How not to deal with current business problems

I believe an email I recently sent to a French business (an ex-pat publication that emailed me to announce a sudden 25% increase in its standard subscription rates) has application and advice applicable to many businesses in the current economic climate.

When faced with business downturn, financial woes, lack of funding for growth or any business problem too many businesses reach for the closest tool to hand. Very often the use of that tool ends up in disaster – the business might as well have shut its doors and saved the effort it wasted. It’s not only the law of unintended consequences that busineses fail to consider – it’s the very simple law of inevitable consequences.

There are better ways of dealing with business problems – of all stripes and colours and no matter what the cause than crudely grabbing and deploying the closest, simplest tool.

One of my most valuable guiding principles throughout my career is that every problem is an opportunity in disguise. Consider that an old, well-worn cliché if you will – but its a principle that has worked for me over and over again and one I can’t think has ever let me down.

In the current climate businesses everywhere are facing collapsing supply chains, lack of loan or investment capital, changing customer demands and patterns – all alongside the ever-present demands brought by emerging technologies.

Whatever the problem is, there is nothing to be gained from sitting “inside the box” staring at the walls of the business and trying to find an answer using whatever happens to be at hand. Just do the same – just more of it. Crudest possible example – we need more money … so raise prices.

Any actual, worthwhile answer will be outside the box of the business and will only be found through use of innovative and creative thinking – which often requires that far too often ignored opportunity – to stand far back, go back the very roots of the business and ask some dumb sounding (but actually very profound and pertinent) questions – such as

• What does my business do?
• What product, service AND value does it provide?
• Who are its customers? (eg; in the case of this publication they are completely missing customer groups crying out to be organised into groups of valuable recurring advertising revenue)
• … (here are the killers) How well is the business DOING at PROVIDING its products or services to the HIGHEST POSSIBLE QUALITY using the BEST TECHNOLOGY to DELIVER THE GREATEST VALUE to THE BROADEST RANGE OF CUSTOMERS?

Anyone who can answer the last question genuinely and truthfully well needn’t read the rest of this article.

As an aside, anyone who knows me will tell tales all night long about my mantra that all technology is enabling technology. “Enabling” is a double-edged sword – the nuclear fusion that enables “clean” energy equally enables the destructive power of the nuclear bomb. The growth of on-line propagation of news (and the hideous, privacy invading advertising and marketing industry that makes it all appear free) can be seen as enabling the destruction of centuries old print publications – OR – a huge opportunity enabling a publishing business to serve its customers BETTER.

So, without further ado, here is my email to ??? …

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Sirs,

I write out of concern for your publication and your business.

My wife and I find your publication useful and would not like to see it disappear.

Yet I fear that if you pursue your announced path it will disappear – and quite soon too.

I am NOT seeking work (so please don’t offer any) and free advice is often worth only what it cost.

Maybe read this email as “feedback” or “opinion” and proceed from there.

I read your email announcing subscription price increases with dismay. Why?

1. You say you have “invested heavily in improvements to the design and usability of our website so that you are able to access the information you need faster and easier.” False statement. True statement is that I have seen no significant improvements and your website remains as poorly designed, technologically outdated and difficult to use as it was six years ago (kindly note those letters FBCS after my name designating me as someone very well qualified to comment on IT and web matters)
2. You say your number of subscribers has increased significantly. You must therefore be receiving significantly more income, hence I will not be alone in asking why you assert a “need” to increase prices other than opportunistic greed. I do hope you find that viewpoint contentious as I am trying throughout to get you to see another, in my opinion more relevant, point of view (kindly note the letters FIoD after my name designating me as someone very well qualified to comment on business matters)
3. You say you have “added an e-Paper version of your monthly print edition so that all subscribers are able to read it at any time, on any device” – in effect you are doing no more than adding the PDF file you send to the printers to your website and allowing it to be downloaded – if that is not what you have done then more fool you. Your promises of investing to make it more readable across “more devices” (presumably phones with small screens – and navigation and presentation of adverts could really do with a change)  requires little more than a change in file format in order to make use of today’s technology (e-readers or screen readers) rather than yesterday’s static PDFs.
4. You make vague statements about “future investments”. It is not the role of your customers to finance your business’ future investment needs – that must come from built-up reserves, increases in other income or normal business finance routes.

