As Book Purchasing Behavior Changes, So Must Publishers’ Sales Metrics
This essay is part of the 2015 Big Ideas Issue. Find the complete list of Big Ideas essays here.
In 2015, the publishing industry is seeing signs that ebook sales as a share of all books is flattening out. Whatever the forces behind this are, publishers are forced to explore better methods of optimizing ebook revenue.
One basic strategy required to manage sales is to define and understand the purchase cycle so you can measure the different transitions and better understand how your marketing and pricing are working to achieve your goals. An old method of doing this in many industries is the notorious “Sales Funnel.” The problem with that approach today is that it fails to take into account the feedback loop of social media in providing peer-to-peer recommendations that are so vital to the success of a book or almost any product. Today, as publishers show interest in having a more direct relationship with their readers, they need to have a framework that reflects new digital behaviors. When looking at the traditional digital interactions a company has with consumers, we use the following framework.
The Four Phases of the Digital Consumer Interaction
Source – Where they come from and how they find you
Engagement – What they do between awareness and conversion both on your sites and outside
Conversion – What you want them to do, who does it, where, and how often
Loyalty – How often they re-engage and why (not necessarily following conversion)
The key to applying this framework is that it provides a rational way to define metrics in all four phases with a balanced approach being optimal. Consider starting an effort to generate a large list of consumers. It is possible to spend a great deal of money acquiring consumers (Source) but if you are driving them to a poorly designed experience (Engagement), it’s like driving lemmings off a cliff. They probably won’t convert or come back. You will see this imbalance very easily if you have a balanced scorecard of metrics. Conversely, you could create fantastic pricing that drives high conversion but if you have no traffic, that’s most likely not helping achieve your goals.
Loyalty is perhaps the most critical measurement here. Old-style metrics such as conversion rate assume a visitor comes and either buys or doesn’t buy. Many times, customers need to visit multiple times, engaging in different ways, sometimes interacting in multiple places before they decide to buy, register, or convert in any other way. If your metrics are counting the early visits as missed conversions because they can’t follow the consumer interaction across multiple engagements then they are not helping you understand what is really happening and how to best drive conversions.
So that brings us to the Digital Content Purchase Cycle, which is a modification on the above chart that is more focused on how, where, and why a single piece of content gets bought by consumers. This framework takes into account some behaviors that are outside of a publishers control or even visibility, particularly including how those who have read a book interact with other readers and potential readers.
In order to create it, we had to ask: What do we really want to measure to describe actual behavior and lead us to actionable insights?
- How they discover the book
- How/why they purchase the book
- How/where they consume (read) the book
- How/where they discuss the book
When used right, this framework is intended to provide meaningful measurement across the entire cycle of interactions between publishers and readers, retailers and readers, and readers and each other. What’s added are the components about how readers consume the book and then how they discuss the book after they have read it. That last one is the critical piece that the industry needs to understand better, as it ties back into discovery (by other consumers). Some common examples of this type of measurement are Facebook likes, reviews on retail sites, and mentions in tweets or on online forums. We strongly encourage publishers to consider a number of these types of metrics and to put the effort into determining which ones correlate most strongly with continued discovery by other users and ultimately more sales. Determining which readers do the best job of promoting your books, where these interactions happen, and how to reach them and encourage them can yield significant value.
This insight can then become part of your marketing activities. Consider that your email campaigns can influence readers in different ways. Are you trying to introduce them to new titles, or influence them to purchase books they already know about? Testing should reveal what balance of these efforts will work best.
This is why having a measurement framework that takes in as much of the entire picture as possible is so important. By measuring across a balanced set of activities, you truly get to the cause and effect of everything you do to promote and sell books and this leads to a better balance of these efforts to maximize your returns.
Related story: How Book Marketers Can Move Beyond Verticals