More On Giving Away Books Before They Are Available To The Public

I didn't expect a lot of feedback when I shared the results of free downloads of the book vs. paying for the actual copy. I was wrong! E-mails were flying this afternoon!

First of all, I am not grumbling. More than anything, I want to share facts, metrics that others wouldn't share with you. I want to be as transparent as possible, transparency is one of the things you tell me you appreciate about this forum. I want for folks to learn how new marketing techniques work. And I sincerely appreciate all of you who e-mailed me to say that you got a free copy and purchased a copy of the book, much appreciated!!

Let's assume that 100 units have been distributed, to-date. Here's the distribution (as of this afternoon ... the metrics changed since the last post due to incremental paperback sales):

• Free Draft Of Pre-Published Book = 72%.
• $7.95 Download Of Finished Product = 14%.
• $14.95 Paperback Copy = 14%.

If my only purpose were to sell books (which it isn't), revenue per unit would be (0.72*$0 + 0.14*$7.95 + 0.14*$14.95) = $3.21. Net profit per unit would be about $1.80.

The $3.21 net revenue per unit metric is probably most compelling. Comscore's disputed statistics in the Radiohead promotion suggested 60% of the units were free downloads, and suggested that the weighted average net revenue per download was about $2.50.

So you can see that there's a level of directional similarity in the numbers. Hey, I have something in common with Radiohead!!

The books are not written for the sole purpose of selling books. They are part of what I would call a "micro-channel" strategy to running my business. There's a ton of free information available on this blog. I speak at conferences. I offer free spreadsheets. I write books for fun and to document important (and theoretically more-valuable-than-free) concepts.

I have learned that, as of today, the most effective strategy in growing my business is the combination of a transparent and informative blog, coupled with books that offer increased insights and sophistication. So if we allocated book costs and revenue across actual projects that were sourced from the blog/book, book sales are "sizzling"!

And that's what makes this whole thing so interesting. The giveaway doesn't work on a "linear" basis --- measuring sales as a function of each unique marketing strategy. A whole slurry of micro-channels work together, and at the end of the day, the whole is FAR greater than the sum of the parts. The giveaway as a sole marketing channel wasn't highly effective. The entire strategy is highly effective.

That's probably the takeaway I needed to share in the original post!

Now go buy the book!

Does Giving Away A Draft Copy Of A Book Help You Sell More Books?

You can't throw a rock in the book blogosphere without hitting a pundit telling you to give away your book prior to releasing it, in an effort to build momentum for the release of the book. Heck, Suzy Orman and Oprah gave away versions of Ms. Orman's already-published book, and it worked! So the strategy HAS to work!

Recall that I attempted this strategy with Hillstrom's Multichannel Secrets. I freely gave away a copy of the draft version of the book to anybody who asked for a copy.

I am here to tell you that the strategy created buzz. It created anticipation. It got folks talking about the book. I gave away a boatload of free draft copies of the book.

One month into the release of the book, I have metrics that tell me whether the strategy worked.

To date, I gave away nearly three times as many books as I sold.

Imagine if I had done this with the money a publisher invests in a new book? Self-publishing allows you to trade-off popular strategies with financial rewards.

The internet is filled with success stories, filled with interesting hypotheses. It isn't always filled with acknowledgement of failure. In my case, the strategy of giving away draft versions of a book to help sell the book failed miserably. The next book will have a very different marketing plan!

For The Price Of Two Lattes

You might be interested to learn that sixty percent (60%) of loyal readers purchasing Hillstrom's Multichannel Secrets chose the e-book option.

The e-book version is significantly discounted ... for just $7.95, you obtain fifty-nine secrets every CEO can use to improve profitability. The paperback version of the book sells for $14.95 (and in case you were wondering, I make less money on the e-book version of Hillstrom's Multichannel Secrets).

Honestly, folks, what kind of world do we live in where fifty-nine multichannel secrets that help multichannel CEOs and Executives improve profitability cost the same amount as two lattes from Starbucks?

