Leslie Gaines-Ross has an interesting article on the HBR blog network today, dealing with business models in general (In a New Era for Marketing, Parental Discretion Advised — note link may expire). An excerpt from her post appears below:
Every well trained manager knows about the “four P’s” of marketing. To make a sale, a company must offer the right product to meet customers’ needs, and at the right price. It has to be offered in a place they find convenient and, in order for them to know about it and how it can help them, it has to be promoted well. New research by my colleagues and me, however, suggests that another “P” is growing in importance. Customers also care who the parent of the product is.
For those who are interested, the article goes on to discuss basically how people are looking for who the parent company is, their corporate brand so to speak, and whether its someone with whom they want to do business. In fact, I would go one step further — not only do people want to know who your “parent” is (if your company has one) but also who your partners are, what they’re like, and if they reflect positively on your brand. I think the research behind the article is flawed, as the numbers are gross exaggerations of reality, but all of the pieces are incredibly relevant to one specific group of people — readers of ebooks. And this has implications for the would-be author hoping to sell to them.
Going back to the top of the article, the four traditional Ps plus the new one all impact on the ebook reader’s purchase:
- Product is, has been, and always will be the determining factor — a good story well told will always do better than a crappy story poorly told. If you want to waste your time putting up poor quality work, expect poor quality results;
- Price is huge for ebook purchasers, with 99 cents being the “impulse” price point vs. the egoists who say “you should never sell your book for less than $4.99” (or $3.99 or $2.99 or $9.99). I call them the egoists because they feel like they are personally devalued if their book is too “cheaply” priced…of which I can’t help but think, “Okay, your ego is bruised at 99 cents but it’s intact at $2.99?”. It reminds me of the classic joke about the man who asks a woman if she’ll sleep with him for $1 million, to which she responds after some thought, “Yes, I probably would.” He then asks if she’d do it for $10 and she is offended, “What kind of woman do you think I am?”. To which he responds, “We’ve already established what kind of woman you are, now we’re negotiating price.” If you are selling your writing, we’ve already established what kind of writer you are — a professional one. As such, to me, there are only three differences between 99 cents and $2.99 — first, of course Amazon gives you better royalty percentages at $2.99 than 99 cents (70% rather than 35%); second, the obvious “price” to the consumer; and finally “volume”, how many copies you’re going to sell at 99 cents vs. $2.99. Basically if you sell 6x or more copies at 99 cents, you would make more money overall by pricing at 99 cents; if you sell less than 6x more at 99 cents, then you would make more money by pricing at $2.99. But people ARE competing on price, and it’s working quite well for their bank account;
- Place takes on a whole new meaning in the digital world. Where indie authors used to find themselves shut out of the major markets i.e. bricks and mortar bookstores, the new world order plays to their strengths — digital stores, with virtual storefronts, where your book competes on an almost even footing for webpage space with anybody else’s book. And while Amazon’s Kindle sales are dwarfing everybody else in North America, the real question for the author is not where are you going to sell but rather when are you going be able to sell everywhere? The Kindle Select Program is burning up the internet wires with lots of tales of woe or joy, and it requires exclusivity at the start, but after that, even those authors will upload to Smashwords, Apple, B&N for the Nook, Kobo, etc. Everywhere you’re apt to find a reader, that’s where you want to be to make their purchase as easy as possible.
- Promotions are an interesting area. Most people think in terms of traditional promotions for authors — book signings, conferences, bookmarks, talks, advance reader copies, etc. — yet people are experimenting with gift cards, sales, flyers, garage sales, craft fairs, hobby shows, Twitter, Facebook, Blogger, WordPress, more more more more more! Some are truly innovative, some are, umm, misguided. But they try a lot to give themselves “discoverability” that now goes way beyond the old world where you hoped a magazine would give you a starred review or you made a bestseller list some month. Things are both more chaotic as well as dynamically targeted now. And there are lots and lots of people coming up with ways to say “Hey Readers! Here’s a new book you might like!”
- Parent or Partners is a “new area” but it isn’t that new for authors. For years, authors were gauged by which publisher or imprint carried their work. Or dropped them. Now, in the wild west frontier that is e-publishing, readers are more likely to notice other elements. Like if you had a good cover artist, based not on their name, but whether you had an eye-popping cover. Or the proof-reader and formatter you partnered with (if you didn’t do it yourself), because readers notice if your ebook is full of typos and formatting problems. Some readers will even eviscerate you in online reviews for badly set books. However, both of those are really not about your partners so much as the product itself — it goes to the quality of their “experience” they receive while reading your book. Instead, “partners” are far more likely to show up in one of two ways: the publisher/e-publisher you used or the vendor you’re using to sell your books. Under the first, this might seem a lot like the old world — who’s your imprint? It strikes me as being a bit different now though — as the author of the original article stated, it is more about corporate reputation. People aren’t looking at your publisher to see if they are a good guarantee of “quality” so much as avoiding partners who are scum-sucking scammers screwing every author or reader whenever they can. Avoiding evil publishers, so to speak. I myself have a very strong bias against Harper Collins Canada — it seems like every time I go to look at a book on Amazon where the pricing is wonky (i.e. ebook seems much higher than average, often higher than hardcover or paperback even), it is published by Harper Collins Canada. I’ve even beaten them up for it on their Facebook feed, to which they tell me it is Amazon controlling the pricing. A complete crock, but that’s their mantra, and I look forward to their eventual bankruptcy as the digital world leaves them behind. Equally, though, some readers care not about the publisher so much as your vendor. And more and more I am seeing otherwise reasonable people state that Amazon is evil and they’ll never buy from them. Some base it on Kindle Select exclusivity, some don’t like the lending library, some don’t like their impact on bookstores, some don’t like their comparison apps, etc etc etc. But if you are a seller of books, there is good news — while those readers are passionate about not buying from Amazon, they don’t yet seem to care if you still sell it there, they just care if you ONLY sell it there (because they won’t be able to buy it). In other words, if you go with the multi-vender / place model, they’re okay. As long as they can buy it from someone they don’t hate. Sigh. Oh, life was so grand in the old days where people just bought their stuff and didn’t argue with the company! 🙂
Interestingly, each of those five Ps? They also give you competitive advantages over some of your competitors — produce a better quality PRODUCT, sell it at a better PRICE, sell it in more PLACES, do more innovative PROMOTIONS than they do, and choose your PARTNERS wisely. Ones that add value to your product probably in one of the other four areas. At least, that’s my two-cents worth today…