BRANDING AND PRICE POINTS

I’m running a fever at present, and I’ve spent most of the preceding 24 hours in bed or doped-up in a chair, so please forgive any slower-than-usual mental processes that may express themselves in my contribution this month.

My wife and I have been analyzing price points in the author-published market in my genres (Military Science Fiction and Space Opera), as we do every six months or so.  We’re trying to price my books in the ‘sweet spot’ that maximizes income, but doesn’t cost more than other books competing for the same readership.  It’s always an interesting exercise.

It’s been made even more interesting this week by the release of the latest Author Earnings report.  Hugh Howey and ‘Data Guy’ have found that the Big 5 publishers have increased the price of their e-books across the board – but because they’re now dictating agency terms to Amazon, the latter is no longer discounting their books, so consumers have to pay the full charge.  As a result, not surprisingly, the sales of their now-more-expensive e-books have taken a plunge – and independent author-publishers have taken full advantage, increasing their lower-priced sales accordingly.

I think this has been reflected in Amazon’s KDP Pricing Support tool for authors using its services.  You can use it to analyze books similar to yours and see the way market prices are trending.  Here, for example, is how the tool analyzes my book ‘Stand Against The Storm’, published in February this year and currently priced at $3.99 for the e-book version.

KDP Pricing Support 1

As you can see, if we adopted Amazon’s recommended price point of $5.99, the tool projects we’d sell 30% fewer books, but make 10% more money.  A compromise price point of $4.99, according to the tool, would give us 5% more income but 15% fewer sales.  Quite frankly, I’m of two minds as to whether the small increase in income is worth the loss in sales.  I regard sales volume as an essential part of building my base of ‘1,000 True Fans’ (and hopefully many more) for the longer term.  I’m really not so sure it’s worth damaging the expansion of that base in the long term (by restricting sales volume) in the interests of a short-term (and not very high) income gain.  I’d be interested to hear what other Mad Genius Club authors and readers have to say about that.  Please let us hear your views in Comments.

The other aspect of this, of course, is the question of branding.  If you haven’t considered your brand before, Wikipedia has a useful introduction to the subject, as does About.com.  As authors we want to persuade readers to buy our brand, not just one of our books.  We want to develop a following that will look for a book with our name on the cover and buy it sight unseen, because they know we’ll deliver what they like, and they don’t mind paying their hard-earned dollars to us because they expect to get value for money.

The trouble is, a genre develops its own generic rules and styles that must inevitably affect our personal brand as authors.  We daren’t position ourselves too far out of the mainstream, or we risk being overlooked by readers who are searching for reading material that meets the norms of the field.  (The exception, of course, is the author who’s become so successful and developed so strong a fan base that he can go off at a tangent and take his loyal followers with him.  They like him enough to tolerate, or even embrace, deviation from the norms of the genre.  I’m sure we all aspire to that, but I doubt whether there’s more than a dozen authors in military science fiction and space opera who’ve developed that level of support.)

Having said that, I must also admit that there are exceptions that appear to prove the rule.  For example, I’ve come across several crossover books from the romance or erotica genres that intrude into science fiction bestseller lists.  (To name but two, see the works of Erin Tate or Anna Hackett.)  Their covers are obviously designed more from the perspective of the first two genres than the last – so much so that the covers alone make me absolutely sure that I’m never going to spend my money on them.  However, their success in the sales charts indicates that they certainly are having an impact.  The question is, why?  I suspect the answer is that their primary customers are readers of romance and erotica, who are ‘judging a book by its cover’ and buying what’s familiar to them.  In the process, they’re driving the books up the SF sales charts at the same time.  Of course, the authors aren’t concerned about details like that – they just want to sell their books, and clearly they’re doing pretty well at it.  (I think my wife would laugh so hard at the thought of me trying to write a romantic or erotic SF novel, she’d have a hernia!)

Be that as it may, I suggest that the price point for one’s books depends as much on one’s brand as it does on one’s genre.  If the top 20, or top 40, bestsellers in a genre show a pattern where a third to a half of them are clustered around a particular price point, that’s a pretty good guide to where to price your own book – unless, of course, you’re a new author trying to build your fan base from scratch.  You’ll probably have to start at a lower price point to do that.  (I started at $2.99, and waited until my fourth book before moving to $3.99.)  If your personal brand is well-established, with a loyal fan base, you can probably price your books above that popular price point and get away with it;  but it’s risky.  If you allow your readers to get the idea that you’re greedy, or no longer offering value for their money, I suspect your sales will fall off very quickly indeed.

