Books on a Budget: The ROI of Reading

In my career as a senior Information Systems manger, there was an acronym that became the key to nearly every budgetary, marketing, and purchasing decision.  That acronym was ROI, which stands for Return On Investment.  When a management decision was made to expend funds, the very first question was always "What is the expected ROI?"  In industry, ROI breaks down to "What am I getting in return for the money I am spending?"  That could be anything from expected sales generated from marketing or advertising dollars, increased efficiency or security in production or communications, or simply added ability to research and develop new product lines.

So what is with the Business 101 lesson?  I thought this was a Speculative Fiction blog.  Well it is, and this concept has a lot to do with Speculative Fiction from both the perspective of the author as well as the reader.  I will start with the reader perspective, that way any of you who are not authors can feel free to move on once we get to the author-y parts.  But since hopefully every good author is also an avid reader, this first section should be of value to everyone.

So for readers, when we buy books we obviously are not going to see those dollars every again, with the possible exception of whatever the used bookstore might give us back on our dog-eared, cracked-spine copy of the latest and greatest literary adventure.  But we do have an expected return from the money we spend on a Speculative Fiction (or any genre, really) novel.  We expect to be lulled under the spell of the master-author, swept into a state of "willing suspension of disbelief", and spirited off body and mind to the wondrous world of the author's creation.  That is the payoff.  How we feel when we have finished the book is the return on our investment.

Oddly enough, the dynamics of book buying and ROI have changed radically with the surge and relative ease of self-publishing and ebooks.  The cost of a "random read" has dropped considerably, so much of the need for discernment has gone away.  With free book giveaways, bargain basement days, and on-the-web blogs, a reader could theoretically satisfy their appetite without spending a dime on books.  The market has never been better for readers, or has it?

Growing up in a simpler time I learned a few bits of country wisdom that I think play into this question.  "You get what you pay for", "There's no such thing as a free lunch", and "Quality not quantity" are words of wisdom we should consider when bargain hunting for books.  Are we really getting a "bargain"?

Yes, one can go to Amazon and download ten books for $1.99 each instead of spending $19.99 on one book, but are we getting the ROI we are expecting?  Honestly, from my experience, sometimes yes, sometimes no.  I can tell you that the main difference in price tags comes from books that have been put out by a publisher vs books that have been self-published.  Does that mean that a $20 book from a publisher is ten times better than a $1.99 self-published book?  Not necessarily, but sometimes the answer can be a resounding YES! 

So how do we know what our expected ROI is?  Reviews aren't always the answer, because plenty of self-published books can pad their reviews with enough friends, family and fans to make even a real stinker LOOK impressive.  I've bought more than a few of those.  All raving 5-star reviews and after spending my money and reading the book I was wondering what book they all had read.  It certainly wasn't the pig-in-a-poke that I burned a few hours of my life on.  So let's look at a few factors that can help determine how to calculate our ROI before spending money on a more expensive book rather than a slew of cheaper ones.

1) Has the book been decently vetted?  It is a fact of life that not everyone is going to like every book.  People's tastes, preferences, etc are all different, so honest reviews can help us here.  If the only reviews you see of a book are all 5-star, gushing reviews, and yet the book is $1.99 on Amazon, the caution flag should go up.  Books that have been genuinely vetted usually have professional/independent reviews linked through Amazon, from blogs, to review sites, to Goodreads reviews.  Also, truly vetted books are usually going to have a few stinker reviews, just because people's tastes are not all the same.  Finally, if you are reading the 4 and 5 star reviews and the reviewers do point out a few "less than glowing" things in the book, chances are those are more unbiased reviewers and are more reliable than 5 star reviews that simply gush about the flawlessness of a book.  Don't just look at the number and star ratings, but actually read the reviews.  A discerning reader can pretty quickly discern a book that has been genuinely and objectively vetted and reviewed vs those padded with gushing friends and family.

2) Has the book been edited well?  Sometimes collaborative works (with two or more authors names) are generally reviewed more thoroughly than single-author works.  Also, like it or not, most traditionally published books get a more thorough editorial once-over than most self-published books.  Notice, I said MOST not all.  Some self/indie authors do hire outside editors.  For those that do, I STRONGLY encourage you to thank your editor in the acknowledgements or otherwise give readers glancing through a preview that the book has been independently edited.  This is probably the biggest driving factor in the quality difference between books published by an actual publishing house vs self/indie published books.  Often self/indies are on a budget and they will largely self-edit, or will depend on beta-readers (who often are NOT professional editors) to deal with the editing.  As a result, things make it into the final books that might not have gotten past a professional editor at a publishing house.  Note also, this is NOT saying that traditional publishers don't sometimes produce some real stinkers that could have used a good napalming and then a reediting before seeing print, but as a general rule part of the higher price paid for publisher published books vs self/indie books is paying for the extra eyes that go over manuscripts before they hit print.  Again, this is a general guideline and NOT the only factor in determining ROI, but it can be a big one.

3) What is the print quality?  In the world of ebooks, this is becoming less and less of a factor, but for those of us who still like the feel, smell, and experience of paper books, this can be a factor.  Many self/indie published books are printed at mass-market POD (print on demand) printers, so the quality is generally as poor as the printers can get away with for as inexpensively as possible.  Because POD is more expensive, this actually serves to level the playing field somewhat between publisher published books, who generally have their own printers or have bulk-discounted printing services, and self/indie published books.  Where the self/indies really are unbeatable is in the ebooks, because there are no printing costs.  In the print world, generally the publisher books come a lot closer to competing because of the differences in POD and mass print runs.  For those looking for paper books, consider the printing source and whether it is POD or whether you are buying books that have been quality printed.  For the longevity and "shelf-life" of books, that quality printing can go a long way for volumes you want to keep around for years.  If it is a "one-and-done" type reading, then it really makes little difference.  Even the POD printers do a great job at producing readable, useable books, so if longevity and shelf-life are not a factor for you, then this may not be part of your ROI calculations, but if you are building a library you plan to pass on to your kids, quality printed books are a must.

