Reinvent Your Publishing Company for Sustained Growth
By Brian Jud
One difficulty that inhibits the growth of book-publishing companies is that they think of themselves as book-publishing companies, selling books through bookstores (bricks and clicks) and to perhaps to libraries. However, the advent of Amazon.com, ebooks, social media and more demanding customer expectations challenges that philosophy.
As a publishing-company executive seeking long-term growth, you have an obligation to re-examine your business model and deploy your marketing capabilities in ways that create competitive advantage and long-term growth. Thus, you are confronted daily with the mission of running vs. reinventing your firm. It is not a situation facing only book publishers. The Wall Street Journal is cutting jobs and investing in new areas in a move seen as “the latest sign of how traditional news organizations are racing to transform themselves.” (Wall Street Journal, June 19, 2015, page B5)
In most publishing companies the business model is a fixed axis around which the company revolves. It is often established as a default position rather than a calculated decision, and is rarely altered. Consequently the marketing systems that support it remain static. If deviations occur, they typically focus on product offerings within the existing business model as the company leans on its established recipe for success.
As an alternative to “the way we’ve always done business,” consider recalibrating your business model to respond to -- and compete more successfully in -- a changing environment.
Amazon.com provides a good example of how revising and updating a business model can place a company in a better position to exploit opportunities and maximize long-term sales, revenue and profits.
Jeff Bezos founded Amzon.com in 1994 with the goal of using the Internet to revolutionize the way in which books were sold. As time went on, he recognized that his early model would not sustain the growth he desired. Around 1998 Amazon expanded from books into music, video and games. These were logical modifications of Amazon’s business model since they utilized the same logistics capabilities that books did. In 2005 Amazon introduced Amazon Prime. During this time period, Amazon ventured into on-demand book publishing with CreateSpace.
Still driven to update its business model, Amazon began expanding into computing services, including storage and cloud computing. This move demonstrated the fact that focused business models are most effective when they appeal to distinct market segments with clearly differentiated needs. Most recently, Amazon is investigating an app that would pay ordinary citizens to drop off packages instead of shipping with UPS (The Wall Street Journal, June 17, p B1)
The growth of Amazon.com from one person’s idea into an enormous retail juggernaut was the result of regular, strategic adaptation to market changes and evolutionary opportunities. In other words, they re-evaluated and modified their business model. You can do the same.
You do not have to make enormous changes to your current model to exploit opportunities. All you may need is little exploration into different ways of reaching existing and potential buyers. For example, in addition to selling books only through book retailers and to libraries, you could generate sales to corporations, associations, and schools. There are also non-bookstore retailers through which you could sell your products. These include gift shops, airport stores, military exchanges, supermarkets and specialty stores.
There are two elements on which to focus when creating a new business strategy: your business model and your marketing competence. Here is a matrix that points out how you can exploit these two variables to adapt your basic organization and reinvent your publishing company.
|New Business Model
Finding new users and uses for content
Selling content to non-retail buyers to solve business problems
|Existing Business Model
Selling books through bookstores
Selling books through non-bookstore retailers
||Existing Marketing Competence
||New Marketing Competence
Routine book marketing (Existing Business Model and Existing Marketing Competence). The most widely practiced book-marketing strategy is to sell books through chain and independent bookstores, either physical or online. Selling books to libraries is included in this category. The focus is on unit sales sold to the general public.
Most independent publishers operate in this quadrant, competing for shelf space, customers’ wallets and media time. Books may be sold directly through online stores, but sales in brick-and-mortar stores are typically sold through a network of distributors and/or wholesalers. Unsold books may be returned for credit, and payment is generally made to the publisher in 90 – 120 days. Mass communication is conducted through publicity, reviews and social media, as well as media appearances and placement.
Expansive book marketing (Existing Business Model and New Marketing Competence). Some publishers seek to grow their businesses without significantly changing their routine business model. In this case they move to increase their unit sales by selling through non-bookstore retailers. Examples are gift shops, supermarkets, airport stores, military exchanges and specialty retailers. The business model is similar to routine book marketing.
However, this growth strategy requires additional marketing competence, since publishers must adopt a more-targeted marketing strategy, focusing on selling through outlets that attract potential buyers who are increasingly likely to want the book’s content. Additionally, the publisher may need to find and work with new distribution partners. Publishers’ representatives make sales calls on retail buyers to promote the use of their books as premiums. For example, a retailer selling gas grills may give a barbeque cookbook with each grill as gift with purchase. Promotion is expanded to include more targeted publicity, advertising and sales promotion.
Creative book marketing (New Business Model and Existing Marketing Competence). Some more-adventuresome publishers are willing to move outside their comfort zone to focus on increasing revenue. They put their toe in the water by experimenting with a new business model, but do not have to significantly increase their marketing competence.
In creative book marketing, publishers can find new users and uses for their existing products (printed and ebooks), or sell their content in different forms. New distribution channels may be necessary, but traditional marketing techniques suffice.
For instance, a publisher selling job-search books in routine fashion could sell them to prison libraries and through college bookstores and military exchanges. Similarly, publishers could sell existing content in a different form though new or existing channels. An example would be adding a DVD to a cookbook, demonstrating the techniques described in the book.
Disruptive book marketing (New Business Model and New Marketing Competence). Publishers seeking greater sales, revenue and profits will disrupt their existing business activities and delve into the world of non-retail selling. Here, books are not sold off the shelf, but are sold to buyers in businesses, associations, schools and government agencies who use your books to solve a business problem. This is a parallel marketing strategy that does not replace work in the other three quadrants, but augments it.
For example, a marketing manager may want to increase sales of a product. You would demonstrate how giving your book away as a gift with purchase could do that. Associations want to increase revenue. Align your content with their cause for a cooperative marketing effort. Then show them how they could use your book as a fundraiser, or as a gift (premium) to people who join or renew their membership.
Disruptive marketing requires a new business model because there are no existing distributors or wholesalers to these end users. Your representative calls on people who purchase content -- the information in the books -- rather than books per se. Your representative finds the potential buyers, prepares and presents a proposal and then negotiates the sale.
There are ways to grow your publishing business without disrupting your existing comfort zone with drastic changes in your business model. Nor do you have to stretch the limits of your marketing competence. Change and expansion can be evolutionary rather than revolutionary. Simply be aware of the different growth paths and investigate potential opportunities.
Brian Jud is the Executive Director of the Association of Publishers for Special Sales (APSS – www.bookapss.org– formerly SPAN) and author of How to Make Real Money Selling Books. Contact Brian at firstname.lastname@example.org or www.premiumbookcompany.com and twitter @bookmarketing