What is the core business of news media? They are not in the business of “reporting the news”. News media’s business is to aggregate an audience to deliver to advertisers. That is why celebrity tabloids sell – the perceived quality of the “product” only affects the demographics and size of the audience. But in reality the audience is the “product”, journalists and producers are the manufacturing team. The sales team are supposed to be the rain makers. But news media believes their own manufacturing-oriented PR that their business is “the news”.

If news media companies are to thrive under a pay-for-content business model they must now do two new things well for sustainable competitive advantage. Firstly they must deliver compelling content, now mixed with rights management and security that does not interfere with the reader experience. Secondly they must become expert subscription marketers – better than Time Life or Readers Digest. Because the internet is littered with the corpses of companies who believed “if you build it, they will come”. If your business depends on paid subscription you had better become outstanding at the skills to deliver subscriptions. Dave Earley said

It is worrying that users will now be made to pay for news simply because marketing departments are unable to make online advertising work.

Sadly this is typical of sales and marketing reactions in a mature market, it always looks easier to chase the next big thing rather than get great at your core business. If their marketing departments can’t sell online advertising (B2B) how are they going to develop the skill to convince people (B2C) to pay for something they’ve previously got for free? I wouldn’t take that bet.

News media is like the buggy whip manufacturers complaining their markets are shrinking because cars have replaced horse-drawn carriages. Nobody promised newspapers a perpetual license to make money. Evolve or die.  Get good at your real, core business.

Rupert, baby, deliver an audience to your customers.

The Singapore Slingers are based in Singapore, but I’ve heard if they put a Singaporean on the floor he must take one of the two import slots that NBL teams are allowed. Normally those spots are for players who have to produce every game in the role they are hired for.

This may be a limitation of the FIBA license granted to the NBL and international politics of basketball. I’m investigating,  but if this is true it seems like a sports marketing mistake.

Do not to put obstacles between your customers and your product. In this case the Slingers need decent home crowds, and that means putting local talent on the floor – developing it if you must.

More to come as I gather information.

In the new media world not being in an EPG make you invisible. It doesn’t matter that I can scan while channel surfing, I rely on the description that pops up on screen or on the EPG. Until last year I would go online and look it up, but I finally got tired of that. So as a result my family watch precisely one (1) hour of channel Ten per week. We watch less channel 7.

What amazes me is that the management of these businesses obviously thought cutting a deal to be on Foxtel’s digital would not impact their ratings. Instead it allow the other Foxtel digital channels to capture eyeballs and forget about their programming. So the only way I discover their programming is to see their expensive advertising in other media.

My informal pub chat poll shows my household is not unusual. Foxtel subscribers love their remotes, their electronic program guides and their planners.  Media analysts counter that very few Australians watch Foxtel’s channels other than sport or movies. It doesn’t matter, enough of us have stopped watching Seven and Ten because it is not accessible.

Lesson: Do not get between your product and your customer.

Thankfully Ten is has now joined the party. Now seven needs to get over their C7 digital hissy fit and make their schedule available.

I look forward to watching the fall-out in the industry over this. When a major market player decides to flex their muscle, they should make sure they are a big enough player. I suspect that at a claimed 18% of the Australian book retail market Angus & Robertson will find it is not enough to succeed.

Bunnings on the other hand does have enough market share. But more on that later.

Update Michael Rakusin has granted permission to reproduce his letter below

6 August 2007
Mr Charlie Rimmer
ARW Group Commercial Manager
14th Floor, 379 Collins Street,
Melbourne, VIC 3000

Dear Mr Rimmer

We are in receipt of your letter of 30 July 2007 terminating our further supply to Angus & Robertson. As you have requested, we will cancel all Angus & Robertson Company orders on 17 August and will desist from any further supply to your stores.

I have to say that my initial response on reading your letter as to how you propose to “manage” your business in the future was one of voluble hilarity, I literally burst out laughing aloud. My second response was to note the unmitigated arrogance of your communication, I could not actually believe I was reading an official letter from Angus & Robertson on an Angus & Robertson letterhead.

My reply to you will perforce be a lengthy one. I hope you will take the trouble to read it, you may learn something. Then again, when I look at the level of real response we have had from Angus & Robertson over the past six or so years, I somehow doubt it.

The first thing I would say to you is that arrogance of the kind penned by you in your letter of 30 July is an unenviable trait in any officer of any company, no matter how important that individual thinks himself or his company, no matter how dominant that company may be in its market sector. Business has a strange habit of moving in cycles: today’s villain may be tomorrow’s hero. It is quite possible to part from a business relationship in a pleasant way leaving the door open for future engagement. Sadly, in this case, you have slammed and bolted it.

More to the point, however, we have watched our business with Angus & Robertson dwindle year upon year since 2000. We had to wear the cost of sub-economic ordering from you through ownership changes, SAP installation, new management, and stock overhang. In summary our business with you has dropped from over $1.2 million at the end of 2000 to less than $600,000 in 2007.

