Innovation Excellence Research Pivots After First Subscription Launch Underperforms

What’s the most important rule of innovation? Fail fast. Innovation Excellence Research (IXR) – a website dedicated to innovation for business professionals – takes

What’s the most important rule of innovation? Fail fast. Innovation Excellence Research (IXR) – a website dedicated to innovation for business professionals – takes that to heart with its new premium subscription model. Chief Research Officer and Principal Analyst Doug Williams spoke to us about the company’s pivot to an innovative revenue model after a disappointing launch. Plus, discover interesting pricing benchmarks and why retention is so difficult for research library models.

Founded: 2013
No. of Publications: 1
Employees: 1 plus freelance
Business Model: Subscriptions and advertising
Website: http://www.innovationexcellence.com/
http://innovationexcellence.sites.hubspot.com/ix-research-reports

Target Audience

Business professionals whose success depends on implementing innovation in one way or another, across many functional roles and at all levels of the organization.

Williams previously worked at Forrester Research, where targeting a business audience based on interest in innovation and product development was difficult because the company’s practice was defined by traditional functional roles, such as marketing, research, and technology. Therefore, he launched Innovation Excellence Research with the intent of building strong relationships with an audience that is explicitly interested in innovation regardless of an individual’s role or department.

Content

IXR offers syndicated, original research that explores in depth key topics of interest to innovators in business.  In contrast to the many short pieces and blog posts that Innovation Excellence offers for free on a broad range of topics, IXR offers in-depth studies on critical topics, supported by original, primary research.
The site bills itself as “The World’s Most Popular Innovation Website,” serving the needs of business innovators of all kinds by “assembling an ever-growing arsenal of resources, best practices and proven answers for achieving innovation excellence.”

Some statistics on the free website:

    • Monthly visits: 425,000
    • Monthly pageviews: 1,300,000
    • Average visit: about 3.13 pages
    • Linked In group members: 22,000
    • Weekly email digest (opt-ins): 13,000

On this foundation, a paid content subscription service called Innovation Excellence Research (IXR) was launched in mid-2013 to “provide innovation executives, innovation practitioners, and innovation vendors with the data, insights, analysis, and recommendations needed to build innovation as a business discipline.” 

IXR is led by Doug Williams, a former Forrester Research and Jupiter Research analyst with extensive experience producing syndicated research. Following is a look at this paid subscription business at a very early stage post-launch.

Developing the Business

The size of the Innovation Excellence audience seemed adequate for launching a paid subscription. Assuming that less than 1% of visitors or less than 10% of weekly email list recipients would subscribe to a paid service (in line with data from our 2013 Online Subscription Benchmark Report), IXR could still produce 1,000 paying customers — enough to form a reasonable foundation for the business when coupled with a high-priced subscription plan.

A pre-launch survey to the Innovation Excellence audience — recruited via on-site ads and the weekly email digest — showed real interest in the IXR subscription concept, but significant price sensitivity.  According to survey results, the percentage of respondents who were likely or very likely to subscribe varied at the following price points:

    • $149 = 23%
    • $199 = 24%
    • $299 = 6%
    • $499 = 9%

 

Despite the higher penetration rate at lower price points, the subscription was launched at $300 per year, since higher prices left more room for re-pricing, if necessary, or for discounts and promotions. This price point is similar to that charged by GigaOm Research, among other services that offer a similar kind of syndicated research product. An annual pricing model was used in order to limit “drive-by” subscribers who would pay for one month, download everything on the site, and then cancel the subscription.

Unfortunately, no price testing was performed during the product launch campaign even though the pre-launch pricing survey suggests a sweet spot around $199/year.

Customer acquisition depends largely on advertising across the free website — although IXR is not easy to find in the Innovation Excellence navigation bar — as well as in the weekly email digest and in social media. There is currently no budget for paid media.

Ironically, the IXR website is built on an old WordPress platform that allows only two payment methodologies. IXR works with Mediapass, which processes all financial transactions and validates users who are entitled to access content behind the paywall. The business needs to upgrade its publishing and payment platforms, but lack of funding is currently an obstacle. 

Current Challenge

IXR is gaining traction slowly, as it wrestles with several important challenges and considers pivoting to a new business model.

Most crucially, a critical mass of papers in the IXR library is the biggest challenge to building the subscriber base. Williams expects conversion rates to improve substantially as the IXR content library expands — i.e., individual prospects will convert if they find a paper that addresses an immediate need. The value of just one piece that solves an immediate need more than justifies the annual subscription price.

IXR’s launch plan for building its library was a two-stage process. It began with the assumption that a certain percentage of the Innovation Excellence community would support the paid subscription, based on its devotion to the free content offering. A rapidly acquired core group of paid IXR customers would then collaborate to identify hot topics and develop the research agenda with Williams.

Unfortunately, early customers have been more issue-focused and less willing than expected to co-create the research agenda. The plan was to follow up that initiative and produce new research papers monthly. Given the lack of an agenda, that goal has not yet been realized. Only two research papers have been published to date.

Moving on to Plan B, Williams is identifying key topics and hiring respected analysts and thought leaders who can author reports — as similar services, like GigaOm, do.

A Possible ‘Pivot’

Prior to launch, IXR created a research panel, with an opt-in email list of innovation professionals that has grown to more than 1,000. The offer to panel members was, essentially, “join our panel, participate in the research process, and get access to the aggregate data in exchange for your contributions.”

The panel may prove to be an interesting research engine that could drive revenue in two different ways. First, IXR could sell access to the panel to third parties (such as consultants or innovation management software vendors) to conduct their own research with innovation practitioners. Second, IXR could offer external analysts and thought leaders access to the IXR panel at no cost to gather data via surveys or interviews. In return for this valuable data, these individuals would write a report using the collected data that would be published within the IXR content library. Authors would gain access to data to help them win new business of their own, and the reports would help grow the IXR library more quickly than has been possible by sourcing them organically. In this possible model, Williams’s role would evolve to research director managing the panel and the research contributions of external analysts. This concept was explored recently with a select group of external contributors and, within a week, a number of them expressed interest in this kind of partnership. Still, it will be several months before IXR begins publishing material under this model.

While this panel-based evolution looks promising, Williams is also considering whether customers might find other kinds of content — for example, video interviews with innovation leaders — more worthy of payment.

5 Key Takeaways:

    1. No surprise to online subscription professionals, but it’s hard to start a paid online content product. It’s even harder if your prospect base has been trained to expect similar information from you for free. However, separating free and paid content by content type is one way to clearly convey the value of your paid content.
    2. Niche publications suffer from small audiences that make it difficult to test pricing and offers, meaning that the publisher often must rely on small sample surveys and instinct.
    3. The “reference library” subscription model is particularly challenging because while the urgent need for information comes and goes, the monthly billing continues. Retention is difficult under this model.
    4. Expect less from your customers in terms of participation. This goes for participation in surveys, discussion forums and cooperative content development, unless you have a person or staff dedicated to this task full-time (and then the ROI must work out, which it often doesn’t). This is true even when it is in their strong interest to participate.
    5. Success increasingly comes from a willingness to innovate, iterate and pivot, often rapidly, and sometimes more than once.

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