Tuesday, November 10, 2009

You Should Crave the Rave!

I recently finished reading David Meerman Scott’s latest book World Wide Rave. It is a great how-to book on creating “triggers that get millions of people to spread your ideas and share your stories”. With the same quick pace of his past books Scott introduces readers to his six Rules of the Rave:

1) Nobody cares about your products (except you)
2) No coercion required
3) Lose control
4) Put down roots
5) Create triggers that encourage people to share
6) Point the word to your (virtual) doorstep

In the following chapters he shares some powerful examples of how PR, marketing and product professionals took advantage of these ideas to raise awareness. My favorite story was how Cindy Gordon, VP of new media at Universal Orlando Resort, hyped the upcoming Harry Potter attraction by telling just seven people. These seven were so influential that eventually 350 million people heard about the attraction.

He also weaves some best practices like creating buyer personas to understand who you are trying to reach and tactics like using negative titles (Do Not Read This Blog Post).

I also appreciated his admonitions about what not to do like creating “lead bait” or tracking leads and press clippings as a measure of effectiveness.

World Wide Rave is a great kick start for people who need to get their message out so people will beat a virtual path to your doorstep.

Monday, November 09, 2009

Stephen King & Intertemporal Pricing

About 11 years ago, I read an article in the Wall Street Journal entitled The Future of the Book. It was written by Daniel Akst on December 18, 1998. It made a real impression on me because he made some prognostications about what would happen to the price of books when they became digital. Akst argued the following:

The cost of books ought to plummet once they are distributed and consumed electronically. Consider that a hardcover book retails for $30 and wholesales for $16. Out of that sum, $6 goes into manufacturing (paper, printing, etc) to say nothing of shipping, inventory costs and publisher’s overhead. Editorial expenses are a mere $.67, and the author’s royalty is $4. Publisher’s pretax profits is $1.

E-distribution could radically lower the cost of publishing – and the barriers to entry in the publishing business.

I was reminded of this article (subscription required) recently when I read about Scribner’s decision to delay the e-book release of Stephen King’s newest title “Under the Dome” for about six weeks. The cited rationale was to “preserve the value of the hardcover edition”. King supported this strategy as a way to help the independent bookstores and the national bookstore chains sell the hardcover edition. Adam Rothberg, a spokesman for Simon & Schuster rightly pointed out that “Publishers have long issued different formats of a book at different times… and that this is an opportunity to see what happens when we issue the e-book at a different time in the publication sequence”.

In business school I learned that this was called inter-temporal pricing and it is market segmentation based on time of need. In the case of books the manufacturing costs for a paperback and a hardcover are about the same so the hard cover reader agrees to pay a premium for first access. Movie studios have also experimented with the timing of releases, although one of the drivers for that seems to be about piracy and most recently some have issued all formats at once. One of my favorite examples of this used to be how the New York Times would sell the paper at once price in the morning, and then drop it if you purchased a copy after 2 pm.

In looking at the Stephen King example, the only people who might be miffed are Kindle owners that happen to be Stephen King fans. The WSJ shared that this same release strategy will be in place for Sarah Palin’s upcoming book as well as for Ted Kennedy’s memoir. However as e-reader adoption grows, we’ll undoubtedly see more experimentation here.