Sourcebooks CEO Dominique Raccah: ‘Data Works Better Than Your Gut’

By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid

Dominique Raccah is a data-driven publisher.

As CEO of Sourcebooks, a Naperville, IL-based publishing company with nearly 100 employees, Raccah oversees a team that makes decisions about everything from what books to acquire to cover art to marketing messages. An increasing number of those decisions are being made using data, much of it gathered by Sourcebooks from its readers.

At the Digital Book World Conference in January, Raccah announced on stage that Sourcebooks would be engaging in agile publishing for its new book, Entering the Shift Age, by futurist David Houle. This method of publishing – modeled on agile software development where software is built incrementally using collaboration and self-organizing teams – seeks real-time reader feedback before the book is actually published; i.e., data.

Raccah’s experimental and data-driven approach to publishing may be paying off. Sourcebooks revenue was up 19% in 2011 on the back of 795% growth in e-book revenue, which now comprises 28% of all Sourcebook revenue.

After receiving her bachelor’s of science degree in psychology in 1978 from University of Illinois Chicago, Raccah went on to achieve her master’s degree in psychology from the University of Illinois at Champaign Urbana. In 1980, when she graduated, she began her career at Leo Burnett, a global advertising agency, where she worked on quantitative research. As associate research director, she helped clients like Kelloggs and McDonald’s use data to make business decisions. In 1987, after seven years at Burnett, Raccah launched Sourcebooks and has focused on building it ever since.

We spoke with Raccah about using data in book publishing, her company’s approach to e-book pricing and why it’s important to sell books directly to readers.

 

Jeremy Greenfield: I find your background incredibly interesting. Do you think the time you spent at Leo Burnett has helped you as a book publisher?

Dominique Raccah: It’s been incredibly useful. Burnett helped me think through industries that are in turmoil.

I worked on coffee during the coffee wars and diapers during the diaper wars. I worked on cookies during the cookie transformation. Any time there was upheaval, that’s when you’d be looking for information, trying to obtain data. I had more experience in strategically thinking about transforming industries than others. Certainly no transformation that looked like this [book publishing].

I also learned some things about economic ups and downs. Sourcebooks has been growing pretty continuously for a lot of years and part of that comes from having the experience of being on the Procter [& Gamble] account during one of the economic recessions and watching Procter say, “this is when you invest because you’re going to grow market share.”

Having all that experience gave me stamina, which I think entrepreneurs need. You need a lot of stamina because it’s not easy and book publishing is not easy.

 

JG: 2011 was a big year for Sourcebooks in terms of e-book revenue growth. Do you have a head of digital masterminding this meteoric rise?

DR: No.

 

JG: Why not?

DR: Because digital is run out of my office. I’m head of digital. I’m not sure how digital can be run out of anyone’s office besides the publisher or the CEO.

You’re making strategic decisions that you need to make sure everyone buys into across the organization and it’s very hard to get that buy-in and that strategic coalescence without involving the CEO.

 

JG: Speaking of high-level digital decisions, what’s your company’s official position on e-book pricing?

DR: We don’t have an official position. One of the things that is really different about somebody like me is that I’m fairly unattached to tactics.

I’m attached to big goals and the tactics need to be driven by the goals. I’m really interested in getting books into as many people’s hands as possible. I’m interested in the success of authors, I’m interested in having great books survive. I’m interested in data and being data-driven.

And so, I’m going to be fairly pragmatic and data-driven about what will get us to those goals.

 

JG: This might be a silly question, but what pricing model do you use?

DR: We’re a hybrid publisher. There are four of us [hybrid publishers]. We are agency with Apple and wholesale with everyone else. You can tell because they’re the publishers who are on the Apple bookstore who are wholesale on Amazon and Barnes & Noble.

EDITOR’S UPDATE: It has been pointed out to us that there may in fact be more than four publishers on a “hybrid” pricing model.

 

JG: What do you think will happen in the industry in the long term and short term because of the recent Department of Justice action?

DR: There are a couple of actors that could make a difference and we need to see how it all plays out. You need to see what happens with the Apple lawsuit. You need to see what Random House does. You need to see what Macmillan and Penguin actually do and you need to see what Amazon does. The chess board could go in a couple different directions.

All I know is what I’m reading in the press because I obviously don’t talk to these guys.

I think it’s going to be hard for Barnes & Noble, but I think that they have a very loyal audience in Nook and they’ve done an incredible job in really creating a customer base – of taking some of their customers and moving them over to digital.

