Business Value Chain for a Blog
To continue the series of business basics [the fist segment was Business Strategy], this story is about the business value chain.
Once your business has chosen its strategy, the next step is to implement the strategy through its value chain:
A value chain is the way a business adds value for its customers by processing inputs into a product or service.
Maybe you’re thinking, but Jon, I have a blog or a website and what you’re saying sounds like a big manufacturing business.
Well, call it a personal crusade of mine, to try and get micro online businesses to apply the same principles that the big boys use. I honestly believe it is the best way to succeed and grow so bear with me and let’s hope it make sense by the time I’m done.
At its core the value chain is a very simple set of steps that converts inputs or raw materials into that mythical substance…customer value.
Here’s simple illustration:
Inputs » Business Processes » Products or Service » Customer Value
Let’s use a blog as an example, since most bloggers don’t think about traditional business methods.
Inputs: At a high level inputs for your blog would start with life experiences, research, a website, and the internet. Of course these can all be broken down into sub components like blogging tools, sites you visit for news, your day job etc. In a business like blogging the inputs are usually available to almost anyone…that’s one of the reasons that blogging has become so popular: it has a very low barrier to entry.
Business Process: The business process is the key to success for a blog or any other business. There are many important factors but the key ones are:
- efficiency: how quickly can you process inputs and turn them into products [stories].
- quality: can you maintain quality levels above that of your competitors [this depends of course on your business strategy, but most blogs are based on quality differentiation]
- marketing part one: how do you gather information about your customer’s needs and how well you are meeting them?
- marketing part two: how do you attract new visitors to your site and keep the ones you do have coming back?
Products or Services: If you’re a blogger your product is your content and also the general user experience while at your site. That’s why interactive features such as poles and discussions that happen in comments are popular on blogs. They provide engagement and add to all users’ perception of value.
Customer Value: In a traditional business how successfully you are creating customer value is easy to measure. It is simply how much someone is willing to pay for your product. Guess what, in a blog it’s just as easy…no it has nothing to do with your Adsense earnings…it’s the most valuable commodity of all…your visitor’s attention. The measure of your site’s value is basically how much attention do you command from your visitors multiplied by how many visitors that you receive.
From this point how you choose to monetize that visitor attention also comes into play and it should be integrated into your strategy and your value chain.
The primary benefit of taking basic business principles and applying them to your blog is that now you have a framework for the measurement and improvement of your online business.
Which points along the chain are the weakest? Which are the strengths? How can we improve the weaknesses and better leverage the strengths?
For me I recently realized that my blogging platform was the weakest link in my value chain. Even though my site received significant traffic and had many inbound links I made the business decision that in the long run I’d be better off to move to start a new site on Wordpress and abandon the old site. While it’s not easy to turn your back on a year’s worth of work, the wisdom of the decision from a business point of view is clear.
Already, after only 10 days of the new site, I have many features that were only a dream on the old site and my time spent working on the technical side of the site has decreased dramatically and my time spent posting has gone up. It may take 2 years for the decision to pay off fully, but in the long term it will be well worth it [business tip from experience: in general always favor the long run when making decisions - it takes time to get to a place of quality and the more sturdy your foundation the smoother the ride will be].
Conclusion:
Don’t neglect time tested business principles just because your business is small or micro…they still work and they can be applied to any business form.
Always start from the end of the chain and envision what the value take-away or benefit the visitor will receive from trading his or her time for the experience of browsing your site. The clearer you can define this benefit to your customer the easier it will be to create and improve the rest of the value chain.
Ideally you’ll work at least some of this out before you begin your site, but if you haven’t, don’t be afraid to make corrections, even dramatic ones if necessary, to favor the long term results that you are seeking. If you don’t have the results you are wanting then look to the basics of the value chain to deconstruct your site’s business processes and understand where and what you can improve.