A recent report by MIT Sloan Management Review and Deloitte found that nearly 90% of managers surveyed report that their industry is likely to be disrupted by digital technologies. Yet less than half of the managers report that their company is doing enough to prepare for this disruption.
When digital is a focus, it is most often at the surface level or what is often equated as the “presentation layer” that the customer sees.
A focus on the surface may create a few initial benefits in meeting prospect or customer expectations. But ultimately that focus is going to create great strain internally across operations, revenue management and client/customer servicing.
Transformation of an existing business model requires analysis of current operations and dependencies. What areas of the business are performing to expectations and forecasts? This acquired understanding must become the basis for creating a strategy that reflects transformation.It should be reasonable, given available personnel and financial resources. Also recognize that digital, digital products and digital services must be managed, curated and executed differently.
Simply applying digital at the surface to your traditional model is going most often to be disastrous.
There are a few ways, (if done properly and with a realistic strategy) that can help to transform a digital revenue and business model:
1) Create the “content machine”. A media company must focus first by evolving their editorial processes that lead to the creation of specialized content. As a contrast to print, digital content is living and breathing. It maintains a long tail in time and reach. Digital content must be continually curated, connected and leveraged to increase audience acquisition, grow relevance and recognize new digital revenue (new subscriptions or increased advertising revenue as practical outputs).
2) Become data and analytics oriented. “Gut decision-making” doesn’t move fast enough in today’s dynamically changing marketplace. As humans, we take a long time to process information and inputs. Sending a newsletter or magazine to a printer, seeing it land on a newsstand and hoping for new subscribers is a tactic of the old economy when things moved slower. Continuing those tactics and practices leaves you in peril.
Now there are more efficient and effective ways of curating and growing a circulation audience. Using the digital analytic and other data you have can give you immediate insights and intelligence. It will allow you to iterate, innovate and adapt quickly to changing customer preferences, competitor activity and changes in your audiences (unknown, new or known). Becoming data and analytics-oriented serves to identify data you have and data you could accumulate (or acquire) to build new digital products. Both aspects of a data and analytics orientation offer you the greatest opportunity to barrel forward in the digital marketplace.
3) You must recognize that many if not all of your traditional methods of management and execution must change and be considered through a new lens. This includes marketing, sales (lead generation particularly), audience development, accounting, capital investment and technology platform selection and implementation. Also consider your company culture and the expertise of your staff. These areas are often the most challenging to consider and surely are very challenging to change and evolve. They will be hard decisions requiring significant and important actions but cannot be forgotten or overlooked.
You cannot succeed without the right infrastructure.
Each element of the transformation towards a new digital revenue model requires making hard and realistic decisions. Time is of the essence and the market doesn’t have the patience to wait for you. Your competitors are moving forward. Take the hard look, identify your strategy and path– and get started.
Editor’s Note: Kevin Novak is a featured speaker at the 2017 Niche CEO Summit, June 21-22, in Washington D.C. He will provide several transformation cases, discuss the nuances, steps to take, and the challenges of digital transformation and new revenue/business model identification. Looking for more digital strategy and ideas? The Niche Digital Summit takes place September 25-27, in Chicago, and is 100% focused on driving online revenue for niche media businesses.
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More about author: Kevin Novak is the Founder and CEO of 2040 Digital, a full-service digital strategy firm. He also serves on the Board of Directors Executive Committee for the Business Information Association (BIA-Connectiv) representing B2B and B2C for profit and non-profit publishers. In addition, Kevin serves on The Board of Directors for the Business Press Education Foundation, and the Board of the Specialty Information Publisher’s Association, He is also serving as an adjunct faculty for the University of Maryland.
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