Facebook 500

We hit 500 Facebook "fans" last month, or at least I think they're called fans; perhaps likers. As a reward to our loyal fans, we provided a generous 40% off coupon. The catch was we wanted to know what games you played. I was hoping to increase our understanding of our Facebook customers. It's no use telling people about some fantastic new card game if they hate card games. We want to tailor our marketing to our community, which is what social relationship marketing is all about; being useful. So with a coupon that you simply cannot ignore and asking for just a small amount of information, we received 79 coupons back. Here are some of the results.

The general game store rule of thumb, one which I spout off about all the time, is that our customers are generally mono-gamers, interested in just one game. The RPG people don't visit the miniatures, the card players don't care about board games. One game store owner in a seminar talked about how he once put a sheet over a display. It generated more interest from customers across the spectrum than any product could have. The general impression is that a display needs to literally be on fire for a customer to cross genres and check it out.

Perhaps that's true, but our Facebook crowd, those that actually pay attention and are regular customers, are multi-disciplinary gamers for the most post. 65% are cross genre gamers, playing more than one type of game. If it is true that most gamers are mono-gamers, then our active Facebook crowd is something else, a group far more engaged in hobby gaming. They would have to be.

Imagine not being a cross-genre gamer and listening to use on Facebook. There are roughly five categories of hobby games, which means if you're a mono gamer, 80% of what we're saying is garbage. You certainly won't find us interesting and you'll likely ignore us after a while. Facebook is really not a very good medium for communicating with those people, unless they're very good at adjusting their filters without tuning us out completely. That's very different from say, a comic book shop or a potato chip company.

So let's look at what they play:

 
Here's a break down of what people play. 65% fit into more than one category. Mono gamers tended to be from across all the categories, although very few RPG players only play RPGs, according to the surveys.

So what did we learn?  16% is a fantastic response rate. Direct mail coupons usually return 2-3%. Those who want to follow the stores activities are for the most part (84%), only mildly interested in what we're doing, and are unlikely to act. Perhaps having the coupon more prominently displayed for a longer period would get better results, although that's hard to do with Facebook. The method in which the coupon was displayed, on the wall, posted a couple times, rewarded those who were more actively participating in the forum. Those listening were obviously more interested in what we had to say. For every type of game you play, I become 20% more relevant to you, so it's not surprising.

I should also mention that those 500 fans (now over 600) are not all local customers. One hundred are friends and family, with some store overlap. Probably another 50 are remote fans, game industry people, or otherwise not likely to visit. That should put a damper on excitement over raw fan counts, but it also reflects well on the coupon response rate. I would love to hear your observations about this.

Cake Mix

Driving into work today, I heard an interesting interview with Dan Ariely, author of The Upside of Irrationality. Arierly is a behavioral economist who looks at the marketplace. He made a couple of interesting points I think related well to how we think of value and investment in hobby gaming.

Back in the '50's, instant cake mixes originally consisted of a powdery mix that only required adding water. Housewives, used to baking from scratch, hated this. So these all-in-one cake mixes began requiring additional ingredients, like eggs, for example. Suddenly people liked cake mixes because they were engaging with the product. They were creating something themselves. They had an investment, even if it only meant adding a couple eggs.

I had similar thoughts while I was putting together a Warhammer vehicle a few months ago. It was the new Hellhound flame tank. It's built on the chimera chassis, a common element to all vehicles in the Imperial Guard, except the Leman Russ. This was my seventeenth chimera chassis vehicle, but something had changed. The tedious wheel assemblies were missing and the fiddly track bits were much easier to put together.  It occurred to me that the whole process was something of a scam, or at the very least, a mental exercise.

Heck, you can buy a completely assembled tank for less than half the price. It's called a toy. Yet, I pay a premium price for the experience of putting this thing together. Better yet, I began seeing the line that Games Workshop was walking. They couldn't put the whole thing together, yet it couldn't be so difficult and tedious to discourage people from the hobby. I was being asked to add some eggs to the powdery mix and water so that I would engage with the hobby.

