There was a time, not too long ago, when some in legal and professional publishing would refer to their sector as offering “a license to print money”. The highest quality publishers were renowned for the wonderful reputations of their products and services, their market knowledge and intimacy, their relationships and engagement with their customers and, even though prices were high, compared to other forms of information publishing, they were trusted and supported by their markets. Obviously, customer service was always pretty terrible but that was a quaint characteristic which was recognised and accommodated, partly on grounds that true value was being added in other, perhaps more important ways.
Of those days, to my present minor embarrassment, I wrote:
The professional and other advisers who represent the primary customer base need the information in order to operate effectively and profitably. Their characteristics are high socio-economic status, good education, seniority of job function, strong purchasing power and ready accessibility in sales and marketing terms. These elements combine to define the overall attractiveness of professional information publishing for those with the skills to succeed in it.
(“Legal and Professional Publishing,” contribution to Book Publishing in Britain, J. Whitaker & Sons (1995) and Legal and Professional Publishing, Robert McKay, The Law Librarian, Vol..26, No. 4, December 1995)
Maybe it’s inevitable, not least because of the world economy in general but, maybe more significantly, because nothing stays the same, that the tide has turned and the reports are more gloomy, in the form of shrinkage and reduced margins. It is now unsurprising to see Reed Elsevier, owner of LexisNexis, on the defensive, stating a case to the market as to why it will not be broken up and the now interminable speculation about its likely future, latterly involving Bloomberg , while the latest rumours of an impending Thomson Reuters – Wolters Kluwer merger are equally predictable. It’s not the case everywhere, as there are stories of growth and optimism in particular quarters. Those publishers who have been in receipt of awards and honours of late, seem to be able to translate this to growth and profit. Being realistic on pricing probably helps too, and maybe Bloomsbury Professional’s recently launched online service at UK£195 shows an understanding of market trends and conditions.
One of the key requirements of being successful in any commercial venture, and stating the blindingly obvious, is the ability to find, reach, impress, communicate and trade with customers. Yet, when it comes to the sort of customers with whom professional publishers want to do business, among them librarians, information specialists, academics and practitioners, many of the obvious and arguably simple routes to market don’t seem to work well.
Take direct mail, once the basic form of product communication. As one senior executive told me recently, though I don’t necessarily believe him, that no marketing person below the age of forty would even think of wasting money in that way. Maybe it makes sense, though. Response rates, even in chasing existing customers for renewal purchases and business in general are pitiful and ever-declining, making expenditure in that direction often not cost-effective. Even lower rates are achieved by email campaigns but at least the minimal cost of mailing large numbers of addresses and coping with flawed data continues to make this an area of activity. Of course, there must be a problem that, with, say a 0.25% response rate, and a need to sell 1000 items or subscriptions, 400,000 names need to be mailed. Then the question must arise as to where in a discrete market is anyone going to find so many prospects. They simply don’t exist.
Tele-marketing is often worse. Is there anyone who wishes to be called by a sometimes unpleasant stranger, inevitably at the wrong time of day, to be sold something that is probably not required? The chances of success on cold-calling are extremely low, for all the obvious reasons and where the call is to an existing customer, perhaps to secure a renewal and solicit some new business at the same time, much skill and luck are required to get it just right.
Face-to-face selling, with a trusted sales representative visiting customers has all the right characteristics, combining superb salesmanship with customer care and the personal touch. Among the problems are high cost of retaining the resource, with all the on-costs but also the fact that one individual can only make a limited number of expensive visits a day and has to spend a great deal of down time arranging visits and travelling to clients. Therefore, unless each successful transaction carries substantial value, it has a tendency to add up to not very much. It’s only worth having face-to-face contact if the individual rewards are high.
Retail outlets and agencies of one kind and another are another channel increasingly impaired by changing customer habits, loss of margin to the publisher, remoteness from end-user customers and, except in relation to specialist intermediaries, a structural failure and disinclination to deal with subscription-based and electronic products, at least until quite recently.
So what is there? Many of the other marketing tactics employed seem to fall into a category of being seen to be doing something, are often unmeasurable/unmeasured and serve more in terms of creating awareness and driving potential customers to web sites, rather than with the purpose of achieving actual, on-the-spot sales. I understand the values of the likes of Google AdWords and suchlike but wonder how effective it is in professional, rather than consumer markets. Many people value Amazon for its efficiency, professionalism and technical wizardry but it addresses only certain parts of the market and its requirements. Likewise, gurus on conference circuits and, in fairness, many others, extol the virtues of social and business networks, YouTube, Twitter and other forms of viral marketing to get messages out to and indeed build target communities. If awareness and brand identification is the key step towards making sales, as in consumer markets, then all well and good.
However, when I look at professional publishers’ web sites, for the most part I don’t see evidence that much is changing, except to the extent that their products can be purchased or that the same content is available online. The focus seems to be very much on a reactive approach to customers, to the extent that the website is there, ready and waiting for the point at which the customer wants to consider a purchase, at which time an efficient and professional transaction can be undertaken.
Perhaps it is the case that marketing communication efforts that are intended to lead to sales are just not effective in middle markets where specific activities need to be undertaken to reach customers, as with direct mail to manageable targets, field sales teams, tele-sales and bookshop support. Maybe the only workable focus can be on the largest customers who rightly require and, because of their value, can receive personal, key account management to sustain and grow business from them. Then at the other end of the market, the small practitioners, their needs can be served by a reactive approach, so that, when they need something, they can search until the find it from one source or another, perhaps increasingly via Amazon.
I just have the impression that for many customers in the middle, perhaps the most important segments, not a great deal of effort is or can be spent, effectively, in reaching them and retaining their business. Perhaps this explains some of the difficulties in growing professional publishing businesses.
Sadly, the license to print money may have been shifted from the corporations to a handful of extremely lucky executives who could probably buy their own countries in which to do the printing. The recent news about the departure of Thomson Reuters’ chief executive, with his alleged $37.7m share, options and compensation deal, at the same time as the corporation’s share price has dropped by 36% over the previous six months or so, might indicate that the business priorities one might expect to see have gone adrift, hence the inclination, possibly, towards merger.