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  1. 1. David ShepherdContent and Platform Director, XpertHRReed Business InformationDavid Shepherd is Content and Platform Director at XpertHR, the online legalcompliance toolkit and data service for human resources professionals and smallbusinesses published by Reed Business Information. David was launch editor ofXpertHR in 2002 and has helped it grow rapidly into the leading onlinesubscription service in its market. His previous career included stints at IRS, nowpart of the XpertHR Group, and Incomes Data Services, now part of ThomsonReuters.david.shepherd@rbi.co.ukwww.xperthr.co.ukwww.xperthr.comwww.xperthr.nlwww.personneltoday.comwww.twitter.com/xperthrImages in this presentation are from iStockphoto.com unless otherwise specified. 1
  2. 2. Follow me @oldshep, my most prolific tweeting colleague @mjcarty and the mainXpertHR Group profiles @xperthr, @tribunalwatch, @payintelligence and@personneltoday. 2
  3. 3. Many publishers in both consumer and b2b are looking to charge for online services thatwere previously free, typically websites that were seen as a “value add” or brandextension of a print product but are now in search of a more sustainable “user pays”business model.By contrast, my product, XpertHR, was an exclusively paid service when it was launched10 years ago in 2002, and has spent the past five or six years moving in the oppositedirection, opening up to search engines and visitors and finding new ways to engagewith non-paying users – without dropping the paid subscription model.I’m assuming that most people here today fall in to the former group, so why should yoube interested in our experience? After all, we are travelling in opposite directions.The answer is that the most effective “user pays” online business models are not basedon charging for everything of value but on achieving the best balance between free andpaid. 3
  4. 4. Introducing XpertHR...• Launched 2002• A subscription service for HR professionals• Regulatory compliance, best practices and benchmarking• Rapid growth in market share at expense of competitors• Double digit growth and very high renewal rates• Benchmarking data service and salary surveys added 2009/10• Liveflo workflow application launched November 2010• XpertHR International launched December 2010• XpertHR NL launched January 2011• XpertHR US launching 2012 4
  5. 5. When we launched XpertHR it was a paid subscription service, with all content availableto paying subscribers only.The implicit message to visitors who somehow found their way to the website was“keep out, this is for subscribers only”. The only options offered to non-subscribers were“buy now” or “book a demo”.This didn’t stop us from selling subscriptions and building the business very rapidly atthe expense of our competitors, because the product itself was demonstrably superior.But it did mean that the marketing and sales methods we used were of necessity old-school and offline, albeit executed highly effectively.To sum it up, we had a digital product delivered by an analogue business. Or, to put itanother way, we were “on the web but not of the web”. We were not taking advantageof the marketing and sales opportunities that come from being a web-based product.Taking advantage of those opportunities requires one thing above all: opening up theservice to allow – indeed encourage – engagement with non-paying users, akaprospective customers. 5
  6. 6. So we embarked on a major programme of opening up and, in effect, joining the web onits own terms. This is work in progress for us, but so far has involved:• A complete site redesign in 2006 (and there’s another one on the way).• Opening up categories of content for free access.• Search engine optimisation, including deep structural changes to retrofit SEO to oursystem.• Ensuring a free segment of all content items is in front of the subscription barrier andhence available for indexing by search engines.• Launch of a blog, Employment Intelligence, followed two years later with the launchof two breakaway niche blogs, Tribunal Watch and Pay Intelligence.• Use of the blogs to engage with HR and employment law blogging communities onboth sides of the Atlantic.• Building a social media presence via the content team (not the marketing team),especially through Twitter and the HR blogosphere.• Working with our free-to-air community site www.personneltoday.com to drivetraffic .This transformation has had many benefits, but for the purpose of today’s presentation,the key one is that is has helped us, as an online subscription service, to match ourselling process more closely to our customers’ buying process. 6
  7. 7. To make the web a place where you can do business as well as a medium through whichyou deliver your product, you need to match your selling process to your customers’buying process.It is hard to achieve this by putting everything of value behind a paid subscriptionbarrier, or by expecting the first point of contact to be a completed “subscribe now”form or a request for a salesperson-led product demonstration.That just isn’t how most of us make buying decisions. It is asking too much, too soon,before the prospective customer has had a chance to take the steps that feel naturalbefore making a decision.If you want to use your website as a selling medium, why not think of it as a shop? I’mnot thinking here so much about retailers’ websites, which are in a different categoryfrom information and data services, but more about the ways retailers match theiroffline selling process to their customers’ buying process.We can learn much about buying and selling from the world of retail. 7
