Over the past few years, direct-to-consumer (D2C) sales have been top-of-mind for many in the publishing industry. This approach has also been hotly debated, with some advocating for deeper consumer relationships through data, and others equating D2C with taking on Amazon in the retail space—a fight in which few, if any, would like to engage. I caught up with five experts who have all dealt with D2C relationships in varying ways to gather some insight into this brave new world.
Jason Merkoski was a development manager, product manager and the first “technology evangelist” at Amazon. He helped to invent technology used in today’s ebooks and was a member of the launch team for each of the first three Kindle devices. Merkoski is also the author of the recent Burning The Page: The eBook Revolution and the Future of Reading.
Q: As the former senior program manager of Amazon's Kindle team, you had an early look at the then nascent relationship between readers and digital content. Were there any trends you noticed that changed your perception of how people interacted with books and book content?
As far as the way that people interacted with ebooks, I will say that I noticed a “diffusion of innovation” through the reading populace. At first, the people who tended to read ebooks were those who I would call innovators or early adopters. These were the people who could see the value in plunking down $500 on a new e-reader, people like former astronauts, presidents, actors and actresses—the trendsetters. These are the people you would see on airplanes in the early days of ebooks with a Kindle, and everyone would crowd around them to see how ebooks worked. Gradually, as the “diffusion of innovation” spread, in part because of these early advocates, e-reader technology became more common.
Q: How do you see publishers changing their acquisition and content creation processes to accommodate new types of interactive or social books?
Smart publishers are changing to adopt best-practices from the tech industry, taking Silicon Valley thinking and applying it internally. This means, for example, creating new types of ebook apps. Creating innovative retail portals to help users discover, buy and read content. But when it comes to content creation and acquisition, the process is mostly unchanged—much to the discredit of publishers. Ebooks have propelled self-publishing into new heights, and I believe there are lessons to be learned from digital self-publishing that could benefit savvy publishers.
Q: One challenge of a direct-to-consumer model is that some feel that it's simply a euphemism for “competing with Amazon” on a retail level. What are some of the non-e-commerce related benefits of building direct consumer relationships?
There isn’t a single publisher around that can compete with Amazon. But it’s not about competition. The direct-to-consumer model is about knowing your customer. It’s all-important! Typically, the primary customers that a publisher engages with are business-to-business customers: the retailers and distributors. But not the end-readers. By knowing what the end-readers want, what they’re like, what other books they buy, who their friends are, what books they’re sharing, how much they spend on discretionary reading–well, it’s a treasure trove of data that can help not only market books better, but help curate new books, or new editions of existing books. That said, retailing content isn’t necessarily the only way to gather this data–there are intriguing platforms now which help to connect publishers to readers without encumbering publishers with the burden of setting up their own niche retail portal.
The Data Junkie
Laura Dawson is product manager for identifiers at Bowker. She can’t stop talking about identifiers, metadata and book discovery. She has recently published a collection of short stories, The Place Where I Come From.
Q: In the many years you've been working with publishers on data analysis, what are some of the trends you've noticed?
Well, it really depends on the publisher. There are quite a few midsize publishers and imprints of larger houses that really embrace data, want more of it, and apply it to marketing and even to editorial decisions. But “data” means a lot of things to a lot of people, and data about book publishing and consumption is notoriously hard to gather–if it exists, it’s proprietary to a retailer (where you left off in your Kindle edition of Dr. Sleep, for example). But we’re a little further down the road than we were in 1995 when I began looking at publisher data seriously.
Q: What are some examples of publishers doing well in terms of data-driven engagement or branding?
I always think of O’Reilly, of course, and Harlequin. They’ve both been leaders for quite some time. There’s Osprey in the UK. These are publishers who know their readers, and who are dedicated to gathering as much data as they can about them.
Q: There is so much to do in the way of D2C relationships and models. If a publisher wants to begin building D2C relationships today, how should they begin?
Again, it all depends on the publisher. For trade publishers who do a mix of titles, it's really hard–readership is diverse and dispersed. For genre publishers or publishers of nonfiction, such as cooking or carpentry, it’s a bit easier. There’s an already-defined audience. It’s just a question of going to where they are and interacting with them, offering them useful information and expertise, demonstrating why they should read your titles.
Q: Recently, you published your own collection of short stories. Part of that project involved making changes to things like the cover or format. It also involved a lot of direct contact with your readership. What has this endeavor taught you about the role of direct-to-consumer relationships from the content creator’s point of view?
Ha! That readers really just want you to get out of their way so they can read. That they are appreciative, generous with time, and once they’ve devoured your book they want to know when the next one is.
Another valuable lesson is that the reviews, on Amazon for example, are…strange. I received two negative reviews for very different reasons: one, because in the opinion of the reviewer I had placed a city sign in the wrong place, the other, because the reviewer felt the book was not “uplifting.” In fact, the book isn’t uplifting, and wasn’t intended to be–it was actually meant to be rather disturbing.
There’s a very good reason publishers traditionally have been bad at interacting with consumers–consumers can be unpredictable. And unpredictability is terrifying.
Kristen McLean is the founder and CEO of Bookigee, a Miami-based tech startup that produces software, events, reports and more for the book-publishing ecosystem. These projects include WriterCube, a tool that uses visual analytics to help authors understand their audience, and WriterCube Book Marketing Database. McLean is an eighteen-year veteran of the book business with experience in retail, marketing and consumer research. Follow her on Twitter @BKGKristen.
