{"id":6448,"date":"2021-03-12T13:00:00","date_gmt":"2021-03-12T13:00:00","guid":{"rendered":"https:\/\/jerichowriters.com\/townhouse\/articles\/the-scent-of-coffee-and-the-market-for-lemons\/"},"modified":"2021-03-12T13:00:00","modified_gmt":"2021-03-12T13:00:00","slug":"the-scent-of-coffee-and-the-market-for-lemons","status":"publish","type":"post","link":"https:\/\/jerichowriters.com\/the-scent-of-coffee-and-the-market-for-lemons\/","title":{"rendered":"The scent of coffee and the market for lemons"},"content":{"rendered":"

Imagine opening a fresh jar of instant coffee. Think about popping through the film that seals the jar and smelling the aroma underneath.<\/p>\n

What do you smell? Remember the sensation. Hold that thought.<\/p>\n

Now:<\/p>\n

To <\/strong>George Akerlof and the market for lemons<\/strong>.<\/p>\n

Akerlof is an economist, best known for his development of the idea that some markets are impeded by asymmetric information.<\/p>\n

What\u2019s the big idea there? Well, in classical theory, everyone knows everything. So if you\u2019re selling tomatoes, I know how fresh they are, how they taste, how likely they are to squish before I get them home, and so on. For any repeat-purchase, we do indeed possess that information. Unless you change the type of tomatoes you\u2019re selling, I know everything I need to know from my prior experience. So you stick a price on your tomatoes and \u2013 if the price seems fair \u2013 I buy em.<\/p>\n

Akerlof noticed, however, that plenty of markets don\u2019t work that way. His particular example was the market for used cars.<\/p>\n

Let\u2019s say that Umberto Upright is selling his motor. He\u2019s driven the car carefully, serviced it correctly, fixed any problems. For a car like his, a price of $10,000 would be eminently fair and reasonable.<\/p>\n

Unfortunately, Crookedy Clara is also selling her car. It\u2019s the same make and model, but she\u2019s never serviced it. The oil hasn\u2019t been changed for 25,000 miles. At top speeds, something horrible rattles. And the rear fender is badly dinged, but so cleverly patched you won\u2019t really tell until winter exposes it.<\/p>\n

Clara\u2019s car needs a good $7,500 of repair work to get it in anything like the shape of Umberto\u2019s car, so a fair price for Clara\u2019s car is probably $2,500.<\/p>\n

But, as a buyer, you can\u2019t tell the difference. What do you do?<\/p>\n

You think Umberto is Upright, but you aren\u2019t sure, so you should offer him $9,000 to take account of the risk. Umberto sees your $8K and thinks, \u201cWell, if that\u2019s all I\u2019m going to get, I\u2019ll keep the car.\u201d<\/p>\n

Clara sees the $8K and is all over that deal, so you end up vastly overpaying for something that Clara would (in a perfect market, with perfect visibility) have sold for very much less. Next time, you might not make a purchase at all.<\/p>\n

Akerlof called that \u2018the market for lemons\u2019, and he won a Nobel Prize for a short \u2013 if somewhat more technical \u2013 exposition of that exact problem.<\/p>\n

And, OK, used cars: everyone knows that\u2019s a problematic market. That\u2019s why you can end up paying an expert third-party to give you an opinion before you buy. Why there are specialist warranty contracts you can purchase to protect you.<\/p>\n

But there are huge markets where the same basic problem exists. Health insurance, for example. You might want to buy insurance, but are you a heart attack waiting to happen? Or a health nut who\u2019ll live to a hundred? The insurer doesn\u2019t know. Any uniform price is too low in the first case, too high in the second.<\/p>\n

Which brings us neatly to the market for books.<\/strong><\/p>\n

Let us say that your book \u2013 your debut novel, no less \u2013 has been bought, and is being widely stocked, by Barnes & Noble, or Waterstones, or whatever the flagship bookstore is in your most excellent country.<\/p>\n

You know everything about your book. So does your editor. So does your agent. So does everyone else who\u2019s worked closely on it.<\/p>\n

But the reader knows NOTHING.<\/p>\n

They have at their disposal the following ingredients:<\/p>\n

    \n
  1. The fact your book sits in an illustrious and selective bookstore (which doesn\u2019t apply if the store in question is Amazon.)<\/li>\n
  2. Your cover<\/li>\n
  3. The blurb<\/li>\n
  4. Some basic pointers as to genre<\/li>\n
  5. Any puffs from fellow authors or advance reviewers<\/li>\n
  6. Recollection of any mentions there have been about you and the book in the press<\/li>\n
  7. As much text as the reader feels like reading in-store (ie: not much at all.)<\/li>\n
  8. The price (which is essentially a flat price across all print books of the same format)<\/li>\n<\/ol>\n

    In other words, they know almost nothing of the book itself. You\u2019ve worked unbelievably hard and long to make this book the best possible version of itself, and the reader has almost no knowledge of any of that. It\u2019s like the tomato seller is just selling a sealed box marked \u201cvegetables, various\u201d and asking you to pay $17.99 to take it home.<\/p>\n

    Fortunately, books are cheap, so plenty of readers are prepared to take the sealed-box \/ Crookedy Clara risk. But although the problem isn\u2019t a high stakes issue, it\u2019s still an issue. No one likes paying money for rubbish, even the money involved is fairly small.<\/p>\n

    So readers often use strategies like these:<\/strong><\/p>\n

      \n
    1. Buy what\u2019s on the front tables of a big bookstore<\/li>\n
    2. Buy another book by an author whom they\u2019ve read before<\/li>\n
    3. Buy a book that is clearly in a genre which they tend to enjoy<\/li>\n
    4. Buy something (probably an ebook) if it\u2019s heavily discounted<\/li>\n
    5. Buy something if a friend or newspaper or other trusted authority has recommended it<\/li>\n<\/ol>\n