I’m still considering my options price-wise.  My next book comes out within the next two weeks.  Do I want to price it at $4.99, and move the prices of my other books accordingly?  Or do I want to leave it at $3.99 and go for volume over short-term income?  Decisions, decisions…

33 Comments

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33 responses to “BRANDING AND PRICE POINTS

  1. 30% fewer books sold means the pool of people who don’t need to make an INITIAL decision to buy your books is 30% smaller. That means the “I think I’ll try this guy” decision has to be made by more people. You’ve tracked the repeat buyers haven’t you? Will that population be hit as hard, or is it just new sales?
    Another question I have is this: What impact will this have on your KU income? Price point doesn’t matter to KU readers, because we pay the same $10 per month regardless of the price point of the books, or how many we read. If much of the 30% who stop buying become KU borrowers, you don’t lose ALL of that income and your books are still circulating.
    Now, if 10% more income means the difference between being able to replace the tires on your car or not, that is a huge factor. For people living on the edge, it could be huge.

  2. John in Philly

    A reader’s thoughts.

    Branding. I probably fall into the true fan camp for a number of authors. For you the buying process is, Grant has a new book, glance at price, buy. The reason is twofold, you are a known quality author, and you price somewhere in the sweet spot. This applies to many of the authors I read regularly, and I spent little time debating the book purchase.

    New author. A little more complicated and each part is not always weighted equally. Is the new author being recommended by an author/blogger I read, in what genre, and what price point.

    Established but new to me author. Mostly the same points of the preceding paragraph, but two more questions, what is the quantity of the titles, and does the author publish fairly regularly.

    If we leave the bell shaped area of the pricing curve, and visit the .99 cent end the buying choices are not automatic. A poorly written novel even when priced at .99 cents is no bargain. And the higher priced area, $ 10.00 to $ 15.00 is a quick buying choice. That would be no, with a bad word added to the front of no. But the book might get put on the wish list, and usually drops in price over time. In the days of print publishing I did not buy hardcovers, I waited for the cheaper paperback version.

    Finally. fairness. If I use my skills to create something of value, I expect and demand to be fairly paid. The author deserves the same.

    John in Philly

  3. From a reader’s perspective, and having watched my grandfather run his business when I was a kid, I’d suggest running your operation at the beginning like you’re a crack dealer; get as many people hooked early on as you can to build a base. Once that’s done you should be able to raise prices on new works (you will hopefully have honed your craft enough that the new works are demonstrably better than the early stuff). You might also consider keeping the older works low at that point in order to attract more new customers.

    • You said what I was going to. The older works are fine to leave at current prices; but if you feel that the newer works are worth more than the old sweet spot price, then go for it.

      Personally, when I’m looking at an unfamiliar author whose book blurb looks interesting, I look at page and word count as well. “Will I get my money’s worth” in terms of unknown is helped in part by that.

    • Lea

      like you’re a crack dealer

      Heh. That’s definately how things work to me.

      Funny enough, I think independent authors are in a better position to raise prices a bit (not as high as I’ve seen some established, big 5 authors. I’m probably not paying 10 bucks for a book I could buy in paperback for 6 for instance). Because they aren’t available in the library.

      If you are a big time author and your prices go too high, I go to the library. I can’t do that for your average independent.

    • Alan

      By analogy to competitive manufacturing industries, what you’re doing is called “buying market share”. It’s most effective when the total available market (in $) is down due to recession, slow recovery, etc., IF you can afford to do it and your competitors can’t.
      If everyone can afford to do it, and if everyone is rationally competitive, it becomes a race to the bottom – a price war – and in the long term nobody wins.
      Of course, in the book market you have the advantage that the trad pubs appear to NOT be rationally competitive, so you can steal market from them no matter what the economy is doing, so that distorts the analysis a little.

  4. Eowyn

    Someone else mentioned kindle unlimited; I find KU insanely helpful, and always wonder about the authors who don’t use it. When I like the books I read there well enough, I buy them. If I don’t like them, I don’t feel a grudge against the authors for wasting my money.

    But I must admit I wonder; I know you get paid when I borrow a book and read 30% plus of it. But do you get paid again if I return it, and later borrow it again?

  5. Rhythmdoc

    I agree that at $10.00 – $15.00 I’m pretty unlikely to buy an e-book; if I want that particular book I’ll probably just buy the physical book, even if it’s even more than that. I’m sure this depends a lot on age and disposable income, but my opinion is that $2.99 and $3.99 really don’t ‘feel’ different to me. (So, obviously, you’d be better off pricing it higher.) Both feel like a low price and low stakes decision, and for that matter so does $4.99. I think $5 is probably a significant psychological barrier. And, for that matter I personally might be slightly *more* likely to buy a book at $3.99 – $4.99, because it doesn’t say ‘new author’.

  6. I’m not sure about that tool, since it really pushes the $2.99 bottom. It even suggests I price Kiwi at $2.99, which is absurd. Although I guess I’d make the same amount of money selling 0 copies.

