I made a breakthrough in organizational workflow for my speech and debate publishing company, Monument Publishing. At first it appears risky and hazardous (how on earth will I make money?), but I think it’s going to be successful. At least I hope so.
This is a long post that sorts out my thinking a bit. I’m sorry if it bores you, but if you’re an entrepreneur like me, you’ll find it a bit interesting. Besides, I’m a little anxious about the big change because it could flop, so I’d appreciate your feedback.
In short, I abandoned my traditional packaging for a more flexible options system for my brands. I’ve streamlined all my sourcebooks to $30—a drop in price for all of them—but I don’t think I’ll lose money in the end.
Let me explain things real quick in case you’re not familiar with Monument Publishing. I have five brands for all the speech and debate events: Blue (team-policy debate), Red (Lincoln-Douglas debate), Gold (extemp, parli, impromptu), Silver (apologetics), Bronze (interps and platforms). Each of these brands has various products, the main being a sourcebook written or edited by a leader in the speech or debate category. Students may own products under each of the brands, but the sourcebooks were the staples serious competitors would buy. Here’s a chart:
Let me explain what I traditionally did with these assets, what I’m going to do differently, and why I think—despite my fears and doubts—it’s going to work.
1. Sourcebooks and Packages
My sourcebooks go out to a niche market of homeschool speakers and debaters participating in Stoa and NCFCA leagues. Needless to say, they are niche markets, so I don’t sell millions of books. After paying all my authors and coaches, printers, and a stack of others involved in my little gig, I fair pretty well every year. I’d like to think it is because of the price of our sourcebooks ($40-$80) and the package deals we offer with them that bring out even more money.
The sourcebooks are pricy, but speakers and debaters have grown to very much appreciate their value. They’re written by top coaches and competitors in the country (I seek them out and build a team every year). The quality of the material is incredible, the competitors know it, and they are willing to pay top dollar for them.
I have quite a number of other materials, too, like flowsheets, textbooks and timepieces. Things that speakers and debaters enjoy. I traditionally put a group of these together for a slightly-more-expense package that encouraged an upsell. Everyone paid the basic prices (noted in the sourcebook price), but the packages encouraged other additions that kept cash-flow coming in. If I averaged $80-$100 per customer during the year, I would have a sustainable year of sales.
|Brand||Sourcebook Price||Package Price|
2. My Changes
Over the years this system has worked pretty well. However, these past few years some problems have surfaced.
- The economy stinks. Yeah, I guess that’s the new normal. I’m resolved to stop using this as an excuse for bad sales. Sure, people are looking to pinch their pennies, but that means I need to increase my value. I’ll show in a minute how I’m nailing that in the bud.
- Customers already owned the package items. For instance, one year they bought the package that included the textbook, so why buy the next year’s with the same textbook? Besides, customers didn’t want all the package items. If I included a pack of flowsheets with the package, not all the customers cared for the flowsheets. But, they may have appreciated the textbook. So they would have to reconsider getting the package with unwanted items just to save money.
- My margins were being eaten up. My brand managers (I have a few other people helping me with this) wanted to add products. My Bronze Brand Manager, Scott, for instance, wanted to add Michael Hyatt’s Platform to the Bronze Package, but even ordering a bulk quantity cut into the package upsell price. In the end, these outside sources—though they added value for the customer—brought very little back to the company.
- I’z gots my competitors. Sure, this is a niche market—and I’m the leader in it—but because of the high price of my sourcebooks, I have had several entrepreneurially-bent competitors rise up and attempt to make their own sourcebooks. (Most of these competitors were alumni of my camps…isn’t that ironic?) We’ve developed a pretty slick oiled machine over the years, so quality is tough to compete with, but they nail me on price. Needless to say, I fear I’ve lost customers just because my competitors low-ball me.
- Customers felt manipulated. My pricing strategy felt like one big gimmick. I didn’t feel guilty about it (hey, I need to run a business here), but customers didn’t appreciate the manipulation to spend more. Though many of them would upgrade the larger packages, those that didn’t felt they were missing out on something they may have wanted. All of them felt played with, which wasn’t good.
So I made a change. On the surface it appears to be incredibly risky, perhaps stupid. Maybe it is, the verdict is in the future, but I decided to go for it. Customers are going to love it because I’m practically giving the sourcebooks away. Here are the new prices:
|Brand||Sourcebook Price||Package Price|
So, I dropped the prices significantly, and I gave no incentive to upgrade to a more expensive package of products.
Customers are thinking, “Yeahhhh!”
Business friends (and my wife) are thinking, “Yeeeash! How are you going to make any money?”
It’s risky, but I’ve got my reasons why I think this will work.
3. Why I Think (and Hope!) This Is Going to Be Awesome
First of all, I can count on increase in volume. Happy customers = more sales. Since the sourcebooks are so inexpensive compared to previous years, I’ll sell more of them and make more on the margins inherent to the sourcebooks themselves.
But this isn’t reason enough to be so risky. I’m going from $80-$100 surity to $30. That’s a huge cut.
But the freedom will win people over. I’ve gotta believe that.
I believe our products are good and my customers want them, but the packages and pricing strategies of old limited the customers’ freedom to choose what they wanted. I overhauled my entire sourcebook strategy to allow customers to add products, but also the freedom not to. No forcing, no manipulation, no packaging gimmicks. Add them to your sourcebook order, or not. No worries…we’re getting the book(s) out to you either which way. For a base price of $30.
I think customers will appreciate this. And for starters, I’m giving them a financial incentive. When they order the sourcebook, all other items in the brand comes 20% off. This is a little incentive to buy those extra items, but not a manipulative one. Essentially, the customers get to build their own package. I’m not dictating it.
Download my 2013 Conference Form. It shows it pretty clearly:
Do You Think It’ll Work?
I released this last week with a couple of brands (Silver and Blue), the rest rolling out next week. So far, about 3/4 of my customers have voluntarily added resources to their sourcebook preorder. I guess this is working.
Long post. If you stuck with me to the end, you’re a good friend. It’s helpful for me to write this out. Sometimes running a home business gets complicated, but I suspect this will simplify things for my customers. They are who I should be focused on anyway.
What do you think? Do you think this will work? I’d appreciate your feedback below.