Publisher seeking more revenues from your markets? Predictive analytics could open new horizons for you.

Publishers the world over know just how difficult it is to make a decent margin. This is because most publishers rely on third party retailers to generate most of their business. The problem with this approach is that you don’t know who your end reader is – or how much they value (or not) what you produce.

Free white paper for publishers wanting to grow margins

In a recent article, consultancy group Accenture defined a process called “predictive analytics” to help any company generate better returns from their sales and marketing. Here at Red Page Consulting, home of A Brand Day Out, I have taken a good look at this article and have written a free white paper on the topic for publishing companies which you can download here, with my compliments. You don’t even have to register your details! 

Or, if you haven’t got time to read how to increase your publishing revenues…

If you haven’t got time to read the piece, let me try to explain. Predictive analytics is a management process whereby you examine your “descriptive” analytics (your conventional marketing and other data), agree internally on a consistent approach to that data, and then use this information – combined with field information/segmentation etc to predict certain outcomes algorithmically.

Put simply, predictive analytics allows you to future model your different market segments to determine various “what if” scenarios. After a thorough assessment, you can determine how market growth, shrinkage or stability affect the performance of your publishing portfolios.

Predictive analytics  lets you manage underperformance out of your business

It can be surprising what is thrown up by this process: sales discounting  issues; individual staff performance problems; problem customers; renewal problems in certain segments; completely failing product ranges…

Using predictive analytics to model the future, you can define different approaches to your marketing and your pricing to ensure revenue growth by segment (rather than the traditional publishing model of one price – or price point – fits all.

Value-based pricing is crucial for publishers

Pricing is of course crucial. Publishing companies are often averse to the idea of pricing out of a price point. Many indeed are unable to comprehend the concept of “value-based pricing”. But in a world where a 1% change in price can leverage an 11% increase in profits (assuming volume and fixed costs stay the same), the folly of not understanding value-based initiatives is starkly revealed.

But top management needs to “buy in” to make it work!

The key to the successful implementation of predictive analytics in marketing and pricing is for top management to commit to the process and to ensure that all data analysed is agreed beforehand. The Accenture authors call this a company-wide agreement to “one version of the truth”.

No deviation: every department understands  and agrees what is being assessed at the beginning. Which means that all future decisions – both comfortable or not – are all taken objectively and with the company’s best interest in mind.

The white paper tells you more than I’m able to in this brief blog. Please download and take time to read it yourself – or see other useful downloads for publishers on our downloads page. And, if Red Page can be helpful to you in implementing the process, please don’t hesitate to get in touch.

In any company, at any one time, different departments may want to say different things about the company and its product range.  Sales may want to talk up the latest product. Editorial may be concerned about writing quality in brochures or on the web. The MD may be concerned about ethics. The FD may be concerned about pricing policy online. And so it goes on…

Often, however, these issues are not controlled; despite the fact that message ultimately is a marketing responsibility, it is often the case that the message when written down is simply “put up” by the marketing team but written elsewhere. A lack of marketing ownership of message is therefore a major factor in the collapse of brand equity – and especially in the social media context.

The report by the Altimeter Group makes for fascinating reading but the findings are profoundly logical when you take time to reflect on how chaos grows within a business:

1. Consistency can be avoided by knowing what business goals you want your social media activity to achieve. Best, as ever, to define these as SMART objectives so to avoid the usual “woolly” objectives such as “to achieve greater exposure…
2. The companies surveyed had on average 178 social media accounts (excluding employees’ own accounts) – from Facebook and Twitter to Foursquare and Flickr. Companies need to reflect on all their social media touchpoints to reduce confusion and maximise “story”.
3. Integration is crucial. Demands for newer and newer social media outlets creates stress points within a business: do you retain the existing and go with the new too? Do you drop the existing? Do you drop some of the existing? Management of system and message integration will be degraded by an unclear strategy.
4. Reputation management will flounder if social media pages are not kept up-to-date, on-message and relevant. In the social field it is crucial to stay in contact with customers/prospects and ensure rapid response.

To address this problem – a particularly significant problem for larger firms and yet even small businesses succumb to politics – Social Media Management Systems (SMMS) have been developed.  The report highlights some of the issues faced by users of these systems including quality, features and price, and I recommend you read that part of the report carefully.

However, for me the report’s findings are particularly interesting when we look at how best a company can align its social media effectively. The recommendations are:

1. Establish the business goals – “because playtime is over”
2. Conduct a social media account audit and only keep those the company will support – you’ll find that many accounts have been set up and many of those are either dormant or ineffectual or were set up because an employee wanted to set it up but has now lost interest.
3. Map out permissions and document workflow. Permissions in the hands of the wrong groups can lead to chaos and brand degradation. It is not surprising to learn that often those who have been in companies longest often have the least idea of marketing, brand and position.
4. Develop a content strategy. The last thing you need is a social media centre which is a melange of nonsense. Every marketing asset must have a measurable output.

