Category Archives for Business

Amazon Should Share Its Data

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Unlike many other indie authors, I’m actually a fan of Kindle Unlimited. I think it’s generally a good thing for indie authors. Believe it or not, I think it’s especially good for indie authors that don’t sell very much. The downside is, KU is harsh. Unlike straight book sales, KU makes a clear and important distinction between two groups: buyers and readers.

Authors and publishers aren’t used to tracking those two groups separately. In the information era, this is a critical mistake. In the past, big name authors and publishers could get away with selling books nobody actually read. Today, you can’t do that. If nobody’s reading your books, it will ultimately be the kiss of death in the only market that matters: Amazon.

Because whether you track the data or not, I can assure you that Amazon tracks the data. They know who buys your book. They know who downloads it for free. Thanks to the Kindle’s wireless connectivity, they can tell you who has ever bothered to even crack it open (whether you’re in KU or not). They know how many pages that person read – and more importantly, what page they stopped reading. And if people aren’t reading your book all the way through, they know it.

If you’re not selling very well, you can know it, too. Got a five hundred page book? Did you just register 500ish page reads? I guarantee you that wasn’t 500 people trying one page of your book and giving up. Somebody just read the whole thing. On the other hand, if you’ve only got 15 page reads, that’s not good. Somebody tried it and didn’t like it. Unfortunately, this data gets lost as your book becomes more popular. It’s hard to tease this information out when your KU page read count is several multiples of your book’s length. You’re back to guesswork.

And that’s where I think Amazon has missed the boat. Releasing some of this data, in an anonymized way, would provide valuable feedback that would help authors – and Amazon – make more money.

Here are some things that I’d really like to know as an author and publisher:

  • How many people actually saw my book’s listing on Amazon.
  • What percentage of them bought the book?
  • What percentage downloaded it through KU?
  • Of those that downloaded it (free or purchased), what percentage actually read even a single page?
  • What percentage actually finished the book?
  • Of those that didn’t finish, where did they stop reading?

Each of these data points gives me a spot where I can improve my product – the book – or the marketing of it. If people aren’t actually seeing it, I can improve that end with external marketing. When people aren’t buying or downloading it, I know I have a presentation issue: my cover, title, description, or genre selection needs work. If people never open it, then I know I still have a presentation issue. When people stop reading it, then I know the book itself has problems. If I know where they stopped, then I know where it has problems.

In the digital age, I can actually update my books to fix these problems – but only if I can pinpoint and identify them! Amazon has this data. They could easily anonymize it enough to present it to authors and publishers, especially if they made you wait until you had enough sales before you could see it. I could live with that constraint.

But it’s frustrating as hell to know that data is out there and not be able to use it.

The Magic Words To Get To the Top of the Slush Pile

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As a publisher, I get asked a lot of questions by a lot of writers. One of the most common is, “what are you looking for in a book?” There are a lot of answers to that – but most of those answers really vary from publisher to publisher. Yes, we all want a book that’s “good.” But good is largely a matter of taste. So exact details of what I’m looking for won’t match what any other publisher is looking for.

I can’t give you a magic formula that will generate a book I’d agree to publish. But I can give you a few magic words that will put your book on the top of the slush pile, and automatically ensure that I’ll look at it quickly. I can’t say definitively that this would work with every other publisher. It would surprise me, however, if this didn’t help you. Are you ready? Here are your magic words:

It’s a series, and I have two more books already written.

If you’ve read any of my marketing posts, you’ll immediately understand why this is so important. The thing is, the decision of which books to publish is a business decision. It’s not about which books I like. It’s about which books I can sell. And the simple fact of the matter is that a series makes far more economic sense than a standalone book.

The short version is this: if I have 3-5 books in a series, I already know how to use conventional marketing techniques to ensure that I have a very high probability of recouping my investment in your books. I can’t guarantee them blockbuster status. I can’t even guarantee them high sales. But I can probably make my money back, especially since we operate on a lean structure and keep our costs low.

That means there’s very little risk to me for taking a chance on your book. It’s still not zero-risk. Any book can totally bomb. And the books still have to be good enough. If the books suck so much that nobody will read the second or third, then having a series just means I’m losing money on three books instead of one. But if we’ve got three books, with more on the way, and the books are good… we can probably make something work.

This doesn’t mean your odds are zero with me – or any other publisher – if you’ve only written the one.  It doesn’t mean we won’t look at your book. It also doesn’t guarantee we’ll accept your work. But for us, business logic dictates that an author with multiple finished books goes straight to the top.

