Looking back

 

Previously we’ve discussed that writing is a three-stage journey: from the actual writing to publishing, and to marketing the book. We focused on the dynamics of book promotions, comparing it to running a small business or start-up. It has the same cycles, initial needs, trial-and-error scenarios, not the least the same fears and thrills involved.

 

In the first two parts of this series, we talked about capitalization and delegation as two business components of book promotions, the rest being expectation of returns, systems orientation, and fear.

 

Breaking even for book promotions requires at least 18 months. Any planning less than this time frame can compromise your goal of belonging to the top self-published earners.

 

On the other hand, delegation is necessary, too, in book promotions, but it’s difficult for many writers for fear of losing control over their work. Planning to delegate tasks involves three categories: things you know, things that you don’t know or can’t do on your own, and the unknown in between.

 

One of the most important tasks that you don’t know—or can’t do on your own—is how to build an audience, which your book marketing success depends on. When choosing your expert team members to perform audience building and other delegated book marketing tasks, remember these factors:

 

• research about specialized tasks so you can intelligently discuss these with experts
• work with integrity and transparency with your provider; and differentiate those with integrity and those who are predatory
• do the tasks that you love and can do every week for a long time
• pick team members who treat you as an important client; the more business you give to a provider, the likelier you’ll be treated with more importance

 

It bears repeating that many writers think of book marketing as writing blogs, articles, social media posts, press releases, etc., which, in fact, comprise only 20% of the entire process. The key to successful promotion is to understand the entire process.

 

In this article, let’s discuss the third component of book promotions, which is expectation of returns.

 

 

Everyone wants to be rich

 

You have probably noticed radio or television programs trying to sell self-employment as a dream, concentrating on the fact that people want to be rich, be their own boss, have all the time for themselves.

 

In fact you could be wealthy from writing. If you do, however, it will be as a result of long and hard work, learning from mistakes, taking risks but being disciplined about a step-by-step process you designed for yourself. A good example is self-published author Mark Dawson, who Forbes reported to be earning around $450,000 a year from Amazon:

 

He didn’t start as an overnight success, however. His first two books bombed, which put him off writing for some years. It wasn’t until he started thinking like an entrepreneur–giving his first book away for free and developing plots in serials–that he started getting traction in self-publishing. He would also write four hours a day during his daily train commute to London, where he held a full-time job to raise two kids. It’s this combination of creativity, business mindset and grit that separate successful self-publish writers from mediocre authors.

 

Having the dream is very important, as it motivates you every day and drives you to do the work. Don’t stop the dream. Break it down, however, into smaller parts. Whatever you do, don’t let your dreams for the future make you a fool today. Those who succeed have their eye on the ball for what they have to do today, and they do it. Succeeding in your book promotional business will be the result of thousands of tiny little steps, pieced together over a long period of time.

 

 

Break your dream into parts

 

As I said, having the big dream is good; in fact, it is probably necessary. Most people, however, don’t have the drive or the will to see a dream that is years out into the future from being realized, and be motivated every day just from that dream. It helps tremendously to have interim goals and dreams. To get your feet on the ground in terms of dreams and goals,start by having your small business divided into four chronologic parts in the following order:

 

1. Launch preparation
2. Audience-building
3. Sales
4. Profit

 

 

Launch preparation

 

In previous articles, I’ve spent a lot of time on capitalization and delegation. These are two of several parts of your project that need to be done thoroughly before a launch. As I mentioned in those articles, impatience is your enemy. Many new small business people are so anxious to get going they fail to prepare adequately. Perhaps the best basketball coach in the history of university basketball, Bob Knight, said it best: “Most people have the will to win; few have the will to prepare to win.” Truer words about starting a business have never been spoken. Learning all you can learn about your market, about book promotion, the vendor market, capitalization, cash flow management, what those who have succeeded before you have done, what those who have failed before you have done—those are but a few of the items you need to learn about before you can have a plan. Having a goal and the timeline to finish your preparation to launch is the first step.

 

 

Audience-building

 

The business of book promotion is primarily a direct marketing business. Another way of saying that is that it is a database marketing business. The reason for that is simple: it’s a numbers game.