Selecting the appropriate SMMS system is also crucial. Here, the recommendations are:

1. Rank your requirements before you talk to SMMS vendors
2. One size rarely fits all – be sure what the offering is, who it is normally tailored for and whether it will fit in with your own company’s needs. Buying “the best” may result in buying something unaffordable.
3. Try before you buy – software often sounds great but true service is provided by something which works logically, intuitively and well.

And finally, the report concludes with four implementation guides to ensure the social media strategy is adopted and works:

1. Change management requires investment – ensure all participants are educated and trained to deliver effectively and consistently.
2. Use third party suppliers to help accelerate roll-out. Many publishers would probably not seek to do this due to financial constraints; in which case having a “power champion” in-house will be essential to drive the programme.
3. Conduct QA, test and learn – a particularly interesting recommendation: simulation of events such as a company crisis will help define social media effectiveness.
4. Tie measurement back to business goals. Here, as we have said, it is important that these goals can be measured in a way which is acceptable within the management team of the company so that it continues to benefit from management support.

But when it comes to marketing outputs, consistency is what counts and this requires having experienced marketing professionals managing the message: people who understand message – properly. This is not a cry for territorial ownership by the marketing department, rather an understanding by senior management that message is too important to be left to territorialism.

Sales versus marketing - the issues are far too subtle for such an apparently simple solution, as this brochure for Triumph motorcycles highlights

It has been reported recently that the Chartered Institute of Marketing in the UK (the CIM) is advocating a “merger” of the disciplines of sales and marketing for fear that in the current climate the sales department’s activities take precedence over marketing. Oh dear… it’s this old favourite again.

In my early years as a marketer in publishing, the issue was always “marketing versus editorial”: editorial knew more about the product than anyone else and therefore had the final say on what, where, when and how a product could be marketed. Now we read that the situation has become “sales versus marketing”: sell the thing no matter what. All expressions of territorialism based on departmentalisation are wrong.

For any company starting out, every element of the company is geared to achieving sales of the product offered. Yet sales, the transfer of money for value, is more than just the sum of the transaction. When a customer buys a product, he/she buys an emotional belief: reassurance; service; delivery; value; supply; trust; certainty.

Thus it is that any company now which propagates a belief that a functional department such as a sales operation should have precedence over any other department is heading rapidly for the dustbin of oblivion. Once, we all lived in a certain world: people worked for companies churning out products which were then forced on people to buy. Industrialisation created as sense of continuum; in many ways economies were the perfect socialist model: people engaged in production and people buying production – keeping everyone happy.

But today, this model is long past its sell-by date. Indeed, it doesn’t even have a “best before” date. Marketing – proper marketing that is – is, as I have argued before, about inherent truth. Truth delivers trust and credibility; delivers new orders on trust and repeat business on demonstrable credibility via product experience. Marketing, therefore, is the ultimate expression of a company, its products and its values.

To hand the future of any business to the sales department, or indeed to the editorial department, or ANY department is to surrender a real link with the customer. It is marketing in its widest (non-departmental) sense which must drive a business: strategic planning; focus groups; product development; product management; pricing; customer service; touchpoint perfection and more.

It is nonsense to call for the merger of sales and marketing. Indeed, this is demonstrated by the often lame fop to marketing in the generic job title of  “Sales and Marketing Director”;  a vague title often defining a Sales Director who can do a bit of marcoms delivery.

It is better to call for an end to territorialism in the boardroom and for a common understanding of the consumer with all elements of the value chain facing only in that direction. Marketing must drive business – but only if the business begins to realise that marketing is not just the delivery of weird campaigns and straplines.

Marketing, as has been said before, is too important to be left to the marketing department. But it’s way too important to be handled by the sales team. In the words of Bill Shankly speaking to a translator when faced by a mob of Italian journalists , if there is a clamour for sales to lead the attack in difficult times, just say “tell them I disagree with everything they say“.

Credible perception and proven delivery are all that matters to a customer; if these are granted then all else falls into place – from price to the handshake. Let that never be forgotten.

Happy Christmas readers – see you all next year!

A thoroughbred from wheel to wheel? Quality and imagery unite to tell the story of the workmanlike Francis Barnett of 1935

In the “Facebook Generation“, it has at last dawned on marketing professionals that they can no longer get away with unsubstantiated claims, spin and obfuscation. Or has it?

From “Every Little Helps” and “The Big Price Drop” from Tesco to the current government’s ”We’re all in it together” and the previous government’s “fairness“, the marketing world is littered with phrases which are at best unclear while at the same time appearing to be authoritative and heart warming.

A manipulated brand perception – rather than actual brand delivery – is a core marketing strategy. This is wrong. These days, consumers are more sophisticated than that.

I believe that the best marketers, indeed the best sales people and even the best business managers, now need to understand the value of inherent or demonstrable truth if they are to be credible in today’s commercial world. This is especially the case when social media invites open and experience-based judgements of commercial delivery.