Amazon is going to put pricing pressure on. They made that really clear. And that’s going to require Barnes & Noble to match the pricing and that’s going to put pressure on them.

I think agency was a methodology that allowed Barnes & Noble to not have to do that for a lot of books.

 

JG: Let’s talk more about data. What kind of data are you gathering?

DR: We’re at the beginning in this. We’re really interested in the things we take for granted that turn out to be completely wrong.

One of the first books I ever did was called Creating Your Own Future. What do you think that’s about?

 

JG: Careers?

DR: It was the first book about retirement for women. In the first year, I sold 4,000 copies. Reviews were incredibly good. The next year, Henry Holt put out a book called something like, “the woman’s guide to retirement planning,” and they sold 80,000 copies.

I always use these kinds of examples. Data works better than your gut. You go out and ask a question. That’s what we should be doing.

One of the things I’m really excited about in the Discover [a New Love romance e-book subscription service] platform is we’re gong to build a piece called “your opinion matters” and we’re going to be putting in questions and surveys and gathering data.

We’re doing this testing with our consumers to provide our booksellers with better books.

 

JG: Let’s talk about Discover a New Love and selling direct to readers. Why is this important for Sourcebooks going forward?

DR: Our industry tends to not spend as much time talking to readers as we need to. It’s really important that we learn to make better books, especially in a marketplace as crowded as romance is.

To create great packaging and position in romance, you want to really get a feel for what can make a difference. One essential way publishers can add value for authors is to be really good at that stuff: what is a good cover; what is a good title; what is a good tagline.

We’ve got load of questions we want answered and we’re looking to accomplish three things.

Number one is feedback and understanding. Getting data.

Number two is that we’d like a sense of community: We want a place where we have a sense of conversation. It’s a little different than data gathering. A conversation might be about a particular book and a particular author. We want to dig deeper in to what people are saying.

Number three is really about trends. When you look at the data on your own site, you get a better idea of what the trends are. If highlanders are going away and cowboys are in, you’re going to get that information coming back to you from the marketplace.

 

JG: You only launched the site a few weeks ago, but can you tell me how successful it’s been so far?

DR: We beat our first set of numbers, so that I was really pleased with. We’ve never done anything like this before so we don’t even know if the numbers made sense but we put down some numbers and they were fairly aggressive.

 

JG: Let’s talk digital talent.

DR: We’re training everything.

I think publishers really need to think about this a little bit differently. I have eight people in my PR [public relations] department. Every one of them is doing social media. So, are they digital talent? Because they’re also doing PR bookings. In fact, the person who is responsible for Discover a New Love is the person who heads our business unit for editorial for romance. For her, this is all new learning. She’s being trained from the ground up. We invest in our people.

 

JG: How is agile publishing going so far?

DR: Agile has been transformative for us. When I listen to other publishers talk about some of the issues they have, I get how much agile has changed our mindset.

 

JG: What do you mean?

DR: It changes what problems you focus on and how you focus on them. What kind of data sets you want and which ones you’re missing, what customer response are you testing for. That’s why you need a direct-to-reader model. Because you’re not going to be able to answer those questions from afar.

If I need to know what of these four things are people responding to in this book, I’m not going to put out four different books and get that data. I need an agile model to test things. And I need to be doing it pretty consistently. I need a lot more information than publishers have had in the past. That’s the mindset we’re going into.

Eric Ries [author of The Lean Startup] talked about it when he was talking about his own book: He said, “we can debate covers all day long, we can have that conversation, but that’s actually not useful.” What is useful is getting feedback from customers – not even feedback, you want to know what is it they want to buy, what moves the needle.

 

JG: Have you seen bottom line results from adopting these methods?

DR: Not yet.

I’ve seen incremental results. I’m looking for revolutionary improvement and that’s what we’re working on. We want to create a much more impactful way of publishing books. Extraordinary impact for readers.

Have we seen this model create that? No, but we’re at the beginning. We’re two months in.

 

JG: What are you reading and on what platform?

DR: I only read on iPad. I’m reading 11/22/63 [by Stephen King, Scribner], Imagine: How Creativity Works [by Jonah Lehrer, Houghton Mifflin Harcourt] and The Dovekeepers [by Alice Hoffman, Scribner].

 

JG: You don’t read print books?

DR: No. I stopped reading print books pretty much the day that the iPad came out. I have an iPad 3 [New iPad].

Write to Jeremy Greenfield


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