Adding this extra ingredient to our games is why we value our hobby. We have invested in it. We have engaged with the product and more than likely modified it in some way that put our signature on it. We make "unique" characters or write our own adventures in our role playing games. We creatively model and paint our miniatures to be different from our peers and to satisfy our creativity. Our card decks are about beating random card distributions into submission with our creative will to create a competitive deck. This is hobby gaming at its best, and it's really just adding a couple eggs to the mix. Scratch building anything is not part of this equation. The value is in the addition to something already perceived as a quality framework.


Where games have failed, I would argue, is when no eggs are required, or when the framework is lacking. The best example are pre-painted or semi-painted miniature games. There are no eggs to add, just models to set up and play. You may like these games, but let me tell you they are dismissed by most hobby gamers out of hand. They're often not sure why. The rules are solid. The models are pretty. But there's something missing. What is it? Hmmm. No eggs to add.

Likewise, anything free form without a solid game framework is also not going to get much traction. Miniatures without a game system in mind, role-playing books that are more about ideas than the game (some indie stuff, for example), or game that don't allow the addition of creativity, which I'll discuss in a minute.

The personal investment we have in hobby games is why we love to regale anyone willing to listen about our character or our adventure. Ariely talks about how we value our children. How much money would you give to have never had your children, to erase all your memories of them? They just never were. It seems the real value we place on our children is the life investment we've made in them. How much money would you take for every one of your game books and supplies? How much would you take to have all your memories and experiences of those games erased?  It's like the Visa commercial. These memories are priceless.

Board gamers perplex me because of this and I don't really understand them, since they don't add eggs (I love eggs). They seemingly add no value to their games. However, to many analytical types, such as my wife, games are not about adding value, they're about an even playing field and well designed rules. Perhaps there's another personality type, a truly analytical one, that enjoys cake but doesn't want to think about the eggs. It's also why, I think, most board gamers are serial purchasers of games.

There are definitely those who only play one game, like Scrabble, Monopoly or Settlers of Catan. However, most hobby gamers play many different games, and the hobby store business model requires that we sell many games to these people, unlike say chess or backgammon. Once you've sold someone a chess set, you'll probably never seem them again. Hobby board gamers don't add eggs, but man do they love variety in their cake. It's also a kind of warning to other game manufacturers, if eggs aren't involved in the baking of your cake, expect to get treated like a board game; something that holds momentary interest, a new flavor of frosting, but only until the next new cake comes about.

Recession Business

I've been thinking more about how running a business in a recession changed my thinking. It has been a good thing for me, really. It transitioned my thinking from gentleman farmer, dabbling in retail with one foot in the IT world, to true retailer, examining the nuts and bolts of our operation. It has moved my from a gross footing to a net footing. There is definitely some high concept strategy in running a small business. It's required to be successful, but the recession taught me that executing that vision requires strong tactics, especially in cost controls.

If you define yourself as a strategy guy, tactics can seem beneath you. You can outrun your boring "tactical" expenses with your brilliant "strategic" income growth. The recession made frugality fashionable. Everyone was doing it. As sales began to slip when customers began losing their job, society (the press, friends, etc.) reminded us all to focus on costs. Nothing was sacred any longer.

Our fancy, logo printed bags were dumped. The term "merchandising expense" was stricken from my vocabulary; usually used as an excuse for overspending on displays or under performing muggle product. It became clear to me that after five years, the community had shown their demand and I would no longer attempt to supply them with what I thought they should buy. Some games were simply outliving their demographic, as harsh as that sounds. I still fret over the thermostat temperature, battling with the evening staff who have to deal with skyrocketing heat in the game center. You could probably create a temperature formula based on the event attendance and demographic (AKA girth). We buy all of our office and cleaning supplies in bulk now. However, the biggest savings came from the marketing budget.