What is demonstrable truth in marketing?

Demonstrable truth is what every good business person should understand: whatever you say a product delivers is then supported by experience with that product. So much so that when the time comes to buy another, or to renew a subscription, the choice is made easier.

Indeed, the choice is natural: price is the economic sacrifice made to achieve value perceived to be greater than the price paid. If value is seen in marketing, a product is desired. If delivery is what was promised on the brochure, advertisement, back cover or wherever, pleasure is demonstrated by repeat purchase and even word of mouth.

Lack of skill in marketing and sales

Publishers often find that sales of new publications, or renewals of existing ones, are often below par. In most cases, a swift examination of the sales and marketing approach – combined with an assessment of what the customer values most – will reveal that claim is not substantiated by delivery.

Often, however, it is the case that sales and marketing people themselves are unable – or not skilled enough – to understand what a product does and why it does it. As such, any meeting with the customer is always doomed to failure: the customer doesn’t believe what he/she is being told; the marketer/salesperson is unable to comprehend what the customer is telling him/her.

Clearly, the volume of individual products a company has to sell – especially a book publisher - is an automatic accelerator of complacency: volume creates stress and inefficiency. Yet this is not an excuse for unprofessional marketing; quality must always come first if commercial success is required. Stint on quality, stint on success.

The impact of deceptive, misleading or just plain poor marketing communications is disastrous: unsold benefits; confused perception; unwillingness to pay. Value delivery – and an understanding of what that value actually is – is therefore crucial to commercial performance.

Today, if truth is not demonstrable, people talk about it just as they always did. Except that in the world of social media, everyone gets to hear about it.

Annual price increases - sophistication can leverage greater returns for publishers

December is often the time for publishers to address the issue of annual price increases; this is particularly so in book publishers where margins are uber-tight but the “January price rises” are not exclusive to books. Enter the “across the board” price rise – a technique now viewed as highly flawed for many reasons.

Typically, an across the board price increase will either apply a price increase to all publications or there may be a few bands: 5%; 10%; 15% etc. Yet price bands do not reflect the value offered by the publications sold. If stock isn’t moving at the current price, price is unlikely to affect stock movement at any price (hence why many a good book ends up in the remainder shelves and specialist resellers).

It is well known, of course, that a 1% increase in price delivers an 11% increase in profits if all other things remain the same. So it can be argued that if sales volumes don’t change then products of any quality can have their price increased. This is of course logical – except that in many cases a price increase may not actually reflect the real value offered by a publication and may well end up leaving valuable profits un-leveraged.

Sales volume is directly related to the value offered by a product. Assets drive purchasing decisions (brand, quality, content) and price is then seen as an indicator by the customer as to whether what is on offer represent an attractive exchange: money for value.

But many publishers have not succeeded in understanding that their products and services may indeed be worth far more than they are charging (or, conversely, far less). It is for this reason that pricing consultants are now viewing across the board price rises as an antediluvian device for leveraging company revenues.

As a way of describing the issue, Paul Hunt, president of global pricing consultancy Pricing Solutions, describes how, in the US property market, many properties are priced on a cost-plus basis, irrespective of their location on a plot. “Lake front” properties will always outsell street side properties – the former are under-priced and the latter are over-priced in terms of the perceived value for the price.

Standardised pricing here has created a system where properties perceived to be of high value are in high demand yet priced cheaply. Conversely, properties in lower demand are priced at a point where the value (a home of just the same size and quality) is seen as being not worth the investment.

But Hunt has a caveat, which is very significant.  “A certain amount of confidence needs to be applied in pricing — you must believe in your lakefront property”, he argues. “After all, if you don’t believe in it, why should the customer?”

Cynical price increases which bear no relationship to perceived value are a recipe for disaster. All the more reason, as we have said before on A Brand Day Out, for companies to have a much more sophisticated approach to their customers than they currently do. Value is critical in attracting new customers and – especially with subscriptions, digital services and magazines – retaining existing ones.

For publishers, of course, value is difficult to assess in many cases and, equally, it can be difficult to predict what will be a good seller. Without access to complex and often expensive tools like conjoint analysis software, a publisher must turn to its instincts: reviewing sales trends to see which products are selling ahead of their predicted curve.

If people are buying a product in large numbers at £16.99 and demand is ongoing (or even increasing) then a higher price can be charged. Retailers can then price to your price reference point – Amazon, for example, will use their complex algorithms to price down when sales increase – but the advantage remains in that, whether selling via a retailer or selling direct, the higher “reference price” is now the driver of stronger profits.

What this means of course is that the annual price round is more difficult because across the board price increases are easier to implement systematically: simply select the products and apply a universal price increase. But more sophisticated players are now examining each and every product in their portfolio, assessing sales volumes, deciding on risk, and implementing price rises which reflect the real value the products offer to customers.

