Whenever you’re formulating a strategy, it’s important to know precisely what business you’re really in. Here’s what I mean: Nike isn’t in the sneaker business; it’s really in the aspiration business. All State isn’t in the insurance business; it’s really in the security-for-your-family business. Disney isn’t in the movie business; it’s really in the unforgettable experiences business.
One day over lunch, Seth Nichols, Founder of Longitude Media, spoke about his company so crystal-clearly that it got me thinking. He said, “I’m in the lead gen business.” When he went on to talk about all the tactics he’s using for his publishing businesses, it was so obvious why he was successful — he knows exactly what business he is in, and all his actions (products, sales efforts, marketing campaigns) are consistent with that goal.
So, let me ask you, what business are you really in?
If you said publishing — Bzzt — Sorry, you’re wrong.
Magazines? — Bzzzt — Strike two.
If you said content creation — Bzzzzt — You’re getting closer, but content creation is still focused on the “what” rather than the why.
I’ve thought about this quite a bit. If you think you’re in the “content creation” business, you are likely really in one of these five businesses. Why is it important to know what business you’re really in? The optimal business model and marketing plan depend on it!
1. The Education Business
Publishers who are in the education business create quality, how-to content that is meant to drive results for their followers.
A good example is what Don Pesche accomplished at August Home. He produces high-quality, evergreen, instructional content about woodworking, cooking, and gardening.
If your main goal as a publisher is to educate, you’ll find the most successful business model will likely be to create a paid subscription in exchange for access to content both online and off. From there, you can build your audience by allowing people to try before they buy. (But remember: don’t give away too much for free. Various free trial models can help you find balance.)
In the education business, advertising becomes less important. It’s a cherry on top, but these types of businesses can survive on reader revenue alone if you strategize thoughtfully.
2. The Research and Data Business
The research and data business is a B2B model by nature. Healthcare Business International, for example, is a company that uses independent, original news and analysis to provide a database of insights and comprehensive, systematic and structured coverage for the worldwide private healthcare industry.
The key to success is to understand the use cases of the data in order to target the right users and play up the value proposition of your database. You’re not selling the “database” per se, you’re selling a tool that helps customers identify the best growth opportunities for their business. As with many B2B products, you usually need to pair some outbound calling with inbound efforts.
If you’re a B2C publisher, you can still get into this game if you are selling research about your audience — their habits, behaviors, and preferences — to vendors in your industry.
3. The Lead Generation Business
Does this sound like you? Based on how visitors interact with your content, you have behavioral data and/or survey data that showcases who is in the market for a certain product or service in your industry. You sell this information to businesses for a premium price. If so, you’re in the lead gen business. You provide qualified leads to partners (qualified is, of course, the key word).
Remember Seth saying he was in the lead gen business? Take a look at one of his brands: The Equipped Brewer. It’s an online publication dedicated to the success of young craft beverage companies. They can use insights about their audience’s—brewery and distillery owners, head brewers, production managers—behaviors to clue the craft beverage industry in on trends, products, and missing services.
The key to success with this model is ensuring transparency with your readers. No one likes being spammed, especially by third parties. Additionally, you also must understand the economic value of a lead, and don’t be shy about pricing. If you know a customer is worth a million dollars, and a sales team can convert 10% of qualified leads, that means every lead has a theoretical value of $100k! This isn’t to say you can literally charge that high for the lead, but don’t undersell yourself either. You are in the lead gen business, not the coupon business! Have an idea of the value you are creating.
For this model, there are a lot of tools that can help you deliver higher quality leads to your partners. It’s something you need to be proactive about — what you are providing is infinitely measurable. If you send on lousy leads, your client will get lousy results, and you’ll lose the account. On the other hand, if you can be their go-to source for quality leads, you’ll have a client for life.
4. The Branding Business
The business of branding encompasses most national consumer magazines like Good Housekeeping or Rachel Ray Every Day. It also includes the controlled B2B publication industry. If you are in the business of helping people identify with your brand, and have successfully amassed a loyal following of people in a specific “psychographic” or “demographic,” you are probably in the branding business.
For this model, our old friend advertising is actually a perfectly appropriate revenue stream. You can use your brand halo to generate awareness for your sponsors. The key to success, however, is being more creative than relying on banner ads or full-page print spreads.
Consider utilizing custom sponsored content, co-branded products, or hosting joint events. What can you do to help your advertisers build brand awareness with your attractive like-minded audiences?
5. The Community Building Business
Publishers are often in the nexus of a community. As author and professor Jeff Jarvis puts it, “We need to build new services that deliver relevance and utility and thus value to individuals and communities, earning us data, loyalty, and revenue in return.” From a consumer standpoint, you have the opportunity to bring together enthusiastic hobbyists and experts. From a B2B standpoint, you have the opportunity to bring together all aspects of an industry: suppliers, customers, consultants, financiers, and other third parties.
Melcrum, for example, has a membership program and series of summits to foster community for internal and corporate communications professionals.
Events are typically the key business model here, but of course, you can also combine that with paid content, directories, online communities, and other products and services that are attractive to your niche.
The Business of You
So, what business are you really in? Whether it’s one of these five common categories, or you’ve realized you’re in a business all your own, it’s important to define it. Once you know your business’s purpose, you can align your goals against it and start creating revenue streams to match it.
How the Sterling Woods Group Can Help
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About the Author, Rob Ristagno
Rob Ristagno is the founder of The Sterling Woods Group and partners with companies to drive rapid digital revenue growth. Prior to creating Sterling Woods, Rob served as a senior executive for several niche media and e-commerce companies. Rob started his career as a consultant at McKinsey and holds degrees from the Harvard Business School and Dartmouth College. He has taught Product Strategy at Boston College.