      These strategies work well enough, but they tend not to help debut authors:<\/p>\n

        \n
      1. The vast majority of authors won\u2019t get to be on the front tables of the big bookstores. (I often have been, but sales don\u2019t\u2019 always follow.)<\/li>\n
      2. No one can buy \u201canother book\u201d by you, because this is your first.<\/li>\n
      3. The \u201cbuy genre X\u201d rule is so weak that it doesn\u2019t really help differentiate your book from 10,000 others.<\/li>\n
      4. In the world of print, heavy discounts are rare, except at the very end of a book\u2019s life, and most trad publishers are still reluctant to discount ebooks properly.<\/li>\n
      5. Word of mouth is slow. Your book will have long left physical bookstores before it has the chance to operate. And press coverage of new books is scanty. Yours will quite likely to receive no reviews and, in any case, the link between reviews and sales is feeble.<\/li>\n<\/ol>\n

        So what do you do?<\/p>\n

        Well, there are no good answers: that\u2019s Akerlof\u2019s point. In markets with asymmetric information, good solutions just don\u2019t exist.<\/p>\n

        But you can do some things, all right.<\/p>\n

        You can fight tooth and nail for a cover you love. Those books of mine that have done best have had great covers. And contrariwise. Covers matter hugely.<\/p>\n

        Less important, but only just less, you can perfect that blurb. Be perfectionist. Pursue the thing until it shines.<\/p>\n

        If you\u2019re self-publishing, you have direct control over those things, so get them right. Put in the hours. Pay the money. No excuses.<\/p>\n

        If you\u2019re trad-publishing, you\u2019re working with a machine that doesn\u2019t always value your input, so you need to be as obstreperous as you need to be to get the outcome you want.<\/p>\n

        But better still \u2013 and this gets right to the very heart of your brand distinctiveness \u2013 you can do this:<\/p>\n

        You can have a killingly good elevator pitch at the heart of your book<\/strong>. You can \u2013 and must \u2013 express that pitch in every page and line of the book. The book has to be the perfect fulfilment of the pitch you first imagined all those months and years ago.<\/p>\n

        Then the job of the cover is easy: it needs to express that pitch.<\/p>\n

        The job of the blurb is easy: it needs to express that pitch.<\/p>\n

        Your choice of any puffs or review quotes or similar is easy: pick the ones that best express that pitch.<\/p>\n

        Hell, if you took this idea to extremes, you\u2019d apply it to yourself too. How to dress? In a way that expresses the pitch. How to cut your hair? The pitch, the pitch, the pitch, the pitch.<\/p>\n

        (I\u2019ve not gone down that road myself, but I think brothers in crime Terry Pratchett and Neil Gaiman do, or did. They\u2019ve sold a book or two between them, so maybe that\u2019s an idea to explore.)<\/p>\n

        I\u2019m doing a webinar, at the end of next week, on elevator pitch. (Open to Jericho members only, and available on replay if needs be.)<\/p>\n

        Understanding elevator pitch is like getting close to the DNA of bookish perfection. The longer I\u2019ve been in this game, the more I tend to think that elevator pitch is the secret of almost everything \u2013 even plotting, even character, even the stuff that seems a mile away from marketing claptrap.<\/p>\n

        So: if you can come, please do. It\u2019s going to be fab.<\/p>\n

        That\u2019s it from me \u2013 almost.<\/p>\n

        Bur first: do you remember that jar of coffee? What did you smell as you opened that jar?<\/p>\n

        Fresh, deep coffee aroma, right? The very essence of why you bought the product in the first place.<\/p>\n

        Except, get this: coffee granules don\u2019t smell.<\/strong><\/p>\n

        The manufacturers put the scent in artificially, and quite separately. They do that because they know that every aspect of the experience has to live up to the brand promise \u2013 the elevator pitch \u2013 of the product itself.<\/p>\n

        So yes, some marketing things are just added on (coffee scent, book cover) at the last minute and quite independently from everything else. But they only work if they describe an inner essence that runs right through the core of the product.<\/p>\n

        And that essence needs to be right. When perfect pitch meets ready customer \u2013 that\u2019s where you get sales. That\u2019s where you defeat Akerlof\u2019s asymmetry.<\/p>\n

        See y\u2019all at that webinar.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Imagine opening a fresh jar of instant coffee. Think about popping through the film that seals the jar and smelling the aroma underneath. What do you smell? Remember the sensation. Hold that thought. Now: To George Akerlof and the market for lemons. 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Bingham","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/jerichowriters.com\/wp-content\/uploads\/2023\/09\/harry-bingham_avatar-96x96.jpg","url":"https:\/\/jerichowriters.com\/wp-content\/uploads\/2023\/09\/harry-bingham_avatar-96x96.jpg","contentUrl":"https:\/\/jerichowriters.com\/wp-content\/uploads\/2023\/09\/harry-bingham_avatar-96x96.jpg","caption":"Harry Bingham"},"description":"Write novels and non-fic. I've published trad & self-pub. Love both. Best known for my Fiona Griffiths crime series. Oh yes, and I'm the capo di tutti capi at Jericho Writers.","url":"https:\/\/jerichowriters.com\/author\/harryjericho\/"}]}},"_links":{"self":[{"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/posts\/6448","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/comments?post=6448"}],"version-history":[{"count":0,"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/posts\/6448\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/media\/6449"}],"wp:attachment":[{"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/media?parent=6448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/categories?post=6448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jerichowriters.com\/index.php\/wp-json\/wp\/v2\/tags?post=6448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}