Publishing: Providing value via vetting rather than distribution

This 26-Year-Old Is Making Millions Cutting Out Traditional Publishers With Amazon Kindle.

Interesting story about a writer publishing her novels directly to the Kindle via Amazon and apparently making quite good money at it. Without an official publisher.

One thing I’ve noticed on Amazon is that a lot of these indie novels are crowding out those by mainstream publishing houses in the ‘Recommended for You’ lists. I’ve found with the few indie novels I’ve sampled that they are poorly written and/or edited, which makes it hard for me to get into the story.

Publishers going forward are really going to have to embrace their role as a filter of good stuff, making sure that what they publish is truly good. Anyone can make their own content available. Publishers are going to provide value through vetting much more than distribution.

Elitist? I don’t think so. When everyone is online, those that help find the signal in the noise are going to be in a good position to provide value.

Cascading Website Improvement

Here is an easy to implement process for making quick improvements to your website that have a large impact in terms of the number of visitors they benefit and your bottom line in one month.

Identify the top 10 pages on your site in terms of number of page views. Go through each page and identify one change you could make to each that would improve the experience for the user. Some things to consider:

  • What is the most important next action we want people to take on this page? How can we make it more clear or easy to do?
  • What extraneous content or interface can we remove from this page to make the core purpose more clear?
  • Use live visualization tools to see where actual users seem to be having problems on those pages.

You are looking for low-hanging fruit in this exercise. Identify one change you can make in the next business day to put the improvement into action. Capture other ideas that require more effort and use those when considering longer term projects.

Now make that one change. Repeat for the next 9 days.

Next, identify your top 10 pages in terms of the revenue they generate for your organization. Look for easy changes you can make to those pages to enhance the earning potential with your visitors. Use the same processes as above.

If you do this you’ll have made 20 improvements throughout the site for your most visited and highest earning pages. Not bad!

Old Members Are The Future!

Deirdre Reid wrote a post this week about dealing with a dearth of young leaders in associations. I’m going to take a good crack at the idea we have to increase the percentage of young people in our organizations and I wanted to give Deirdre credit for kicking off this idea when I read her post.

By 2050 over 25% of the population in the U.S. will be 60 years or older according to government projections. 1 in 4! That’s compared to about 18% today. Given overall population growth, that represents more than 50 million new people 60 years or older in 2050 compared to now.

Old people are the future.

A lot of associations complain about how old their membership is. Given the way demographics are going, we better get used to it!

I also wonder how many of the 50 and 60 year old members of today were active leaders of their association 30 years ago. I’d wager a beer that it’s a very low percentage for many organizations. Our personal activities are driven by the professional and life stages in which we are immersed. Perhaps we are being too hard on ourselves about not having a lot of youth involved in the organization. Perhaps they just truly don’t care or we aren’t in the business of providing the value they are looking for at this point in their lives. Or there simply aren’t enough of them!

It is always worthwhile to take a step back and give our assumptions a few solid kicks and see which of them fall over and which stand up to scrutiny. Maybe you should be trying to get more ‘old’ members engaged rather than tilting at the young member windmill.

Micro Payments, Micro Profit?

The only way to make significant revenue with micro payments is to get an awful lot of them.

Any questions? 🙂

OK, I’ll say a bit more about my rationale for that position.

I work with a lot of membership organizations and the idea of micro payments is often very appealing to their leaders. They provide a very low price point on some products which they can point to when members complain about overall prices of products. It’s also quite trendy, with high profile examples like leading the way with that business model for micro-lending.

Let’s take a look at the math for a hypothetical association. Let’s say they are a scientific society with 20,000 members who pay $399 a year to join. We’ll use them as our pre-qualified base of prospects for a micro-payment product.

Evernote, the very popular note taking application that works on almost anything with a chip and a screen, recently shared some stats. Shortly after they started up, about 1% of their free users converted to paying customers.

If we take a mirco-priced product at $1.00 and 1% of our hypothetical base makes the purchase, then you end up with this:

(20,000 * 1%) * $1.00 = $200.00

Compare that revenue to what they get in membership dues:

20,000 * $399.00 = $7,980,000.00

The organization will literally waste more in jammed paper in their printers than they would make on this single micro-priced product. This is before taking into account the costs of producing the product and implementing micro payments, online access, etc.

Hell, having a single staff meeting to discuss this product already puts it in the hole!

This association would need a base market of about 2,000,000 people to make the revenue even slightly interesting with these assumptions. They still need a lot more people in that market even if you bump up the price and the conversion rate.

Other issues with micro payments include:

  • They must be frictionless to complete (think texting to donate to the Red Cross for Haiti, for example).
  • Products with micro prices are often perceived as low value by your prospective buyers.
  • You’ll often need a wide array of micro-priced products rather than just one to have the level of sales you need to create significant revenue.
  • Repackaging content from other sources into micro-priced chunks often requires selling it to an entirely different, and larger, market.

The only exceptions I might make for developing micro payments if you don’t have a large enough market include:

  • It serves a political or policy need that provides enough value beyond cash revenue;
  • People who purchase the micro-priced product are great candidates for macro priced products that you then sell to them (classic loss leader transactions).

I’m sure someone somewhere in the association world has done a successful micro payment model. (Let me know about it in the comments if you have!) But every leader and product manager must go into the decision making process with a realistic understanding of the numbers involved before committing resources to implement this model.

Great Ideas Often Start Out Merely Good

When I was growing up in Columbus, Ohio, in the 70s and 80s a new product line was introduced at the Big Bear grocery store: white label products. This was one of the first experiments with this new kind of consumer product.

