While many in the econtent industry have sought growth through all things to all people strategies, Hoover's developed a simple formula for success that they call SMB2. This equation translates into the company's focus on the Sales, Marketing, and Business development professionals found in Small and Medium sized Businesses.
When D&B acquired the company last March, it did so because of Hoover's stronghold on this end of the business intelligence marketplace. Hoover's strategy for growth is also a simple one: enhance product and customer input; convert free users to paid subscribers; increase retention; and entice subscribers to upgrade. And Hoover's has been plugging along with an "if it ain't broke, don't fix it" philosophy since the online product launched in 1999. But times have changed and, eschewing mere cosmetic enhancements, Hoover's has taken a long look at how to best deliver on their basic business premise.
Hoover's has spent the last 18 months doing a massive overhaul on its product offering. While the basic content premise remains the same--to provide the answers to any questions about businesses that users might have--the way to deliver the product effectively had to be completely revamped in light of a gradual shift in Hoover's business model. "Like most companies in the 90s," says Michael Reiff executive director of content, "we were getting ready for our IPO and were primarily advertising based." Back then, Hoover's designed a site to achieve this goal, which Reiff describes as, "a combination of Ask Jeeves and Yahoo!, but for the business world." But like other content companies that weathered the collapse of early internet financial models, Hoover's figured out that the real (steady) money was in subscription-based services. And while they will still serve the needs of advertisers and offer third-party content, they've retooled the site from the ground up.
Ultimately, the redesign can be summed up in one key objective: a greatly improved user experience. Hoover's has focused on more intuitive navigation, improved performance, and more usable search tools. However, most of this has not been as a result of actually adding services, but rather organizing the services in a way that clients can more quickly understand and effectively leverage.
To that end the company has invested "on order of a million dollars on this redesign," according to Russell Secker, executive VP of marketing. He says, "About a third was spent on customer research, marketing and the input side and the other two thirds on the technology side." While Secker describes this as "A relatively modest expense so far" he says, "We need to sell about 300 additional accounts in the first year to break even."
One key difference from Hoover's previous incarnation is the separation of the free and premium sites. While free users will still get the Hoover's experience, the focus has been to clearly demonstrate to premium users the value of their decision to subscribe. Instead of using a "big design firm this time around," Reiff says, "we began with our own customer research." The entire design process was built on a foundation of close work with existing customers to evaluate and enhance the usability experience.
Reiff says, "While we focus on converting the free users to paid; we also want the site to clearly demonstrate what we did with the redesign so that new users 'get it' very quickly." The new interface includes stripped-down search options because Reiff says, "users were confused by the number of options." Buttons on a sidebar jump to sections that might be of particular importance to a subscriber, like People, Products, Operations, and Financials. This time around, Hoover's has pointedly called out the tool sets available to Pro and Pro Plus subscribers in order to reinforce the value of upgrading to their premium offerings.
In terms of the content offering, Hoover's has doubled the number of categories in the Industry Directory to 600 and offers more granular subcategories as well. Hoover's has also "gone to great expense working with NewsEdge to provide industry news coverage in each of the 600 categories--for subscribers only," according to Reiff who says this is a feature customers specifically requested. Because Hoover's is editorially based, Reiff finds that many customers look to the site for their news about the companies they profile. And to further the understanding of Hoover's editorial roots, they now include by-lines with company descriptions and plan to provide a feedback mechanism to the editors soon. "We want users to know there are people behind our content rather than being an aggregated service," says Reiff.
"Pricing is unchanged," says Reiff, "We are not using this as a way to up sell." Free users will be exposed to more advertising than before but the good news is that paid users will not be. The paid section has one skyscraper ad, period. So while the company's goal is to maintain and grow its core user base, it wants to generate revenues by improving the way subscribers are able to use the site to get to essential business information. "People using Hoover's are very mission oriented," says Reiff. "When we save them a single click, it's worthwhile."