Note: This post is more for fellow indie writers, but it will apply to any readers out there who own businesses or who work in small businesses and are involved in some of the financial decision making.
If you’ve worked in a business long enough, you’ve probably heard this happy-sounding little acronym ROI: return on investment.
But what the heck does ROI mean? If you want a good financial definition of ROI, here’s a place to start. If you want to understand my real-life experience with ROI, then read on.
See, the problem with ROI, especially for new businesses (and writers need to think of this as a business — it’s an art business, but it’s still a business once money exchanges hands for said art) is that people focus too much on actual dollars.
I’m a firm believer in the saying “you need to spend money to make money.” And, yes, you need to be smart about where you spend the money, but if you get too caught up in the micro view of ROI, you lose sight of the macro view. The Big Picture. The Long View.
For me, some things can’t be measured in dollars. I’m selling my novel at 99 cents. Think about that — a whole book for 99 pennies. I can guarantee you that if we looked at my ROI on things like advertising and cover art, we’d see that it’s in the gutter. According to the financial definition. According to the short-term view.
But I don’t care about that. I’m in it for the long haul. Here’s how I look at it: if my ad brought in a reader for life, that is worth so much more than that one sale. It’s impossible to measure the worth of that one reader since this person could end up being part of my passionate tribe…one of those people who helps me get other readers (at no cost to me).
The other thing that strict-ROI-professors don’t consider is this: if you spend no money on business promotion and you make no money, where does that leave you? I’m always baffled by people (and yeah, I’m talking writers here) who are so quick to dismiss doing anything that costs money simply because they quickly do a calculation and realize they’d need to sell a gazillion copies of their 99-cent book in order to make up the cost of an ad campaign. They’re missing the point about that thing that can’t be measured: all those readers who might become fans and who will continue to buy books (at higher prices than 99 cents, because true fans would be willing to pay a few more bucks, trust me) and who will continue to recommend you and your work.
I’m not suggesting writers should be pouring tons of dollars into ad campaigns or cover art or special promotions. That’s not realistic for most of us. But you’ll need to spend some money, even more so now, given the influx of titles that are added on a daily basis. I understand if you don’t have the funds; that’s a different situation than simply saying you won’t spend the funds “because the ROI won’t be worth it.”
And yes, I realize that some of the cash you spend might not result in any sales. The ad campaign or Facebook promotion might be a total flop. It happens. But you need to experiment until you find what does work. The other thing to keep in mind is this: it’s hard to predict huge ROI…huge ROI is a hindsight assessment.
I think this is true for all new businesses, by the way — not just writers. Forget about ROI for the first year, maybe even the first two. Focus on exposure. On winning lifelong customers (readers, in my case). On engaging people. On putting out the best product you can, whether that’s a book or a bright shiny new widget. And be willing to spend some cash in order to get your work the exposure it deserves.
Because it deserves it, doesn’t it?