One of the big assumptions I made when I started my business was from a book I read on retailing (I read most of them). It postulated that retail stores should spend 3-5% of their gross sales on marketing. That's exactly what I did, spending tens of thousands of dollars over the years on TV, radio, print, direct mail, movie theater ads, you name it. No doubt it brought in customers, but the expense always seemed rather high and the results inconclusive. When the stock market crashed and we experienced a big drop in sales, I stopped our traditional marketing out of survival. I was always told you could coast for a few months without advertising before sales lagged. Then I asked the important cost cutting question, what if I just didn't spend that money? What would happen? What if I could extend that few month lag to six months?

What happened was nothing. Or more accurately, when we stopped advertising, our sales actually went up a little. Over the following year, it was clear that traditional advertising had little bearing on our success. Nobody watched TV, and when they did, the medium was so scattered that you rarely hit your audience. The year before the recession, everyone was advertising heavily in the Yellow Pages; that stopped cold. What was increasingly driving customers to our store was social media marketing and word of mouth. Our customer emails, Facebook, Twitter, and the occasional guerrilla marketing campaign were working wonders. Despite naysayers, we're now learning that social media marketing targets both your base and new customers. This is hugely important.

Since then, I've decided to focus our marketing entirely in the social media arena. I'm definitely trading my time for my money, but the savings are tremendous. It's often the difference each month between losing money and making money. 3-5% of my gross sales, the amount I was spending on traditional marketing, is a huge increase to your bottom line in a trade where 7-10% is the usual profit margin. The media website Vitrue tells me my time spent marketing on Facebook is worth over $500/month. None of this would have happened without the recession driving cost cutting measures. You would think everyone would want to do it? Facebook advertising is up 400% in the last year, but there are many who still shy away.

When the dust finally clears, small businesses that survived the recession will be stronger. If they ran profitable businesses before the recession, they'll do even better now. If they were marginal, my guess is they'll be much stronger in the future. For me it has been about fully engaging in every aspect of my business. It has been about questioning every assumption and focusing first on customer service. If it doesn't serve my customers and it doesn't make me money, I don't do it. Most importantly, it has been about listening to my customers.

P.S.: We increased our store hours by 5% during this period, adding staff.

List Making

As a retailer, I am a little obsessed with watching what other store owners are doing. Unlike your normal work environment, we generally work alone. Those little bits of knowledge and tradecraft you would normally grok by just being around people are hard earned on our little desert islands. Oh, you use 8x10 bags instead of 7x4? Genius! You can yell at UPS for not delivering a package during posted business hours? Amazing! When it comes to product information, this is no different.

There is no monolithic clearinghouse for new game information. Even the big distributors only carry a fraction of what's available. So we prowl forums and social networking sites and scoff at the various top lists that show up on occasion. There is scoffing, but there is also some analysis of what we might be missing. The list I've scoffed at the most over the years is the ICV2 list. Who are these guys? Where do they get their wacky information? You can go nuts trying to analyze these things, or go bankrupt thinking you can follow someone else's list.

Still, lists are intriguing, so in the spirit of oversharing, I thought I would compare the current ICV2 list to my own. It's as close as we've ever gotten to their listings, so it struck me as interesting. Feel free to discuss.

Top 10 Hobby Channel Collectible Games -- Q1 2010
#	ICV2	BDG
1	Magic: The Gathering	Magic: The Gathering
2	Yu-Gi-Oh! TCG	Yu-Gi-Oh! TCG
3	HeroClix	D&D Miniatures
4	Naruto CCG	Pokemon TCG
5	Legend of the Five Rings CCG	Game of Thrones LCG
6	Pokemon TCG	Naruto CCG
7	Star Wars CMG	Star Wars CMG
8	D&D Miniatures	Warhammer Invasion LCG
9	Vampire: The Eternal Struggle	Axis & Allies CMG
10	Arcane Legions	Heroscape
Top 10 Hobby Board, Card, Family Games -- Q1 2010
#	ICV2	BDG
1	Settlers of Catan	Dominion
2	Dominion	Settlers of Catan
3	Ticket to Ride	Space Hulk
4	Pandemic	Dungeon Lords
5	Carcassonne	Carcassonne
6	Mystery Express	Pandemic
7	Ticket to Ride	Agricola
8	Munchkin	Thunderstone
9	Bang!	Runewars
10	Agricola	Memoir 44
Top 5 Roleplaying -- Q1 2010
#	ICV2	BDG
1	Dungeons & Dragons	Dungeons & Dragons
2	Pathfinder	Pathfinder
3	Warhammer Fantasy Roleplay	Rogue Trader/Dark Heresy
4	Rogue Trader/Dark Heresy	Warhammer Fantasy Roleplay
5	Dragon Age	Star Wars RPG
Top 5 Non-Collectible Miniature Lines -- Q1 2010
#	ICV2	BDG
1	Warhammer 40k	Warhammer 40k
2	Warmachine	Warmachine
3	Warhammer Fantasy	Warhammer Fantasy
4	Hordes	Malifaux
5	Dark Heaven	Dark Heaven