    • That last phrase, there, is full of Truth with a capital T and decorated with all the spiky, little barbs.

    • Yeah, I think it recommends nothing lower than $2.99. Every short story I’ve run through the tool on.

      As such, I haven’t found it to be particularly useful. Bloody Eden was recommended at $2.99, but I sold about the same and made more money at $4.99.

  7. I tried an experiment where I priced new novel-length works higher, then dropped the price when the next book in the series came out. My sales went up a little BUT I started this last fall, at a time when book sales tend to go up anyway. This spring everything has dropped considerably and I did not continue the experiment. Since you have a much larger fan base, and much higher sales, you might be able to do something like that more successfully. My $.02 (not counting inflation adjustment.)

  8. I’ve already commented on what Peter said, but I’m back. That’s because MGC is where I was first given the permission (by myself) to become a book reviewer, so when I review something, I always mention it here.
    And that’s also appropriate in this case, since Amanda is a Mad Genius. Read her new book!
    http://habakkuk21.blogspot.com/2015/05/the-sword-of-arelion-by-amanda-s-green.html

  9. Peter, I faced that same decision last December, except that I worked out the advantages/disadvantages on my own. I priced books higher and got few sales. The following is my current system, and I see no reason to change it.
    First novel in a series, $2.99; subsequent novels, $3.99. Short stories, $0.99, novella is currently the same but isn’t selling. I’ll pull it and rewrite it at some point, make it a novel. It’s in that segment you mention, outside the norms, of my ‘brand’ at least. Most books available on KU, a couple published widely, and those are about to become available on Google Books as soon as the signup process is complete.
    Amazon’s pricing tool helps with Amazon sales, but I’m gathering data for other markets as well.

  10. Laura M

    I seem to be on track for one novel per year, and my science fiction has legal undertones and overtones, so it’s not quite mainstream for the genre. I’ve priced both at $3.99.

    Sometime in the next 6 weeks I’m going to be publishing my first space opera. Mindful of the fact that I’m going outside what I’ve been doing, but hopeful of capturing a wider market–where instead of just being obscure I’m unknown–I plan to price at $2.99. Also, this one is going up everywhere right out of the box, not just Amazon. I want to see if that initial surge of having some visibility and novelty, coupled with being available everywhere, won’t help me get my first Kobo sale.

  11. I’m probably a bit different from most of the readers here: buying an ebook is a trivial expense for me.

    I simply won’t try a new author, unless well-recommended, at a price-point ABOVE $4.99. Hell, I was not terribly happy when Baen’s prices jumped as a result of getting on Amazon. . .

    But for anyone writing Indie, I’d say a price-point above $4.99 is professional suicide. . .

    Note: ESTABLISHED authors I’ve read for years (and yes, Peter, you’re on that list. I discovered your “Maxwell” books after a mention on MHN, a bit over a year ago. Call me one of your 1000 True Fans. . . ) are a different story. . .

  12. I started out at $4.99 for novel length work. After listening to DWS talking about pricing your books as if you thought they were every bit as good as something from a Trad Publisher, I ran an experiement last year, bumping everything up to $5.99. I immediately started selling more books. Doubled my income. Until September when sales dived.

    They didn’t recover, so this year, I lowered the prices down to $4.99. No change. I gave away half the series, two books a week. Zip response in the sales–I think this is a KU effect. So now I need to try something new . . . and here it is, May already, and about time for the early summer dip in sales. Meh. Not the best time for an experiment.

  13. regularjoeski

    My wife and I read for pleasure, alot (kindle has >1800 titles in cloud). Neither of us will buy full priced books, ie >7.99 anymore. New authors to us are picked at 3.99 or less. 4.99 or 5.99 is only authors with a number of consistent books who we like. Once we find authors we like we tend to buy everything they come out with (still waiting for your next book). Brand, once built, will justify to us a higher price, ie we are fairly sure we will not be disappointed. KU is used to try new authors. We have found minimal correlation between price and quality. Big publisher books are just as likely to be terrible as .99 books, that is why no high priced books. Hope this helps.

  14. First, thanks for the link to authorearnings. I left a post there about what I think of the ‘big book’ publishers. I want my authors to be happy, so they will write more books. Indie authors have the double duty of being businesscritters as well as authors, and have to balance all the decisions. I have not tasted the waters of Kindle Unlimited, and currently do not plan to. I think of it as an electronic library, but I believe the authors do get a monthly dole based on readership, so I guess it is better than a brick and mortar library.

