The book as price model a thing of the past?
If book publishers know one thing it is this: once a book is published, you have to publish more. This is because, behind the glory and beauty of the latest launch, lies a nail factory churning out product to keep cashflow strong or, more likely, just to stay afloat. There must be an alternative to this.
It is argued that pricing for a book is linked to retail practice rather than consumer value. Most publishers today are still as concerned about the retail “price point” as ever before. Yet who defines end value? The publisher? The retailer? The consumer? Ultimately, value is defined by the consumer. He or she is the only arbiter in the final decision.
If a product is desirable beyond the price suggested, then purchase is inevitable. But only by those who view the value as essential. If value is not perceived, purchase is unlikely – or requires marketing to engender that which is not immediately visible. Consequently, it can be observed, the false application of price points to the purchase of information is a nonsense. The perception of value must be self-evident if either strong profits are to be delivered or targeted volume is to be achieved.
The folly of the price point
Price points either undersell or oversell a product. It cannot be the case that information or literature is “worth” £9.99 or £19.99. Discounting and “three for two” deals for books turn purchase into a money-focused, rather than value-tuned, transaction.
Retailers argue that this tactic works, of course. And it does – with the proviso that the consumer perceives the value of the products in the bundled deal rather than the contents of the package. The only value perceived is the lower price – and the hope that the larger amount expended (spending on two books) will deliver higher intellectual value when the three books are consumed.
Price points are related only to the promotion of stock movement based on retail-orientated behaviours. They bear no relationship to the potential profit of a book. Unless, as is often the case, the publisher wants to sell out of printed stock in order to deliver the margin to the nail factory. In this case, why is the price point relevant in the digital space?
A price point surrenders value. It leaves profit on the table merely to encourage volume sales.
Try before you buy?
Let us consider the alternatives. Some have argued that digitisation of books permits the part-selling of books. Consumers can try before they buy. If we reflect on the value debate, we can see that whether a book is available in whole or in part, financial transaction is only possible if self-evident value is demonstrable. Why pay for part of something which is not understood? Would a motorcyclist buy a front wheel but not the rest of the machine?
A consequence of “try before you buy” is to create a mini nail factory producing bit-part books whose existence and production take up more staff time. The model is a replication of the flawed larger model of price-point based product.
Maximising the brand?
It can be observed that in selling component parts - consumer testing – relies still on the conceit of brand. Publishers who do not leverage brand are now falling behind those who do. For a brand, in an uncertain world, is an emblem of certainty of experience. Anyone can publish a digital book today but at the point of purchase, the value debate comes to the fore: who would buy a book by an unknown author from a digital platform designed around financial exchange rather than quality and substance?
What use is a price point for an unknown author? It can be seen that brand – service, design, quality, delivery – is crucial to perception. Brand is therefore crucial to a publisher’s freedom in pricing to value.
Library models in the digital space are now seen as offering new potential: consumers rent a product in return for a small fee. If more value is required, the product can be rented for longer. This model is interesting but contains two signficant problems of the publisher’s own, historic, making: a book is perceived as a book and therefore has a known price – both by the publisher AND by the consumer.
It can be seen, therefore, that for information to be leveraged today, the perception of “the book” needs to move beyond the historic book trade model. Consumers require information and are prepared to pay for it. Publishers need to sell product with inherent value. The psychological challenge therefore is in the perception of what a book actually is. A book is currently perceived as a product with a known price point.
Poor quality publishing
If we return to the publisher as nail factory, we can see that a requirement to publish a set number of “titles” per year is part of the structure to deliver an annual margin. A consequence of this process is a failure in quality. If a brand is built on quality but destroyed by the demands of volume then the brand will not survive. Or it will be damaged.
A reliance on price point has created a business model designed around volumes, margins and sales where the focus is on selling stock in sufficient quantity just to keep going. Where then individual product focus, brand potential and leveraged value?
It is argued, therefore, that publishers need to focus on niches with defined value opportunity. They need to develop brands which are equated with chargeable price. They need to nurture quality through robust commissioning. They need confidence in pricing to value. They need to establish formal links via nuanced marketing with the end user – the consumer. The publisher needs to exist as profoundly relevant in the crowded minds of the consumer.
It is clear that if publishing companies see their future still with the book trade then they are surrendering brand ownership and perception to others whose only aim is to clear stock, not sell value. The price point is the enemy value perception except in those cases where a publisher brand is only to sell product at a certain price. This, as we can see, is why many publishers are suffering with ever tighter margins. If the trade is to play a part in this process then they too need to understand that as book sellers they are selling more than books.
The book as price model? No. The publisher as price model? Yes. Brand ownership and leverage is crucial to future financial success.