 

In direct mail or database marketing, the average response rate is 1% to 2% if you’re mailing to an external mailing list and using a free offer. For a house list, the rate jumps to 3%, according to the DMA Response Rate Report 2015. E-mail marketing has its own numbers that are different, as do every media and situation.

 

Let’s use 2% as our median, regardless of the media, just for the sake of illustrating the importance of audience building. If every time you employ a direct marketing campaign of some type to people who know about you and your book, and one (1) out of fifty (50) buys it, then out of your audience of fifty (50) people, one (1) will buy your book. However, if ten thousand (10,000) people know about you and your book and the same one (1) person out of fifty (50) buys it, you have sold two hundred (200) books. In that latter case, you have royalties of $1000.In the former case, however, you can purchase a vegetarian sandwich at your local Subway. It’s about the numbers.

 

Many authors think they will get sales as soon as they start promoting. It could happen, but this is the exception to the rule. Your expectation should be that you sell no books for one year after launching your promotions. Your goal in the first twelve (12) months should be to build your audience to your goal size and nothing more. If you get more than that, that’s great. However, many authors who have reasonably good promotion operations quit in their first three (3) to six (6) months because they have no sales, when simple persistence through twelve (12) or fifteen (15) months would have put them exactly on the right track. Don’t make that mistake. In a future article, I will get specific about audience building methods.

 

 

Making sales

 

For the purposes of this article—which is about managing expectations of returns—the most important thing to say about making sales is that it will occur largely after an audience is built to an adequate size. There are many strategies and tactics about making sales, about converting interest into greater interest, about driving buyers to the sites that maximize your royalties, about repeat business. The important thing to know for the purposes of expectation of returns is that you cannot get demotivated by small numbers of sales in the first year. The first year is about building your audience.

 

 

Betting the Rent Money

 

The next most important thing to know about making sales is that it is not for that sailboat you always wanted. It is for one thing and one thing only—reinvestment in more promotion. The return that you get on your sales for probably the entire first two years after launch should be about raising the level of promotion and building your audience to one that is both larger and deeper in its relationship with you. You have probably noticed in any new phase of technology business, for instance, that if you follow those who are succeeding the most in building their brand and their sales, they make very little profit compared to their growth in sales. It is because they concentrate on building the size of their audience. Profit is for later.

 

In earlier articles I’ve written in this series, I’ve written about capitalization. You can see that the capital you raise will have to be out-of-pocket for 24 to 36 months minimum if you are to succeed. Do not use money that would otherwise be for future mortgage payments, college funds for your children, or for the nursing home for your husband when his curmudgeon personality morphs into senility. Don’t do it. You could lose all of your initial investment, so you should plan your capitalization expecting that will happen. Ten percent of self-publishing authors report making an independent living from royalties* from book sales. That’s very exciting. It’s a higher number than it was 10 years ago. It will go higher. You can be one of those. Just don’t bet the rent money on it.

 

I’ll give you a great example from my life. In the late eighties, I launched a healthcare marketing firm. It was fabulously successful. It was an Inc. 500 company, meaning it was one of the 500 fastest growing privately held small businesses in the US. We had seven-figure sales and were still growing by 50% a year. Then in 1992 Ross Perot became a candidate for the US presidency, and his style forced a much more substance-based debate about the healthcare cost crisis. I expected that debate to be in 1996,betting many decisions based on that assumption. Consequently one of the very first things President Clinton did in 1993 was appoint Hillary Clinton to head up a fast-track initiative to decide on the solution. The entire nation thought Hillary was a left-wing liberal on the subject, and thus nationalized healthcare was just around the corner. The moment the initiative was announced, my business shrank by 80%, destroying it and hundreds, perhaps thousands, of other healthcare marketing firms instantly. I lost $500,000 … including the rent money.

