I’ll Repeat It: “Worry about Your Customers”

Booksquare on Amazon’s purchase of Lexcycle two days ago:

Right now, it’s time for the publishing industry to step up to the plate. Stop worrying about fake issues like text-to-speech and start worrying about your customers. You may not be able to stop the settlement you negotiated and you cannot stop Amazon from acquiring better technology. But you can demand that your books be sold in the most consumer-friendly manner possible. Take the initiative to be a leader in the future of books — recall that your competition is changing rapidly — and you’ll be a leader in the future of reading.

[…]

The Lexcycle sale is great news for the hard-working team that developed this incredible application, against so many odds. It’s not so great news for everybody else. Consumers are slowly being locked into a single vendor. Publishers are being backed into Amazon’s corner. Yet, yet, yet, I ask again: where are the publishing initiatives, the fresh thinking, to protect the free market?

There’s more at the original article.

The greatest strength of the Kindle format isn’t the reading device or even the book format, but the ease with which you can purchase and download a book. Stanza was a worthy attempt at a competitor.

Once Again, It Comes Down to Value

Electronic Cottage reports that there’s a small-scale user revolt boycotting Kindle titles that are priced higher than the new release and/or bestseller $9.99 price point:

Now, Amazon has many books over the $9.99 price it promised for new releases when Kindle was first launched. That price was a major selling point to convince buyers that the large investment in a Kindle would pay off over time. The price also acknowledged the obvious: a Kindle edition is less valuable than a hardcover; although you cannot pass along your Kindle edition to friends, you are at least paying a significant amount less than the hardcover price. Unfortunately, short-sighted publishers feel they are losing dollars instead of realizing that a $9.99 Kindle sale doesn’t usurp a hardcover sale. It is a brand new entity. A plus. Pure gravy.

Kindle owners have organized a boycott of Kindle editions over $9.99. The uprising is ably helped by Amazon’s own online tools: the 9.99boycott community and a boycott discussion forum. Cleverly, the boycotters are using the Amazon tags feature to tag books over $9.99 with the 9.99boycott tag. Boy, if I were a publisher or author, I sure wouldn’t want to see my books listed at the top of the tag’s “Popular Products” under the boycott tag.

Interesting that part of the article here is that Amazon has provided customers with all the tools they need to create an uprising within their own service. Pay attention to the number of books the author says he purchased at the lower $9.99 price point. Like iPhone applications, there appears to already be a price ceiling forming with the Kindle.

I don’t think this is what Amazon was going for, nor do I think they promised everyone $9.99 books, but (again) like the App Store, the customer base is showing what they’re willing to pay.

(Via Tools of Change for Publishing.)

eBook Prices versus Print Prices – Are They Too High?

Are eBook prices edging a little too high for people’s comfort? Josh Quittner writes in Time:

If only the Kindle 2 were cheaper! Despite its other shortcomings, Amazon’s new and improved digital-book reading device does enough right that it could become the Model T of e-readers, capturing the imagination–and discretionary spending–of the masses. But in this wretched economy, in which most of us will purchase only nonessentials that save us money or make us money, I doubt folks will pony up $359 for a pleasure-reading gadget. And thanks to Amazon’s mysterious pricing policies, the old argument–that digital books are so much cheaper than their hide-bound ancestors–no longer holds.

Before a recent visit to my dear old mum, I purchased The Kindly Ones, by Jonathan Littell, a 992-page Nazi-palooza that, given the nearly 3-lb. weight of the new English translation, makes for an ideal Kindle selection. But when I got ready to buy it on Amazon, I blanched at the $16.19 price. Every Kindle text I’ve purchased since Amazon started selling the device in November 2007 has been $9.99. Indeed, that was one of the Kindle’s main draws: you could buy books wirelessly, on demand and at a fraction of the cost of their printed peers. Case in point: Littell’s book was listed in Amazon’s Kindle store with a hardcover price of $29.99, making the digital version seem like a real bargain. But later I discovered that Amazon’s bookstore was selling the new hardcover for $17.99. So the Kindle saved me all of $1.80. Big whoop.

Customers aren’t stupid. They realize that an eBook like that on the Kindle or on other electronic bookstores doesn’t cost as much to print, warehouse, or to distribute—because those things don’t cost anything. Quittner himself writes about an “old argument” that “digital books are… cheaper” than print pieces. A lot of people are used to purchasing a large portion of their books at the $9.99 price point on Kindle, because that’s an automatic discount applied to both new titles and to titles on the NYT bestseller list.

