In partnership with the US Independent Book Publishers Association (IBPA), SPN is proud to present a series of articles on the ‘four Ps’ of marketing and how you can apply them as independent book publishers. This, the second article in the series, is about ‘price’. The references are American, but the ideas are global. Enjoy!
No matter what you’re marketing—print books, digital books, audio books, sidelines, your authors as speakers or experts, consulting services based on book topics—you’ve got a challenge ahead. As I pointed out last month (see “Marketing Whatever You Have to Market: Product”), marketing anything is hard work. Nothing sells without a huge effort by someone, and usually success requires perseverance and initiative as well as luck.
For help in brainstorming marketing strategies, you can use a framework featuring the basic “four Ps” of marketing outlined long ago by business school professors: product, price, place, and promotion. Last month, I covered the first P, product (or service—what you’re selling and, even more important, what customers perceive they are buying). This month, I’m focusing on price, which includes payment options and discounts, delivery charges, sales taxes, and any device necessary for reading the book.
Factors for Figuring Costs
Price and cost are seldom the same, for either seller or buyer. The prices business owners ask for their merchandise are not the same as what that merchandise costs them, and it’s important to recognize that the sales prices they set and what their customers pay are seldom the same.
How significant the difference is between price and customer cost depends on several variables, and understanding them can help publishers (and retailers) price books more competitively. To illustrate these variables, let’s look at price differences between books from publishers that sell direct and books from book retailers, both storefront and online.
If you sell PDFs or e-pubs from your website and don’t charge sales tax, your customer’s cost is almost the same as your price—unless the material needs to be printed, in which case the customer bears the costs of that. The only other typical costs are those associated with the computer or mobile device the customer is using, any costs for Internet access, and any transaction fee or interest charges associated with PayPal or a debit or credit card.
If you retail print books—by phone, from your website, to walk-in customers, and/or at public appearances and book fairs—you can control much of your customers’ total cost.
People who buy from storefront booksellers often pay the highest total amount. They may pay a book’s cover price unless they have a frequent buyer discount or a store coupon. In 46 of the 50 states, they’ll also pay sales tax. (In Seattle, the combined local and state sales taxes add almost 10 percent to any purchase.) Unless they walk to the store, there’s also the travel cost. (Feeding a parking meter near Seattle’s most popular indie stores usually costs $4 an hour; taking the bus costs $2.50, but it’s quicker for me to walk a mile each way to a neighborhood bookstore.)
Still, “shopping local” may not always be more expensive than buying online. Now that online retailers such as Amazon are charging sales tax on many purchases, the true cost of an online book purchase depends on several factors. The two big ones are discounts and shipping charges.
Online merchants often offer significant price breaks, especially on new titles. On my own new title, they’ve offered as much as 30 percent off. Make a large enough purchase each time at sites such as Barnesandnoble.com ($25) or Amazon.com ($35), and shipping is free. Buy a membership at B&N ($25 annually plus applicable sales taxes) and you may get an additional 10 percent discount on your book purchases along with the free shipping. Free shipping is also a benefit of Amazon Prime ($99 annually).
But if a book isn’t discounted and its cover price is low enough that the purchase does not qualify for free shipping, a nonmember reader will pay $4 or $5 more than cover price, plus any applicable sales taxes. By contrast, some indie booksellers always ship free, and during special promotions, some even deliver to nearby addresses at no charge. If bookstores offer frequent buyer programs, book club discounts, and other specials, those deals apply to both their storefront and online customers.
Prices Really Paid
Researching what your titles cost in each available sales channel helps you understand how competitive your pricing is, and what changes you might make to improve sales—or profits.
Possible changes include exclusive offers. No online retailer can provide a book personally inscribed to a recipient by the author, for instance, but you can. Few e-tailers offer premium-price limited editions, and, at the other end of the price spectrum, few sell scuffs for rock-bottom prices like a dollar a copy.
Some changes in pricing can be temporary. If you have enough contacts in your customer database and blog and on social media sites, it’s easy to publicize flash sales, pre-publication discounts, and coupons. For example, when area temperatures dipped below 20 degrees early this year, the Clinton Book Shop in New Jersey posted a limited-time special offer on Facebook: “Today, when you stop in and mention this post, your purchase will be discounted by what the mercury reads. If the temperature outside is 20, you save 20%.”
Longer-lasting offers, such as series discounts, two-for-one discounts, and discounts for standing orders and for bulk buys for book groups and classes, can be announced on company websites and in books’ end matter.
If your books are not widely distributed, consider offering free shipping during a new-title launch for purchases of multiple copies or for purchases that exceed a certain dollar amount. A telephone sales rep can use this offer to up-sell, and even an automatic announcement in your website’s shopping cart might encourage an add-on purchase, especially if this announcement includes a message like “You may also be interested in…” with the covers of suggested titles.
Understanding the real costs in each sales channel also gives you the opportunity to decide which retailers to support with your promotions. For example, when you realize that sales tax and parking fees might mean a customer would have to pay 50 percent more to buy a book at the indie store in its author’s hometown than to buy it online, you might consider offering that store an author appearance, or a coupon, or a window display—or all three.
Or you might create a cooperative advertising deal with the store owner so that anyone buying the title during launch week gets a discount equal to the cost of one hour at a parking meter. (If nearby meters still take quarters, you could ask the cashier to demonstrate the price breaks physically, with a cash rebate of however many quarters an hour costs.)
If buying direct from your publishing company is one of the most economical options for consumers, make sure this information is prominent on your website’s home page. At a minimum, include and highlight a sentence such as “Buying direct from us almost always guarantees you the best total price” and link to a page with details.
If your shopping cart accepts promotion codes, the applicable discount needs to show in the purchase amount being authorized by the customer. Language such as “Your discount doesn’t show here, but it will be deducted when we charge your credit card” is unlikely to reassure prospects. If you can’t get discounts calculated immediately online, consider providing a phone number so that transactions can be completed in person.
Other Cost Considerations
Researching the costs of buying through your distributor and wholesalers is also important. This is especially true if you have an exclusive distributor agreement and the distributor’s pricing or terms are unattractive to your target markets.
If you sell direct to libraries and such specialty accounts as schools and gift shops, make sure that your discounts and any quantity requirements for orders are comparable to what other vendors offer them.
In summary, understanding all the cost factors for your prospective customers is key in ensuring that your books are competitively priced in each market you’re pursuing.
Linda Carlson (lindacarlson.com) writes from Seattle. The author of two small-business marketing books, a case study on marketing services published by the Harvard Business School and Prentice-Hall, and a book of history, she spent four years on the Humanities Washington speakers bureau.
This article was originally published by the IBPA in the USA.