This Spring, I’ll be publishing a new book entitled A Member Is Worth a Thousand Visitors: A Proven Method For Making More Money Online.
The book is anchored by a discussion of the five forces of online revenue growth through memberships. My team and I identified these forces over the past two and a half years through hands-on experiments with our clients, primary research and interviews, and a review of research projects done by academics. We’ve seen our approach drive 50-600% revenue growth.
Have you ever heard of the book “All I Really Need to Know I Learned in Kindergarten“? You can take a kindergarten-style approach to most things, including new product development. What do I mean? Strategic planning and research start with your ABCD’s: Audience, Business Partners, Content, and Dynamics of your Industry.
Audience: What Problems Does Your Content Solve For Them?
Understanding your audience starts with recognizing that your audience is made up of several sub-segments. Not all of your audience members are the same. If you’re unaware of the benefits of segmentation, check out this article.
Carve off one segment at a time. For each segment, identify your best and most engaged customers. This is the group of customers to find and learn from. We call them your whales.
Start with one segment’s whales, and set up a handful of interviews with existing audience members. In the interviews, gather answers to the following questions about your category:
- Why is this category important to you?
- What are your needs / what do you care about?
- How are your needs met today? (What do you buy? How do you use it?)
- Describe how do these products make you feel.
- In what ways could the product better meet your needs?
- What needs are not being met by these products?
- What else (not directly related to this category) do you care about?
I also recommend collecting some basic demographic information – age, gender, household income, etc. – if it is not already in your database.
At the end of the research, summarize your key findings:
- What needs are consistently identified?
- How are those needs typically met today? Where are the opportunities to meet these needs better?
- What unmet needs exist?
- What are emotional attributes related to the category? (These will be themes from answers to the question “How do these products make you feel”.)
Business Partners: Monetization Opportunities Beyond Advertising
Who else is talking to each segment? Forming strategic partnerships with other brands who are already talking to your audience scales your business quickly. This goes far beyond advertising. When I was working with the digital consumer financial services company Homesite (which you probably have not heard of), we were able to quickly scale our customer base through strategic partnerships with firms such as GEICO and Progressive (which you certainly have heard of thanks to the Gecko and Flo, respectively). At TrackMan, a sports media company, we scaled through established brands such as golf equipment manufacturer Callaway.
These other firms will not help you out of the kindness of their heart. You will need to find a way to add value to them. Of course, you can offer advertising placements, but you should consider a way to go above and beyond a banner ad or back cover. How can you solve a business problem for them? Can you send them warm leads or help their research and development initiatives? Or perhaps you can you create a premium experience for their customer base?
The easiest way to figure out how to add value to business partners is to ask. Set up calls with your top advertisers and/or prospects. Strive to deeply understand their business needs. For example:
- What are your top three objectives this year?
- Where are your top three pain points?
- What are your strengths and weaknesses in the sales/marketing funnel? (Listen for things like lead acquisition, trial, conversion, engagement, or retention.)
- How can we help you meet your objectives in addition to what we are already doing?
After you finish the research, jot down some ideas on common business problems in the space, and a list of ideas on how to help solve those problems through your audience or your content. This research may even inspire an idea for a new B2B publication.
Content: Yes, It Is Still King.
Content is still king. I’ve written about how the decline in content value (especially digitally) has created an opportunity for quality, curated, targeted content. When we perform a content audit with our clients, we follow a three-step process.
1. Inventory your content.
You have more than you think. Articles, sidebars, interviews, photos, videos, infographics, social media posts — the list goes on. Inventory what you already have to see what you’re still missing.
2. What tangible problems does your content solve for its audience?
We believe readers should pay for new products. Advertising can be a bonus on top. For your audience to pay for the content, you must solve a specific problem for them. For example, it could be how-to information, product or company reviews, proprietary research studies, or curation of third-party information. Make an exhaustive list of all the problems your content solves for your audience. Try to bucket the list items into categories.
3. What emotional attributes does your content espouse?
Good brands need to be functional and also emotional. Even if you are a B2B brand, your content should have emotion (for example, authority). Content that solves a problem without an appropriate emotion (or no emotion at all) is less effective.
According to leadership expert Tony Robbins, “80 percent of success is due to psychology—mindset, beliefs, and emotions—and only 20 percent is due to strategy—the specific steps needed to accomplish a result.” Your content should inspire your audience to take action. It needs emotion to do its job.
The management consulting firm McKinsey also advocates focusing on emotional attributes to build brands. For example, looking at the hotel industry, you can see Holiday Inn conjures the emotional image of “fun and a bit wacky,” while Westin goes for “serenity and efficiency,” and Four Seasons “calm sophistication.” At Cook’s Illustrated, we used a voice of “authority and confidence” that appealed to the audience looking for tested, foolproof recipes in a world where anyone with a computer can post recipes of dubious quality.
Dynamics: You Have Competition
“We’re so unique, we don’t really have competitors.” WRONG. Everyone has competitors. At the very least, you are competing with a Google search for information in your category.
How else are customers solving the problem your content addresses? If you do not know off the top of your head, then the competitive set should occur naturally from the research you have conducted on your audience and business partners.
For each of your top three to five competitors, spend time understanding the following:
- Which of your audience and business partner needs are they meeting? How?
- What emotional attributes does their brand espouse?
- What is their business model (ad-supported, subscription, unit sales, etc.) and pricing?
- How do they appear to be acquiring new customers (check out their social media presence, email marketing activities, notice advertisements, look for them at retail/newsstand, etc.)?
- If publically traded, read their latest annual statement and understand how they make money.
When you conclude your research, your summary should include thoughts on:
- Which part of the market is overcrowded? Are there too many companies trying to solve the same problem in essentially the same way? Is there anything you could do differently to stand out?
- Which part of the market is underserved, either because no one is focusing on certain problems, or those who are focusing on the problem aren’t doing so effectively?
Congratulations! You now have done enough baseline research to start writing an NPD Mission Statement. An NPD Mission Statement consolidates all the insights you uncovered during this research phase and guides the product development efforts in a clear direction.
How The Sterling Woods Group Can Help
The Sterling Woods Group teaches clients our five forces to methodically make more money online. The goal: make sure you lock in double-digit growth year after year using the power of digital media. Many companies have experienced over 50% growth using our system. Beyond the financial benefits, clients tell us that – for the first time in years – they feel truly focused.
We offer workshops, coaching, and keynote speeches. Sterling Woods is also an agency that launches new digital initiatives so clients don’t have to add overhead. Our agency business model is unique in that most of our fees are based on performance.
About the Author
Rob Ristagno, Founder and CEO of Sterling Woods, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. He started his career as a consultant at McKinsey. Ristagno holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.
Rob is the author of A Member is Worth a Thousand Visitors: A Method for Making More Money Online, set to be published in 2018. He regularly speaks at key media conferences, including at Niche Media events.