Why Publishers Must Sell Direct

Posted by on Nov 29, 2013 in Insights | No Comments
Why Publishers Must Sell Direct

In late October, HarperCollins began selling eBooks directly to consumers, starting with C.S. Lewis’s ever-popular Narnia series. Readers can go to narnia.com or CSLewis.com and purchase DRM-protected ePub files for use on nearly every eBook reader (including our favorite, Readmill, but excluding the apps of the two biggest online retailers: Amazon Kindle and Apple iBooks). One month later Penguin UK became the first of the big five publishers to partner with Readmill, in “order to bolster direct eBook sales.”

These initiatives highlight the necessity for, and implementation of, a much more robust direct sale strategy for the big five publishers. The two most compelling reasons that book publishers must sell their eBooks (and hardcovers) directly to consumers are: 1) Actionable data, and 2) The re-establishment of brand.

The more you know your audience, the better you can serve them

It’s implicit that since Amazon withholds nearly all customer, sales and engagement data from publishers, these data must be highly valuable. What’s explicit is: the more you know about your customer, the better you can serve her or him. Subsequently, the better you serve your customer, the more likely she or he will return. Building sustainable business means acquiring, growing and maintaining customers, not simply unit sales.

This is true for the book publisher as much as it’s true for the restauranteur or the local sporting good store. The restaurant whose manager remembers that you’re allergic to nuts and that you favor crisp, acidic white wines can steer you away from dishes that contain the former, and toward the new Sauvingon Blanc that is prototypical of the latter. The publisher who knows that a segment of readers purchased both Jhumpa Lahiri’s “Unaccustomed Earth” and Alice Munro’s “Dear Life” within two days after release might do well to email that segment with an offer in advance of the publication of Karen Russell’s “Vampires in the Lemon Grove.”

(The simplest offer would be “Hey, do you know this book, which is very similar to other books were eager to read, is coming out next month?” It could communicate, “We know this about you because we pay attention, and we’re excited to serve you and your reading habits.” It could make it dead simple to purchase a hardcover plus eBook bundle, or better yet, allow the reader to purchase one for himself and send a gift purchase to a friend for a reasonable discount.) 

There are a lot of important lessons publishers can learn from startups, like their digital-native methods of understanding and optimizing the customer lifecycle. The infamous Dave McClure, former PayPal executive and Founder of 500Startups likes to call it, in a cheeky “startup pirate” acronym: AARRR: Acquisition, Activation, Retention, Referral, and Revenue.

The bottom line: You can’t improve what you can’t measure. Selling directly to your audience means publishers can gather measurable data that is actionable for best serving customers.

Communicating directly means building brand

“A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another,” Seth Godin wrote in 2009.

When people observe the brand “Apple” (see the logo or hear the name), they have an immediate and distinct image and feeling: good design that “just works.” Similar for “American Express”: excellent people-centric customer service. These two brands have a myriad of channel and distribution partners for their goods and services. But one major channel that makes it easiest to broadcast and most powerful to learn from is the direct-to-consumer. For Apple, it’s the dividend-paying bet it made with retail flagship stores. For AmEx, it’s a robust data-driven digital and email conversion funnel. The direct exchange of value with customers and potential customers is the cornerstone of building a brand that consumers recognize and remember.

Memories create trust and consistency (or lack thereof) generates a set of expectations. These are what a consumer carries with her as she ventures forth in making a decision about a product or service. And these memories and opportunities for consistency are what are missing from today’s brand-less process of discovering, choosing, acquiring and reading books. Evan Ratliff, in a great roundtable in VQR about flourishing in the digital age, said: “With all due respect to publishers, with the exception of very, very few imprints, nobody ever walks into a bookstore and says, ‘I want the new HarperCollins.'” And this expression of this phenomenon is the opposite of brand. It’s the opposite of memory, of trust – it’s the absence of expectation of quality or satisfaction.

Bottom line: In the absence of brand, all that is left is the commodity. Revenues won’t be significant at first, but creating brand memory and expectation through direct sale leads to repeat customers.

Prototype: HarperCollins and Narnia

HarperCollins has indeed begun making strides leveraging one of its most recognizable authors and books series (a sub-brand) to help fill the absence of brand recognition and have it “trickle up” to the parent brand over the long term. I call their experiment with the Narnia series a “prototype” because it is a relatively riskless way to model how other direct-to-consumer funnels might operate. The early (barely viable) feature set from the big five publishers who do sell eBooks directly online (all with the exception of Random House, though the recently-merged Penguin does), has been simply, give the web end user a way to “Buy eBook Now.” But this consumer decision is at the very bottom of the customer conversion funnel.

Instead, selling direct to consumers must contemplate the beginning of the reader journey (the top of the marketing funnel), where readers who will become buyers and customers first begin the process of locating and buying the products they want.

Instead, selling direct to consumers must contemplate the beginning of the reader journey (the top of the marketing funnel), where readers who will become buyers and customers first begin the process of locating and buying the products they want. Readers know they can walk to the local independent bookstore or Barnes & Noble to locate hardcovers and paperbacks “in real life.” They know to go to Amazon to locate books online. For publishers to sell directly and make a significant impact – in order to create and sustain the cycle of knowing your audience, serving them better through that knowledge, and developing brand memory and a consistent set of quality expectations – they must also contemplate building user experiences (like Narnia.com) that are the initial destinations unto themselves. They must create digital journeys – entranceways and exits – that make their pathways both clear and memorable to consumers.