Your stated subscription increase equates to a 25% increase across the board. You say you have not increased prices since autumn 2018.

Your announced price increase is over 20 times the mean inflation rate in France since autumn 2018 and over 52 times the most recent annual inflation rate – the one your paying customers will have in mind when assessing your price hike. (source: https://www.rateinflation.com/inflation-rate/france-inflation-rate/)

You cannot – in any sensible business scenario – demand a (very sudden – you emailed only last week soliciting views on subscription rates) 25% hike in the price of your product. No business in my decades of experience has ever managed to impose such a large increase in its product pricing during a period of low inflation without losing large numbers of customers. I know of no business that has tried and survived. The likely outcome of your decision is that your income will FALL as you lose more subscribers than you will gain in income. Simple maths – you do not have to lose 25% of your subscribers to wipe out any gain from a 25% price increase.

You cite Brexit and Covid as drivers of your increased subscribers. Both are rapidly becoming yesterday’s news – I can get all the Brexit information I want or need for free from a dozen different sources (all quicker and more up-to-date than your publication) starting with the relevant government websites and including dozens of free, on-line publications. Covid will shortly be a non-story – and even if you disagree with that statement it is possible again to obtain more accurate and timely Covid information from other sources – so easy it is difficult to avoid the stream of “news”.

I understand that the printed news industry is facing difficult times. The ever onward march of technology has forced the end of many industries- during my long career I have watched them go. You will have as much success as King Canute in turning back the tide of technological progress.

The printed news industry is hardly the first to be killed off. Every printed newspaper on the planet is facing the same difficulties and all the ones that are disappearing or have already gone have either put all or their most valuable content behind paywalls (hint: nobody pays) as you have done or (eg; Guardian, Independent, New York Times) place appeals to support quality, independent journalism – which usually results in a cascade of further begging emails if you do provide financial support.

But … IMHO you should seek innovative solutions to your problems rather than try to relieve your woes by imposing pain on your customers for the latter course only leads to the demise of your business. It is entirely possible to fund a business such as yours without invading people’s privacy, using tracking technologies (as you have started to do) or anything else that is about to be killed off if it doesn’t become plain illegal first.

Personally I would start by asking yourself what service and value your business actually provides (not a stupid question and not one that has a simple or trite answer). THEN plan to USE new technologies to most effectively deliver that SERVICE to your customers in the process maximising the VALUE you deliver while retaining the income stream necessary from both readers AND advertisers or other income streams.

You sit between two principal income streams: readers and advertisers. Your challenge is to maximise income from both streams.

Provide a truly superb SERVICE and maximise VALUE to all and your problem is solved.

The way to do that is to take a long, hard look at your business, understand what it does and why it deserves to survive then set about delivering superb service and value to both sets of income providers while simultaneously reducing your costs (no, I’m not suggesting you slash your wage bill or solicit “free” content – that’s just despicable and a short-sighted even quicker way to lose readers).

Make those improvements and you find a lasting solution.

Do as you propose and I’ll be sorry to see your publication join the long list of journals that have disappeared.

I am proposing no solutions as I am not (and have no desire to become) your paid consultant and you must find your own way through what you probably perceive as a maze but is actually a simple straight line from A to B. Instead I offer advice on how you find that line. Far more valuable, in my experience.

FWIW, free advice.

Kind regards,

PS – I humbly suggest you stop telling your paying customers about all the good and valuable things you have done for them and start ASKING and LISTENING to their opinions of the service and product you supply. One way leads to doom, the other to business improvement and financial gain.

PPS – I will be publishing an anonymised version of this email on my business blog as many businesses are currently facing similar problems to you and must learn to step back and look at their problems with fresh eyes rather than reaching for the closest hammer and walloping their business into extinction.