 

This is why you cannot spend what you cannot afford to lose. I lost everything, but on the day the bank, the banker, the courts, and the judge’s mother showed up to take the vulture money, I was 35 years old. I could afford to lose the rent money, because, at 35, one can still practically live out of a box or under a bridge. I didn’t have a wife and children back then, so my temporary financial ruin only hurt my investors, employees, and me. That is bad enough, believe me. If you are in that situation, go for it. If not, don’t spend any money you can’t lose; don’t ruin the lives of your loved ones.

 

 

Narrowing the range

 

It is great to have a goal of being one of those 10% of self-publishing authors who report making an independent living from the royalties. It is the goal I would pick.

 

If you have never been involved in direct marketing or you have never been involved in significant book promotion for yourself, some of the concepts I’ve been describing in this or other articles in this series may be helpful but not particularly specific enough for you. So let me make a couple of suggestions about early goals for the first couple of years. You are welcome to then pick these apart and come up with those more appropriate for yourself. I’ll give you a starting point, so you don’t feel like you’re guessing.

 

I will suggest goals for the planning, the capitalization, and the audience building.

 

Planning - It can be difficult even for motivated people to adequately prepare their plan for a launch. It is an “all work and no reward” time in most ways. For that reason, I suggest you limit this period of time to six months. This probably means more than 250 hours of work, which is likely more time per week than you’ll need after you have launched and are into operations. The reason I suggest this is that if you spread this period of time out too far, you may not be able to keep your emotional momentum to get yourself to launch.

 

Capitalization - This is the hardest to get specific about. Your decisions about how much you spend on production and who you pick, what freelancers and what vendors you use have more effect on whether you have the funds to last a year or more in promotion, than anything else. Having said that, your plan should be to have capital of at least $10,000 before you start. If at this point you are cursing at me, it is okay as long as you don’t call me on the phone and do it. In later articles, I would suggest that a very motivated author can raise more than half of this capital without using out-of-pocket money or having to pay it back. I know that many of you reading this are muttering to me, “So write that article already, dufus.” Well, dufus is working on it.

 

Audience-building - If you are in your first 18 months post-launch, I suggest that 90% of your promotional efforts be geared toward building an audience of 10,000. My definition of “audience,” whether it is an e-mail list, a snail mail mailing list, a Twitter audience, a seminar attendee audience, or something else, is what is known as an opt-in audience. In other words, all 10,000 people have proactively taken steps to learn more about you. If you buy a mailing list, if you compile a mailing list, these don’t count as your audience. They may only count as your audience once they approach you, and even then those who approach have to go further down into deeper and more sustainable relationships or friendships with you in order to maintain their definition as part of your audience.

Profit

Virtually all of those 10% of self-publishing authors who report making an independent living from royalties do it from several books  they are promoting.* Think about that. If an author is making $48,000 in free-and-clear income per year from 6 books, he or she is likely to have built strong and ongoing promotional operations and reinvested in them all the time. If gross royalties are $92,000, reinvestment is $24,000, and taxes are $20,000, that yields that ‘independent living’ of $48,000. Gross royalties of $92,000 means each book is yielding $15,333 on average per year. Assuming the author manages his or her royalty percentages intelligently, this royalty income can come from 200 book sales of each title per month.

 

Does that sound overwhelming? Maybe, but think about that a little more. Those authors have multiple books published, and all the books are being promoted. That means that to get to that state required consistent promotion of their books until the promotion was for all of those books. If significant profit came earlier, the average number of books and publication for those authors would be a lot less than six or seven. They had for each of those titles 20 sales per month before they had 200. Their audience size was 1000 before it was 20,000. Their income after expenses was $48.00 long before it was $48,000. Persistence, discipline, a desire to study and learn from results, and no matter what, keep writing, always!

 

The most important lesson on profit is that it is important to enjoy the success of your incremental goals before profit starts happening. On a day-to-day basis, the journey and watching your wins (and reversing your defeats) is what is rewarding. Don’t be discouraged when you find yourself having gross revenues from royalties of $10,000, but no profit after you reinvest in your audience-building machine. It’s a sign of success and that you are on your way to becoming one of those 10%.

 

Our next article will be on applying a systems orientation to your book promotion business operations. You should be able to continue writing your next book as you self-promote, and that means systemization of your promotion so it doesn’t take all your time.