Thursday, August 7, 2014

Know Your Readers (Pricing)

Readers aren't uniform creatures with uniform buying habits, so why do we approach pricing with the assumption that they are?

Pools of readers:
1. The Free Crowd. If you put your story free, they will download it, but they'll never get another of your books... unless you put that one free, too. These are the same as a library crowd. They range from teenagers with no extra cash (the majority of the audience on WattPad) through college kids to pensioners with no extra cash (more likely to be found on Bookbub and Goodreads).

Don't ignore these readers. If they love your work, they will give you the most powerful marketing tool of all - word of mouth. If young, they're likely to come back later and buy all of your books in a few years when they have a job and income. (Baen Free Library has thus made lots of sales across the years.) You can develop lifetime fans here, who will turn into fans who buy everything you put out... but right now, they're loyal to price above all else.

However, understand they won't pay for your books. There's no money to be made from them, so while they're very relevant to marketing, they're irrelevant when it come to pricing - to actually making money to buy food and pay rent.

2. The discount crowd ($0.99 - $5.99)
Believe it or not, this is a different group from the Free Crowd. There's plenty of overlap, but it's a different crowd. Unlike the hardcore free-only, the 99 cent crowd will buy books cheap. If they're long-term broke, they're likely to use some of the tools to track your sales and only buy when the price drops. These are the people who keep all the used bookstores in business. At this price point, you're competing with used paperbacks from McKay's Powell's, Amazon... you are NOT competing with new books from B&N or Book a Million.

How big is this market? I don't know if there's a way to tell - certainly it hasn't been measured. But it's been large enough to support thousands of used book stores across the US alone (much less the charity shops in the UK), and to propel low-pricing indie authors into millions sold.

You can develop fans here. If you stay in this price range, they'll buy everything you put out the moment they discover it. (Not the same thing as the moment you release it, and that's why a mailing list / social media presence / targeted advertising is a good thing.) You can also use this range to tempt people into impulse buying your works, in conjunction with targeted advertising.

3. Occasional Bookstore Browsers. ($6.99 - $9.99)
For those of us who've been head-down in the indie world for years, and can remember the bemoaning of any changes to Amazon's algorithms, it may come as a surprise that there are a large number of people out there who only buy a book now and then, and think that they should cost about the same as bookstore prices. The idea of a $2.99 book is met with "What's wrong with it, that it's bargain-bin price?"

But to millions of readers who buy only occasionally, either for themselves or as gifts for others, as often from a brick and mortar bookshop as online, $13.99 is a pretty normal price for a paperback. If you can position yourself with all the same signals (especially cover, blurb, and correct 'feel' to your sample chapter) as a traditional publishing house, then they'll consider $6.99 a fine price to pay for the ebook.

However, this is a much smaller market, in volume, compared to the power readers who regularly trawl the used book stores, looking for their favorite authors and interesting new reads. So you'll make more money per sale, but will make fewer sales.

4. Fans. ($0 - $50.00)
All of the above categories are loyal to price, not to a specific author. And in the general world of books in aggregate, when a potential customer is looking for a new-to-them author, price will significantly impact their browsing and buying habits. However, when a reader is a fan of a particular author, the price consideration becomes very, very flexible indeed. Baen has found they can sell the unedited pre-release ebooks for $15! And the same people who paid that will drop $25 on the hardcover of the same story!

These people are to be cherished, interacted with, and the first to know when a book's coming out, because they're the ones who will, over the years, ensure you have an income from every story you tell. Take care of your fans, and nurture them with a very long-term eye; short-term gouging will only result in ex-fans who spread bad word of mouth faster than any good word could go.

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Critical note: Readers will be all of these categories at one point or another, from one book or author to another. No single price point is The One Right Way, nor will any stay The Right Way forever and ever amen. Price with purpose, and with forethought, instead of in reaction to your hopes, fears, or feelings about the market.

hat tip: http://kriswrites.com/2014/01/29/the-business-rusch-marketing-and-readers-discoverability-part-who-knows/

4 comments:

imagestealer said...

Nice analysis, and well written.

As a non-author, I still find these types of articles of interest, as they can provide me with insight into what the author may be attempting to accomplish (in addition to making a living, that is).

I have been reading (and buying books) for more than 50 years, and I have now reached the final stage, where I much appreciate an author that can actually write. some of the new authors fill me with despair, as it appears they could not recognize a dangling participle if they were about to hung by it!

I am constantly on the search for new material, and when I find an author that tells a good story and has a reasonable level of competence with the language, I tend to buy all their works.

Due to many factors, space being among them, I no longer buy dead tree books. I far prefer e-books, and have a significant library. I read somewhere north of 200 works per year, (so far this year I have purchased and read 129 books)and pricing is only one criterion, and not the most important one.

Keep up the good work.

Old NFO said...

Good points, well worth reviewing and thinking about, especially on marketing follow-on books...

Anonymous said...

$3.99 seems to be the sweet spot for my work, I think because I writer shorter novels (70-80K words). $4.50 is OK, but at the lower price, the books really move.

TXRed

Brigid said...

Doing the Book of Barkley as a kindle,nook,ipad added to the costs (as I had someone format and set it up for me) but hope that would help with sales for a lot of folks don't want the dead tree books. I really appreciate Peter sending me one though.