Choosing your book title is the single most important decision you will make that will determine how well your book sells. And most authors have no idea why.
Most self published authors really mess up this step. If you get this wrong, it’s going to destroy your potential for selling a lot of books. To understand why, you have to know…
The Little Marketing Formula That Determines How Much Money Authors Earn
There’s a simple formula that every author should know. Here it is:
Leads x Conversion Rate x LTV = Revenue
First, the definitions:
Leads is how many potential buyers you attract. There are many different types of leads, and each type of lead will have its own unique formula of conversions and LTV. Here are some common examples of types of leads for an author:
Visitors to your Amazon book page
Audience for a book signing or lecture
Your conversion rate is the percent of your total leads that you convert into paying customers (readers). For example, if 100 people visit your book listing on Amazon and 10 buy, you have a 10% conversion rate for that type of lead. In my experience, a 10% conversion rate for visitors to your Amazon book page is slightly above average, and easily attainable if you get your book title and cover designed properly as we’ll cover later in this post.
Lifetime Value of a Customer (LTV)
LTV is the lifetime value of a customer for your business. In the most simple case, if you have only one published book and sell no more products or services, your LTV of a customer right now would be the revenue you earn every time you sell a book. If you’re a self published author and you sell your book for $2.99 on Amazon, that means your LTV is about $2.
The Key to Earning More Income as an Author
Now that you understand the marketing formula, it becomes really easy to see how to increase your income. You only have four choices:
1) Increase the amount of leads
2) Increase your conversion rate
3) Increase your LTV of a customer by creating more products or services to sell
4) Reduce your costs
Increasing Your Leads to Sell More Books
When 99% of authors talk about “marketing,” what they’re really talking about is getting more leads. Posting on Facebook and Tweeting, distributing a press release, doing a book signing… these are all lead-based activities. And, the truth is, you’re wasting your time, money and energy if you start your marketing by focusing on lead generation.
Why is that? Because the first thing you must do is maximize your conversion rate…
Maximizing Your Conversion Rate is the Most Important Thing You Can do To Sell More Books
Getting leads and traffic is easy. Converting leads into buyers and loyal readers is a little more challenging, takes more preparation and knowledge, and ultimately will lead to a lot more success (ie, more income).
With a poorly designed title and book cover, your conversion rates will be miserably low, and well below average. Let’s look at the numbers to see an example of just what this means for your income:
1,000 leads a month to your Amazon book page x 1% conversion rate x $2.00 LTV = $20 monthly revenue
If that’s what your formula looks like right now, the first thing you ought to do is increase your conversion rate. The second thing you ought to do is increase your LTV. Only after you have done both of those things should you even bother to try to increase your leads.
Most authors do marketing completely backwards, causing them to go broke before they ever break out and sell enough books to make a profit.
If you look at the formula, you’ll realize that you can double your revenue one of three ways:
1) Generate another 1,000 leads a month
2) Increase your conversion rate by 1%
3) Increase your LTV by $2
The easiest thing to do is simply increase your conversion rate. Changing your book title or book cover could easily increase your conversions on Amazon by 1% or even as much as 10% (that would be a 10x increase in income by just changing your book title or cover – and I’ve seen those kind of results with my own books and my clients).
The second easiest thing to do is simply increase your LTV. For most authors, that just means writing more books. The more books you have published, the more books your average reader will buy, and the more your average revenue per reader will grow.
If you’re a nonfiction author, you could create additional products and services to sell to your audience as well. Consider creating a video training course, a one-on-one coaching program, consulting, group coaching, or other products and services that will help your audience achieve their goals. All of these will help increase your LTV and increase your income without generating one single extra lead or doing any of what most authors call “marketing.”
Lastly, you can generate more leads. This is by far the hardest approach to take, yet the approach most authors choose without even considering other options.
The Marketing Secret that Only the Pros Know and Will Keep You Broke If You Don’t…
There’s a little secret that all professional marketers know and understand, and almost no one else does. This one secret can make you rich if you understand it, or destroy your financial life if you don’t. Here it is:
The higher your conversion rate and LTV, the more money you can afford to spend on marketing and still earn a profit.
Let’s look at another example so you can see the kind of difference this makes to your income…
Consider an author with one self published book priced at $2.99 who just chose the first book title he could think of and designed the book cover himself. He gets 1,000 leads a month, has a 1% conversion rate on Amazon and a $2 LTV. His revenue from book sales is $20 a month. Since his revenue is $20 a month, that means he can afford to spend up to 2 cents per lead. If he spends more than 2 pennies to generate a lead, he’ll actually lose money for every bit of “marketing” or advertising he does.
Consider another author who has self published five books at $2.99, has a video course for sale and a formal coaching program. Her conversion rate on Amazon is 10%, she generates 1,000 leads a month right now, and her LTV is $25 ($5 from her books, $10 from her video course, and $10 from her coaching program).
That means, every month she creates 100 new customers for her business out of 1,000 leads, and each customer spends on average $25. Her monthly revenue is $2,500. Not all that much, but nothing to sneeze at. She generates $2.50 per lead on Amazon. That means, she can afford to spend up to $2.49 per every lead and still earn a profit on every lead she generates.
Who do you think will win the “marketing” battle? The author who can afford to spend $2.49 per lead and still earn a profit every time or the author who can only afford to spend 1 penny per lead?
This is why conversion rate and LTV are far more important than lead generation. If your conversion rate and LTV are healthy and strong, you can afford to buy as many leads as you want all day long and still earn a profit. If your conversion rate and LTV are poor, you will only be throwing money away every time you advertise or “market” yourself and your books.
In the next post, we’ll discuss how to choose your book title to maximize your conversions. In later posts, we’ll discuss designing your book cover to maximize conversions, how to increase your LTV, and how to keep track of the right numbers so that you know every time you invest money in your business, you’ll earn more than you spend and actually earn a profit instead of throwing money away.