At a time when every purchase made is being assessed for value, publishers ignore the potential real value of their products at their peril.

Effective brand management and positioning - the Penguin Books logo highlights the importance for publishers to manage their brands effectively for long term success. But brand is more than just a logo.

Strategic planning is crucial to business success, yet planning often goes out of the window as the latest business theory or article whizzes past the desks of management. This is not a good thing; if anything, vacillation shows inexperience. No matter how good the latest theory, if a manager cannot digest it in line with the strategy of the business then leadership will fail. And the same applies to brand management and the product portfolio.

Take Naymz - the competitor to successful networking site Linked In which describes itself as “complete personal brand management”. Originally it was called Naymz. Then it was called Visible.Me. And Now it’s called Naymz again – with emails saying “Visible.Me has changed back to Naymz”. Hmm, not a good advertisement for complete personal brand management then? Of course, Naymz is not alone; only a few years ago the Post Office in the UK toyed with changing its name to Consignia - completely overriding consumer perception of the business. Publishers can learn much from this nonsense. To coin a phrase, “publishers – know your place.” Or, rather, know your position.

Brand is about emotional perception – delivered consistently. Waiting to see which way the wind blows is not an option when it comes to brand: customers purchase through known attributes. Penguin books are well written, well edited, well produced. A legal solution from Lexis-Nexis will be robust and authoritative. A Mills and Boon Romance “does exactly what it says it says on the tin” – to quote the successful Ronseal advertisements of a few years back – and “brings romance to life“

Yet brand erosion can occur swiftly when the brand, and its perception, are not managed. Publishers start to publish books “out of portfolio” just to bring in volume and cashflow. Cash shortfalls cause those who panic to start discounting unnecessarily resulting in core brand assets of price/value being eroded. Products offered through e-readers are somehow not dealt with in the same way as print, with branding going out of the window. In truth, all these examples highlight that when the financial chips are down, it is very easy to avoid discipline and to go with the flow.

But, as with a company whose management keeps changing its mind and staff leave, the same applies to customers of a brand. If a publisher has an emotional link with its customers, it messes about with that link at its peril. In order to ensure that brand is managed effectively in these difficult times, publishers need to reflect on brand management itself and take the process more seriously than ever before.

Yet these things are easier said than done. Publishers – again largely for financial reasons – often do not invest in brand or brand management. While some may have some ”corporate guidelines” for logo placement and the like, others leave brand in the hands of the marketing department to do with what they will. Neither of these options is in any way serious enough.

Brand, successfully managed, will deliver long term benefits across the business: a strategic marketing and business plan providing a long term and credible leadership position which staff can grasp; consistent commissioning decisions in line with segmentation; reputation management across all touch points; a logical price/value position for portfolios; a direct consumer/publisher relationship; long term loyalty and revenue streams; a logical entry point for prospects.

Relevance plus dependability = commercial longevity, you might say.

So how can brand management be championed to enable consistency of thought and excellence of delivery? Much depends on a company’s willingness to change – to place itself at the heart of its customers’ emotions. This requires a new way of looking at brand management and its recruitment and maintenance within a publishing company. Solutions can include:

• Recruiting the right kind of people who are less obsessed with self and more concerned with a company’s relationship with its customers
• Avoiding a “central guru” brand manager who becomes so indispensable that when he/she leaves the brand falls apart – dissemination of understanding is crucial
• Questioning the current set up and being prepared to act to get rid of underperformance
• Determining the greatest brand opportunities in the  business and putting the best person on the job to manage them
• Encouraging vigorous debate about brand strategy, arriving at decisions and incorporating these into the marketing and long term business strategy
• Actually having a strategic marketing plan and taking the process seriously (beyond the usual budget line and spending outputs)

No business – no political party even – survives long by promising much and delivering little. The same applies to successful brand management. By bringing brand perception and management within the core strategy of business – and by hiring the right people to do it – publishers can make themselves relevant before it is too late.

Publisher cash flow - 10% of customers can lose you 125% of your profits

Dr Reed Holden needs no introduction to professionals in the pricing community which is why I found a recent article by him in The Pricing Advisor (published by the Professional Pricing Society) so fascinating. His insights into pricing and value control are spot on and here are some salient thoughts which I think offer real substance for anyone in the throwaway world of publishing profitability:

1. At the end of a quarter, the pressure is on to deliver results and sales people will do almost anything to get the deal even if it means offering discounts to close the sale. Don’t let this happen. Holden argues that once price becomes the issue, competitors also will start to price down: result – all players in the market start to be judged on price and not value. What does this mean for publishers?

For publishers in the book trade, this approach is near suicidal; bookshops are not scientific when it comes to pricing and for years have peddled books like baked beans and salt. Sure, a bookselling chain will be happy to buy at greater discounts but what about returns? What about customer perception if the end price for products is even lower than before? This is bad news for a book trade publisher.