Folks, you probably shouldn't use your corporate account to purchase a latte for you and the account representative from Google that is visiting your office today. But using your corporate account to purchase Hillstrom's Multichannel Secrets makes business sense!

At $7.95 for the e-book version, your company probably needs to increase net sales by $35 or less to make up for the cost of the e-book (or just $75 to make up for the cost of a paperback book and shipping).

Even better, you get the e-book immediately ... you don't have to wait a week for printing/shipping. You pay less, and you get your product now! Now, you won't get the cover art or back cover information with the e-book version, but you do get all of the content.

So pull out your corporate credit card, and give the book a try!!

Secret #52: Best Practices Have Their Place. So Does Merchandising And Marketing Innovation

At a recent conference, the presenter asked how many attendees displayed a shopping cart at the upper right hand portion of the screen, a cart that displayed how many items were in the cart? Maybe five out of fifty attendees raised their hands.

The presenter blasted the other forty-five attendees for not following "best practices", then suggested that the attendees would "soon be dead" if they didn't follow this "best practice".

The e-mail marketing, online marketing, and web analytics communities are sometimes obsessed with best practices. Maybe we're obsessed because so many of us are ignorant of simple changes that could improve performance.

We need to be mindful of best practices. But we need to also get away from best practices. Take a look at the e-mail marketing campaigns you receive. Take a look at the websites you visit. They're all practically the same! We're just a bunch of marketers basking in our own self-perceived best practice marketing brilliance --- all doing the exact same thing to a thoroughly bored customer.

Marketing and merchandising innovation are what matter. Recall my Nordstrom experience, where we killed a catalog in 2005, in stark contrast to the best practices of the punditocracy who demand a seamless multichannel experience featuring a viable selling catalog? Heck, I believed the punditocracy, strenuously demanding the seamless multichannel experience that included a viable catalog marketing program. Yet somehow, over eighteen months, we increased our sales and profit in the direct-to-consumer channel by doing the exact opposite of what pundits suggested we do.

Would Apple be successful if they followed best practices?

Starbucks broke every retail real estate best practice by over-saturating the market at levels never seen before.

Zappos broke every shipping and handling best practice by offering free shipping and free returns and by getting merchandise to you in a day (by the way, if you live in Germany, Otto Versand will deliver product to your home faster than Zappos delivers product to your home).

Best practices have their place, increasing sales and profit today. Merchandising and marketing innovation drive sales and profit increases tomorrow.

Hillstrom's Multichannel Secrets: Fifty-Nine Facts Every CEO Can Use To Improve Profitability!

Secret #35: Information Ages Differently

Here's a frequent question: "Why won't my retail customer purchase from my catalog or website?"

We've been taught all this multichannel stuff without adequate validation of actual customer behavior. A survey of 1,149 likely multichannel shoppers doesn't do true multichannel customer behavior justice.

The truth is that customers behave very differently across channels.

Customers who purchase from a catalog have a long memory. This is validated by the fact that many catalogers can mail customers who last purchased five or six years ago, and make money doing so.

Customers who purchase from a retail store have a short memory. Quick, tell me every store you shopped in when you visited the mall in January 2007? Or tell me every website you visited on March 14, 2008?

Multichannel marketing is an art form. It isn't all about slapping up an inventory system that links channels, followed by a coordinated multichannel advertising campaign that includes catalogs, e-mails, and display ads all connected by an integrated message.

Knowing that retail data ages quickly, knowing that online data ages almost as fast, and knowing that catalog data ages slowly causes us to make very different marketing decisions. Or at least is should cause us to make very different marketing decisions! We market to recent retail customers, yet we're willing to market to long-lapsed catalog customers, because the return on investment is comparable. And we use only the advertising channels that maximize this opportunity, targeted to the audience most likely to respond to them.


Hillstrom's Multichannel Secrets: Fifty-Nine Facts Every CEO Can Use To Improve Profitability.

Secret #47: Lists Are Dying

The foundation of Direct Marketing is the list. And unfortunately, the list is dying.

Back in the day, we had very limited information about customers. Given that we knew almost nothing about customer behavior, the list meant everything. The fact that the customer purchased from Bloomingdales By Mail within the past three months meant a lot.

