subject: Reinventing Your Business [print this page] Reinventing Your Business Reinventing Your Business
We all know that the internet evolves at an incredible rate. One of the biggest challenges for an affiliate marketer or anyone with an online business is successfully adapting to all of these changes and leveraging them to grow their businesses. For many companies, this means adjusting to selling online vs. in a store and finding ways to connect with customers in a new environment. For affiliates, it may mean learning out how to utilize new marketing platforms, focusing on different verticals, or leveraging new technology. To have a long-term, successful online business, you have to be ready to adjust to and take advantage of new developments as they happen (or before they happen). This means that over time you may actually have to reinvent your business if you plan to remain successful and continue to grow. If you have been in the affiliate marketing industry for a few years, chances are pretty good that you can already look back and see that your business has changed quite a bit from when you began. But, for many companies, making these kinds of changes is easier said than done.
Netflix vs. Blockbuster
Let's look at two companies in the same industry who have clearly taken different paths to adapting to changes brought on by the Internet with very different outcomes. Netflix and Blockbuster both built their businesses in the offline world. Each was focused on providing consumers with the ability to rent movies on DVD (and other physical media) to watch at home. The main difference was that Netflix would send customers those movies in the mail while Blockbuster would have them available for you at one of their brick and mortar stores. Netflix worked on an all-you-can-watch subscription model, while Blockbuster charged customers a fee for each individual movie they rented.
As the Internet (especially broadband) has grown, it has become possible for a growing number of users to download movies or stream them on their home PC. As more and more consumers look to access content online, the DVD rental business has suffered. Why go to the video store or wait for a DVD in the mail when you can simply download a new movie from the Internet or from your cable/satellite provider? No doubt, executives at both companies saw this coming and realized that their current DVD rental-based business models were destined to fall off dramatically in the years ahead. The question was how to reinvent their businesses to move from delivering physical products to providing access to digital products online. Over the past few years, each company has taken its own path toward adapting to these changes.
Last week, Netflix reported better than 25% growth year over year (Q3 2010 over Q3 2009) with over 2 million new subscribers signed up in Q3 of this year and sales of $550million for the quarter. They still offer their physical DVD subscription option, but are delivering more and more content to subscribers online. This allows them to accommodate their legacy customers who still prefer receiving DVDs in the mail while building a new business with their online customers.
On the other side of the coin, Blockbuster filed for Chapter 11 Bankruptcy on September 23, 2010. The company has over $1billion in debt and had already closed many of its retail locations over the last couple of years. Despite being the most recognizable brand name in the industry, the company was beaten by an upstart company (Netflix) that had a different approach to the business and then did a better job of adapting to the online environment.
Admittedly, Netflix had some likely advantages in adjusting its business model to the growth of the internet no physical retail locations, a well-established subscription model, etc. However, Blockbuster was certainly the larger company with a solid track record of business and brand success. Yet, Blockbuster was unable to reinvent itself to effectively compete in the changing market. Its various attempts at store-based subscription models and other initiatives have generally failed to capture consumer interest.
There is a great lesson here for affiliates. To achieve long-term success in online marketing, you have to be ready to reinvent your business and adjust to the changing market. If you become overly focused on one area of your business and are unwilling or unable to adjust when the market changes, you risk having the industry and your competition leave you in the dust. It also shows that no matter how much a company comes to dominate an industry, there are always opportunities for innovative competitors to enter the market and eventually turn things upside down. We don't have to look any further than Google or Facebook for examples of companies that began as upstarts and eventually took over their respective markets.
By being flexible with your plans and being ready to reinvent your business to take advantage of changes in the market and consumer behavior, you stand a much better chance of achieving long-term success.
