Last Updated Dec 15, 2010 11:47 AM EST
Sure, the recession was tough on my business. But I see much bigger challenges ahead.
We help companies minimize the costs of their corporate subscriptions -- some 500,000 different magazine and journal titles, plus databases from firms like IDC and Gartner. Before the recession, every year revenue grew about 25 percent. But in 2008 companies started slashing headcounts. We get paid per subscription, so when our clients lay off employees, our business takes a hit. In the first half of 2009 our sales were off 30 percent.
At the same time there are other changes impacting our business. For one thing, readers are increasingly shifting away from print subscriptions to electronic publications. We are moving with that change -- and, in fact, benefit from it. That's because our customer service costs are lower for managing online subscriptions due mainly to the fact that the delivery is so reliable. With print you have weather, missed deliveries -- a whole variety of things that can go wrong that we need to address on any given day.
The bottom line: We were under a lot of pressure as our business customers cut back and we had to adapt. That meant coming up with new products for the U.S. while at the same time going after faster growing global markets.
Diving into new markets
At an industry networking event in early 2009, I met someone who specializes in programs that help magazine publishers manage the trial offers they use to attract subscribers. Our conversation gave me the idea for a new line of business. Later that year, we launched a partnership program that links retailers and magazine publishers.
Through this initiative we create a variety of programs to help those online retailers drive sales. In some cases, customers may balk at online shipping charges so our program offers consumers who pay for shipping on an item a complimentary one-year subscription to one of 15 different magazines -- a bonus that essentially offsets that shipping charge. Another program offers a complimentary magazine subscription to consumers who spend at least $30 at certain online stores. In this case the offer helps those retailers increase the average purchase consumers make on their site. Under these partnerships we get compensated a bit by the publisher and by the retailer.
These programs are an entirely new market for us, and my business partners were concerned that we would be taking our eye off the ball in our core business. But I argued that we had no choice -- we have to keep reinventing ourselves.
And even with the shift away from print, publishers will continue to look for ways to generate print trials because that builds brand awareness and ultimately drives growth in the online side of the business. Together, these efforts really helped boost sales in the second half of 2009. As a result, we actually ended the year about even with 2008 -- a significant victory, considering the state of the overall economy. And this year sales will be up nearly 25 percent, to $12 million.
Investing in talent
I've also been paying more attention than ever to upgrading our talent. In the second half of 2009 I hired a business development person who had left one of our competitors. He called me and, frankly, I wasn't planning to hire someone for that position. But he is so talented I decided it was an opportunity I couldn't pass up.
Given all the pressures on our business it wasn't an easy decision to hire a new high-level executive. But it was a smart investment. He helped us focus on tapping overseas markets, something we had not really done before.
There are some big, fundamental shifts going on in the global economy that have nothing to do with the recession -- the most significant of which is the rise of new economic powers, particularly China and India. It creates new competition, but also potential new customers. I knew we couldn't afford to stay isolated. At the same time I was reading about a likely permanent shift downward in consumer spending here in the U.S. -- another reason to look abroad for growth.
My new business development director helped to develop a strategic alliance -- scheduled to launch in the second quarter of 2011 -- that will allow us to manage print and online subscriptions to U.S. publications for Asian companies. If this works in Asia, we can replicate this in other parts of the world. Ultimately, more than a quarter of our new business could come from partnerships outside the U.S.
As a result of this new world order, I've asked my 15 employees to report back to me on what they are hearing from clients. What do they need? What are they doing differently that could affect our business?
At the same time, I'm spending more time traveling to meet with clients. Before the recession, I might have been on the road a quarter of the time. Now I spend half my time traveling. Our clients' budgets have been cut, so they can't stop by to see me like they used to. And I think you need to keep that personal connection with your customers. It is much harder to cut ties with someone you know than it is to cut off some nameless, faceless individual.
I really try not to run my business from my comfort zone. As an entrepreneur you need to watch what's coming -- and you have to be brave. You need to ask yourself, how can I ride this wave? Otherwise you'll find the wave is actually a tsunami -- and it will drown you.
A school teacher and assistant principal before starting her own business, Julie Sue Auslander tries to squeeze in her passions for yoga, skiing and family whether she is on the road or at home.
-- As told to Amy Barrett