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.

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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.

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

27 Comments

Filed under FYNBOSSPRESS, MARKETING

27 responses to “Know your reader demographics: Pricing

  1. Draven

    ok, so when my book is complete, should i make a $2.99 standard version and a $5.99 extra special collectors edition?

  2. A quibble, if I may. I think Category 2 should be broken into two kinds of readers: the Discount Crowd ($0.99/used book/discount books) and the General Indie E-Reading Market ($2.99 to $5.99). Those readers aren’t hunting for bargains: they *expect* ebooks to be priced in those ranges, and will likely balk at higher price points. And the AuthorEarnings.com reports hint that this is a huge market segment, both in number of copies bought and dollars. When you include the Kindle Unlimited market ($12-15 million a month paid directly to authors), the size of that pot o’ gold is even bigger.

    I’m also not entirely comfortable with conflating used bookstore users with ebook readers. I think the two groups don’t have a huge overlap (I could well be mistaken, of course). The anecdotal evidence around me is that frequent ebook readers only buy a handful of paper books a year, if any, no matter what the price range. In many cases because even a $0.99 used paperback is going to take up shelf space that just isn’t available anymore. I personally no longer buy paper books; my last move (involving close to a hundred boxes of printed products) cured me of that habit 🙂

    Finally, I think the freebie crowd is not the same as the library crowd. People who go through the trouble of checking out a book will likely crack it open and take a gander. Very many (perhaps the vast majority of) freebie ‘readers’ are electronic hoarders, filling their hard drives with a myriad books they may never read. I’ve pointedly ignored free readers for well over a year (the last time I did a free promo) and my writing income hasn’t suffered one bit (and by “not suffering” I mean risen by 500%). I think people who aren’t willing to try a book at a $0.99 promo price aren’t going to be buying books any time soon. If their circumstances change, then they’ll be customers I’ll care to attract. Although I do think that making some sample-sized works (novella-sized or shorter) perma-free can be a useful promotional device.

    As always, IMHO and YMMV. I’m doing fairly well pricing full-length novels at $3.99 (shorter ones at $2.99), but that’s over a fairly short time (slightly over two years indie publishing) and in two specific genres (the third genre, horror, has so far been an abject failure for me), so my experiences could well be atypical, a fluke likely heading to a dramatic turn for the worse (knock on wood), or both.

  3. Joe Spiker

    Yeah sorry as somebody who is only a reader calling me a discount reader is insulting to me. I’m primarily a ebook reader now and the 5.99 price point is my ceiling for any ebook. Simply not going to pay paper prices for an ebook. But keep trying to negative labels on people like my self. I mean I must not be a fan also because I’m not willing to pay a large amount of money for an authors work. I kinda of thought the fact that I devour an authors list of books, read their blogs religiously to see when their new stuff comes out kinda of thought that made me a fan.

    To me as a reader discount ebooks are those under 2.99 and someone paying for a overpriced paperback and an overpriced hardcover would be a collector.

    • BobtheRegisterredFool

      I do not see anything in her statement disparaging discount readers. The only person bringing in negative associations for that category is you.

      I understand that her category labels may sound like she is saying you are not a fan. She is not saying that.

      Yes, the categories can be defined differently. Her goals are a) being useful to sellers b) not insulting buyers of any category c) being a column rather than a dissertation.

      Four may well be the fewest number of useful categories. What else is she going to call the last category? One could label category three ‘the fools who keep traditional publishing in business’ and four ‘absurd spenders’. Fan and fanatic are the few non-pejorative English words for that type of purchaser. They do exist, even if they are more obvious in, say, the Japanese otaku funding the production of anime with DVD purchases.

      • Devotee for someone who bought the leather bound editions of Freehold and On Basalisk Station might apply, but yes, fan and fanatic are the most common. (Or a lit’ra’chure teacher who is hiding his or her fondness for genre fiction in plain sight . . .)

        • BobtheRegisterredFool

          Yeah, I really dissed the breadth of the English language there. Mea culpa, mea culpa, mea maxima culpa.

          • English is a magnificent, wonderful way to not quite find the perfect word. Which is probably why it happily steals from every other language it crosses paths with. 🙂

    • Christopher M. Chupik

      I am in the discount crowd, and I’m not insulted.

      • Reality Observer

        Neither am I (nor will I be insulted if called a “discount author”).

        There are connotations to the word, though. I would preferably call that group the “low price point” section of the market.