Don’t Blindly Follow Your Competition

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Never, ever blindly follow your competition. I see people do this all the time – both in the writing world and the martial arts world. It’s a huge mistake, for multiple reasons.

First of all, successful marketing is very personal. A few years ago I had a conversation with a friend of mine once – a local gun store owner. I’ll never forget what he told me:

You and I could be marketing the exact same product at the exact same price with the exact same marketing – down to the same wording, phrasing, and imagery. And it might work for you, but not for me. Or the reverse, it might work for me but not for you.

My experience since has proven this statement to be 100% correct. When you’re not Disney or Coke or Microsoft, one of the gigantic brands of the world, successful marketing is personal. And if your marketing doesn’t connect your customers with you on a personal level, it won’t work.

Blindly copying your competition is highly impersonal. You’re not being you anymore. You’re being them.

Now, don’t misunderstand what I’m saying. Of course it’s worth keeping an eye on your competition. If they start doing something interesting, take a look at it. Just don’t blindly copy it.

Because it may not be working for them, either.

To illustrate the point, I want to return to yesterday’s story about the early years of my dojo.

I did something I didn’t want to do: I opened a class for 4 and 5 year old students. I resisted it. I’d taught this age group before, and the reality is that most kids at this age just aren’t ready for this kind of class. But my wife and I sat down, thought about it long and hard, and decided to give it a go. We put a ton of effort into it. We developed a special curriculum just for that age group, structured the class differently than we’d ever done before, altered our expectations, and altered the belt promotion timeline. If we were going to do it, we decided that we’d do it right.

We only had one teacher available for that class: my wife Morgon. Due to the times we scheduled the classes for, I couldn’t get out of my day job to teach it. And preschoolers require tons of attention. So to ensure that we maintained a good class, we capped that age group at six students per class. Also, because we only ran it once per week (vs two sessions a week for our normal classes) and also for a shorter duration (45 minutes instead of an hour), we basically charged half what we did for our normal classes.

Read that second paragraph again. From both a business perspective and a martial arts perspective, the class was a failure. It never really made enough money to be worth the time. And we never managed to get the class quality up to our standards. The latter reason, more than anything, is why we eventually shut it down. I didn’t feel good about offering a class that I didn’t believe in 100%.

But there’s more to the story. Right before I opened my dojo, another dojo opened just up the street. And when I say right before, I mean right before. In fact, I originally wanted to get their space. They beat me to it. When I inquired about the location, they’d already signed a contract. No worries for me – I just found another space and made do.

But I did keep a close eye on them, and I’m dead certain they kept a close eye on me. And when I started advertising my “full” preschool classes, lo and behold, they started pushing their own preschool classes. Hard.

The school’s owner made a classic mistake: he assumed that because I pushed this so hard, it must work for me. In reality, it was never working very well at all. I just made the best of the situation I’d found myself in.

That dojo closed down more than a year ago, and I’m still running. This single decision, obviously, isn’t why – nor should it be taken as a slam against them. This is a tough business, and I salute them for their time in the ring. But it was definitely a mistake – one that you and I can, and should, learn from.

Whatever latest thing your competition is trying may be working really well. Or it may not be working at all. It may be brilliant. But it’s just as likely that your competition is moronic. When you see your competition try something new on the marketing front, the very first question you should always ask is, “is it working?” If it is, the second question must be, “why?”

If you can’t definitively answer both questions, then be wary of it. That doesn’t mean don’t do it at all. Maybe it’s worth experimentation. But keep your experimentation cheap until you get good data of your own.

Even then, before you try it you need to ask one final question: “Is this compatible with my own brand?” It’s very difficult to repair damage to your brand once it’s done. So you want to work to keep your brand solid in the first place.

Marketing 101: Fake It Until You Make It

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When you’re first beginning any business endeavor you face a serious chicken-and-egg problem. People want to buy proven, successful products and services. But how can you create a proven, successful product or service when nobody will buy from you? You have to fake it until you make it.

I’d like to share a little story from the very early days of my dojo. Like all new businesses, we struggled in our early months. We had a non-trivial monthly overhead (mainly rent and utilities). And since we had very few students (because hey, we’d just opened the doors), those payments came straight out of my own pocket.

I did something I didn’t want to do: I opened a class for 4 and 5 year old students. I resisted it. I’d taught this age group before, and the reality is that most kids at this age just aren’t ready for this kind of class. But my wife and I sat down, thought about it long and hard, and decided to give it a go. We put a ton of effort into it. We developed a special curriculum just for that age group, structured the class differently than we’d ever done before, altered our expectations, and altered the belt promotion timeline. If we were going to do it, we decided that we’d do it right.

