Know your reader demographics: Pricing
Next week I hope to return with a last few points and summary to the long summary. Then I’ll dive more into the issue of demographics and knowing your readers. However, I’m working this weekend, so you get the start on demographics that’s already been written, instead of the time-intensive new words that’ll eat into my sleep schedule.
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.
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.