I paid $22.99 for a magazine yesterday. Not a magazine subscription; a single issue of a magazine. The magazine is called Magneto, and it is (big surprise for those who know me) a car magazine. But it’s not just any car magazine. It’s perhaps the finest magazine focusing on rare and exotic vintage cars, and the racing thereof, that I’ve ever seen. And in the fact that I paid nearly 23 bucks for it is a sales lesson that’s very timely and very applicable in how to compete with online vendors.
You see, I’m passionate about car magazines. I love them. I love reading them, and I spent over ten years writing for them as a freelancer. In fact, I wrote over 300 articles for them, and one of my stories was nominated for a National Motorsports Press Association award. I was good at it and I loved it, although it was never more than a side gig. I quit writing for them in about 2008, when two things happened – first, my business as The Sales Navigator started occupying all my professional time. And second, the magazine business itself was in a decline. Magazines got thinner in both page count and paper quality, the amount of space allotted to editorial content went down, and there was less of a demand for the in-depth analytical articles I liked to write. And, full disclosure, the magazines were paying less. It felt like a race to the bottom. That was one race I had no interest in.
Fast forward to 2020. Most of the magazines I used to write for (Circle Track, Stock Car Racing, Street Rodder, Rod & Custom, Racing Milestones, and many others) are gone. History. In fact, the largest publisher of car magazines shut down 19 titles last year. The few that they have left are a shadow of what they once were. Even Hot Rod, the magazine that arguably started the car magazine industry, is a shadow of what it was just fifteen years ago. The reason is simple – the level of content and photography that those magazines used to provide is now widely available on dozens of websites, for free or very inexpensively. Those titles attempted to continually cheapen their product to try to make the numbers work in the face of Internet competition – and they lost. (Is any of this starting to ring a bell yet in your business?)
So, you’d expect that when I go into my local Barnes & Noble, the magazine rack would be barren, right? Nope. The space once taken by thin, low-quality magazines is now occupied by high-end magazines. Magazines like Magneto, Rodder’s Journal, and many, many other titles that, on a per-copy basis, go for double or triple the price of the magazines they replaced. And yet, people buy them. Why?
Because those magazines are incredibly high-quality in all phases. The editorial content is the best, period. The cars covered are unusual and important, and the stories told are complete and interesting, and not just a list of specifications and dates. The photography is high-end, done either in studio or on location by the best photographers, in the best lighting, with the best equipment and the best editing software. Advertisements are present but don’t dominate the magazines. And these magazines are BIG. My new issue of Magneto is 178 pages of automotive goodness, and it’s produced on very heavy paper and cover stock, most resembling a paperbound book. In fact, some people refer to these as “bookazines” or “coffee table magazines.” Are they successful? Many of these magazines are all out of back issues for purchase, so I’d say that, yes, they are.
These magazines are successful because they don’t attempt to compete with cheap online vendors. They have picked out a niche, they are doing that niche better than anyone else, and they have created an economic structure (the amounts they pay for writing and photography) that the Internet simply can’t match. Do they sell as many copies as, say, Motor Trend? Probably not – but they make the economics work very well for them, and have figured out how to compete with online vendors.
Take a look at your business. At least once per week, someone asks me, “Troy, how can I possibly compete with cheaper online vendors like Amazon?” My answer is, “You probably can’t – especially if you’re trying to do it the same way.” Cheap online vendors aren’t a fad – they are here to stay. But there is still a high demand for a higher-service, higher-contact, higher-quality business model. Here are five quick ideas to help you compete, and win, against pure online vendors:
- Establish two-tiered pricing. Some of you CAN compete with Amazon on pricing – IF you do business the Amazon way. With Amazon, everything is automated and there is no personal customer service involvement whatsoever. If you’re selling a more commoditized product (for instance, reams of copier paper) and can make money at that pricing level as long as no personal service is involved, consider allowing your customers to buy at that price point IF and only if they are willing to buy with the same no-personal-service model. But when they need personal service – even if it’s a phone call – they get a different and higher price point.
- Do it better. Let’s be honest – Amazon doesn’t thrive off high-end products. Their biggest niche is in the low-end, cheapest possible, products. Look at the Magneto solution; sell products that are so good they nearly require the buyer to have a more personalized experience (and the higher price point to go with it).
- Know your customer. One big edge you should have is this: Your salespeople SHOULD know your customers better than any online vendor ever could. That SHOULD be because they consistently question and update their knowledge. It’s an unfortunate truth that too many salespeople don’t ask questions and don’t know much about the customer (good sales training should focus on questioning as a primary skill) – and those salespeople then wonder why they lose business. Not only should you be asking lots of business-related questions early on, you should be updating your knowledge of those issues every six months or so. Your business changes, and so does your customer.
- Focus on helping your customer run his/her business better. This is related to the previous point – what do you do to truly help your customers run their businesses better that isn’t tied to a check? For instance, do you refer business to your customers? Even better, do you put customers together who could do business together?
- Create an experience. I often pick on the car business, and for good reason – I sold cars at the start of my career. As part of my education, I read a book called Customers For Life, by Carl Sewell, the owner of Sewell Cadillac in Dallas. He talked about making a visit to Sewell an experience. When salespeople greeted customers, they didn’t race each other to get to the door and they didn’t immediately ask them about buying a car. Instead, they welcomed them and opened by offering them a cup of (good) coffee, a glass of wine, or a soda (I visited the dealership several years ago, and they really do this). They created an experience out of a visit to Sewell – and they sold an awful lot of Caddys.
There are, of course, numerous other ways to compete with the Internet vendors, but this is a start. The key is to not try to be Amazon. One of my favorite sayings (and as far as I know, it’s my own) is: “You can’t beat your competition if you’re trying to be your competition.” Magneto and their counterparts have figured that out, and that’s why they’re successful. You can be, too.