Rethink How You Do Everything: A Lesson From The National Trust

The National Trust: core transformation

The National Trust: reinventing core business

Confronting Change

Every business needs to confront change at some point along its cycle. Yet change isn’t simple and the fear of alienating core customers whilst trying to win new ones is a strategic dilemma that challenges every business and its leadership team.

No one gets out alive

Museums, charities, restaurants, pubs, hotels, attractions, clubs, broadcasters, cinemas, newspapers, magazines and book publishers (the list goes on), all need to align with new market forces in order to make their businesses emerge stronger and fitter in the future.

Tools

Managing change means managing a portfolio to ensure new and relevant products and services are being developed in time to satisfy emerging needs. The Boston Growth-Share Matrix helps us do that.

Relevance

The challenge for any business is being nimble enough and the danger is only doing what you’ve always done and expecting to satisfy new customers with new tastes by asking them to order from the old menu. They won’t enjoy their meal, they won’t come back and they won’t recommend.

Sign of the times

One conversation I’m hearing a lot in the media and publishing sector is the following:

“We want to find ways to make our business more engaging and lively online. If we do this, we can be more relevant and attract a more diverse audience of younger people who want to engage at a different level with our brand and help us grow. But our traditional customers don’t come for that. So, how can we find a way to be relevant to the new without alienating the old”

Audience development isn’t a series of concentric circles. You can’t start with the people you traditionally serve and build infinite circles of new customers outwards. Instead a business has to shift, and shifting means some people will leave as others join.

Customer segments

There’s no better way to understand this challenge than to sit down and analyse the personas that make up your existing and potential market. Good customer segmentation will help a business see whether it can reconcile the needs of an existing audience under one program or whether it needs to service each segment separately in order to grow and retain the traditional cash cows to ensure an effective and timely transition from old to new. It’s a juggling act that is not for the faint hearted. It’s also why change feels like the only constant: a business never stops changing and it needs to be one step ahead of the market to thrive. What is your business doing to stay ahead and thrive?

A lesson from the Trust

Although I’m writing about forces of change in the media industry,  I find it useful to view change and the way it is being implemented in other sectors. One current fascinating example is the UK’s National Trust.

The Trust has implemented a customer engagement strategy and is being savagely accused of ‘Disneyfication’. Its chairman, Sir Simon Jenkins, wants to make properties more accessible to the public by opening up roped-off areas, recreating historical scenes, lighting fires and getting rid of ‘do not touch’ signs that are the traditional demarcation lines of non-engagement in its 300 or more properties. His strategy is about making the customer experience more memorable and driving a higher level of engagement to provide a visitor experience that will help grow the Trust as an attraction and family outing and have new people visit more frequently whilst also encouraging their friends to join. Critics say this is ‘intellectual slumming’.

Rethink the way you do everything

But the Trust will have pondered the risks of alienating their 3.8 million core members long enough to know that the risks of inaction, and therefore not appealing to a new generation of consumers, is an even greater threat than change.

New initiatives, like giving velvet cloaks to visitors as they enter Hampton Court are, in the chief curator’s words, ‘for our very survival (…) we need to reach out to people who just aren’t interested in history.”

Naysayers complain that the “buildings are not meant to be welcoming”, calling the initiatives ‘infantile’, and accusing the Trust of ‘crossing the line into entertainment’ and being “patronising to the public.’

Parallels

Every business has a legacy. This is why I see parallels between the Trust and UK publishing. Like the Trust, UK publishing needs to trade a certain history for an uncertain future. Fear and habit make us protective of the core and, even if we know core customers are not likely to ensure long term viability and sustainability, we tend to hang on to them and allow them to run our businesses.

I’ve written about transformation before and practised it at many levels.

A solution for publishers might be to develop a “parallel” offer for new audiences instead of trying to entice them directly into the traditional “pipeline.” This is because square pegs don’t fit round holes and reaching new audiences usually works best with new approaches. If new approaches differ significantly from traditional practices, they may be more effective as standalone diversifications rather than extensions to the core.

Don’t change the core – re-invent it

The National Trust aren’t in fact choosing between one audience and the other. Instead they are leading a “parallel” strategy by offering participatory activities whilst preserving old labels and interpretative tools.  At some point the business will have to make a choice. It won’t always be able to afford to do the “and”. Effective portfolio management means juggling parallel offers long enough to get started with a new audience and, once you can show how this converts to sales, you will need to make informed decisions about divesting parts of the business that might no longer qualify as “core”.

Is your business trying to cut a new direction but having its efforts sabotaged by the old guard? If so, how are you handling the situation?

2 thoughts on “Rethink How You Do Everything: A Lesson From The National Trust

  1. stephen bateman Post author

    I have added comments posted by members of the TOC Special Interest Group Discussion Forum visible here http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=34014987&gid=104765&commentID=25963311&trk=view_disc

    Eliza Wing • Good thoughts Stephen… I am convinced though that if publishers truly embrace this change they will not necessarily need to jettison their traditional audience. Books can and ought to live in various formats. What publishers need to do NOW before others step in is experiment and quickly iterate. Cut what doesn’t work (quickly), move on, etc….that is the mindset that will help the media survive this disruption.