For publishers selling direct  and who have long term key accounts, price reduction merely serves to “train” buyers to wait until the end of each quarter to get the best deal. This should be avoided at all costs – long term erosion of subscription value has a devastating effect on value perception and willingness to pay. High value B2B and professional subscription products cannot afford the perception of being “not worth the money”.

2. Holden argues that when price discounts are requested, management must always ask the question ”why”? This is not simply a tactic of denying the request - although it is important to train sales people that such requests can’t simply be granted – but a way of developing strategy. For example, it may be that a key account needs a different product to the one on offer – companies can enjoy more successful relationships with clients by adapting to change rather than offering a “one size fits all” product solution. For publishers, this could mean:

Trade publishers – requests for increased discounts imply that the bookseller is not efficient at selling your books at your pre-determined value point. This is highly likely given that neither the bookseller nor the publisher knows who the end customer is. Many simply don’t care.

In my experience I have seen territorial sales agents demanding ever higher discounts but at the same time delivering fewer sales. The higher discounts in this instance are to preserve the agent’s margins rather than deliver sales to end user at value-based prices. It is important to be certain why the discount is being requested – it may indeed be the case that for trade publishers there are better books/e-books out there than the ones you are publishing; this places increased emphasis on publishers and commissioning staff to model and plan their product marketing. Simply commissioning a one-size fits all book for the sake of output and cashflow is a moribund philosophy today.

Direct publishers - Here the benefits are truly enormous. If price is the issue, it will almost certainly relate to value delivered and not just the price. Key accounts offer huge intelligence about future product development and feature delivery. Lower value products can be developed not just to satisfy the customer but also to act as a “flanking” product to avoid incursions from other publishers. Indeed, in legal publishing for example, history shows us that monolithic products have slowly but surely been eroded by benefit-laden solutions from smaller suppliers.

3. Putting a stake in the ground now is Holden’s solution to discounting. What he means here is that managers need to map how, why and when discounting is occurring, study the results and arrive at a corporate policy and appropriate business development strategies. He argues, rightly, that discounting particularly to small customers (to “win new business”) will be corrosive in the long term: new customers will always expect the lower prices; existing customers will (definitely) find out. Result: disaster. For publishers, this could mean:

Trade publishers - mapping discounts by client, by sales person, by product range. Steps can then be taken to eliminate certain discounts. The problem here, of course, relates to neighbourhood pricing: the trade expects a discount and the publisher relies on the trade like an ivy clinging to an oak. However, there will be opportunity here. In my experience I have been able to analyse complete account sets and then remove the most unprofitable ones from the portfolio. Remember, if accounts are unprofitable, they must either be made profitable or removed.

It is quite possible, for example, that a trade publisher could in time establish a direct relationship with readers, sell fewer books and make more money then by selling in volume to a trade which doesn’t care and which is happy to return unsold stock. This is particularly the case given the huge opportunity offered by social media marketing, brand empathy and branding strategy.

Direct Publishers - again, a process of mapping by client, key account manager, region, industry type. A real problem with companies with large key account teams (and even those with large teams of advertising sales people) is that politics comes into play and senior people (e.g. a sales manager bonused on revenues rather than margins) won’t play ball. Here the onus is on the senior management team to be blunt. In business we have no time for entrenched people: if they won’t change then they have to go.

I’ll conclude with what Holden calls “the value of NO”. He cites a number of scenarios, which are well worth repeating here:

• Research has shown that 70% of B2B firms and 80% of service firms make the mistake of responding to all customers. Products do not meet the need of all customers – rather than sell the same thing to all people and risk price attrition, produce other items to sell (profitably) to other segments. The key word here is “profitably” (not an excuse to sell lower priced items at further discounts).
• Don’t force high value items onto customers who want a lower priced product. (A Brand Day Out note: in a trade environment, a price must define value: customers can choose to pay the higher price from a browse situation – it is not up to the trade to reduce the pricing on your value proposition).
• Identify poorly-performing customers. In desperation, companies load themselves with clients who are too expensive to service. A rough rule of thumb is that 20% of a company’s clients deliver 225% of its profits. This means that all the other customers have a negative effect on profits to bring that number down to 100%. Holden says that  70% of a company’s clients will be at break-even and the remaining 10% will be responsible for losing 125% of a company’s profits. That’s one heck of a hit from so few on so much.
• Finally, always remember that it’s value and not price that sells a product: whether it’s a Mills and Boon or a multi-site enterprise licence for a digital solution. As Holden says, “the best antidote is to understand, leverage and eventually manage the value of the firm – that’s leadership“.

The question for publishers is when you want to start work.

Social media more important than life and death? Bill Shankly may have had a view on that!

