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Archive for the ‘Strategy’ Category

The Mag Nation Dilemma

Monday, June 15th, 2009

Mag Nation is constantly faced with a dilemma. We try to be different and non-commercial in the way we do things, and yet, the reason other companies are commercial is….well…. it is commercial!

Our website is a prime example of this. Increasingly we are using it to engage with you, our audience. We think our website is fun and perhaps a little quirky (eg the magdentifier as seen below). Yet ultimately, it needs to sell lots of magazine subscriptions, books, t-shirts and stationery items if it is to help us to survive.

the-magdentifier
Mag subscriptions have been growing rapidly, and we have high hopes that the other products making up “the third floor” will prove popular. However, we know that we still turnover less than 0.5% of the volume that the large online players do, despite the better service that we think we offer.

We can’t afford the mass brochure drops or tv advertising that they do, and we don’t have a team of 20 people dedicated to search engine optimization, affiliate marketing and all the other stuff that we have had to rapidly educate ourselves on.  All we have is our personality, and as much as Billy Joel loves us just the way we are (!?!?), personality doesn’t cut it in from a “hey we exist” perspective compared to a brochure hitting every physical mail box in Australia and New Zealand 3 times a year. Fewer than 1 in a 100 people in our home cities of Melbourne or Auckland have even heard of us, let alone the rest of Aus and NZ. So how do we build awareness of what we have to offer, without spending a fortune (that we don’t have) to “buy” awareness?

When we look at the other large online players, their sites are inundated with commercial offers. Buy a sub to magazine X and win a set of steak knives. Buy two subs at the same time and go into the running for a trip to the moon. You get the idea. As magazine purists, we tend not to care so much about the free gimmicks. That said, these other guys are probably a lot smarter than we are, and I’m pretty sure that they do it because it damn well works.

And so here we are back at our original dilemma (don’t you love it when the ramble of a blog post does a full circle?) Should we be more commercial to sell more subscriptions? We have given it a try… Currently if you subscribe to one of 6 different mags, you go into the running to win a free trip to Paris. Does this float your boat? If you are reading this blog, then you are obviously in the 1% who knows who we are. To generalise, you are more likely to be passionate about mags than the 99% who have never heard of us. Would this chance to go to Paris make you more likely to purchase something? Or does it stink of commercialism and turn you off?

Ok – too many damn questions. We have to walk a fine line and perhaps the trade-offs between commercial strategies that keep food on our table vs maintaining our personality and integrity don’t actually have to be trade-offs. Maybe the real answer is to keep doing what we have been doing – try lots of random, different things and those that work get put down to my genius while those that crash and burn were ideas that can be attributed to our Operations Manager!

Disclosure

Wednesday, June 10th, 2009

After only 3 entries on this blog so far, lots of people have made positive, encouraging comments, while many others have emailed or tweeted their support. However, the feedback has not been all one-dimensional. A few people have privately asked me why I am disclosing so much about the mag nation business, our strategy, our future fears and plans. They have questioned the wisdom of giving up competitive advantage and the element of surprise. The overarching theme of these conversations focuses around disclosing too much which in turn would allow a mag nation copy cat to set up in Sydney, Brisbane, Perth or Wellington before we can get there.

Our not so secret defensible asset is relationships. We probably know over 1,000 niche publishers, and this hasn’t happened overnight. We have taken years to build these relationships, and a new entrant into this space would find it very hard to replicate this in a short time. Its not that someone else couldn’t do the same thing, but it would take time.

So, I don’t mind “giving the game away” via this Blog. The big players in the industry can’t replicate what we have, and potential newcomers have to be aware of the blood, sweat and tears it requires to build trust and respect with so many small, passionate and retailer wary creative souls.

And that is where I want to end this entry. With a thank you to all of the small local and international publishers who have taken the time to get to know us and let us know you. To Mike, Kate, Eddie, Andrew J, Andrew L, Andrew M, Timba, Chris, Rob, Mel, Di, Martin, Becky, Amelia, Woody, Chris, Campbell, Liz, Jess, Lisa, Thierry, Marian, Fraser, Kyra, Grant, Rachael, Ian…. (ok – there is no way I can list all of you – you know who you are) – you guys are our competitive advantage.

Getting the strategy completely wrong

Sunday, May 31st, 2009

We thought our business was all about magazines. How wrong we were. This erroneous focus almost cost us our company.

When we raised capital for mag nation, our pitch was focus focus focus. We would be the magazine experts. The category killers. A disruptive force in a static industry.

It turns out that we have become all these things, but focusing on it cost us big. Our focus on product (sounds like a smart thing to do), led us to ask the wrong questions. Who likes magazines? Everyone does – men, women, sports nuts, fashion queens, petrol heads, stamp collectors, IT nerds, entrepreneurial dreamers… everyone. So where is everyone? Before we knew it, we had stores in crowded shopping malls as well as high street strip locations. Nightmare.

We gradually realized that our focus should be on our customers. Why didn’t any of you hit us on the head earlier? We can’t be everything to everyone. So, we took a look at which of our customers love us, and which of them were indifferent, and unsurprisingly, the love wasn’t coming from the malls. We couldn’t identify a common gender or age group, but there was a common trait amongst those engaging with us. So we came up with a term called “urban savvy”. This group of people transcends age brackets and professions, but focuses on an outlook on life. These were the people who were spreading the love. These were the people who really got what we were trying to do.

So, we simply asked these good folks what they liked about us and what they wanted from us. Revelation! Amazing rocket science stuff. Talk to your customers and ask what they want. In doing this, many of our assumptions were shattered. I have been quoted in the press saying mag nation will never sell stationery and that we are only about magazines. Who has egg on his face now?

Our core customers told us they also love design books, beautiful stationery, and niche designer t-shirts. They told us that they enjoy the mag nation atmosphere. They like the quirkiness of the brand. They like it when we talk to them. They are often as passionate about a particular magazine as we are about the magazine category. We share a bond.

So, our focus is now on our core urban savvy customer. We still welcome everybody (mag nation was built to be inclusive), but our principle has always been focus focus focus. We were just focusing on the wrong thing.

Hopefully we now have the strategy right. We are engaging. We have conversations on Twitter. We are listening and learning from you. Keep talking to us. We need you.