You would be quite correct to question whether our offering to the market had changed in any way. The answer can be derived from the fact that during the same period our business with Dymocks, Book City, QBD and Borders continued to grow in double digits, our business with your own franchise stores has grown healthily, and our overall business during the same period has grown by more than 50%.

Six years ago we were allowed to send reps to your company stores and do stock checks. Then these were “uninvited” and we had to rely on monthly rep calls to your Buying Office. Subsequently even that was too much trouble; your Buying Office was too busy to see us, so we were asked to make new title submissions electronically. Every few months the new submission template became more and more complex. This year, we have been allowed quarterly visits to your Buying Office at which we were to be given the opportunity to sell to all your Category Managers. At the first, we did indeed see all of the Category Managers – but they didn’t buy any of the titles offered. At the second, one Category manager was available, and again no purchases resulted. At the last (only last week), two Category managers attended. Through all of this, your overworked and under resourced Buying Department never got to see, let alone read, an actual book. While one may be forgiven for believing that Angus & Robertson is actually a company purveying “Sale” signs, I do believe you are still in the book business?

That Angus & Robertson is struggling for margin does not surprise me. It amazes me that the message has not become clear to your “management”: there are only so many costs you can cut, there is only so much destiny you can put in the hands of a computer system, there are only so many sweetheart deals you can do with large suppliers. After that, in order to prosper one actually has to know one’s product and have an appropriately staffed buying department. Most importantly, one has to train sales people of competence. You will never beat the DDSs at their cost cutting game, you will only prosper by putting “books” back into Angus & Robertson. And it would seem to me paramount to stop blaming suppliers for your misfortunes, trying ever harder to squeeze them to death, and actually focus on your core incompetencies in order to redress them.

How a business that calls itself a book business is going to do without titles such as the Miles Franklin Prize winning book or titles like Rich Dad Poor Dad (according to this week’s Sydney Morning Herald it is still the fifth best selling business title in Australia nine years after publication) is beyond me. And how in good conscience Australia’s self-purported largest chain of book shops proposes to exclude emerging Australian writers who are represented by the smaller distributors, is an equal mystery.

We too have expectations Mr Rimmer. We have had the same expectations for many years, none of which Angus & Robertson have been willing to deliver:

• That we are treated with equal respect to the larger publishers within the obvious parameters of commercial reality;
• That your Buying Department is able and willing to assess our books with equal seriousness to those of the big publishers and buy them appropriately;
• That you recognise the fundamental differences between the smaller distributors and the larger publishers and stop demanding of us terms that we are unable to deliver;
• That you would support and help develop Australian literature.

Had you made any effort to meet these expectations you would have found the niche we should have occupied in your business, as have all other book shops, and you would have found our contribution to the profitability of your business would have been dramatically different.

In summary, we reject out of hand this notion that somehow, even giving you 45% discount on a Sale or Return basis, with free freight to each of your individual stores, where we make less than half of that on the same book, puts us in the “category of unacceptable profitability”. We have seen Angus & Robertson try this tactic before – about 12 years ago Angus & Robertson decided that unless we gave them a 50% discount, they would not buy from us any longer. We refused. Angus & Robertson desisted from buying from us for seven months. We survived, Angus & Robertson came back cap in hand.

We have seen Myer effectively eliminate smaller suppliers. We survived and prospered but look at the Myer Book Departments today.

We have seen David Jones decide that it had too many publishers to deal with and to exclude the smaller suppliers. We survived and prospered but look at the David Jones Book Departments today.

David Jones and Myer sell other goods; Angus & Robertson does not.

That the contents of your letter of 30 July are both immoral and unethical, I have no doubt. That they probably contravene the Trade Practices Act, I shall leave to the ACCC to determine. (Five percent interest PER DAY !!!)

If you wish to discuss any of the contents hereof you may call my secretary for an appointment at my office in Frenchs Forest. I shall be marginally more generous than you and at least allow you to pick a convenient time.

Michael Rakusin
Director
Tower Books Pty Ltd
Carpentaria, Alexis Wright : Winner of 50th Anniversary Miles Franklin Literary Prize, 2007

Copy: Graeme Samuel, Chairman, ACCC
Rod Walker, Chairman, ARW Group
Ian Draper, ARW Group Managing Director
Rickard Gardell, Managing Director, Pacific Equity Partners
Simon Pillar, Managing Director, Pacific Equity Partners
Barbara Cullen, CEO, ABA
Maree McCaskill, CEO, APA

It is the best-known, English-language suggestion sell. And it works. Every business can up-sell something to a customer who has their wallet open.  It’s just a matter of getting creative enough on your product or service offering.

I tend to favour the suggestion sell cost less than the original item. In the same way that the fries cost less than the hamburger. IT and consumer electronics retailers can sell extended warranties, consumables and accessories. Consultants can up-sell research seminars, subscriptions and evaluations.

