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Investing in your readers

Satisfied readers can be one of the most loyal customers you will ever have, coming back to buy your books over and over as long as you deliver the promise of a good story and high-quality writing. To engage those readers, you invest your hard-earn money in production, distribution, and marketing of each book you launch. But do you know how much is too much based on the profits those readers bring to you? Do you know how many books will they end up buying for you justify that investment?

The concept of measuring the amount of profit you can expect to generate from a reader over the entire time they keep buying books from you is known as a customer’s Lifetime Value or LTV.

Your reader’s LTV can be calculated based on the typical behavior of a reader for your genre. That means knowing how many books they buy per month, where and how they buy those books and how much they are willing to pay for them. Then take that information and consider your how many books are you publishing or will publish in the following years.

For example, consider the romance genre.

Romance readers consume books at an amazing speed with an average consumption of one or two books a month with 92% still buying print books, 64% also buying e-books and 35% acquiring audiobooks.*

Making the assumption that a single romance reader might follow a good author for at least five years, you can calculate that a loyal reader will buy the two books you plan to launch each year. That means that if you sell each book for $7.99 your reader’s LTV is $7.99 by 10 (since it is two per year) for a total of $79.90, then multiply that by the amount of books you expect to sell.

Knowing this you will be able to consider if it makes sense to invest in marketing to that reader based on their profit potential.

Are you willing to invest more in marketing for your first “hook” books knowing that that satisfied reader will come back for more? Or is it too risky for you because the profit is not enough?

Whatever the case, knowing the LTV of your reader will enable you successfully manage your budget, Tweak your marketing plan based on potential and avoid pitfalls that can hinder your growth as a successful profitable author.

*Source: The Romance Book Buyer 2017: A Study by NPD Book for Romance Writers of America

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