February 21, 2008 | Thursday
The courage to be rich, Web-style
By Jackie Danicki - Blogger in Marketing |News |Online Sales
One might expect the author of such titles as The Courage to Be Rich and The Nine Steps to Financial Freedom to know a thing or two about making money. One would be quite correct to do so.
How is the author making money? By giving away her book for free online.
Suze Orman is a financial guru in the US. She has her own TV call-in show and is heavily featured in the Oprah Winfrey media empire - she goes on the chat show, has a radio show on Oprah’s satellite station and also has a monthy column in O magazine.
Last week, it was announced that Orman’s book Women & Money would be available for 33 hours as a free download from Oprah.com. In just a few days, more than 1,000,000 copies of the book had been downloaded.
That’s perhaps not surprising when you consider how much attention people pay to Oprah Winfrey. (They don’t call her influence “The Oprah Effect” for nothing.) What you may find surprising is what effect the giveaway had on sales of the book.
Within a few days of the download offer, the book hit number six on Amazon’s best-seller list. Soon after, it reached number two. Despite the fact that Winfrey made it very well-known that the book was available for free, a substantial number of people chose to pay for it.
Oh, did I mention that the book was first released a year ago? So this is a significant sales revival for an old title that the publisher probably thought had already seen its peak rankings.
The take-away for those selling online could be one or more of the following:
1) Re-think your concept of “lost” sales.
Some might think that all those downloads amounted to a loss of $14,970,000 (at the discounted Amazon price) in sales. But the fact is, the vast majority of those sales would not have occurred without the free offer.
2) Re-think how you treat your customers.
Have you ever purchased a DVD, sat down to watch it, and felt slightly sick at all of the completely OTT warnings about piracy you are forced to sit through before you can watch the film you paid for? Did you not feel even a tiny bit resentful at the big studios for treating you - a paying customer - like a criminal?
As UK social media guru Adriana Lukas says, “An industry that treats its markets as enemies and abuses customers is in trouble.” (Check out the poster - with some slightly harsh language - that accompanies that quotation.) Contrast this with the generous, helpful spirit in which the free download was offered. Who do you reckon has the happier customers?
3) Re-think your business model.
Please, don’t have a stroke over this suggestion. It’s not nearly as scary as failing to re-think your business model and finding it redundant a couple of years down the line.
And there is every possibility that you will conclude that your business model is just fine, no alteration necessary. So no harm done either way.
I’ve seen a few people wearing a t-shirt that reads:
Your failed business model is not my problem.
Somehow, I cannot imagine customers even 30 years ago wearing such a t-shirt. I don’t think they were so hyper-aware of business models and how they are imploding all over the place. Perhaps that’s because the implosions were not so close to end customers back then, or so seismic and frequent. But if your customers are aware that things are changing, it’s probably a good idea to be at least one step ahead of them.
For example, there is the question of how movie studios can afford to keep making $200 million films in the face of piracy, file sharing and other perceived threats to the business model. As Techdirt CEO Mike Masnick notes, this is the wrong question:
It’s like going back to the early days of the PC and asking how IBM would keep making mainframes. The point is that $200 million movies may mostly be a thing of the past.
...No one is saying to make worse movies—but to recognize that it should no longer cost so much to make a movie… [T]here was a lot of publicity around a group of Finns who created a Star Trek spoof and are trying to help others make and promote inexpensive, high quality movies as well...[T]he quality of the spoof movie is astounding—not all that far off from what you’d expect from a huge blockbuster sci-fi picture, but was done with almost no budget at all.
Given the advances in technology, the quality is only going to improve. So, again, it would appear that a big part of the answer to the $200 million movie question is simply that anyone spending $200 million on a movie these days is doing an awful job containing costs.
The applications of the giveaway model for publishing are pretty obvious. For your own business, which has its specific constraints, pressures and other circumstances, it may not be obvious at all. You may even conclude that there is no application for your business. Again, no harm done.
While it may not be an easy consideration to undertake, there is not much to lose and everything to gain by doing so. Just ask the author of The Courage to Be Rich.
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