Had a great conversation yesterday with a friend of mine in the US. After talking about how the leaves on the trees combined with heavy snow to cause pandemonium on the streets of America, our conversation turned to the effectiveness of social media – and, to coin a neologism, “virality“. A natural turn of events in a conversation, as you might expect…

The conversation was timely because in yesterday’s Publishing Perspectives, the question was raised: how much is social media visibility really worth? A question which should further be asked is this: do your marketers know what they’re doing in order to be able to measure its effects?

In today’s social-media world, many long-in-the-tooth publishers (and many younger ones too) act like rabbits in the (allegedly proverbial) headlights when social media is mentioned. There seems to be an acceptance that if the company has a Facebook site and does things on Twitter then everything is fine and dandy. Some publishers have a place on Facebook or Twitter and that, it seems, is that – boxes ticked; “we’re doing social media”.

Well yes and no. Take a look at many publishers’ social media pages and really you wonder what the difference is between aimless meandering on Facebook and equally pointless mass mailings of brochures to a bought-in mailing list.

The entries are dull in many cases: “new book on copywriting by Alf Scrivener launched today”; “don’t forget that Arthur Crown will be talking on Twitter today about Mediaeval Numismatics”; “Professor Wolfgang Beer-Wolff will be discussing his book on Early English Poetry and  Christian Eschatological Typology on the French Radio Show Non-Plus at 10.30 today – catch it if you can”.

Little wonder that chairmen and women and managing directors up and down the kingdom are looking at their overheads and asking themselves why they’re paying someone to do this. Although, as we have seen, they know it has to be done. What’s the real story then?

The social media story, in a nutshell, is this: interact frequently and relevantly to customers and prospects who matter to you. Facebook calls this process EdgeRank.  As they say in my home town, “you what?“

In Facebook Newsfeed - the core display area – Facebook classifies each news item you produce on your site as an “object” and, when someone interacts – either by liking, or – better – by commenting on your post, the object then has an “edge”. The more interactions, the greater the edge rank. As Facebook explains on its site:

“The News Feed algorithm uses several factors, including: how many friends are commenting on a certain piece of content, who posted the content, and what type of content it is (e.g. photo, video, or status update).

If you feel you are missing stories you’d like to see or seeing stories in your News Feed that you don’t want to see, use the different News Feed Controls to adjust your settings and give us feedback about your preferences.”

The incredibly clever algorithm which controls those stories that appear examines three areas:

1. Affinity  between the viewing user and the edge creator (where the edge creator is the person who comments, tags etc)
2. Weight of the edge type (e.g. tag, comment etc) – comments, for example, may show greater interaction than a plain “like”
3. Time decay – a factor determined by how long ago the edge was created

As can be appreciated, the greatest science is rendered greater by those who know how to exploit it. And here something happens which old marketers have known about for years: you need to know who your customers are, what they like, and how they behave. Measurement, therefore, is crucial.

Yet even at this point, some publishers still act like dodos on Mauritius – they know it would help if they could learn to fly yet nothing’s happened so far to encourage them to do so. Until a British warship laden with hungry sailors appears on the horizon…

Facebook engagement is not about having another conduit for your “unique” take on things. That’s merely brand extension by subtle copywriting technique. Instead, it’s about understanding the very nuance of your brands and triggering relevant “hot buttons” in the minds of your customer base.

This is particularly crucial when you reflect that Facebook populates different people’s ”walls” with stories which its algorithms determine have relevance beyond the wall where the story started. It’s when friends of friends start to pass on material that stories go viral. Which is why it is that Facebook marketers need to understand the very blood of their product relevance when crafting entries.

So, going back to the Publishing Perspectives question: how much is social media visibility really worth? Well, a lot, actually – if you know what you’re doing. As with all marketing, ask yourself this question: what do you want your customers to do and why does this matter to me? This one question will then open the doors to measurability.

Companies like Starbucks (25+ million friends and counting), Coca Cola (35 million) and Adidas Originals (11 million) engage with customers and prospects big time. They will measure impact on a global scale: sales in peak periods; leveraged sales through promotional activity by region or season; sales through given store chains. All is measured and tested, time and again.

What is clear, though, is that a comparison between number of friends and given response to a social media initiative by statistical analysis alone does not make compelling reading for those looking only at stats.

Take Adidas as an example, yesterday they had a hallowe’en feature which attracted (at time of writing) 994 likes, 152 comments and 81 shares: a total of 1227 interactions from a universe of 11,304,352 – a potential “response rate” of 0.0001%. Yes, on the face of it, not good. Using other statistics, Adidas has 60,156 people “talking about” it on Facebook – 0.005% of its universe. Hmm – that’s a subscription product response rate if ever I saw one.

Statistics are not the main thing here – but they tell you when you’re engaging in the right with with your customers and when you’re not. You can compare campaign with campaign, entry with entry, to assess brand engagement, learn and develop your marketing. But never forget that there has to be a commercial imperative at the end.