    Stephen Bateman • Thank you for commenting Eliza. In my experience every business relies on its core audience to keep the ship floating long enough to allow it to reposition. Reinventing the way we do business will inevitably take us in a new direction, with a new mindset and new ways of doing things.

    There is a risk that moving online too quickly to embrace an online community model will result in a degree of lost clientele, simply because the old guard would rather do business and interact offline in an environment that works for them and is easy for them but costly for the business. I am of course thinking of the marketing side (offline vs online). And there comes a point at which, due to a need to lower the cost of doing business, it becomes difficult being all things to all people and a choice needs to be made.

    I’ll take an example of a split audience: crafters. The hard core craft audience typically like their cross stitch patterns between two slices of cardboard and they spend generously to nourish their hobby but it’s not this audience that will build the future of the business because they are not being replaced.

    The future of the business relies on a younger, borderless and more international audience that is more technology friendly. The new audience consists of curious people who are online, searching, interacting, discovering and experimenting. They are influenced by trends and the things their community of friends like. Reaching this more casual and playful audience looking for inspiring hand made craft projects requires a very different marketing approach which is unlikely to focus on the traditional media channels in the way it used to. This is why marketing is shifting from push to pull.

    The question is how quickly and successfully can a business focused on craft (Compare Lark and O’Reilly) build an audience online that converts to sales (media neutral)? This will determine how many of your resources you can afford to re-allocate to this new development and what proportion you move off old product and channels. For some of the time, you will need to keep both going one alongside the other, long enough to afford the new channels to mature and blossom.

    Robert Forrester • Ultimate allegiance lies with authors who in the future will, like musical groups before them, reach their audience with the aid of new or revamped business models. These models will less and less be those offered by the overhead laden media titans.

    Most traditional publishers I would suggest are cooked. True they are in an unenviable position. Continue down the present path half-heartedly embracing e-books or switching completely to the close to zero publishing margins of the digital future? Either way it’s over. Just as in an earlier era manufacturers of steam shovels disappeared for failing to adapt to the rise of hydraulic excavators so too today most publishers will fail because they couldn’t adapt to a new reality.

    Demand for books to read (including p-books) just like the need for digging holes won’t go away it’s just the means employed to meet the demand that will change. So, the only real question remaining, as publishing margins spiral down to near zero, is how quickly the changeover to new models and platforms will happen. Publishers can create all the rationalizations they like but the fact is their business model is unsustainable.

    The readers of the tomorrow are our sons and daughters many of whom didn’t start consuming “books” until books came with an on button. Add to this their visceral dislike of DRM and the exploding availability of “torrented” books -back lists and all- and the future will be here probably faster than most of us even dare to contemplate.

    Stephen Bateman • Thank you for your thoughts Robert. I’m not sure that it’s quite “curtains” for publishers, although they do as I suggested earlier need to drive some big changes in operations. I sincerely believe that most publishers don’t have to go bust. As a matter of fact, I believe they have the means to turn the worst threats facing their businesses into their biggest opportunities, and here are some suggestions:

    1. They need to dominate their niches by establishing a position of authority in the very landscape the threat is emerging from – the Internet. The old proverb “If you can’t beat them, join them,” has never been truer.

    2. They need to aggregates the blogs, twitter streams, and news from relevant opinion leaders in their niche, and build a position of trust and authority in their area of speciality. This can all be automated at very low cost using platforms that literally supercharge content.

    When community lies at the heart of the organisation, there are four basic new revenue streams to focus on:

    3. Audience revenue drivers are a function of the audience size: purchase price and advertising or sponsorship revenue.

    4. Brand revenue drivers comprises brand extensions that can be implemented. Obvious examples include mobile applications, events and new products.

    5. Content revenue drivers shift the focus from the ‘normal’ consumer of any publisher, to explore the opportunities for supplying the asset to other stakeholders. Publishers can use their writers to create branded content commissioned by other companies, and books can be syndicated for other territories.

    6. Data revenue drivers are an invaluable asset for every publisher. This might be in the form of selling on marketing lists to interested brands, building insightful research from aggregate data, or selling through ancillary products to the current audience.

    Robert Forrester • I would agree Stephen that it doesn’t have to be curtains for publishers. However, history would suggest that in face of major technological upheaval legacy players will just not make the adaptations necessary to survive. The principal reason being that the changes necessary will require publishers embrace the new “communitarian” way of doing business, just as you suggest. The embrace will need to be full hearted and at the complete expense of the existing model. Problem is the new model, which in an of itself is inherently less lucrative, will, when fully in place, and with the price of books sinking to zero, totally destroy legacy publishers already precarious profitability My bet is they won’t adapt. They will stick with their ship, focusing ever more on their blockbusters and making a few half-hearted feints toward adopting the new model. This will work for a while so long as their stable of John Grishams are there to sell in the 2,000,000 range. But as time goes on their farm teams of new authors will continue withering. Eventually their steam shovel model will have sunk, swamped by the tsunami of hydraulic models already being developed. I would say time is close to having run out. Not fun to be a large publisher. Really is a rock and a hard place for them.

  2. stephen bateman Post author

    @physical therapy thank you for taking the time to read and for the positive feedback – it’s very encouraging and motivating to know I’m doing something right

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