Foursquare

Black Diamond Games has signed up with Foursquare. Foursquare is a geo-location social networking service. Using a smart phone (or perhaps your iPad), you check into various locations, which usually links back to your Facebook or Twitter account. These types of services attempt to connect you with your friends in the real world. There are other benefits too, as businesses can use your location to provide you benefits, targeted at you when you check in.

For example, last night we were out at Jack London Square in Oakland, having dinner at one of our favorite restaurants, Home of Chicken and Waffles. I checked in with Fousquare and was immediately told there was an offer nearby. Ben and Jerry's was having a three scoops for three dollars special. All I had to do was check in after I walked over. So guess where the family went after dinner? Granted, the Ben and Jerry's screwed up and they weren't offering the special until June 1st, creating ill will on my part, resulting in my blogging about it to over a hundred people, but done right, it's a pretty powerful marketing tool and a clever way to score some free or cheap stuff. However, like anything in marketing, you have to deliver on your offer. I'm pending business owner approval at Foursquare for the store, but once that's completed, I'll have specials available to those who check in often.

Foursquare strikes a balance between customer friendly and business friendly. You can provide tips about a business, become "mayor" if you've been there more than anyone else, and generally make yourself useful.  Businesses likewise can add information, provide incentives, and manage their relationship, as opposed to handing the relationship keys to the customers, who may or may not understand your business. This is in sharp contrast to the snarky, adversarial relationship one sees with Yelp. Yelp, you are wretched.

There are some fun elements to Foursquare, in contrast to your usual check-in system. You receive points for various activities and there are badges to collect. These incentives are a fun way to track your active lifestyle and compete with you friends. With my older peer group and with only about a million people signed up with Foursquare so far, for me it's mostly a game of solitaire. Like any social networking site (or any network), value increases when more people are added. It also adds to the ever faster flowing stream of information on Twitter and Facebook. However, if you're the silent type who never posts, and your friends are wondering if you fell of the planet, this might be a good thing for you.

Foursquare is the leader in this tiny market segment, so I can't guarantee they'll be around tomorrow, won't get gobbled up by Google, Yahoo or Facebook or that the whole concept won't falls on its face next Tuesday. However, if you're a cutting edge, forward looking, social networking, smart phone using type of person, you might want to give it a try, even if it's just for the occasional Black Diamond Games coupon.

Getting in And Staying (RPGs)

Someone was asking me about how we choose RPGs and how they would get into our store. How we learn about them is pretty easy, we're on the look out for new ideas in role-playing games. We means myself and our staff. The staff, especially, are very much into cutting edge role-playing games. Because we try to foster that kind of creative atmosphere, customers will also ask for games along with keeping us up to date on various projects in the pipeline. Distributors are still the industry gatekeepers, and the majority of RPG product will come through them. It's just easier. Indie Press Revolution provides us with quite a bit of "fringe" product, that generally represents the cutting edge. None of this is particular extraordinary or new.

The real question of getting into our store is not so much about the initial entrance, but more about how to get your product to stay. RPG publishers generally think of game stores in the context of the games they personally create. However, unlike say, a comic book store, only about 15-20% of our customers care at all about role-playing games. There will be no lines out the door on Free RPG Day. There is no day of the week when RPGs arrive, requiring us to hire additional staff. It's a niche of a niche.

