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E-Book Readers Are For Influencers

Recently, I was struck by a statistic that was highlighted in a July New York Times article. The article pointed out the fact that Amazon.com, one of the nation’s largest booksellers, is now selling more e-books than hard covers for the first time in history as of the second quarter of 2010. In fact, it was selling almost 1 1/2 times the number of e-books to hard covers. This trend doesn’t show any sign of slowing down either. In the 4 weeks prior to the article, that ratio was approaching 2 e-books to every hard cover.

Many credit the proliferation of e-book readers such as Amazon’s Kindle, Barnes & Noble’s Nook, Sony’s Reader, or Apple’s iPad for driving the consumption of e-books. Though Sony’s Reader has been out for several years, it was the introduction of Amazon’s Kindle in time for the Christmas shopping season in 2007 that launched this rapidly growing trend. The combination of hardware, content, and wireless access was the missing spark that lit the e-book powder keg. It is no coincidence that what started it all was a product called the “Kindle”.

As the proud owner of a Nook, I am amazed at how easy it is to buy, read, and share e-books. I have always been an avid reader (in my adult life anyway), however, I read significantly more with the device than I did before. There are always free e-books that are on promotion and many authors are even giving away the first book in a series in order to get you hooked (I can attest to the fact that it works). I have an e-wishlist with 30 books on it and add one every time I hear about a new book that interest me. Sometimes when I am just sitting around (which isn’t often) or waiting for a plane and get the hankering to read, I just surf the Barnes & Noble eStore to see what’s available.

However, there is an even bigger reason for the growth in e-book sales. In fact, it reminds me of a client I had in another industry. Roaring Springs Water Park is the largest water park in the Northwest. Their season pass program gave the deepest discount to its customers and they considered getting rid of the program. What we did was help them understand that those people who buy season passes were the influencers. They were people who were so passionate about Roaring Springs, they knew they would come to the park enough to warrant a season pass.

Instead of doing away with the season pass program, we helped them add significantly more value through added perks and offerings. One of those was Buddy Tuesdays, where season pass holders could bring a friend for $10. They also stayed open an extra hour on Mondays, just for season pass holders as well as offered a 4th of July BBQ for $1 – again, just for those who were members of “the club”. The result – increased season pass sales and a 30% jump in profit the first year from people who would not only come to the park, but stay longer and spend more money.

How does this relate to e-books? Those who purchase e-book readers are like season pass holders at Roaring Springs. These are the influencers and evangelists. These are those who read so often that they know an e-book reader will be worth the investment. As such, they are shifting their reading habits from regular books to e-books and the book sellers as seeing the shift.

How are Amazon and Barnes & Noble appealing to this crowd? By offering a package of value that goes beyond just buying books cheaper. Those who own e-book readers are part of a club. They get special deals, can lend books to friends, and (in the case of Barnes & Noble) even have dedicated content when you bring your Nook into a store.

What does this mean for the future of the industry? Books will never go away, however, as your influencers and evangelists shift their reading habits you will continue to see a shift in the balance of power. Before, the publishing and distribution process was controlled by a select few. Now e-book readers are making it much more simple to publish and distribute your intellectual property. Barnes & Noble even has a new program called Pubit! that allows to publish your e-book directly to their library. Amazon has its Digital Text Platform which accomplishes the same thing. ePublishing sites like YUDU and Scribd make self-publishing simple and social. The iPad even allows you to have all these ePublishing libraries on one device.

When your influencers are on the move, so goes your industry. The publishing industry is seeing a seismic shift similar to digital music, television programming, and movies on demand. Some might say these earlier movements paved the way. However, one thing is for sure – the book industry is changing forever. Who will lead and who will follow? Who will be caught saying, “it’s just a passing fad”? How will the democratization of publishing affect the quality of the content? All these questions and more have yet to be answered.

Where do you think the growing demand for e-books will take the industry?