    There is actually one publisher that invokes some ‘brand loyalty’ and that is Baen. Obviously, authors get brand loyalty from their name alone, but either Baen endorsed, or a good cheap/free intro novel are good ways to get a foot in the door.
    I’ve noticed some authors manage to start a book with a short novella, somewhat stand-alone, and they are a great ‘read it for free’ option, but may not suit all situations. As TXRed pointed out, the first of a series at a reduced price is another hook that works. The final hook is to have either Insty or Sarah plug your novel. I even read a couple of fantasy romance novels so plugged, and while not my bread and butter reading, I am not adverse to ‘reasonable’ ebook pricing for them.
    As far as an author’s name for brand loyalty, Amazon never forgets, and I do frequently go out to the ‘recommended for you’ section when my reading list is low or empty.
    As a reader, $2.99 is not too much to try a new author. At $5.99, I will only consider it if I have read some other work and liked it. My recommendation would indeed be to have the first book of a series ‘bargain priced’ and the rest for $4.99, my personal ‘sweet spot’ as a reader. As for $0.99 for book one, I don’t think I judge it as a crappy author over a good but unknown to me author; however, that said, I’m always happy to spend $2.99 for the test read.

  15. Holly

    KU leaves out everyone who doesn’t have a credit card or debit card. (I tried to sign up with a gift card, Amazon says nope.) That’s a small percentage of the population, I gather, but it happens to be mine, so I can say that KU status of a book is irrelevant to me as a reader.
    The first factor I consider is budget. If I have a choice between two books, and one is $4.99 and will mean no more paid for books for the next two months, and the other is $2.99, unless I’ve really been waiting for the more expensive to come out I’ll get the $2.99 now, which leaves me money for two $.99 stories and wait on the other, and it may be that by the time I can buy another $100 gift card I’ve lost track of the other book if it’s not by one of the authors I specifically track.
    I’m not anyone’s ideal reader, though: I’m homeschooling six kids and pleasure reading for me is pretty low on the list of things to spend money on. Well, my library loves me and buys everything I tell them to (I gather they have some sort of ‘books asked for by these patrons circulate so buy them first list, perhaps a mental one’), so I guess I’m their ideal reader, but writers ought to feel differently. (And yes, my library will buy indie books on patron request but they don’t do any ebooks, indie or otherwise. Hint hint.)

    • Have you checked out openlibrary.org? It has books which are current, unlike Gutenberg.org, which is only good for non-copyrighted work.
      There is also Project Gutenberg Australia, which uses Aussie copyright laws, not US laws. I’ve found some books there that weren’t on Gutenberg.org. They are at http://gutenberg.net.au/

    • Lea

      My library told me once that if I put in for them to purchase a book (even if they would have purchased if anyway) they put me first on the list to check it out. So I do that every now and then and they order things for me.

  16. Sorry for OT, but I haven’t found a better way to ask this question. I’m not an e-book reader and lately consume most of my reading via audiobook. I’m beginning to think I am missing out on great indie works because of this. Do Indie books ever become available as audio? I primarily use audible.com but am open to other sources.

    • Yes, more and more indie authors are producing audio versions of their books. I’ll be doing that in due course with mine as well. I don’t know that there’s a central registry of them – you’d have to look up your favorite authors by name. Amazon usually lists audio editions along with e-book and print editions, AFAIK.

  17. Joe Spiker

    For me personally a book priced at 5.99 or above is simply a no go except for a very small group of authors. I have read 5 books just this week thanks to KU and 2 that I bought. I have a 10$ a week budget for three weeks a month and that means 2.99 gets me three books. At 3.99-4.99 the author better be someone I already know and like. No way in h¥«« I’ll normally pay over 4.99 for an ebook it’s different if I’m actually buying a paper book that I can put on the bookshelf.

  18. Among her other many wise choices, Laura Montgomery is a Sabrina Chase fan. She is responsible for turning me on (umm, do people still say that? I’m showing my age) to the Sequoyah series. I review the last in the trilogy here: http://habakkuk21.blogspot.com/2015/05/queen-of-chaos-by-sabrina-chase.html

  19. beerme

    Pre-KU my personal rule was $1 per 100 pages for a new author even if I enjoyed the sample. Post-KU I’ll read just about anything due to the lack of investment.

    I think the best use of KU is similar to how Baen used the CD that came with the latest hardback installment for a series. The CD allowed one to get the entire series while getting the reader hooked on buying the newest book as it was released. KU seems to really shine for short works and would allow for smaller stories to be placed for between the bigger books with no investment to the reader. I hate when tradpub tries to pawn off a $1.99 40 page novella during the middle of a series.

    I hope your health improves Peter, this reader is looking forward to the next hit of crack.

  20. jon spencer

    Since I went with KU, I have purchased new, one hardback (Peter F. Hamilton) two paperbacks (Kim Harrison and Robert Buettner) and have read many, many from KU. Including yours. There is so much that is available on KU of what I want to and enjoy reading that paying separately for a book is way down on my list of things.