We only had one teacher available for that class: my wife Morgon. Due to the times we scheduled the classes for, I couldn’t get out of my day job to teach it. And preschoolers require tons of attention. So to ensure that we maintained a good class, we capped that age group at six students per class. Also, because we only ran it once per week (vs two sessions a week for our normal classes) and also for a shorter duration (45 minutes instead of an hour), we basically charged half what we did for our normal classes.

Put those two factors together and it’s easy to see that we never really made a lot of money off the class. But it did have two major benefits. First, it didn’t bring much money, but we desperately needed every dollar of it in those early days. If we hadn’t run that class, we probably would’ve had to close the doors. We came close enough to that as it was.

But more importantly, the class was always full. Always. Over a few years of running it, we only had two kids stay with it past that age group – and one of them was my own son. Kids rarely lasted more than three months. But we had a regular influx of new students joining the class, and that made up for it.

So we advertised that. We put that out everywhere we could: these classes are full. And it had the effect of elevating the status and prestige of our entire dojo. I mean, if our classes are full, we must be awesome, right?

Well, not entirely. It took six months before we had our first regular adult students. And our classes for older children grew steadily, but we had plenty of room for more. But it was still true: our preschool classes stayed full.

We faked it until we made it.

Now, I will put an important caveat on this: never, ever lie. It will come back to haunt you. But one of the secrets of marketing is that you don’t have to tell people everything. Tell them the good parts – and emphasize the best parts. No product is perfect. Your customers know that.

A second caveat: your product doesn’t have to be perfect, but it does need to be good. If your product sucks, then people will be unhappy with their purchase. But if your product is good, and its priced reasonably, your customers will stay happy even if it’s not a perfect product.

Tomorrow: why you should never, ever blindly follow your competition.

Marketing Tip: Stop Whining

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Here’s a pro marketing tip that far too many indie authors desperately need to hear: stop whining.

Let’s recall one of our lessons from a few posts ago:

Nobody will ever read your book if they don’t know it exists. Nobody. Ever.

Stop thinking of marketing as a dastardly activity and think of it as precisely two things:

  1. Letting people know that your book exists.
  2. Letting them know why they should read it.

Forget making people want to read your book (step two on our list). Before you can do that, you have to stop actively turning off potential readers. Making somebody want to read your book is hard. But making people not want to read your book? That’s so easy an idiot can do it – and a great many of them do exactly that.

You’ve probably already heard all kinds of great marketing advice: make sure your description makes the book sound interesting, etc, etc. But today I want to focus on one very specific aspect: your public presence. Not your books, yours.

So you’ve started a blog. You’ve started social media: Facebook, Twitter, etc. You’ve written hundreds of blog posts, thousands of social media posts, but nobody’s buying. Why not?

Here’s my absolute first question: how much do you whine on your blog and/or social media? Because I see a lot of it. A lot of it.

Remember, your public platforms are there to help you sell books. How are they going to do that? You want to look like the kind of person who writes interesting books. To do that, you have to actually look interesting yourself. And do you know what isn’t interesting to most readers?

Whining.

I’m not even saying you’re wrong. Whatever you’re whining about is probably legit: book piracy, having to charge too little in order for your book to sell, someone in the industry treated you unfairly. It all happens. Readers don’t care.

I’m going to take it one step further, though: stop self-deprecating yourself. It doesn’t sound humble. It sounds like you’re really not interesting. If you can’t even find a reason to think of yourself and your books as interesting, I can guarantee you that nobody else will, either.

Every single time you say something negative about yourself, every single time you whine, imagine that you’ve just lost two book sales. That’s money rushing out of your bank account. Is it really that bad? No, it’s actually far worse. Because the effects aren’t additive, they’re multiplicative. The more you do this, the worse it gets over time.

So stop it. Be yourself – that’s great and fine advice. But be the best version of yourself – or at least present that version in public. Stop killing your own book sales.

Marketing: Always Have a Plan

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Brian picks up our discussion of marketing with another fantastic post in the series. Read the whole thing, because I’m only going to excerpt part of it.

Not to step on Russell’s toes, but I’ve got lots of experience with book giveaways. The result is that I’m much less bullish on giving books away for free than Russell is.

The best advice, as always, comes from Larry Correia: only do free if you have a plan.