Q: You have long advocated for D2C relationships. What do you see as the primary advantages of pursuing this model?
I can’t see any way forward for publishers without a viable direct-to-consumer solution in a marketplace where the retail partners do not share fundamental business data with publishers.
In a direct-to-consumer world–which to my mind means that publishers have open access not only to the communication channel, but the sales channel–it’s possible to get feedback, and to respond to opportunities in real time. Not only can you tell your customers what products are available, but you can track behavior and create offers that trigger positive buying and engagement behaviors.
Q: In what ways can you react to this kind of dynamic customer feedback loop?
In a real-time, direct-to-consumer environment, you can see that browsing behavior for a certain author or subject is on the rise, and you can create a just-in-time offer for that community that pushes them toward a favorable behavior–say offering a free download of the first book in a series for which you have a new release coming. We know from consumer research that familiarity with an author’s previous books is the strongest driver of a new book sale.
Right now, publishers’ inability to get that real-time feedback in any way besides social media is a real handicap. It’s like skiing blind, or embarking on a treasure hunt without a map.
Imagine a world where publishers not only see real-time closure of sales from marketing efforts, but where they actually know who and where their end users are in real time. Think of how that could drive business decision-making.
Q: Bookigee deals with a lot of industry data. What are some of the trends you've seen over the last few years?
I really think the consumer is in charge today like never before. They want what they want, when they want it. And consumer behavior is fracturing in a million ways. There are the readers who only download free content. There are the readers who only read short content. There are people who don’t call themselves readers but read thousands of words a day via news feeds or social media. We spend a lot of time studying “readers”. But what about studying “non-readers”? What are we missing? What would we learn?
Q: With regard to consumer relationships, what are some of the major differences between the print book world and the mobile space?
Well, right off the bat, a digital user gives us data in real time in a way that a paper book reader does not. When someone buys a physical book, they create a single cluster of data points: a book was bought at location A by customer B via credit card C. Then it ends. If it’s a cash sale we know even less. We don’t know what happens to that individual book. Does it get lent? Given away? Sold at a church sale? Everything after that first point of sale is dark.
By contrast, a digital reader is creating hundreds of data points, sometimes hundreds a minute. They login to an account (we know all kinds of information about them through that registration); they open a book (what page are they on, how fast are they reading, when did they buy the book, did they take a long break?); they read for a period of time (what device are they reading on, what time of day is it, are there intermittent page turns?); they then browse for a new title (what are they looking at, how long do they stay on individual book pages, do they download samples, do they click through videos, is this a new genre for them?); and so on. It’s amazing.
and Andrew Savikas
Peter Collingridge and Andrew Savikas are VP of product development and CEO, respectively, at Safari Books Online. The Safari team has recently launched Safari Flow, a reading and recommendation web application for tech books.
Q: Safari Books Online has had a history of close relationships with both authors and readers. Have you seen these relationships evolve over time?
Andrew: Absolutely, especially with authors. When we started there was no Netflix, there was no Spotify, there was no ZipCar or AirBnB—there just wasn’t as much awareness of subscription models beyond printed magazines. A lot of authors were skeptical of a service that charged customers about the same price as a single tech book, but let them read as much as they want. It took time to demonstrate that we were a really valuable addition to the ecosystem—giving their content exposure to audiences like enterprises and government agencies, which they’d have a very tough time reaching in other ways.
Even in the early days, readers really responded to online reading—and remember this was well before Kindle and any meaningful ebook market. The big change over the past 12 years is that readers have become much more comfortable immersing themselves in the content, in text and increasingly in video. A decade ago they used our service at their desk at work when they were physically plugged in, and they typically came in for a quick answer to a problem. Today we see a huge amount of usage on mobile devices, with people engaging with the content more frequently and for longer periods of time.
Q: Safari Flow, your new subscription and recommendation product, launched recently. It appears to be built around your customer, from following user-centered design principles to offering the most relevant content to each user, and helping them parse your offerings. What did you learn about your customers in the concept and build process?
Peter: We deliberately put the customer at the center, yes—both theoretically and developmentally. Our initial ideas were based around going back to basics, imagining ourselves as a startup with access to the vast library of Safari Books Online, and no other restrictions, and thinking, “As a user I want to _______.” Some really good ideas came out of that, like wanting to watch the individual clips and read the sections that were most popular with our peers, and the notion of ratings within a book or a set of videos that power some kind of recommendation engine. But we weren’t certain about these ideas, so we built them out quickly in order to get the ideas in front of customers as rapidly as possible and validate them—or not. So there was a lot of customer development as well as more traditional data capture, and that whole process is ongoing and will be forever.
Q: With regards to customer relationships, what is one thing you wish you could have done differently?
Peter: I wish we had started talking to customers even earlier, and making sure they weren’t existing customers of Safari Books Online.
We started doing customer development interviews early this year following the model Clay Christensen helped popularize around finding the “job” your product is hired to do by a customer, but when we got into the thick of development, we found it hard to sustain that kind of deep engagement. That was a mistake! Customer development is hard to do for the first or second interview, but they get increasingly easier, fun and productive. We try to do one a week now and think it’s an important discipline to keep up. The interviews are heavily structured around understanding the customer’s needs—the jobs they need done—and only incidentally about the product or the features.
Brett Sandusky is the founder of bdigitl Media Labs, a consultancy that helps companies with user experience and product development challenges to launch new products. He is based in New York but works globally. He is on Twitter @bsandusky.