Authors ultimately succeed or fail based on their ability to sell books to readers. However, sales alone don't tell the complete story of an author's success because sales numbers are a "trailing indicator". That is, they describe what happened in the past but those results may not accurately predict what will happen in the future. It is possible, for example, for an author to spend a great deal of money promoting a book in order to sell lots of copies but if that money is spent attracting the wrong audience and they don't enjoy the book then it is unlikely they will buy the next one from that author.
So if sales numbers aren't an ideal metric for predicting an author's future success then what should we use? I'd like to propose that authors should measure their success by the number of readers who are likely to buy their next book. This audience is the group of people that comprise an author's "readership".
If a large readership is the goal, then we'll need to figure out how to measure it. Ideally, we would simply survey all potential readers and ask them how likely they are to buy a book from an author but that is an impossible task. How about asking those readers who have purchased one of an author's previous books? That too is difficult since an author doesn't usually have access to this list of buyers.
It is important to mention here that retailers have collected quite a bit of data that would be very useful to authors. They have contact information for readers and they also have a sense about whether a reader enjoyed a book by monitoring her progress while she is reading the book and encouraging her to write a review when she is finished. Of course retailers use these insights for their own purposes and are reluctant to share this information with authors and their publishers. They might provide aggregated data (e.g. age, gender, income levels, location) but they fiercely protect any personally identifiable information since they believe that they alone are the ones who own the relationship with the reader.
What then can an author use as a proxy for the size of her readership? I would claim that there is a very strong correlation between the likely purchasers of an author's next book and the people on an author's email list. These readers form an author's "addressable readership" and are among the most important assets an author can have.
Why are these readers so valuable? Other that the fact that they are likely to buy an author's next book and they are directly reachable by an author, these readers share a few other highly desirable qualities:
An author's readership is fairly immune to higher prices. That is, it should make little difference to this audience whether an author prices her work at $3.99 or $9.99 since the most distinguishing quality of an author's readership is that these readers are very interested in her and her work.
An author's readership is very likely to evangelize an author and her work. Once a reader finds an author whom she greatly enjoys reading, she almost certainly wants to share this discovery with others.
Now that we have established readership as our metric of success and we have started measuring it, the next thing we will want to do is figure out how to increase it.
In order to build readership, an author must first make herself available to her readers in the places that readers are currently gathering. This includes having a presence on social networks and having a website or blog that is findable via search engines.
The motivation for these activities is not to directly sell books. Rather, the primary reason for having a website and becoming active on social media is to allow your readership to identify themselves to you. In other words, having a presence on Twitter or Facebook is a simple way for you to raise your hand so that your readers can find you.
Once your readers have identified themselves, you need to give them a reason to engage with you more deeply. Encourage them to learn more about you and the books you've written by visiting your website or blog. Make them feel special by letting them be the first to know when you've got a new book available or offer to send them an Authorgraph for your books. Finally, cement their long-term loyalty by capturing their email address so that you can contact them in the future.
While building an email list, authors should avoid offering giveaways as a way to encourage readers to sign-up. Signing up for an email list is a "post-discovery" activity and giveaways are most effective for attracting new readers. Furthermore, having too many people simply looking for free books on an author's email list will diminish the impact of her future communications with those readers.
Finally, and most importantly, building readership is a long-term strategy. If an author is willing to be patient and is consistently producing good work and is diligent about connecting with readers, she will be rewarded with a large readership that is willing and eager to consume everything that she creates.