Here are some pointers to help you make that plan:

  • If you only have one book, don’t give it away for free.
  • Most authors will tell you to make the first book in a series free. Consider giving away the second or third book in a series. I’ve found that people are more likely to go back and buy previous books in a series than they are to buy later installments after getting book one for free, but your mileage may vary.
  • Give away free copies of your books through your web site/mailing list. Kindle Unlimited requires a 90 day commitment, and it sucks. Seriously, getting paid based on number of KENPs read amounts to a pay cut from Amazon to tradpub royalty rates.

The moral of the story? Always. Be. Closing!

I should have included some of these caveats in the original post. But I made an assumption – an assumption I know to be erroneous. I assumed that you always have a plan. I assumed this because proceeding into something like this without a plan is fundamentally foreign to me. On the other hand, I’ve known enough indie authors by now to fully understand how bad of an assumption this is.

I’ve witnessed lots of indie authors “try their hand” at marketing. For the vast majority of them, it goes something like this:

  1. My friend did The Thing and it worked.
  2. I need to sell more books.
  3. I’m going to try The Thing.
  4. It didn’t work.
  5. Marketing sucks.

The Thing changes constantly, but you can see several consistent threads: book giveaways, Kindle Unlimited, popup ads to join the e-mail list, Facebook ads, Amazon ads, Google AdWords ads, etc.

Now, all of those things are fine. Any of them can work for you. But here’s the issue: over and over and over again, I see authors essentially just throwing these at the wall hoping something will stick.

That’s not how marketing works.

The thing to keep in mind is that any one of these techniques, on its own, will almost never work. If you run one ad – of any kind – and then don’t do anything else for three months, you will get terrible results. If you want success, you need several things.

  1. Be consistent. You should engage in marketing activities regularly. The best thing you can do is set a simple goal for yourself: Every day I will do at least one thing to help sell my product.” It doesn’t matter how big it is. If you do something every day, it will eventually add up.
    1. Bonus tip: on average, a customer must see your product seven times before they purchase it. One ad campaign won’t do that for you, so you must maintain consistent marketing.
  2. Track everything. And I mean everything. Record the results and compare them. If something works for you, put more time, energy, and money into it. If it doesn’t work for you stop.
    1. Important caveat: you need to collect enough data to be sure it doesn’t work. Any data set with less than a thousand data points is useless. It’s noise, not information. For example: I’m running a pay-per-click ad. Until that ad has had one thousand impressions, the reported click-through-rates for that ad aren’t worth much. After that point, you have enough data to know: are my click through rates good enough or not?
  3. Experiment. There’s throwing things at the wall to see what sticks and then there’s honest experimentation. What’s the difference? With honest experimentation, you tracking everything (see above). You make sure to collect enough data to make your records useful. And then you tweak it, slowly, one thing at a time, to see if you can improve it. If you leave out any one of these three steps, it’s not experimentation – it’s just throwing things at the wall.
    1. Pro tip: failed experiments can still be useful. I’ve found specific advertising methods that work but don’t give me a high enough return on investment… yet. But when I have multiple books in a series, they’ll be worth revisiting.
  4. Coordinate. Don’t do one marketing action in isolation. Do multiple things at the same time. Got a lot of free publicity from somewhere? Great – do a sale at the same time so you can capture as much of it as possible. Or time a new book release to match it. Run your own ads at the same time. If your book is already ranking high on Amazon from the success of one marketing technique, people who see it as a result of other techniques will be more likely to buy it. So plan everything together.
    1. Bonus tip: consistency is good, but coordination is better. If you have limited funds, you’re better off running fewer, strong, coordinated campaigns spaced out throughout the year rather than running something constantly.
  5. Create urgency. As an extension of the last bonus tip, you don’t want to run your specials all the time anyway. You want to create a sense of urgency. Make your customer want to get your product right now. That’s why sales work. They create the sense of urgency for you: buy this product now or you’ll lose out on this great deal. A customer who believes they can get your product at any time is a customer who most likely won’t get it at any time.
  6. Plan ahead. I’m getting ready to launch a novel, and as part of the marketing campaign I’m already considering the launch of my next book.
  7. Start early. I started laying groundwork to sell this book when I started writing it – three years ago. That work is already starting to pay off.

Above all, always have a plan. I’m launching a novel in August. I have an e-mail chain with 1400 words of notes about my marketing plans for the book launch. I have similar notes about Declan Finn’s new novel that we’re re-releasing next month. I’ve got a plan for consistent marketing. I already know how I’m going to track everything. I’ve got experiments I want to run. I’ve coordinated about a dozen separate marketing methods (and I’m still adding more). I’m planning sales to create urgency. And I’m already planning how I’m going to leverage this to launch the next book.