In these frightening days of publishers selling their shirts to the book trade and to Amazon just to stay relevant and visible, Facebook and social media permits two things: brand relevance in getting people to choose your products in the retail outlets and, more crucially, brand engagement and getting people to buy your products from your own website. Assuming, one hopes, that your website allows people to buy directly from you…

So is social media really worth the effort. You bet – but only if you understand the concept of EdgeRank and – crucially – what makes your customers tick. Facebook writing must NOT be palmed off onto some junior lackey or someone who fancies a bit of social media. Like all marketing, it’s too important to be left to rank amateurs and corporate gadflies.

But neither is Facebook just something to hand to marketing who are told to “get on with it”. As the late, great Liverpool FC manager Bill Shankly might have said: “Some people believe that Facebook is a matter of life and death. I am very disappointed in that attitude. I can assure you it is much, much more important than that.”

Or, to cite one of his more pithy statements: “If you are first, you are first. If you are second, you are nothing“.

Measure, test, refine, change, get better. Ignore how social media works at your peril.

Image of Bill Shankly courtesy of Liverpool FC website, with apologies.

Agincourt - how disciplined teams can overcome all the odds

Today, 25th October, is the anniversary of the battle of Agincourt (or Azincourt) and, despite recent revisionist theories reducing the size of the French army, this great English victory is still seen as one of the most remarkable of all times. For marketers, curiously, it also holds a message – you can do a lot with a little.

Whether one views the size of the French army as 60,000, the more likely 25,000 or the revisionist 10-12,000 (or fewer), the ability of a diseased and starving force of 5-6,000 English/Welsh/Irish to defeat an army of skilled, rested and well-armoured knights is remarkable.

Agincourt teaches us – as indeed does the Battle of Britain or Trafalgar – that fortune favours the brave. Timidity and cautiousness results in time for the enemy to consider, re-group and find an alternative. In marketing, we substitute competitors for the enemy, or even the customers: the point is that to achieve what we want we have to act with certainty.

At Agincourt, Henry V had few advantages. The terrain didn’t favour him initially, his army had been starved for days, and the French army had forced him way off course. What he did have was the ability to make quick decisions – he advanced his army so close to the French that he not only provoked them to attack but also he provoked them to attack a position which was stronger than if he’d stayed put. He also had a force of highly disciplined archers and a small force of well-trained knights to focus on areas where the French broke through.

If we translate this to marketing, what can we learn? Firstly, small is often better and easier to focus and leverage. We all know that mass campaigns cause large losses and are often seen as a branding “blunderbuss” rather than a focused sniper’s rifle. Targeted marketing works better.

Secondly, by knowing your own position in the market, your brand credibility is all the stronger. Few brands in publishing are mega brands; many are brands with limited brand collateral. The brands which are strongest are those which have emotional meaning – sufficient for customers to purchase willingly and for competitors to envy.

Thirdly, publishers which engage staff punch well above their weight. So many publishing companies today have become complacent in the area of internal brand management. Those companies which engage staff in brand ethics and brand projection will produce staff who deliver focused marketing collateral.

Fourthly, it always pays to plan. As the saying goes, fail to plan and plan to fail. Talk to many publishers and it becomes pretty clear that the nearest many get to a marketing plan is a spreadsheet showing how the marketing budget will be spent during the year. Often these plans are structured on a legacy basis – “we’ve always done this” – but as any CIM graduate will tell you, a marketing plan is much bigger than the marketing department, it’s about the whole company.

Fifthly, flexibility and mobility leads to victory. Having a plan is one thing but knowing how to change it when the going gets tough is crucial. Marketing departments who understand KPIs and metrics know best what to do when the dashboard lights show a crisis ahead. A trained staff delivers results significantly beyond their size.

Sixth, risk taking – and a culture of risk taking – delivers strong engagement. Empower your marketing team to advance tactics and learn from results – this will create battle-hardened experience which will build into an invaluable corporate memory bank of skills. At Agincourt, for example, the archers were able to enter the French army both to attack and to retrieve arrows – yet they were then able to be managed as a fighting force  to shoot more arrows in a disciplined fashion.

Today, marketing for publishers has become a difficult game – especially for those publishers who have surrendered their souls to become totally reliant on the book trade and the e-retailers. So every marketing pound or dollar must work extra hard for slim pickings in the pocket price.

Those publishers who can leverage message, response, data, social interaction, brand and price in a manner that will convince a sceptical buying public will win the day. Small teams must leverage big results like never before.

As Henry V says in Shakespeare’s play: “We are but warriors for the working day.” The question for publishers and their marketing departments is this: Are you up for the fight?

Image: Battle of Agincourt – one of a series by Michael Smith. Copyright MTA Smith 2011 all rights reserved

"just like that!" - when it works, there's a magic to effective renewals series for publishers

For owners of subscription-based products, e-news services, newsletters, magazines and even those of annual products (e.g. yearbooks or membership organisations), renewals is a key feature in their financial management. Yet it is surprising just how often the core communication of “renewing” is botched. This can result in significantly lower renewals from previously loyal subscribers and, of course, means that much more money has to be spent acquiring new customers at much greater expense.