  8. 8. They invite you inside and make you feel welcome.They display their wares attractively and encourage you to pick them up and inspectthem or try them on.They make you feel that you’re in charge and everything is laid out for your convenience.They give you the sense that, as a customer, you have the power and you make all thedecisions. 8
  9. 9. The best shops go even further.This is Whole Foods Market, Stoke Newington Church Street, London on Saturday 11February 2012 (my photo).On that day they had two tables of produce that customers could try for themselves. Aswell as the cheeses, pictured, there was a table with oatcakes near the biscuit shelves.Personally, I would have liked the cheese and biscuits tables closer together, andperhaps another table nearby with small shots of an appropriate wine, but you can’thave everything.At this store they always have tables of produce that shoppers can try for free. It looksfriendly, inviting, confident.People love to try before they buy.It’s a great example of matching selling process to buying process.(I go to that shop most Saturdays. The only downside is how crowded it gets – but Idon’t suppose the owners see that as a problem.) 9
  10. 10. If the retail analogy hasn’t convinced you about the importance of matching buying andselling processes, I’d like to offer another one.I find the dating analogy is also a useful way of looking at these issues.Jim Morrison could get away with a declaration of love to a stranger – but he was theoriginal dionysian rock god. He could also get away with shoulder length hair, a barechest and tight leather trousers, but I don’t recommend this as a fashion look for mostmen.For us mere mortals, telling a stranger you love them before you know their name feelswrong, not in tune with the way lasting relationships evolve.But isn’t this the same as asking a first-time visitor to a website to fill in a form tosubscribe now or request a salesperson-led demonstration? That’s the equivalent ofpopping the question on five minutes’ acquaintance: rather inappropriate.Whatever happened to getting to know each other? 10
  11. 11. How about a coffee? Let’s take this a step at a time. Get to know each other. Nocommitments beyond an hour or two in a cafe. If we want to meet again, we will. If not,we won’t. Who knows what may happen, or may not happen?What’s the online publishing equivalent of this kind of first date? It could be:• consuming some free content on the website,• downloading a white paper, video or podcast,• following the brand or one of its representatives on Twitter,• subscribing to an email newsletter, or• registering for free credits to view subscription content.But whatever else it is, it will typically be free, without any major commitments, andvery, very easy to do.Where there is a transaction, it is typically not financial but involves the user providingsome personal data (name, email etc) and a willingness to receive marketingcommunications in exchange for access to content or parts of the service.Thus as publishers we provide a more human and natural way for users to get to knowus better. But importantly, we also gain the ability to get to know them better – allowingthe relationship to develop in a more natural way. 11
  12. 12. So far we have looked at one half of the equation: providing opportunities forprospective customers to get to know us better. The other half is just as important: howwe get know our prospective customers better. Of course, as we might expect from thedating analogy, these two sides of the equation are very closely connected.We can find out much directly and indirectly from social media conversations anddebates. But we have also put in place tools, such as Eloqua, to enable what in thejargon is sometimes called “closed loop marketing” but which at RBI we tend to refer toas lead nurturing.By offering a range of free options for visitors to sign up to and use, we can:• discover user interests and preferences,• refine messages and content based on this knowledge,• generate deeper user engagement,• gain even more knowledge of the user,• refine again, and ...• … and so on, in a virtuous circle (or “closed loop”).This approach is enormously powerful and we are getting great results. 12
  13. 13. A “closed loop” process could being with a campaign, such as this one, to get users tosign up and download a single piece of content, in this real-life example a model policyon personal relationships at work.We have had much success with these. But there is an inherent weakness. Suchcampaigns are based on offering users a single piece of content to download. What ifthe user is not interested in this topic at this time?It is much more powerful to offer people a choice – just like Whole Foods Market offersa choice. 13
  14. 14. If someone were to offer you a strawberry cream or nothing, it may be the perfectchoice or a useless one. Personally I can’t stand them. So much better to be offered thebox and allowed to choose.The same applies to sample resources offered by subscription websites. Why not let theuser choose for themselves?Better to offer a choice of several white papers or other resources on a variety of topicsthan to offer just one white paper.But even better than that to offer metered access to the entire service, or large parts ofit, so people can really make an informed judgment on whether or not what you offersuits their needs, by viewing X items of their choice, out of thousands, for free.Does this latter approach open up the prospect of “freeloaders”, coming back for thegood free stuff but never subscribing? I don’t that’s a helpful way of looking at it,especially in a b2b context – and I dislike the word freeloaders almost as much as Idislike the paywall metaphor to describe paid online services. 14