Because I always have a plan.

Marketing vs Advertising

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Earlier this week I noted that marketing is an intrinsic part of business. You can’t escape it if you want to make money. But I also laid out some rather stark math about how bad certain types of advertising can be. The math is real – advertising your book can be a poor return on investment. But you can’t let that stop you from marketing your book.

First of all, you have to understand that marketing and advertising are two separate but related things. Any business you run (and remember, selling your own books is a business!) must do both!

Marketing is everything you do – everything – related to letting people know that your product (book) exists and why they should purchase (and read) it.

Advertising is when you pay somebody to include some kind of ad for your product – a video, a little image, a blurb, a text segment, whatever. It’s a subset of marketing.

Advertising almost always costs money. Sometimes you can work out a trade with someone, but usually you’re going to have to pay for it. With other forms of marketing, on the other hand, you can very often trade hard work for money. And you must keep doing it.

You hate marketing? Suck it up, buttercup – or go get a day job. If you want your books to sell, you have to market them.

You’re probably used to thinking of marketing as a dirty word, but it doesn’t have to be. It’s time to rethink the word. Look at it this way:

Nobody will ever read your book if they don’t know it exists. Nobody. Ever.

Stop thinking of marketing as a dastardly activity and think of it as precisely two things:

  1. Letting people know that your book exists.
  2. Letting them know why they should read it.

The first part is actually the easy part. It’s the second part that’s hard. And that’s the part you probably associate with sleazy used car salesmen.

But it doesn’t have to be slimy. Is there a good reason why people should read your book? Great! Then your marketing step 2 is just to communicate that to them. If there’s not a good reason why they should read your book, then it’s time to go back to your desk, sit down, and write a new one. Or rewrite the old one.

And if you can’t articulate a reason why someone should read your book, then it’s time to think pretty hard about whether or not there is a reason that they should.

Despite the bad math of advertising, you should keep marketing your book, even if you only have one – especially with free, cheap, or easy marketing methods.

Here are some cheap or even free things you should start early and keep at to market your book:

  • Start a blog and write interesting posts about interesting topics!
    • Bonus points if the blog’s topic relates to your book topic!
  • Create profiles on various social media and participate!
  • Get as many of your friends and family to read and review your book as possible!
  • Talk about your book to anyone who will listen!

Here are a few other things that you should consider spending some money on, even if you only have one book:

A good cover. It’s not so much that good covers sell books (although they do). The bigger issue is that bad covers kill books. You don’t have to spring for the best cover ever. But a bad cover is worse than “not worth the money.” It will actually work against you. There are some good places you can get decent covers done for under $200. They’re worth it. This is also the gift that keeps on giving. You pay for the cover now for book one… but when book two comes out, book one still has that excellent cover you paid for. So book one’s sales boost from book two’s release will be better. And so on.

A good web site. Did you read what I said above about bad covers killing books? Ditto for bad web sites. The good news is, it’s pretty easy to build a not-terrible web site these days. But you want more than that. You don’t just want a web site that looks good. You want a web site that’s built to sell your book. If you’re not technically inclined, or if you’re no good at marketing, save yourself a lot of headaches. Pay someone to build a web site for you. You can find some not terrible web designers for a few hundred dollars. Like your book’s cover, this is the gift that keeps on giving. A good web site will keep selling book one… and then take only a little modification to start selling book two. Invest your time and energy here and, if necessary, your money.

Some sales artwork. The internet is a fantastic place and you can find artwork pretty inexpensively if you look. For $10-30 a piece you can buy very high quality stock images to use. For $30-200 a piece you can pay for some pretty good quality artwork. This is especially worth the money if your book is the first of the series. You can reuse that character art for every single book in that line – and add to it with each book. Eventually you’ll have a really huge collection of art you can choose from for flyers, posters, ads, etc. But you can also start small and cheap and build this collection as you have money.

Give away books. Yes, you heard me. Give them away. Give away as many books as you possibly can, especially book one in a series. Ebooks are best for this, of course, because they’re free to you. But give away print books, too, if you have to. The more the better. My experience is that about one out of every one hundred readers will actually review a book (maybe fewer). But you need those reviews. So get those books out the door to anyone who will read them. Remember: this is helpful for getting reviews and selling books now. But even more importantly, you’re laying a foundation of fans who will buy your future books. So give them away like candy.

