How Much Information Can I Afford?

Information may "want to be free," but it isn't. Turning raw data into something with meaning takes resources, even if it's your own data. You might want to consider the following factors before you start collecting data. Some or all of them will apply in most common situations.

• How much will the collection cost?
  • My labor, and that of my employees
  • What else might be done instead, in that time?
  • Fees to Distributors, etc. for reports
  Computer resources
• How will I analyze the results? What will that cost?
  • Can we do it in-house?
  • If so, in what time?
  • What else might be accomplished with that time?
• What changes can I make based on the resulting information? Examples:
  • Improved targeting for marketing efforts
  • Improved judgement for future acquisitions
  • Greater connection between employee pay and results
• If I make those changes, what is the greatest impact they might have? Examples:
  • Lower costs by reducing inefficient marketing and sales efforts
  • Reduce unearned advances due to better sales forecasting from the start
  • Reduced returns processing due to better placement of books in appropriate channels
• If the impact is an increase in sales, what additional expenses will come with those sales?
  • Increased plant costs
  • Increased commissions/distribution costs
  • Increased marketing
  • Increased printing costs in aggregate, reduced on per copy basis
  • Increased royalties, especially if you cross breakpoints
  • Increased returns
• Will increased sales generate increased rates of return? (Usually yes)

Knowledge may be power, but make sure that it empowers you to do something valuable before you seek it. The pure quest for knowledge isn't usually within the purview of a for-profit operation.

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• Opinions presented are based upon our assessment of best practices for the mythical "average publisher." Please use your own business judgment in applying this information.