This is different from promoting a special, time-limited extra as a call to action. The customer has already made a decision to purchase your product. The cost of acquiring the additional order is zero. It will never be cheaper to offer that customer another product. Seize the day.

If you’ve got a product or service that you can’t find a suggestion sell for, leave a comment and we’ll come up with a few ideas for you.

Now would you like to super-size your meal for only $1?

One of the key elements is avoid collecting useless data, and reward the collection of useful data that reinforces the corporate values, empowers the store managers and is an aid profitability through performance measurement.

Obviously the store managers are going to have a say in the KPI.

It is not fancy, it is not exactly beautiful.

It’s one of the best-kept online secrets (and worst-kept direct marketing secret). It is possible to be too well designed or professional. Especially if that award winning design eats most of your marketing budget.

Once, before I knew anything about search engines, online marketing, seo (search engine optimization), I let a business friend talk me into closing a website “better no website than an unprofessional website” he advised. This guy was a marketing professional whose clients were all the big end of town. Big mistake many years later I realised it was popular with our customer base and drive enquiries to our sales team.

Another anecdote. I was meeting with a client last Tuesday to finalise a web marketing campaign, One of his marketing team wanted input to the website I am designing for them. Specifically the objection was to precisely the elements I use to get the fantastic results my websites generate in so little time.

What sells online is whatever speaks to the target audience. Banks and finance companies are expected to have slick, modern award winning design.

Online marketing demands function over form. Once the website gets attention, then you can add pretty features. Make sure the function of the website is clear obvious!

Doctors use numbers to measure our overall and specific health, businesses have KPI’s. Webmasters, eTailers and eCommerce practioners live and die by their stats. But it’s amazing how many website owners ignore their stats.

Web logs get ignored until orders stop flowing

It’s a great quote, but it’s getting the cart before the horse. Logs give early warnings of problems and early pointers to success. Find out your strengths, weaknesses, opportunities and threats sooner than later. It’s always better to have time to plan a response before it becomes critical.

But logs in isolation are useless, we’re after trends. Your traffic should be moving in the right direction, and that traffic had better be relevant. There is not point in say 12,000 unique visitors if it’s all unrelated or marginal traffic.

And seeing how people are finding a website is as important as the bulk numbers. Is a pattern emerging for searchers? Are they looking for particular information or products that you provide, or can easily provide. If your product is on say page 18 of Google and people are willing to dig through 180 websites to find it, then look at improving your ranking, either through organic search improvement or sponsored placement.

Gratuitous plug. If you want to improve your natural placement in search engine results pages and want a consultant get in touch. You’ll be amazed at how high our techniques will get you.

Red Bull bought the (USA) Major League Soccer‘s New York MetroStars and renamed them New York Red Bulls. Steve Rubel at Micro Persuasion calls the renaming risky in When the Team is the Brand.

I think it’s a gutsy move from a company revolutionising the beverage business. Red Bull didn’t get where they are now by being timid. Let’s review the risks.

The team could lose… regularly. New Yorkers hate losers. The brand becomes associated with a pack of losers. But this is a World Cup year, soccer’s profile is huge. The Red Bulls could finish with the wooden spoon and the market impact would still be positive. Soccer is the most played team sport in America due to the number of kids playing it. The move shows long term commitment to the sport in one of the biggest media markets in the world. FIFA wants to grow the code’s popularity in the States and is going to spend money there.

The players could get involved in scandal. This isn’t the NBA, NRL or any of the European or South American leagues. The MLS is still not the big show in US sports. As such the stars are not treated as gods with the egos and behaviour to go with it. No individual players will consitently risk their future careers in Europe behaving like prima donnas on the road. Owning the team actually reduces the risk associated of individual player endorsements.

Pre- and post-season camps and road trips are a risk, especially with the sexual assault scandals rocking professional sports on all continents. Team owners in every sport are addressing these risks, team-wide scandals are not good for anybody’s business or career.

By owning the team rather than sponsoring it, Red Bull can’t use morals clauses to weasel out of sponsorship deals. No doubt all the players have morals clauses to limit the team risk. So if the deal goes bad Red Bull has to step in an fix it. The up side is the deal is all up side for Red Bull: they get a sporting brand to go with their existing extreme games sponsorships. As they build the brand they build their equity value for about the cost of a sponsorship deal.

There is the possibility that soccer in the States will remain a marginal sport. So the risk is MLS fails financially as a league. I don’t think Red Bull or FIFA are expecting it to knock the NBA, NFL or MLB of their pedestals anytime soon. It is a niche play to capitalise on the penetration of the sport. Plus as a European company, Austrian Red Bull would love to see soccer conquer the US market. Just like they imagine the day when they are the world’s #1 non-alcoholic beverage.

Great business.

Update I also forgot to mention the subliminal association of “New York Red Bulls” with “Chicago Bulls” who play in red and are one of the most recognised NBA franchises outside North America. English Premier League also has the Red Devils (a.k.a Manchester United) now owned by an American. Branding buzz all round.