Of course, co-op statisticians changed everything, proving that cryptic equations and "affinity models" identified more potential customers than the Bloomingdales By Mail 0-3 Month $100+ Womens Select.

E-Mail lists represented a transitional stage in the list death process.

Google severely wounded the list. Would you rather rent 0-3 Month $100+ Womens customers from Bloomingdales, or would you rather have access to customers who are looking for dresses RIGHT NOW?!

The only problem with Google is the psuedo-anonymity of the process. The list allows you to know something tangible about the customer --- name, address, e-mail address. Google lets you know that the customer is searching for a dress right now.

So where does this leave us?

Somewhere between social media pap and lists are communities.

A community represents a group of folks with a common interest.

In the data mining world, this might be KDNuggets. In the old days, a marketer would rent a list of KDNuggets users, sending a glossy postcard to the user with the text "DO YOU WANT TO INCREASE SALES BY 294%? ASK HOW!" proudly displayed across the front of the postcard.

Today, the marketer might purchase display ads on the homepage. In the future, the marketer will interact with the community. The marketer might give free software to members of the community, no strings attached. The marketer might offer advice to folks who are dealing with challenging situations.

In kind, the community supports the marketer.

List based approaches to marketing have yielded prominence to algorithmic approaches to marketing. The community approach to marketing re-introduces the human element, an element that is sorely missing in a co-op and Google driven world.


Hillstrom's Multichannel Secrets: 59 Facts That Every CEO Can Use To Improve Profitability!

More About Secret #36: Channel Compromise

Take the example of Bloomingdales killing their direct-to-consumer catalog from a few days ago.

Cataloging and retailing have a love-hate relationship. If your definition of cataloging is "advertising", then the relationship is love. You merchandise a book in a brand-right manner, you inspire customers, you treat the catalog as a cost center, and you drive folks into a store.

But if you want a traditional catalog business, one that drives customers to a website or to the phone to place orders, one that acquires new customers, and you have a physical retail presence, you have a hate relationship!

Maximizing the productivity of the catalog conflicts with the premise of inspiring a customer to visit a store. You want the customer to trust that the size eight dress will fit when it arrives by mail in four days? You better write copy that describes it well, and have photography that gives the customer confidence in what she's buying --- she doesn't want to waste her time returning the item!!

But the very act of copy and photography stands in contrast to the romance required to get a customer to get in her 20mpg car and drive an hour to the nearest store --- her trip might cost $24 in gas alone!

So you have channel compromise. If you walk a fine line between selling via phone and selling in a store, neither channel benefits (which means, by the way, that the customer doesn't benefit).

In the retail world, this leads to killing the catalog --- catalogs drive a small fraction of the sales of a retail store. The catalog becomes a cost center. And there are a lot of forces that want the those catalog dollars in their cost center --- online marketers first and foremost!

However, the next channel to be compromised is e-commerce. More often than not, the website is in equilibrium or transfer with retail (meaning website customers like to shop in the store), while the store is in isolation with the website (meaning store customers don't like to shop online).

With the catalog gone, irresistible forces drive the website into an aspirational brand marketing vehicle. This shift in focus brings a different customer to the website, compromising the e-commerce channel (and by the way, e-commerce is a very different channel than your website is --- more on that some other time). In time, you'll have an entertainment and information-based website that supports a store. Sure, e-commerce will still exist, but it won't be optimal.

Channel compromise is everywhere. All too often, channel compromise results in a sub-optimal level of sales and profit. Our job as leaders is to decide upon a primary channel that must be optimized, or to allow each channel to thrive on its own merits. Any compromise in-between these options results in compromised sales and profit. Or at least that's what the data I analyze tells me!

Hillstrom's Multichannel Secrets ... Buy The Book!

Secret #36: Channel Compromise Reduces Total Profitability

From Hillstrom's Multichannel Secrets, here's Secret #36:

• Channel Compromise Reduces Total Profitability

Assume you are going to go to lunch with three of your co-workers. Thomas wants to enjoy an all-you-can-eat salad bar. Betty wants a nice, sit-down meal at a local bistro. Marge likes the deli down the street.