  15. 15. By providing valuable resources for free, it is entirely possible that you will attract manyusers who consume the free stuff but do not go on to subscribe to the full paid service.They keep going round the free loop.This is not a problem. These are people who like you, they like what you do and theykeep coming back and consuming what you make available for free. In dating terms,they want to be friends but they may not be ready for a relationship.Is it good to have friends? Better than not having friends. So best not call them nastynames like “freeloader”.This is especially the case in a b2b context when the decision to buy may not rest withthe individual user. The user may want to be more than just friends but, to take thingsfurther, they need their boss to sign the cheque.Far from being a “freeloader” such a person may be your brand ambassador, lobbying onyour behalf with the powers that be in their organisation, going round the free loopwhile waiting for the day they can branch off towards your paid services. 15
  16. 16. This example illustrates the point.I have doctored this tweet to alter the details. There is no Twitter user called HR_Person,or at least there wasn’t at the time I made this illustration.But there was a real XpertHR user last year who tweeted her distress at her companynot renewing its subscription. She later tweeted that she had a cunning plan to get thesub reinstated. And a little while later she tweeted that she had been successful.Fantastic.Of course we absolutely love this kind of commitment from our users. And while wewould soon go out of business if we gave our product away, we have every interest inproviding as many touch points and means of engagement as possible for users who, forwhatever reason, do not currently enjoy the benefits of a paid subscription.So how does this picture of the reality of growing an online subscription service fit withthe metaphor of a product behind a “paywall”? Not very well, in my opinion.Can I ask you to visualise what the image of a wall means to you? 16
  17. 17. Walls are bad. 17
  18. 18. All in all, walls are bad.(Especially metaphorical ones.) 18
  19. 19. Smashing down walls with a sledgehammer is good.So can we come up with a better metaphor than “paywall” for the business modelbehind our paid online services?I’m going to have a go. But before that I’d like to take a step back and think about exactlywhat it is that we are asking customers to pay for. 19
  20. 20. Are we simply asking customers to “pay for content”?There is some truth in this, but it is no longer the whole story – and never has been forXpertHR. Increasingly we are selling functionality too. The medium through which thecontent is delivered is a key part of the value.What’s interesting is that, as you step up the value chain, the functionality becomes anever more important part of the proposition.At the top of the value chain, at least for our kind of b2b information and data product,is integration into the end user’s workflow. And this is an area where content is not king,or at least, if it is still king, enjoys a kind of joint and equal reign with QueenFunctionality.Thinking about different value delivered by different kinds of information, data servicesand functionality leads to a more nuanced view beyond a simple binary distinctionbetween free and paid. 20
  21. 21. Here I have defined five value steps for an online information and data service.Broadly speaking, the higher the step the more value is being delivered to the customer.The next view translates the descriptions to content types. 21
  22. 22. This particular schema works for the HR market and for other regulatory markets, but itis not universally applicable.News is relatively low value in our market and tends to be free. But in other markets,actionable news has great value, especially when delivered very quickly and used toinform pricing and trading decisions.But the principle is the same everywhere: different elements of our online productsdeliver different amounts of value to our customers and entail different costs, and henceshould be priced accordingly.The hill-walking image is a little abstract, so I have also created a more literal illustrationof how the schema could translate into payment options online. 22
  23. 23. I created this imaginary matrix as it might appear on a website. It shows the five contenttypes corresponding to the five value steps illustrated in the previous slide.The “free” column denotes open access but registration may also be free or available ata lower price point involving free or paid credits, for example.Whatever the details, the key point is that options are presented to the user with pricingcorresponding to value – from free to fee. There’s something there for everyone and thechoice is theirs to make.I do not think it appropriate to describe this as a paywall. On the other hand I acceptthat “pay matrix” isn’t going to catch on, so how about ... 23
  24. 24. Emphasising the wall focuses attention on what keeps people out.Emphasising the gateway focuses attention on what lets people in. 24
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