First, here are some common problems I have encountered in my years in the publishing industry:

1. A reluctance to communicate a renewal for fear that the subscriber may remember the publication and decide not to subscribe (alas, yes, I have encountered this on more than one occasion believe it or not…)
2. Computer-generated renewal letters which only allow a certain number of text characters (e.g. 150) for marketers to communicate renewals
3. Corporate cynicism (similar to the first item in this list) whereby the renewals letter(s) are seen merely as a function and not as a marketing exercise
4. A failure to define in core documents exactly what is being renewed
5. Staff ignorance and structural issues acting as a barrier to customer service
6. Finally, and most ridiculous if it weren’t actually true, no renewals letter or invoice at all (and, again believe it or not, I have very recent experience of this from a high value publisher who shall remain nameless)

Let no one tell you otherwise, renewals is a marketing issue. It is consultative. It is about reassurance. It is about ensuring that revenue streams are predictable and manageable. Which is why companies which don’t practice a structured renewals programme will suffer.

Here’s a simple 101 for publishers and others who need to maximise the performance of their renewals activity for the sanity of their business. The points below are in no particular order:

• Make renewing the easiest thing a customer can do.
• Renewals income is the lifeblood for publishers with subscriptions or annual products – maximum profit for minimum sales and marketing expense.
• Renewals channel should reflect customer’s delivery mechanism. For example, a paper renewals series would seem a singular extravagance for a product delivered entirely electronically. It would also be unlikely to work.
• As with all marketing initiatives, nothing stands still. Be prepared to measure and test.
• A renewals series of whatever length should not be deemed the sole renewal activity; it is proven that subsequent mailings to lapsed subscribers often leverage significantly high responses and ROI levels than mailings to pure prospects. Subscribers do not die when they lapse.
• Always invest in renewals activity. To expect customers to renew “just because” is complacency of the worst order.
• Always state what the price is, and what the customer gets for the money and for how long. If there are other options (e.g. subscribe for two years and save 20%); state those options also.
• Always give the customer a chance to change their records if information is out of date. Accurate data has a revenue potential far beyond the fact of being accurate.
• Know the costs of acquiring a new customer (cost per customer and ROI). Renewals activity should equate to a tenth of that or less.
• Know what you can afford to spend on a renewal series (based on the above). It clearly is not acceptable for renewals to cost the same as new customer acquisition – especially if (as in the case of high value publications) acquisition ROI could be 100% or lower.
• Renewals is marketing – renewals messaging must reflect the values promised when the customer first subscribed and the values delivered by the product in service. In other words, value promised is value delivered. Value delivered against a promise results in loyalty.
• Renewals messaging must be written by skilled marketing professionals. The renewals message is not some stale editorial piece about how wonderful you are and nor is it an over-hyped sales message. It must carry inherent truth to be effective – truth based on product delivery. It is surprising how few sales or editorial people understand the concept of conveying value. It is equally surprising how few marketing people can write effectively. Tesco’s famous/notorious strapline “every little helps” is not an example of inherent truth. A skilled copywriter is essential.
• If a computer system does not permit messages beyond certain character numbers, change it or write an accompanying renewals message. A weak message implies contempt for the customer – especially as the shorter the potential message, the more brutal it appears. Brutality is the enemy of persuasion.
• Always ensure that anyone who can be contacted as a result of a renewals initiative is informed about the product, what it does, how much it costs, how to access the customer’s records. If a customer has a question and arrives at an unhelpful human being, all illusion is lost: a brand dies in a few unhelpful words.
• In the case of some online automated renewals systems, some customers cancel when they receive a receipt for their payment. This is to be expected. To help keep costs down, an earlier announcement of the intention to renew should be sent to subscribers. Cancellation which occurs before financial processing is cheaper to manage.
• Always anlayse renewal behaviour so you can amend renewal strategy accordingly. When during a renewal series do customer most renew? Will a phone call or email improve response at a set period? How many letters/emails should be in your renewals cycle? All these should be monitored on a consistent basis to maximise renewals series effectiveness, reduce costs and increase ROI and – of course – renewal rates.
• Finally, a question I am often asked: should you incentivise renewals? My gut feeling on this is “no” – or rather, not without more information on what is happening to a given product. Any variation on pricing should be related to a customer making a conditional response. So, if the customer wants to renew for 2 years instead of 1, a saving can be offered. If renewal rates are underperforming against target, this is rarely to do with price – it will concern value. If a customer is not receiving value in excess of the price paid for that value, then reduced renewal rates are inevitable.

I hope this information is useful. A robust renewal strategy is by far one of the most significant marketing activities a publisher can undertake and yet, surprisingly, it is often the most neglected. I hope I have been able to show that by more efficient focus on the process, some of the key stresses of revenue peaks and troughs can be avoided.