Parting thought:

If you’re still on book one, then check your focus. Making a fortune on book sales now is unrealistic for most people. You want to lay the best foundation you can for your next book release. In fact, no matter how many books you have out, you should look at every book release as a chance to grow your base for future releases. Always plan at least one book ahead. “If I do this, I can build up more fans for next time!” Remember, this is a marathon, not a sprint.

It Takes Money To Make Money

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There’s an old saying: it takes money to make money. I hate to tell you this, but there’s no way around that.

But let me back up for a minute. My wife tagged me further down the thread in this Twitter discussion earlier today.

Note 1: I am not picking on Oghma in anything I’m about to write. He asked some fantastic questions today and exhibited the mindset of one truly willing and ready to learn. That’s where all of us started.

Note 2: The thread itself is pretty good. It’s worth a read if you want to sell books.

Now back to the meat of the post.

Self publishing a book means going into business for yourself. Congratulations! I love small business. Welcome to the lifeblood of America! You’re foreign? That’s fine, too – way to go helping to make you’re country great!

But going into business for yourself means that you want to make money. And if you want to make money – real money – in business, you have to do marketing. It is not optional.

Now, some forms of marketing are cheap. I run this blog for an annual price tag lower than what it would cost me to take my family out for a single nice dinner – and even that is a cost that I mostly share with two small businesses. It’s cheap. But cheap marketing brings two issues.

  1. Spending less money means working harder. There ain’t no such thing as a free lunch. You’ll pay one way or another. Less money means more time and sweat equity.
  2. Spending less money often (but not always) means the marketing is less effective.

Now, rule 2 isn’t magic. You can’t just drop a million dollars on advertising and expect to just get it back. You still have to work at it, be smart about it, and choose the right kind of marketing. But if you want to make money, you have to spend money.

So Oghma is asking the exact right questions. He knows he needs to spend money. He’s trying to figure out how to spend it intelligently.

Here’s the thing about the publishing market: spending a lot of money marketing one, single, solitary book is almost always a waste of money. If you only have one book, it’s very difficult to get a good return on investment. It can be done – especially if you’re very good at marketing, or if you’ve written a very good book. But it ain’t easy.

Let’s run through some math as an example. I’m not the best Facebook marketer, but neither am I the worst. And I don’t have the best web sites for my businesses, but again, neither do I have the worst. I’m in the somewhat typical range. So this is actually a pretty reasonable example.

On my typical Facebook ads these days, I can usually achieve a click through rate between 4% and 8%, discounting the occasional outliers in either direction. That means that out of every 100 people who see my ad, 4 to 8 of them will click through to my web site. This is a pretty decent rate in the marketing world.

Depending on the ads, the targeting options I’ve selected, the product I’m marketing, etc, those ads usually cost me between $0.50 per click and $2.00 per click. That’s not really terrible, either.

The next step of the funnel is conversions. For every 100 people who click through my ads, typically somewhere between 4 and 8 will actually buy a product afterward. That’s also pretty typical.

But it’s also the problem.

Let’s assume the best case scenario on both fronts.

  • 1250 people see my ads.
  • 8% (100 people) of them click through to my web site.
  • 8% of those (8 people) buy my product.
  • My ads cost $0.50 per click.

I’ve now spent $50 on ads to get 8 sales.

Now first of all, this is a best case scenario. I, personally, rarely have a marketing campaign do this well. If I could pull it off every time, I’d be quitting my day job and working at the dojo full time.

Second, this is fantastic… for my dojo. A typical new customer at the dojo nets me either $95 (ish) or $250 (ish). Let’s take the worst case number here: $90 per sale, or $450. I spent $50 for that. That’s $400 in revenue increase, and that’s fantastic! Seriously, if I could do this reliably I’d quit my day job.

Now, let’s talk books. Say I’ve sold 8 e-books for this at a cost of $4.99. Amazon gives me 70% royalties, so that’s $3.493 per book. For 8 sales, I’ve made $27.94 – well less than the $50 I spent to get it. At this rate, the more I advertise the more I’m losing money.

And, remember, this is a good ad campaign.

The secret (It’s not really a secret – you can find this all over the internet) to making money off of this in the book world is to have lots of books – preferably in the same series. Then, some portion (but not all) of the customers who pick up one book will buy all of your books, or at least all of the series.

So let’s add one more assumption: let’s assume that 12.5% of the people who buy book one in my series will end up buying the entire series, and let’s assume that I have 10 books. Note: I don’t have many books out yet, and I don’t have good figures for this rate. I’ve completely made this number up for my example.

Now I’ve sold 8 books at $3.493 per book, for $27.94. And I’ve sold one of those people (12.5%) another nine books ($31.44), for a total return of $59.377.

