When Encyclopaedia Britannica president Jorge Cauz announced in 2012 that his company would stop printing books, the world took notice. After 244 years, the iconic reference publisher was going all-digital. While the news came as a shock to many outsiders, insiders weren’t at all surprised. “It was just the final phase of a carefully planned strategic transition that had been 35 years in the making,” Cauz wrote in the March 2013 issue of the Harvard Business Review. Indeed, employees in Encyclopaedia Britannica’s Chicago offices celebrated their company’s transition to the digital age, toasting the dawn of a new era.
How does a centuries-old print publisher transform itself into a thriving technology company? For Encyclopaedia Britannica, the answer was a combination of smart business decisions, careful planning, and finding the right technology partners. Encyclopaedia Britannica had to decide not only what its digital products would look like, but also how to care for a new kind of customer.
Swapping print dollars for digital pennies
Encyclopaedia Britannica describes itself as an education company that sells extensively to schools and libraries. For most of its history, selling had been done face-to-face. “We target teachers, administrators, principals, and superintendents. Mainly we sell at the district level, but sometimes to buildings, and sometimes statewide,” Michael Ross, senior vice president, Britannica Digital Learning US and EMEA said. Encyclopaedia Britannica found great success with this model, and now counts more than half of the 112,000 K-12 schools in the United States as customers.
But as print’s dominance in reference publishing gave way first to the rise of CD-ROMs and then to the Internet, Encyclopaedia Britannica’s customers stopped buying books and started turning to cheaper, digital sources of information. Encyclopaedia Britannica’s print sales dropped from 100,000 units in 1990 to 51,000 in 1994, and just 3,000 in 1996 — a staggering 97% decline over six years. The company was prepared, having gone online in 1994, one of the first publishers to do so. But this meant an entirely new way of doing business.
“Our culture changed from a company selling print books door to door and to schools and libraries, to becoming a technology company,” Ross said. “We weren’t just using digital tools to sell our products, but we actually started creating digital products.” The company also started marketing to schools and libraries under a new name, “Britannica Digital Learning.”
The transition to creating digital products raised two key issues for Ross and his team. While customers routinely paid upward of $1,500 for a complete set of hardbound Encyclopaedia Britannica volumes, they would only pay a fraction of that for digital information. At the same time, they expected digital materials to be kept up to date in ways that print books simply couldn’t be. Company leadership embraced the change as a chance to drive more revenue by selling lower-cost products in much higher volumes — “Swapping print dollars for digital pennies,” Ross called it.
Tools to turn a vendor into a partner
Selling to a vastly larger customer base exposed the limits of Encyclopaedia Britannica’s homegrown CRM system. The software didn’t integrate with the company’s other back-office systems, and it required considerable maintenance. “It was a pain in the butt,” Ross recalled. “It was critical to get into the cloud and get the systems talking to each other.” Encyclopaedia Britannica adopted Salesforce in 2012, beginning with Sales Cloud to address its critical CRM needs, and has since added Service Cloud, Chatter, App Cloud, and Pardot across in-office and remote teams.
Salesforce helped get sales and service reps sharing information, which is vital in a business built on relationships. Encyclopaedia Britannica sales reps stay with customers throughout their lifecycles, and are often the ones users come to first with product questions. Because Sales Cloud and Service Cloud are integrated on one platform, it’s easy to share these inquiries across the company, so sales reps can quickly find answers for their customers. Ross estimated that without Salesforce, he’d probably need three full-time support staffers instead of the one-person department currently employed. “Do we have enough human customer support? Yes, because of Service Cloud,” he said.
A big benefit of going all-digital is that Encyclopaedia Britannica now gains deeper insight into how customers use its products. “Online products let us be more intimate with customers. We communicate more frequently and respond to them better,” Ross said. From there, Service Cloud and Chatter make it easy to log customer feedback in real time and integrate it into the product development process. “We have products that have literally changed immediately because of things customers have suggested,” he said. “That really helps with customer loyalty.”
As evidence, Director of Marketing and Sales Support Rick Booms cites Encyclopaedia Britannica’s strong social media sentiment scores and subscription renewal rates that top 95%. To keep that rate climbing, the company adopted Pardot in mid-2015 to help with onboarding and renewals. Ross said his teams will also use Pardot to get away from “batch and blast” emails, in favor of buyer’s journeys that help them better understand what their customers are really interested in.
Overall, profit margins have increased 8% since Salesforce adoption. Year-over-year profits in Ross’ group grew twice as fast, to 17% over the same time period. “I guarantee we couldn’t have done that without Salesforce,” he said. The group also started using App Cloud to further streamline how they work, beginning with importing accounting and invoicing data from legacy systems into Salesforce.
Company leadership knows that despite early success as a technology company, their work is far from over. In an age where virtually unlimited free information is just a swipe and tap away, Ross sees value in having a trusted brand vet your information for you. “We’d love for everyone to be using Britannica again as the trusted source for information,” he said. “A ton of people still come to us based on trust — they know our information is credible.” In an age of near-unlimited access to information, you can’t put a price on having a source you can trust every time.