit of passion. Your customers will appreciate it.

What’s interesting to us is that none of our solutions involves the latest and greatest new-trend merchandising tool. And none of our solutions is particularly brilliant. All of them are quite basic, and form the foundation of what once were great magazines, trade shows and media companies.

We’ve just forgotten to apply them. And we will continue to forget, at our peril.


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