My return isn’t great in this example, but at least I’ve made a profit. Multiple books change everything. And in this example, now I’m at a point where I can start tweaking every step of my process in the hopes of improving my return.

  • I can try to make better ads. If I can raise my click-through-rate to 10% instead of 8%, I’ll sell more books – and because of how click-ads work, I’ll probably pay less per click.
  • I can try to raise my conversion rate. If 10% of ad-clickers buy instead of 8, I’ll make 25% more money overall – and now the return on my ad money is starting to look pretty decent.
  • I can try and convert more “first book” readers to “series readers.” This might mean writing a better book. Or it might mean putting better ads or better sample chapters in the back of book one.

The point is, once my return on investment is positive, I can start tweaking it to make money.

But if I’ve only got 1 book, then just about the best I’m going to do is spend $2 on ads for every $1 I make back (my general experience is more like $5 in ads for every $1 I make back, on a single book).

The moral of the story: writing 10 books won’t necessarily make you rich. But if you want to get rich from writing, you pretty much have to write 10 good books. Unless your name is J.K. Rowling.

 

That’s Not How Amazon Works

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Surprise, surprise, Vox.com author Constance Grady completely fails to understand how business actually works. Specifically, in this case, how Amazon.com works.

Amazon routinely takes a loss on its book sales, often charging customers less per book than it pays publishers and swallowing the difference. It’s a priority for the company to be your preferred bookseller, even if it has to take a hit; its business model can accommodate the loss, because it generally makes up the extra dollars on the last-minute impulse buys customers toss into their shopping carts. Meanwhile, on the e-book side of things, Amazon’s low prices help drive sales of its Kindle.

That’s not how this works. That’s not how any of this works.

Like most big corporations, Amazon engages in a primary business and a few dozen complementary businesses.

Let’s think through an example: Google. Google earns 78% of its revenue by selling ads on its search engine. Obviously, Google stays focused on search ads. But to keep making that money, Google must remain the dominant search engine. Also, Google wants to get more and more people using online search altogether. To help meet those goals, Google invests in business areas that complement online search: mobile phones, high speed internet connections, etc. Google doesn’t make much revenue or profit off of Android or Google Fiber. In fact, they don’t even need to make any profit to meet Google’s goals. The point of these endeavors is to keep people – preferably more and more people – using Google search, and therefore clicking on the ads that make Google money. These are the complementary businesses that Google engages in.

Like most big corporations (and many small companies, for that matter), Amazon also sometimes uses loss leaders as a sales tactic. Companies like to pick a small number of products to sell at a break-even point, or even at a loss, knowing that they’ll make it up later. People buy product or service A, but then they end up also buying product or service B while they’re shopping. The largest local gun store in town has a range attached. Given their pricing models, they can’t be making any profit off of the range itself. That’s not the goal. The range brings customers in the door – then they spend money on more ammunition, more firearms, more accessories, etc.

Both of these tactics work, and they work best when the loss leader product is also complementary to your main business. In other words, they work best when you use them together.

Ms. Grady’s post shows that she seems to have some understanding of these concepts. But she’s gotten it all backwards. Amazon’s loss leader isn’t books. Books (and, these days, other digital content such as movies and television) is Amazon’s primary business. Amazon may, indeed, occasionally take a loss on specific books. It most definitely does not do that on a general basis with books. Pay attention: Amazon sells more ebooks than print books, and has since 2011. EBooks tend to sell for less money. But because it spends less on distribution and storage costs, Amazon makes a lot more profit off of them. The same is true of streaming music and movies. Amazon has focused on the primary business of delivering digital goods for years now.

Kindles are the complementary business – and the loss leader. That’s why it sells Kindle Fire tablets for so much less than other comparable tablets. That’s why it put so much effort into dominating Kindle sales. They’ll replace Kindle Fire (kids edition) tablets for free for basically forever – so that you’ll keep buying content. That’s why they got into the FireTV market. They replaced my first Kindle e-reader for free even after I straight up told them that my two year old son stepped on it. And Kindle e-readers themselves are dirt cheap to begin with. You can buy a brand new entry level reader for only $80.

As Brian Niemeier notes, however, this article isn’t about getting the facts right. It’s about the Big 5 publishers being terrified of Amazon.

The last time I saw that many weasel words was in an MRK rant. To translate from the demagogue, they don’t know. Note to Huffpo: “And this goes on and on” is not a data point.