The original white label products actually had white labels on them! A can of beans would have a white label and large text saying ‘Beans.’ The idea was that the products were offered at a lower price point because they didn’t have large marketing expenses built in to get people to buy them. (A huge part of the cost of many consumer food items is from marketing rather than raw materials and processing.)

Now white label products carry the brand of the supermarket selling them rather than just ‘Beans.’ Turns out consumers like the comfort of a brand when making a buying decision and adding the supermarket’s brand to a product spreads out their marketing costs across more products, allowing either lower price points or higher profits (or a bit of both).

The overall lesson here is that providing true white label products was a good idea. It lowered prices significantly. But it wasn’t a great idea until stores married it to their own brand.

Give your good ideas a shot and look to see how you can improve upon them. Most great ideas don’t start out that way.

Growth and…

Every organization goes through growth spurts, like a teenager with growing pains. Sometimes they are intentional and sometimes they are happenstance.

The most successful organizations don’t just say, “Growth!” They ask, “Growth and then….” They plan what is next for those people they just brought into their orbit.

You’ve added a new member. Great! What are you going to offer them next?

You have a new customer! Wonderful! What other product or service is a natural offering for them to move up to?

I talk about accelerating engagement like this in depth in the cover story of this month’s Associations Now magazine: Accelerating Engagement Online and Beyond.

Growth and…then what will you do next? This question should be a significant part of any marketing campaign. Have that plan and offer in place so you don’t waste that newly engaged person you spent so much effort to attract.

The Two Tremendous Advantages NPOs Have Over Business

Non-profit organizations of all types typically have two advantages over for-profit competitors: trust and data.

NPOs are trusted more than businesses quite often. The trust comes from being a mission-focused organization as well as knowing that profits are reinvested to support the mission rather than paid out to owners or shareholders.

Many organizations also have a tremendous amount of data about their market already on hand. You know who the big givers are, you know who is in your profession, you know who comes to more meetings and events than others. This data is priceless.

Businesses would give a lot to have the same advantages.

Use the trust you have been given to offer value to your members, volunteers, donors, and others. Use that data to make highly relevant offers and communications to these same people.

Fulfilling your mission as an NPO doesn’t mean you have to be a doormat. Embrace your advantages! Put them to work. You owe it to your mission and your constituents.

Engagement Triggers

I’ve written a few posts on engagement this year and I have a feature article in Associations Now coming out in a month or so on the topic. One important concept that I touch on a bit in the article is that of identifying the natural precursors to a product or service among your other offerings.

If you review your data you should be able to identify segments of your customers who are more likely to buy product B if they have already purchased product A. Or they may have taken some other action you have captured that represents a meaningful change that opens new opportunities for you to provide value.

You can map out these connections and essentially develop an acceleration path comprised of a targeted chain of value that you can offer to relevant people.

My friend Tom Breur, a master at turning data into dollars, wrote recently in his newsletter about using automated triggers in your database to target customers for additional value when they have made a relevant purchase or taken some other step that indicates they are suitable. With Tom’s permission, I have quoted the relevant passage below:

Transactions Initiate Trigger-Based Marketing

Event-based marketing are actions that are triggered by changes in the customer’s life. The term trigger-based marketing is also commonly used. We would consider an “event” a complex, multi-faceted occurrence in the customer’s life. “Some” (unusual) transaction will be a signal this event has taken place. For instance, a customer who has bought a house will subsequently change address. Or a (female) customer who gets married changes her name. A customer reports a stolen credit card, etcetera. Sometimes it is clear from the transaction which event has taken place (like in the case of a female changing her name after getting married), and sometimes it isn’t.

If you understand the implications of an event to the customer’s life, it can help you in servicing the customer better. Or possibly selling additional products. This can become a very efficient means of interacting if the campaign or dialogue follows automatically from the transaction that triggers identification of the event.

The key, as Tom points out, is to understand the changing needs reflected behind a particular action you record in your database and determine what targeted value you can offer to them.

What are the most meaningful actions you currently capture? Based on that, what you can you offer to those people that is powerfully valuable to them given the new scenario they are in?

If you found the excerpt above valuable, you can sign up for Tom’s free newsletter here.

Explore the Edges of Your Market

I worked as a book seller in Cleveland after graduating from college (that early 90s recession looks so cute now!). Working retail like this got to be a bit dull after a while.

To entertain myself on a slow day I would pick one book with at least three copies on the shelf and try to sell it out. I thought of it as David’s Book of the Day. This was great fun, in that I tried to come up with a good reason, a good hook, for anyone to read it no matter what they were looking for. Not everyone bought a copy but I was usually able to find enough people to sell it out before my shift was over. It made the time go faster and I helped a lot of people discover genres they wouldn’t have considered before.

A few lessons from this:

  • You really don’t know if someone will value your product until you offer it to them. Those who ask tend to get.
  • The customer will often judge a book by its cover. Be sure to educate them on the full value inside so they can make an educated decision.
  • The process of turning down one product or offer can often provide a lead to sell something else. Whenever I encountered someone who absolutely, positively, did not want to buy my book of the day, I usually knew enough about them from that conversation to offer them another book that they would buy.
  • Marketing and sales should be fun! There is no reason you can’t inject a little levity and personal challenge goals into it just to see if you can do it.

Push your market. Twist it. See what happens on the edges.

Run Your Own TV Ads via Google

This is a great video report from Slate about how you can run your own television ads via Google.

Note that the average cost of acquiring traffic was around $1 for their experiment (although it appears this did not include production costs). If the average value of each new visitor to your site is higher than that, you’re doing well. Hat tip to Matt Baehr for posting the link this week.