Wakey, wakey! Book publishers are in BIG trouble
I’ve had a fascinating – and occasionally uncomfortable conversation recently with an experienced academic about pricing for books. Pricing? Fascinating? Well, hell yes – if you’re trying to make money and do so using the web. Because all of a sudden, something happens – once online, price becomes fluid, old models die away. Why so? Because the holders of the customer perception changes from the brand driver to the brand deliverer – from publisher to the person that can provide fastest and, dare I say, cheapest.
When you buy off Amazon, you do so because they’ve built a brand around service. You don’t go to Waterstone’s website (well you might if somehow you want to experience a bookshop online…). Nowadays, you don’t even go to the publisher’s website (well you might if they publish online services but rarely for books…). Amazon have been so successful with building a brand around service that people think of them like they think of a Hoover. Their brand has become “eponymous”.
Let’s look at eponymous brands – Hoover (vacuum cleaners); Guiness (stout); Amazon (online store for fast service); Cashpoint (ATM); Ebay (online auction). If you can create an eponymous brand well good luck to you – but you’ll need money, wit and patience.
The problem for the rest of us, struggling with mediocre brands, is how to create demand and manage profitability if sales go through places like Amazon? Because eponymous brands are all powerful, they control the stakes. Just as the same way that the supermarkets control the steaks – or rather how much they’re prepared to pay the farmers to supply the steaks.
Try to sell through Amazon and you’re dealing with hefty discounts even before you start. Build an online and offline marketing strategy and almost certainly a signficant part of your sales will end up through Amazon. Which all means that not only do you as the supplier pay the Amazon discount, you also pay all the marketing costs. Which means your profits are slender, very slender.
What’s the answer? The answer, surprisingly, is in price, value and new ways of marketing. If the book market, for example, is going online, the need to charge “price point” prices is reduced. No more do you need to charge £5.95 or £10.99 or £50. You can charge what you need to make it work.
However, incumbent with price comes value. Here the copywriter’s art – more than ever before – is crucial to financial success. Describe the product truthfully – and well – and price becomes irrelevant. Linked in to this, of course is the need for products to be worth the money.
Who are you making the product for? Why will they want it? Can you make them want it? Today, marketing methods need to be cheaper and gain bigger coverage than old-fashioned techniques because if you spend more, and your sales go through Amazon, you’ve massively dented your profits.
Tracking marketing effort has never been more important – yet, to make matters worse, tracking in the online space is now made more difficult because people like Amazon don’t tell you where your orders came from.
In the 20th Century, the old mantra was “I know half my marketing works, I just don’t know which half”. Then we went through the golden age of direct marketing where everything was tracked and analysed. Now, in the 21st Century, because of eponymous brand power, book publishers are back to where they were – they just don’t know what works, they only know their bottom line and profits. Not helpful.
Today the book publishing world is waking up to the fact that old models of “pile ’em high and maybe someone will buy one” is disappearing. But, just when the growth of the eponymous brand began to make things worse, things begin to get even more frightening…
People like Sony (e-reader); Amazon (kindle) and Apple (i-Pad) are entering a new world. By creating the consumer interface for the very reading environment, they are mounting a fierce challenge to the publisher’s very existence. If people like Amazon control the retail space and control the reading space, what space does the publisher fill? A pretty damned small one. Who cares about a bunch of crusty old English eccentrics in some run-down Bloomsbury garret?
With social media filling voracious demand for novelty and with e-readers and pdas offering smaller and more convenient storage capability, where next for publishers? Seth Godin believes the answer lies in “tribes” (what we used to call a database of users). I prefer to say that it lies in providing value to known customer groups who are prepared to pay your prices. Know your customers, know what they want and price for profit in a world where eponymous brands will demand significant contribution. The day of the price band is over, my friends.
Publishers today must wake up to who owns the brand space and to build brands to fit within the new experience. They must start to understand who these millions of readers are who read their books. Anything less is a surrender of position. And with no position, they have no existence.
Be afraid. Be very afraid…