After last week’s post on how long it will take for your book to deliver a profit, I started thinking. How do you actually calculate your book’s ROI?
The short answer? It’s complicated.
I’ve written before about the Zero Moment of Truth and how most people don’t buy from you the first time they interact with you. This means that means your return rarely comes down to a single moment.
Your customers’ path to purchase
According a study run by Google in 2011, it takes the average customer needs to interact with you:
(More on what these terms mean here.) Rather than someone buying your book and immediately choosing to buy a higher priced product or service, they are also likely to:
My team and I see this all the time at Grammar Factory, where the steps someone takes before working with us could be as simple as this:
Or more complex, like this:
(Note that someone might be receiving weekly emails for 6-12 months before they reach out to chat, and at the same time they might also be following us on Facebook, Instagram, Twitter and/or LinkedIn, and may come along to speaking engagements and other events.)
So the question is: If the average customer interacts with your business 11 separate times before deciding to work with you, how do you calculate the return on any of the steps in that mix?
This brings us to attribution modelling.
Attribution modelling refers to how much weight you assign to each step along the journey your customers take from discovering you to deciding to buy from you.
There are five common attribution models that big companies tend to use – these models help them define the return on their marketing efforts, as well as how much they should invest in different types of marketing. The five models are:
(Note that these models are usually used in an online analytics environment, but the theory holds true for the customer journey in general, whether that journey occurs online, offline, or has both on- and offline steps.)
Last interaction assigns 100% of the value of the sale to the last step a customer takes before deciding to work with you.
In other words, if a customer follows you on Facebook, reads five emails, buys your book, has a phone call with you and then decides to buy a $10,000 package from you, that final phone call would get 100% of the value of that sale. The phone call is valued at $10,000, while no value is assigned to any other steps in the journey.
First interaction, on the other hand, assigns 100% of the value of the sale to the first step a customer takes in the journey.
To continue the previous example, if a customer follows you on Facebook, reads five emails, buys your book, has a phone call with you and then decides to buy a $10,000 package from you, Facebook you would get 100% of the value of that sale.
If you’re using a linear attribution model, every step on the journey would be given the same value. So in a five-step journey to a $10,000 sale, each step would be valued at $2,000.
The position-based model assigns a unique value at each touch point, with greater value to the first and last steps in the journey. The most common approach (the bathtub model), divides 80% of the conversion value between the first and last step, with the remaining 20% divided between the middle steps.
If we return to the early journey I outlined, the steps were:
- 1Facebook follow
- 2Read email 1
- 3Read email 2
- 4Read email 3
- 5Read email 4
- 6Read email 5
- 7Buy your book
- 8Schedule phone call
- 9Buy $10,000 package
Using the position-based model, the initial Facebook follow and final phone call would each be valued at $4,000 (40% each), while the remaining steps would be valued at $400 each (remaining 20%, or $2,000 divided by five steps).
The final attribution model is the time-decay model, which gives increasing value to each step of the journey. Using the previous journey, while the initial Facebook follow and email opens would each be assigned a value, those would all be much lower than the subsequent steps, like buying your book.
So what does this mean for your book’s ROI?
Unless someone randomly buys your book (without having ever heard of you before), then immediately decides they want to work with you, it’s very hard to figure out how much of a role your book is playing in the context of the larger journey the customer is taking.
However, there are some things you can do to help calculate its ROI.
1. Keep track of how your customers find you
The first step is to keep track of how your customers find you. There are a number of ways you can do this, including:
Track their behaviour online:
There are a range of tools you can use to track your potential customers’ behaviour online. While you can’t track how individuals are behaving, you can monitor trends, which can be helpful when figuring out how people find you. Here are some of my favourite tools:
Create book-specific links
When it comes to singling out people who have bought your book, you can create some resources specific to your book, and then include links to those resources in your book. If those links aren’t available anywhere else (e.g. you don’t promote them on social media, share them by email, or let them get indexed in Google’s search results), you can be pretty confident that any stats relating to those links (the number of visits, the number of signups/downloads, etc.) are strictly a result of your book.
Monitor sales activity
As soon as someone buys something from you, you’ll have their details (usually in your bookkeeping software, but if you don’t have bookkeeping set up, there’ll be an email trail). When someone buys a big package off you, you can then go through your historical sales data using their contact information to see what else they’ve bought on the path to buying your big package, such as your book or an online course.
One of the easiest ways to find out how your customers find you is by asking them. If your business is like mine, the final step before most people decide to work with you is a phone call or a coffee. In that phone call or coffee, why not ask how they found you?
While the vast majority of our clients find us by word-of-mouth referrals, asking this question has helped me figure out how other people find us, which then helps us decide where to invest our marketing efforts.
2. Define your most common customer journeys
Once you ask enough customers how they found you (along with tracking their sales and online behaviour), you’ll start to see the common patterns between them. What you’ll discover is that there are probably 3-4 predominant journeys your customers take to find you.
As you start to see the patterns, I recommend mapping these journeys out – including the number of steps involved and the amount of time it takes for someone to move from discovering you to investing in one of your core products or services. Keep in mind that the time frames of the different journeys can vary dramatically: We’ve had clients reach out after reading our emails for almost a year, and we’ve had others sign up in the first conversation.