What shows the intelligence of the customer is that I don’t recall any publisher ever saying in public that eBooks would be less expensive than print ones. Amazon makes a big to-do about the $9.99 price point, enough so that Quittner believes in his article that Amazon is also the one who set the list price for the book he was trying to buy. (This is not true; list prices are set by publishers; Amazon decides what the sale price is, at least when it comes to Kindle titles. I don’t know how the print side of things works.) Customers are intuiting that digital books should not cost as much as print ones.

I ran into this myself just a few days ago. Now having the Kindle app for iPhone, I went to look at a few books to see if I wanted to buy anything. I landed on a book that in print is a mass market paperback. Its Kindle price? $7.99—identical to the pricing of the hard copy version. I don’t think I need to write long on how quickly that decision was made for me.

Companies—and this is not limited to publishers—are underestimating the human desire to own physical objects. To many people (and at least to me), physical ownership of a piece of property, such as a DVD on which a video game is coded, or a stack of paper on which words are printed, is more valuable than a collection of bits that make up even a functionally equivalent electronic version of the same product. In addition, I have more control over the physical piece of property, especially when DRM enters the picture on electronic files and I’m being told what I can and can’t do with it.

What do you think? When you have a choice, which one would you buy? Would you buy both? What do you expect to pay for it?

Discuss, and feel free to answer the poll in the sidebar.

User Reviews as Purchase Influencers

The Economist put up a great article last week on the effectiveness of user reviews on Web site product conversions:

Amazon was a pioneer in this regard: it has allowed customers to post reviews of books and other products for many years. Initially, publishers and authors were worried that allowing negative reviews would hurt sales. Online retailers have generally been reluctant to allow users to leave comments, says John McAteer, Google’s retail industry director, who runs shopping.google.com, the internet giant’s comparison-shopping site. But a handful of bad reviews, it seems, are worth having. “No one trusts all positive reviews,” he says. So a small proportion of negative comments—“just enough to acknowledge that the product couldn’t be perfect”—can actually make an item more attractive to prospective buyers.

Well, of course the general fear is that people will jump out on things that they don’t like, and say all kinds of mean things about them. That’s what the Internet is for—and in customer service, you always hear a lot more from people who don’t like something than you hear from people who do like something. I can tell you from personal experience that both I and my wife have purchased items on account of negative reviews, because learning that it wasn’t what someone else wanted told me that it was exactly what I wanted.

And the volume of reviews means a bunch, too:

The sheer volume of reviews makes far more difference, according to Google’s analysis of clicks and sales referrals. “Single digits didn’t seem to move the needle at all,” says Mr McAteer. “It wasn’t enough to get people comfortable with making that purchase decision.” But after about 20 reviews of a product are posted, “We start to see more reviews—it starts to accelerate,” says Sam Decker, the chief marketing officer of Bazaarvoice, a firm that powers review systems for online retailers.

His company’s research shows that visitors are more reluctant to buy until a product attracts a reasonable number of reviews and picks up momentum. In a test with Kingston, a maker of computer memory, Bazaarvoice collected reviews of Kingston products from the firm’s website and syndicated them to the website of Office Depot, a retailer. As a result there were more than ten reviews per product, compared with one or two for competitors’ offerings. The result was a “drastically” higher conversion rate, which extended even to other Kingston products that lacked the additional reviews.

You see this to a lesser degree (which is also in the article) on blog comments, which start slowly and can pick up massive amounts of steam when a critical mass of people choose to throw their voice into the debate. As the numbers grow, the number of contact points into the conversation increases.

Positive reviews are also motivated by the idea of social capital—that is, people will want to review things favorably and say nice things about them because it puts their name out there and lends them some sense of expertise within the community that cares about the reviews. It gives them a good feeling, and in essence gives them a way to directly compliment the work and the author/creator. Keep in mind also that people tend to buy things that interest them, and you have an interesting social system where the normal outcome is going to be a positive review (unless you’ve hoodwinked them into thinking a product is something it’s not, in which case you deserve the negative reviews).

Giving voice to a community—however large or small—and giving them the power of feedback is a powerful thing. It can even empower them to help you sell something.

What do you think? Have you ever had a purchase decided for you by user reviews or comments? How often do you consult those types of resources when shopping online? Are you disappointed or wanting for more information when reviews aren’t there or there aren’t enough of them?