Of our RPG customers, over half only play D&D. It's not all doom and gloom though, because we'll carry a game with as little as two gaming groups supporting it. For example, we've got two guys who buy RIFTS products (one guy buys two of everything). That's enough to carry RIFTS. If one of those guys, gods forbid, was hit by a bus, we would re-evaluate. Part of my job is to talk to these two guys and regularly gauge their interests. Still playing? Any interest in the next supplement? That's the level of detail that goes into specialty retail. That's the level of decline RPGs have seen over the years. Still, it's the garden we grow and we're happy with it.

So the market is very small to begin with, but it doesn't take much to turn the mental switch from pass to buy. The key is how to keep us stocking that product. The term thrown around in the game trade is the periodical model, in which I treat your book, which I have already sold once, which you have toiled over for months, as a mere magazine. I bring it in, I expose it to my crowd for one to six weeks, and then I get cold feet and drop it once it has sold. I never order it again. This is a subjective, voodoo retail decision that's based a lot on perceptions of customer interest, rather than data. If I only brought in one copy, it was probably already too risky. Not re-ordering it seems like a clear win. In game retailing, the difference between success and failure is often 1 and 0. It's great that I bought that book, but my confidence wasn't high enough to consider it a viable, long term product. How do you fix that?

Assuming you want to fix this, that I'm worthy of your product, that I'm not lazy for turning your cool book into a disposable magazine, the first step is to show some confidence. This means you'll spend some time and/or money marketing the product (Facebook is insanely efficient). You'll need clear indication that there will be follow-up products, preferably with rough release dates and names. It assumes it didn't just show up one day at the distributor, with no previous solicitation, no street date, no consumer awareness. I'll also assume it's of standard quality, isn't of an odd form factor, bound at Kinko's or warps on the shelf.

You'll convince me and your player base that there is more to come and this is just the beginning, not the end. If it's a core book, talk about future accessories. Support it with a preview PDF or a quickstart. Get it featured in an industry trade magazine. Bang the drum. Do something to ensure future life. Players erroneously believe that a game with no future supplements is dead, as if it can't stand on its own without a promise of more to come. If it is the only product, you've got an uphill battle. Create the illusion of life, even if you're uncertain. Customers regularly ask me if I know the future of a product line. Avoid letting this happen.

Make it easy for me to buy it. Evil Hat is taking a calculated risk by sending Dresden Files RPG through the distribution system. Most retailers will not order direct due to the costs involved. To make it worthwhile usually requires a level of risk, in the form of a large amount of product that would be unacceptable for all but top tier RPGs. What's a successful, top tier RPG? One that "turns" or sells, three to four times a year (D&D is at an overall turn rate of 8 for us). Tell me I have to buy more than four copies of your game to make it cost effective and you're assuming de facto top tier status, probably without even realizing it. Mainstream board game companies do it all the time with their minimum case quantities. There's a reason game distribution works, and it's because of the very low turn rates of the trade. IPR is included in this system, in my book, so at least work with them. If I have to buy direct from you, it likely won't work unless you have multiple titles I need.

Margin shouldn't be an issue, but it often is. Game stores have seen shrinking margins over the years without the ability to raise prices. Their costs continue to rise, so they get the squeeze. Some dry up and blow away, not knowing what happened. I know what's happening. I'll carry a book with a 45% margin, but I'll be cautious. At 40%, it better be pretty special and likely limited. When Diaspora was offered to us at 25%, we had to politely decline, despite intense customer interest. The quantities required and the difficult margin made the risk too great. At a full 50% margin, this issue goes away. You are now economically above average.

Finally, there are factors that will make a product shiny, relative to margin or performance issues. There's a "halo effect" for indie press titles, for example. Right now, anything involving a PDF program, in which a publisher is working with retailers as partners, has a halo. I may order more of those products than I currently carry. I think everything good in role-playing for the last decade has come from the indie community, whether they published it or the ideas were borrowed. These modern design paradigms have shown up in D&D, Warhammer Fantasy Roleplay, and lately in Pathfinder. As a retailer, I want to be part of this. I want to show my support. I also want to pay my mortgage, as I don't have a WWGJ (wife with a good job) so charity and public service has its limits. Products with halo effects get special treatment and exemptions from the strict inventory control that inevitably sends almost every book to the clearance rack.