What Vox.com and Puffho are studiously overlooking here is the minor detail that, if any of these speculative scenarios are true, all of the books ultimately came from the publisher. The most risible theory is that unscrupulous reviewers are able to sell ARCs because review copies aren’t marked “not for resale”. Apparently, protecting their copyrights isn’t worth the expense of a ten dollar rubber stamp.

Amazon selling books through third party distributors isn’t a big deal for indie publishers or self published authors. As Brian notes, there’s no way for a third party distributor to get our books in the first place except through us – unless they’re engaging in practices that are already both illegal and against Amazon’s terms of service. This is just one more way for Amazon to sell more of our books. Ultimately, that’s a good thing.

This doesn’t mean that Amazon is our friend. Amazon cares about Amazon. But at the moment, Amazon is also good for the publishing industry.

It’s just not good for entrenched interests and old power.

Running a Successful Kickstarter Campaign

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Our Kickstarter campaign for Lyonesse not only met its goal, we very nearly doubled it. We had a plan going in, and we executed it. Still, we could have done several things better. Here’s an analysis of what we did well – and some thoughts on what we could have done better.

Use Kickstarter for Marketing – not Fundraising

First and foremost, Lyonesse’s success never relied on Kickstarter. Our business model is royalty based, not fixed fee. And our projected operational costs are extremely low (and we have some experience doing this sort of thing, so we trust those numbers). We can fund the operational costs out of pocket more or less indefinitely. That’s why we’re giving the Kickstarter proceeds almost entirely to our authors.

If our campaign had failed, we still could have launched Lyonesse. We could have launched without it altogether. We chose to run a campaign not for funding reasons but for marketing reasons – and I firmly believe that’s the true value of Kickstarter. If you have a strong enough brand – and strong enough reach – to raise huge amounts of money via a crowd funding campaign… you can probably raise that money relatively easily in other ways, too.

Our campaign was definitely successful from a marketing standpoint. First, we signed up enough subscribers to make it worthwhile. We reached a large number of people we wouldn’t have otherwise reached. We got substantial signal boost from certain quarters. People are now beginning to take the project quite seriously.

Set a Realistic Goal

It’s time for a moment of perfect candor. Although we didn’t need the money to launch the project, I would have preferred to raise even more than we did. We’re giving almost all of that money straight to our authors – and they’re fantastic authors who have written amazing stories and they deserve even more than we’ve paid them. But we did an honest assessment of our current fan base and reach and set a goal based on that. We had very high confidence that we could meet our goal.

Because we view crowd funding as a marketing tool, and not a fundraising tool, it was absolutely crucial that we meet our goal. We wanted (and still want!) the public at large to view this project as successful. But even if you don’t look at it that way, meeting your goal is important. Other crowd funding companies are different, but Kickstarter won’t pay you a single cent if you don’t meet your goal.

Warning: you must also set a goal that is enough to meet your needs. We’re lucky. Most publishing gigs these day pay absolute shit to authors. In the long run, we hope to pay them quite a bit more than this. But for now, the bar we had to clear to keep them happy was pretty low. If you’re relying on crowd funding to cover all of your startup costs, however, you’re going to need to ensure that your goal is realistic for that.

You must balance these competing issues. If your audience and reach isn’t enough for you to raise the amount you actually need for your project… it may be time to rethink it.

Get the Word Out

Get it on your social media. Tell all your friends about it. Send it to your e-mail list. Tell strangers about it. Use everything at your disposal. Marketing your campaign is absolutely critical.

We talked about our campaign on social media a lot. I talked about it on this blog a lot. Quite a few of our friends talked it up and spread the word. Chris Lansdown had me on his YouTube channel. Get the word out.

Hands down the number one problem nearly all small business owners face is that their customers don’t know they exist. And they’ll continue not knowing until you tell them.

We did OK at this. But it’s the area where we could have had the most improvement. There are several avenues of marketing that I didn’t pursue, and more that I didn’t pursue as aggressively as I could or should have. All I can say is that this is a game I’m still learning.

Do the things we didn’t do: enlist more influencers to talk about your project. Get good artwork – and lots of it – for promotion. Consider paying for ads.

Grow Your Audience First

We’ve been building our audience at Silver Empire for two years now. It’s still rather small – but it’s far larger than it was at the beginning. Two years ago we couldn’t have run this campaign successfully. But a few days ago we nearly doubled our goal. Timing is everything. Don’t be impatient. Run your campaign when you’re ready to run it.

Good luck!

I wish you the best of luck in your own crowd funding endeavors. It’s a great tool, and it opens up many possibilities. I can’t wait to see what you do with yours!

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