Also make sure that you keep an eye on your book’s role in the journey. I’ve found that Book Blueprint usually shows up in the journey in one of two places:
- 1The discovery stage: Buying the book is one of the steps people take when they are following me on social media and are reading my emails, but they haven’t reached out to chat yet. At this stage, they might still be in the early stages of writing their books – thinking about whether or not to write a book, choosing their idea or writing the initial draft. They aren’t ready to choose a self-publishing company yet, so they’re just learning about Grammar Factory and what we do.
- 2The decision making stage: The ‘decision making’ stage of the journey is when they are ready to choose a self-publishing company – they have finished their first draft (or are getting close) and want to start comparing different companies and services. This is the phone call/coffee stage, and I usually offer to give a potential client a copy of my book, because it will help with their self-editing, and it will also demonstrate the quality of the books we produce.
3. Choose your attribution model
Finally, decide which attribution model you’d like to use to measure your ROI.
My thoughts are that each stage on the journey should be assigned a value. After all, in the last interaction in the process wouldn’t have been possible without all of the previous steps, so why should it get all of the value? Similarly, the first interaction wasn’t the moment when the customer decided to buy – there were several steps after this, so each of those steps should be taken into consideration.
When it comes to how much value they should be assigned, my preferred approach is the time decay model, where each step is allocated an increasing share of the final sale value.
My reason for this is because most of us aren’t willing to invest in a high-value product or service the first time we interact with a business. In fact, the higher the price, the more likely we are to take longer to make the decision. The more likely we are to do our research – to look at comparisons, to see out reviews and more.
If we give up after one or two interactions – we decide the value isn’t high enough, the price is too high, or the process is too hard – we aren’t that committed to the purchase decision. Because our commitment is low, it is easy to drop off after those initial interactions, which means the majority of people do. Ultimately, this means most people are unlikely to convert into customer in the first couple of touch points.
And, because the likelihood of them converting at this stage is quite low, why would I assign a high value to those steps?
By contrast, the longer someone stays on the journey – the more emails they read, the more Facebook posts they like, and so on – the more likely they become to buy. They start to feel like they know you. They start to feel like they trust you.
This is when they start to invest – usually in lower-priced, lower-risk products (like your book).
As they get value from those lower-priced products, they become even more engaged, which means they are more likely to continue to buy. If they got a lot of value from your $25 book, they start to wonder how much more value they could get from a $300 online course, or a $10,000 package.
And when they start having those thoughts, they are far more likely to buy when they are ready.
In my business, because the likelihood that my potential customers will turn into higher-paying increases the longer they spend interacting with us, I put a higher value on the later stages in the journey than the earlier ones.
When it comes to my book, the way I measure its ROI depends on where it sits in the journey.
Measuring Book Blueprint’s ROI
First, there is a general trend in my business that someone who has a copy of Book Blueprint is far more likely to become a publishing client than someone who doesn’t have a copy.
This is for two reasons.
For those who come across the book in the discovery stage of the journey, by investing in the book they have shown a higher level of commitment to engaging with us than simply interacting with a blog post or social media post. They have made a monetary investment in the book itself and, if they read it, they have invested 3-4 hours of their time.
Because they have already invested, they are more likely to continue investing. On the other hand, there are plenty of people following us on social media or subscribed to our newsletter who will never buy the book, and they are also unlikely to buy any higher-priced products or services.
The second reason is because those who are given my book in the decision making stage of the journey have made it to the decision making stage of the journey. I know that’s a very roundabout phrase, but stay with me.
It takes time to reach the decision making stage of a journey. In the case of choosing a self-publishing company, the client needs to have:
- 1Written a book (a big investment right there!)
- 2Looked for different companies to research
- 3Researched those companies
- 4Set up a time to speak with those on their shortlist
All of this takes time and energy. In some cases, there might be a monetary investment involved, such as working with a writing coach on their draft, or even booking in a paid consultation with a publishing company (we don’t charge for our consultations, but I know some companies do).
By the time they reach this stage, they are ready to make a decision. If they are speaking to me, my team and I are lucky enough to be on their shortlist. For those reasons alone, there’s a good chance they’ll choose us. (There’s a far higher chance they’ll choose us if we’re on a final shortlist of 3-5 companies, than if they’ve just stumbled across us on Google.)
If they don’t decide in the conversation itself, giving them a copy of my book to read could be the final piece that pushes them from a ‘maybe’ to a ‘yes’.
So, I know that people who have a copy of Book Blueprint are more likely to turn into publishing clients than people who don’t. For that reason, my book will always get more credit for the final sale then steps along the journey that don’t require as much of an investment (e.g. a blog post, email or social media update).
Then, because I use the time-decay attribution model, Book Blueprint will get more credit if I hand it over at the end of a sales conversation than if a potential client orders it earlier in the discovery stage of the journey.
Again, people who get to this stage are already more likely to work with us. If they’re speaking to three different self-publishing companies, and mine is the only one where the founder has written a book, I have increased the likelihood that they’ll choose me significantly. And if that’s the final piece that nudges them from a ‘maybe’ to a ‘yes’, then that’s one hell of a return on my publishing investment.
How will you measure your ROI
Now it’s your turn. If you’re already published, how do you use your book, and how do you measure your ROI? How much extra business do you think you’ve generated as a result of getting published?
And if you’re still in the writing or publishing processes, has this gotten you thinking about how you’ll measure your ROI? If so, which measures are you going to put in place so you can hit the ground running once your book comes out?