Beyond that, word of mouth, mentions by reading groups online, book-club and/or professional, objective book review site reviews all are part of your investment homework when considering whether or not to buy that more expensive book vs. one of the plethora of bargain-basement buys out there.  The point of this post is not to tell you that one is better than another, but to educate and encourage you to use solid, discerning ROI principles when considering your next read, and don't necessarily let a higher price tag put you off of a particular book.  You might very well find that your emotional and mental ROI for that expensive book far outweighs a series of cheaper but unsatisfying reads.

Okay, so the reader-ly stuff is done, so the next part is for you authors out there.  Your main consideration on ROI is going to be around marketing dollars.  You can write the best book ever and it won't be worth anything if no one ever knows about it to read it.  Now I don't want to spend time rehashing marketing strategies.  I already covered that in another blog post about Successful Authors are Successful Marketers, so I will refer you to that blog for specific marketing strategies.  What this is going to be is about how to evaluate a particular strategy and its ROI for you.

1) What is the potential exposure for the cost?  Before you spend a penny on a particular marketing strategy, you need to have an idea of the exposure numbers.  Exposure also needs to be "quality exposure" not just quantity exposure.  Putting up your book trailer on a TV program with a million "impressions" may not be as effective as say a book giveaway done through a readers site that only reaches a couple thousand people.  Why?  Because on a readers site you are reaching your target demographic, i.e. readers.  For TV ads, radio ads, etc, your broad base exposure is greater, but your targeted exposure is much less.  It doesn't do you any good to advertise your novel to a million people if those million people aren't book buyers or readers.  A much smaller campaign, targeted specifically to readers, or even better if you can target readers of the genre in which you write, could produce exponentially more sales per dollar invested than a broad spectrum approach.  Know the reach of any strategy you try, and more specifically you want to know how much of that reach is going to be the target demographic for your book.

2) What is your demographic?  Perhaps some might think I should have put this first, but most people at least have some idea of who the target demographic is for your book.  Romance novelists probably aren't going to get much of an ROI for marketing which targets a football audience.  Speculative Fiction authors probably aren't going to get a lot of ROI from the Widows Auxiliary club.  Authors of political thrillers probably aren't going to see a satisfactory ROI from marketing to the high school drama club.  You need to know who is reading your books, and your genre, so that you can make the wisest choices when spending those precious marketing dollars.  Focus on campaigns targeting at reaching your target demographic and avoid those which will not reach those who would be interested in your books.  This might seem like common sense, but I have seen ads from authors who got a "great deal" on ad space in a venue completely unsuitable for their genre.  No matter what the price is for a marketing strategy, it isn't a bargain if it misses the target demographic.

3) What is your conversion rate?  Conversion is the term for how many people exposed to your ad actually go out and make a purchase.  You are "converting" that exposure into a sale.  This is probably an area where my business experience runs harshly counter to the "common wisdom" in the industry right now.  I am definitively not a fan of "free days" or "free books".  While in some cases giving away a free book may result in someone loving your writing so much they will go out and buy other things you have written, in general those who are looking for something "free" don't value it.  I spend a great deal of money on books, because I am an avid reader, but I have stacks of "free books" in my library that I have yet to read.  Why?  Because I have nothing invested in that book, I have prioritized the reading of books I have actually bought and paid for.  The freebies are my "reserve tank" for if I get to a point where I have nothing else pressing to read I will pull one out, but honestly I can't say a free book has ever led me to buy another book.  Now even the books I have paid $0.99 for, have some value.  I want to read them, and I have found authors that I went back and bought more books from that I got from a bargain $0.99 day.

When I ran my own company, we did some free giveaways early on and the results were terrible.  But when I even put a minor price on the "giveaway" items, we saw a really nice conversion rate.  Why?  Because if people pay for something, even a little, it has value.  Things freely given are freely discarded.  It is just part of the human mentality.  So I would encourage you, IF you do book giveaways, do something more calculated and know WHY you are doing it.  Something like the Goodreads giveaway of print books exposes you to huge numbers of your targeted demographic, but doesn't flood the market with free copies.  You give away five or ten free copies, but you expose thousands of people to your title and your name, and you put the books in the hands of people who have a high likelihood of reviewing the book.  That is your ROI.  With an unlimited "free day" giveaway on Amazon, yeah you might get hundreds of downloads, but very limited conversions.  If instead you run a bargain $0.99 day on your normally priced $4.99 book, the people who are getting it value it enough to spend something on it, and because you know they are actual "buyers" and not just "freebie hunters", the chance of that converting to sales of your other works is greatly increased.

Okay, this blog post is probably long enough, but for those of you who are not asleep or wandered off by this point, I hope I have shared with you some valuable considerations in considering what your ROI is as both a reader considering purchasing a higher priced book and as an author considering the best way to spend your marketing budget.  I wish you all the success in the world, fulfilling reading, Merry Christmas and Happy New Year.

Blessings,

David G. Johnson
Author of Fool's Errand and Mystic's Mayhem
Books 1 and 2 of the Chadash Chronicles, now available from www.tatepublishing.com