October 15, 2010 at 2:21 pm bcritchfield 2 comments

Strategy First, Then Tactics

(The following is an excerpt from the Introduction of the upcoming book Marketing From the Navel: How to Become a Company Worth Talking About and Arm Customers to Spread the Word)

I have a favorite saying by the famed war strategist, Sun Tzu, that says, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” In the marketplace today, there is a lot of noise. Anyone who learns how to use Facebook is all of the sudden a social media “expert” and the bookstore shelves are littered with publications giving their take on what this new reality means from a marketing perspective. Most of this literature tries to tell you what is going on in the market but few give you the tools to do something about it.

If you were looking for a Twitter or Facebook “tips and tricks” book, then you have come to the wrong place. There are plenty of excellent publications available that will help you hone your skills in one particular technology or another. There are some publications that will give you a task list (i.e. “write a blog”, then post it on Facebook, then Tweet about it). Others will give you a list of rules for online etiquette.

Stephen Covey talks quite a bit about “paradigms” in his writings, such as The 7 Habits of Highly Effective People. A paradigm is a mental map, or the way in which we see the world. He uses the analogy of an iceberg to illustrate that the tip of the iceberg is our behaviors or our attitudes. If we want to make small changes in life, we work on the tip of the iceberg. However, if we want to make large, quantum changes, we work on the mass of the iceberg beneath the water, which is our character. It is as Blaine Lee states in his book, The Power Principle, “The principles you live by create the world you live in; if you change the principles you live by, you will change your world.”

I believe organizations work the same way. For so many years, we have operated under a certain paradigm. The industry as a whole has been making small changes by simply changing their tactics or their attitude about the consumer revolution. We have merely added social media or viral marketing as arrows in our quiver. I want to do more than change your list of tactics, I want to change your paradigm. I want to change the way you think about marketing.

Secondly, you most likely hear a lot of “noise” in the marketplace about new marketing tactics and how the old ways are dead. The Internet bubble of the late 1990s taught us many lessons about hype versus substance. The biggest lesson of all was that core business principles don’t change, but remain constant. For example, you still need a business plan that will generate revenue at some point (being bought out for millions of dollars because you have a lot of users doesn’t count). Also, cash is still king, and the faster you burn through your venture capital money, the faster you will make it to the unemployment line. This is the reason Amazon.com is still growing, yet Pets.com is a mere sock puppet memory. The Internet bubble taught us that though the delivery mechanisms may change, the core principles stay the same.

While there is significant hype about new forms of marketing, whether it be new media, word-of-mouth, or simply new places to plaster ads (i.e. cell phones, urinals, bases in baseball stadiums), there is a risk in all the hype. People are again forgetting the basic principles of marketing that still apply and are more important than ever. Like core principles in the universe (i.e. do unto others as you would have them do unto you), there are core principles in marketing that never change – despite the tactics. Many of the technology tools available today, such as Facebook, Twitter, or LinkedIn didn’t even exist 5 years ago. The tools may change, but if you understand the principles you can be successful no matter what the hot new technology is.

In the following pages, you will hear familiar terms, such as “positioning”, “customer segmentation”, and “customer experience”. Do not be alarmed! These are simply some of the core principles of marketing that, when applied correctly in the new paradigm, are just as powerful and more relevant than ever.

In this book, I introduce two separate models. The first model will help you develop a company worth talking about. This is the strategy component. Before you do anything online or off, you have to create something worthy of our attention, worthy of our passion, and worthy enough to pass along. Otherwise, you will merely create the “noise before defeat.” The second model takes the buzz-worthy organization you have now created, and shows you how to deputize your own customers to take your message out and spread the word. This is the tactical component that will help you achieve a quick “route to victory.”

There were many who were too comfy in the existing power structure and existing paradigm. Marketers controlled the message, the medium, and the content. Today, they are no longer in the conversation, and that elicits great fear in executive corridors and ad agency war rooms. However, those that embrace and implement the following models and principles will find that it is an amazing time in our profession. Never before have we been able to engage with each consumer on a one-to-one basis. Never before have we had the key influencers in our target market gathered together in a central location. Never before has a message been able to spread so quickly.

All you need are the tools… the tools of the revolution.