3 Lessons From The Impending Sale of Rolling Stone

by dpollak on 09/19/2017 · 2 comments

When I was a teenage kid, if you wanted to keep up on music and politics, you read Rolling Stone.

I credit my older brothers for introducing me to the magazine. Once I’d read it the first time, I was hooked.

I especially remember the writing. For me, Rolling Stone was a way to be in the front row at concerts, or behind the scenes of a political campaign, without actually being there.

It didn’t hurt that the magazine had an edgy reputation—just the sort of thing that made a teenage kid from the Midwest want to get his hands on the latest copy.

These memories come to mind as I read the news that, on the eve of its 50th anniversary, Rolling Stone is up for sale.

The news didn’t surprise me. It’s been years since I’ve read a copy, and it’s tough, in general, for magazines to be successful in today’s digital age.

But I was struck by some of the reasons that apparently led to the sale, and the lessons they offer for dealers:

Resistance to change hurts. Rolling Stone’s founder and publisher, Jann Wenner, reportedly didn’t think a print magazine would ever fall out of favor, even as subscribers declined and shifted online in recent years. There’s a lesson here, I think, in the way many dealers regard (and often resist) the purchase preferences of today’s car buyers. I suspect Rolling Stone would be better off today if it had opted to reinvent its business and distribution model a lot earlier. The same seems to be increasingly true for dealers and the rise of online retailing. In the end, there may not be much “it” to get around to if you wait too long.

Reputation and relevance are related. I can’t recall a specific reason I stopped reading Rolling Stone. I do remember the articles and stories seemed less compelling to me in college and beyond. Perhaps the last time I sought out Rolling Stone followed the controversy over its story of an alleged gang rape at the University of Virginia. I read the piece for myself and thought, “this won’t turn out well.” Subsequent investigations found serious breaches of journalistic fundamentals, all of which damaged the magazine’s reputation. Dealers would do well to remember that your reputation is only as good as the worst online review or your last miffed customer. Likewise, today’s consumers have long memories, and social media outlets to vent, when you break their trust.

Talent sets the tone. You could make the case that Rolling Stone thrived the most when it consistently fielded top-notch writers and photographers—some of whom Wenner had the foresight and guts to give their work its first significant chance. The same is true for dealers. When your people really shine, so does your dealership. As their leader, it’s your job to create the environment where they have a real chance to reach their potential, and continue to grow, as individuals. By definition, this outcome means dealers have to do way more than simply provide an attractive paycheck.

The New York Times article reports that Wenner, in the late ‘90s, turned down an offer of $500 million for Rolling Stone. Last year, Wenner sold a 49 percent stake in his company for $40 million.

Perhaps those figures represent the biggest lesson of all.

  • Jim Dykstra

    Dale, not surprisingly, I too love Rolling Stone. Full disclosure, I skewed Wenner’s perspective…I’ve subscribed to the mag for 30+ years. That being said, your strategic comps of RS’s struggles to today’s dealerships are dead on point. Averaging 60% customer (40% repeat purchase loyalty) and employee (salesperson) churn should be a defcon 5 indicator of that sustainability is in question for any business. Like you, I keep asking myself if we’ve finally hit an inflection point. Time will tell.

  • Jimmy D! Great to see your thoughts and to know that your back in action.

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