You decide to compromise. After listening to the opinion of the group, you go to an Italian restaurant, because everybody likes Italian.

Now it is quite possible that you'll have a pleasant lunch. It is possible that everybody enjoys their meal.

But unless the combined interaction between the four lunch attendees is highly stimulating, the overall meal experience will not be as good for each individual.

In no way am I saying you shouldn't try integrated advertising campaigns. The end result of these integrated campaigns and channels should be increased customer retention, increased customer acquisition, increased frequency, increased spend per order, and increased profit, right? If you're not accomplishing this, go back to maximizing each channel while continuing to experiment.

In 2008, more often than not, channel compromise reduces total profitability. Someday, this fact might change.

Buy The Book!

It's Here!! Hillstrom's Multichannel Secrets

It took longer than expected. Now, "Hillstrom's Multichannel Secrets" is finally available!!

This handbook features "Fifty-Nine Facts Every CEO Can Use To Improve Profitability".

You won't find any fancy charts, beautiful images, or complex mathematics in this book. Instead, you will discover secrets that multichannel marketers often know, but seldom talk about publicly.

The book is geared toward the multichannel CEO or executive, though all multichannel leaders and employees should find the content valuable. Our industry has been way too secretive when it comes to understanding true multichannel issues. This handbook seeks to break down some of the glass walls that separate leaders from information.

I am pleased to offer this handbook via Lulu, a self-publishing, print-on-demand service that is perfect for subjects that may not fill an 80,000 word, 300 page book to an important but less-than-mass audience.

The book costs $14.95 (a download version is just $7.95), and can be purchased by clicking on the button below (or via this link):



At next week's ACCM conference, I will gladly give a limited number of free books to folks who wants to chat about Multichannel Forensics or challenges facing the multichannel/catalog industry. Send me an e-mail to schedule some time on Tuesday, May 20 or Wednesday morning, May 21.

This week, I will share some additional facts about a handful of the secrets outlined in the book. Stay tuned!

New Book: Hillstrom's Multichannel Secrets! Get The Draft Version For Free Prior To April 26

My new handbook, "Hillstrom's Multichannel Secrets" will be available next week!!

I've taken a different approach with this handbook. Whereas "Hillstrom's Database Marketing" and "Hillstrom's Multichannel Forensics" focused on the math that supports our craft, "Hillstrom's Multichannel Secrets" outlines "Fifty-Nine Facts Every CEO Can Use To Improve Profitability".

The handbook is written primarily for the Catalog CEO, but applies to the Catalog Executive, Retail Executive, Online Executive, E-Mail Marketing Executive, and anybody who has to deal with multichannel marketing and advertising issues.

Inspired by two of the most popular posts in the history of this blog, 73 Vital Multichannel Catalog Marketing Tips and 53 Vital Multichannel Website / Online Marketing Tips, the handbook drills down on issues every CEO must understand. You'll read all about Catalog Choice, Co-Op Database Use, Matchbacks, Key-Codes, RFM, Test/Control Groups, Online Buyer Lifetime Value, Remail Catalogs, Clickstream Integration, Channel Compromise, E-Mail Marketing, Social Media, List Death, and dozens of additional topics.

There are no fancy charts or complex mathematical formulas in this handbook. You'll simply find 72 pages of high-level facts that CEOs can use to improve profitability, information that many folks believe are proprietary to their business. Given the forces conspiring against the multichannel marketing industry, it is important that all of us improve our base of multichannel marketing knowledge.

When available late next week, the paperback handbook will be available for $14.95. I am self-publishing the handbook using Lulu.

Many of you have been loyal blog readers, and have purchased my previous books. I'd like to give you a little perk for helping build this blog. If you would like to preview the handbook, please send me an e-mail prior to April 26, and I will forward you a PDF file of the next-to-last draft version of the handbook. The PDF will not include the cover (the cover may also change slightly between today and the release date), and the PDF is subject to modification in the final stages of being proofed.

As always, thank you for joining me in this multichannel marketing journey!