I will also tell you that I have more RPG budget than there are viable products. I actually believe I have everything worth carrying based on my criteria. I strive to find more good product, rather than looking for excuses not to buy it. It's the local market that is shrunken, unemployed and disinterested, not me. Nearly half of our RPG section is now devoted to used books. That's a dangerous trend that says we're looking backwards instead of forwards.

You may be telling yourself that the economics of all this just won't work. You're probably right! I don't want or expect access to every RPG product on the market. The low barrier to entry means everyone and their brother still wants to be an RPG publisher. Having done publishing, I don't see the appeal, but here we are. There is the long tail and the PDF market and the direct to consumer market. People will tell me it's not about the money, it's about art and expression.  I'm not going to yell at you to get off my lawn, but I will insist that your product hold to some basic principles to make it into my store.

Embrace and Extend (Pathfinder)

I've been reading one Pathfinder Chronicles book a week for the past month. This week I'm reading The Great Beyond, the planar book for the setting. It finally occurred to me why I like Pathfinder products so much.The model is a kinder, gentler version of "embrace and extend" from the software world. The products are intellectually compatible with what has come before. In other words, if there was subjective gravity on the Astral Plane in 3E, there is in Pathfinder (which means it probably matched 2E). In the case of this planar book, it has hints of flavor and mechanics going all the way back to Gygax and The Great Wheel, yet there's a feeling it could easily fit into AD&D 2nd Edition Planescape. Their approach embraces the past, while adding rarely seen depth. It avoids bizarre convoluted structures and name changes.

Where they depart from canon and extend beyond is with their sophisticated explanations and tone. For example, I just finished reading Book of the Damned, Vol 1, an in depth look at Hell. It was chilling. In past editions of the game, there was a mechanistic view of the planes. Everyone had an alignment. When they died, they went to the plane that best suited them, a kind of personal heaven. Book of the Damned basically says you go to Hell because you've been deceived. They hate you. They tricked you. You will suffer for your hubris. Yes, you belong there, but it's no heaven. You will be tortured and abused for eternity. Was is worth it? Paizo isn't pulling any punches. The mechanics remain the same, but the reasoning has matured. There is a more serious tone to much of their accessories that takes the premise that this stuff is for adults. Stuff characters do matters. It's material that TSR/Wizards of the Coast would be afraid to publish. It's right up there with the excellent, mature writing I've seen from White Wolf.

The Great Beyond continues with this extension of sophistication. There's an attempt to explain how reality works, not just describe it. For example, the entire transmigration of souls is discussed, from beginning to end. If this was ever done before in D&D, I haven't seen it. There's the origin on the positive energy plane, the souls journey to the prime material through star portals, the migration upon death and the various ways in which the soul can be captured or snagged, such as by hags in the shadow plane. There is no greater injustice in the mutiverse than an undeserving soul being ripped from its owners body and abused for eternity.

Other planets and solar systems have a place in the planes, which is unusual to see. And of course, there are many shades of gray. The traditional D&D planar tradition is that everything has a place and in extreme measure. The Great Beyond goes over the various factions within a plane and why they act the way they do (or hints at least). They don't act good or evil because they're on the plane of good or evil. They have their reasons including quite a few grudges that go back to the beginning of time.

So I'm becoming a fan boy it seems. If D&D is your game, I think it's fair to say that if you've wanted some sophistication, you usually had to look elsewhere. Perhaps third party publishers or perhaps another game system (such as the previously mentioned White Wolf). Paizo is not Wizards of the Coast, aka Hasbro, currently trading on the New York Stock Exchange for $39.53. They can take chances and be edgy without worrying about corporate or angry moms or quarterly profits. I haven't seen really good "official" D&D writing since second edition. Sure, the rules were good, but where was the writing?  I guess you forget what you've been missing until you're re-introduced to it.