Unit 4: Reader Acquisition
Part 1: The Importance of Reader Retention
We have previously talked about growing a reader base, and marketing content to the right crowd, but it is very important to also focus on keeping these initial readers coming back for more. Once you have a few books under your belt it’s easier to sell a higher volume. If a reader liked one of your books, they are highly likely to purchase another and, in many cases, your entire series or backlog.
While marketers often talk about “customer loyalty”, the word “loyalty” doesn’t really convey the work that needs to be done to retain your customers/readers. When we talk about reader loyalty we are really talking about reader retention. Your readers will become loyal if you have a system in place that continues to add value. While attracting a reader is an essential part of a successful marketing plan, maintaining a solid retention process in place is key to ensuring your readership continues to grow. A reader retention plan need not be complicated, but it shouldn’t be seen as an afterthought!
In order to start working on a retention plan, we need to understand the benefits of knowing our Customer Lifetime Value (CLV). Your CLV will not only give you a good overview of how much the average customer/reader spends on your products, it will also help you figure out how much time, money and effort you should spend on sales, marketing, and retention in general. The word “lifetime” isn’t a reference to a person’s whole life, but to the amount of time and money, they spend on average on your products. This could be two years or it could be 20, only a concrete analysis of your reader base will help determine that. CLV is a great asset to know, but it is still important to remember that not all readers are the same, and not all to be treated as an “average”. So, CLV has its limitations, but it will help you narrow down your profit margin based on average reader sales, which will then help you trace the steps for your retention plan.
There are several ways to calculate CLV, but the easiest way is to calculate the total profit of a reader over their lifetime of buying from you and remove all costs associated with sales, marketing, and delivery from that amount. The sum you are left with is your CLV.
So for example, let’s assume that your average reader lifecycle is three years, and they purchase $100 worth (I’m rounding up for simplicity in this example) of your products every 6 months, which coincides with how often you publish a novel. Out of this $100, we can assume that $50 is direct profit; the rest goes towards your expenses. So, over the customer lifecycle, you will have made $300 in profit ($50 every 6 months for three years). Therefore, every new reader that you acquire is worth, on average, $300 in profit.
With that in mind, you can now start looking into how much your sales and marketing processes cost on average, and how much you are spending on customer retention. For example, you may be currently spending $30 on Facebook ads to gain one new reader and make the first sale, and don’t really want to spend more on customer retention, because you don’t want to eat anymore into your profits. But, if you think about your CLV in general, $30 is only 10% of the average profit you make from a reader in an average lifecycle. So, the idea of spending money on retention isn’t something to be pushed aside, as it could help raise your profit margins significantly.
It’s good to know your average CLV, as it will give you a great overall idea of how well your sales and marketing processes are working, and if you are giving your customers the incentive to be loyal to your work. At the same time, it can be easy to get lost in the complexities of it all! Use it as an overview, just like you do with all of your analytics, to help nurture and grow your marketing efficiency.
We can talk about numbers until the sun goes down, and while they help measure overall worth, a retention plan is only going to work well if you know how to give it a human touch. Loyalty comes from emotion, and customers like to feel that they are appreciated and listened to. It is very easy to alienate a new customer without realizing it, just by using a wrong phrase or a badly timed email. With so much focus on automation, we sometimes forget about the human touch, and how it can completely change how someone perceives a transaction. Keep this in mind when thinking about your retention plan, and put the onus on you to reach out to your customers and engage them, rather than just asking for feedback, social media shares, and more sales. Communicate in a way that makes your customer feel valued, and create a relationship that feels meaningful. For example, one of your readers may have written a detailed review of your book on Amazon: give them a personal shout-out on your social media channels to show how much you appreciate their feedback and the time they took to create it.
It’s a good rule of thumb to always remember that your customers are your peers. You are opening up a discussion with them, not talking at them and asking them for favors, but talking with them and making them feel like they are a part of your world.
Have you calculated the CLV for your readers? Hop on over to the AuthorpreneurLaunch Forum with comments, questions, or suggestions. I’ll get back to you asap.
Growth Hacking Tip: Send an “oops! forgot the link” email
When automating follow up emails, consider incorporating some “human errors” into your email sequences. One trick is to send one email that’s missing either a link or a file. You then automate a follow up email 1-5 minutes later sending the missing piece of the first email.
While open rates will likely remain the same, we’ve found that conversions for the second email tend to skyrocket.
Photo of the Week: The lil dude was off to Kindergarten! Here is his super hero pose on his way to his first day of school
Meal of the Week: A Lobster Roll while grocery shopping at Fairway Market.
— Marquina (@Marquina) September 26, 2017