  4. sabrinachase

    And don’t forget the positive power of comparison, by having a paper version available that makes the ebook look like a steal! Sometimes people even buy the paper version, too! I usually price the paper so it makes me a dollar of less of profit, simply because I only do it as a reader service (and I only started doing it for a friend who is a bit of a Luddite but wanted a copy of my books).

    And if I may refer to a prior post…could you perhaps expound on *how* to find where your audience hangs out? As a confirmed introvert, this Earth concept “hanging out” has no meaning to me 🙂

    • And in addition to the comparison to your own paper price, consider the comparison to the other books your target audience reads. I write long, literary-flavored (let’s not get in the way of the plot and characters with flowery description, please) mainstream fiction, and I’m not going to sell to indie readers of genre fiction – they don’t like my kind of stories!

      So I have to advertise to, and sell to, starting from indie zero, the people who buy mainstream fiction and are used to prices over the magical 9.99 for ebooks – and to whom 8.99 doesn’t say ‘cheap.’ I’ll let you know if I figure it out.

      Meanwhile, even lowering the price to 0.99 for sales doesn’t generate many – so I don’t think it’s just the price. It’s the discoverability – and getting all those nice folks who tell me how much they like my book to go leave a review and TELL THEIR FRIENDS.

      Sorry – newbie rant.

      • Uncle Lar

        The intent behind 0.99 pricing is purely as a marketing tool. You offer the first in a series for cheap, some will even go all the way to free, to catch anyone who might then take a chance on a new to them author. See Dorothy’s remarks regarding the Baen free library, which generally contains exactly that, first books in long series by Baen authors.
        In fact it helps to make it clear to the potential customer that “here, I’m putting this out here at a give away price in hopes that you’ll like what I do and become a regular customer.” That works much better than letting them think you don’t believe your work is worth less than a buck.

        • I know – but I also know I may produce ONE work, the Pride’s Children trilogy, in my entire writing life. It took 15 years to publish Book 1 – I can’t use ‘traditional’ indie marketing. I have to hope those who like the book (and I offer review ebook copies to anyone who wants to try) will leave reviews and tell their friends.

          We are all different – this is me.

    • As a confirmed introvert, this Earth concept “hanging out” has no meaning to me…

      LOL! I mentally profiled myself two weeks ago, considering myself as typical of my readers, and determined that there is no reliable way for a new-to-me author to reach me. How to resolve this conundrum… I do not know. 😀

      • Draven

        In my case, the reliable way would be to co-write something with an author that I already like…

        or to be in a promo post here

  5. Uncle Lar

    I was raised by grandparents who survived two world wars and the great depression, so yes I am a cheapskate. Also, I can recall when a general release paperback went for a quarter, while best sellers were priced at thirty-five cents.
    While not fabulously rich, I am shall we say comfortable, but one reason for that is I do not and never have spent foolishly. With the exception of a small handful of favorite authors, I always waited until I could pick a particular book up as a paperback reprint, or better yet used at half cover. Now I am almost exclusively e-book after Sarah sold me on Kindle.
    I buy Baen’s entire yearly output through webscriptions. That’s about 100 books a year for $216. But half their output is reprints, so that amount actually buys me about 50 new books for under $4.50 each. The fact that I can go download them whenever I want and in multiple formats is just a little extra bonus.
    Outside of Baen I’m offered multiple choices here, at ATH, the Diner promos, and of course inundated with “similar” choices by Amazon.
    Side note: IMHO the inflated prices placed on e-books by traditional publishers is nothing more than a futile attempt to deny the buying public a reasonable choice and drag everyone back into the last century. It does now and will should they continue the practice destroy any credibility they still might have with the readers and will eventually be a contributing factor to their ultimate downfall.

  6. You forgot to mention Genre. Romance readers will pay an average of 2 to 3 dollars more for their books than scifi or fantasy readers. If you look, the romance books are almost always priced higher.
    Other genres also can have different pricing models.

    I would not put 5.99 in the discount pricing category, I’d limit that to 4.99 myself, (except, again, for romance, I’d put it around 6.99 there).
    I think .99 has developed into it’s own special category.
    Last of all, NEVER price a book at 1.99. For some reason, that price-point seems to now be the mark of doom. Mark Coker did a thing on that, it’s quite curious.

  7. Among the freebie readers, there are also the pirates. What happened to John’s latest book inspired me to finally write another post on my wordpress, which I will now shamelessly promote:

    “Don’t Pirate indies”
    https://drmauser.wordpress.com/2016/04/10/dont-pirate-indies/

  8. Thank you all for your comments, and I swear I will get to them. Yes, Sabrina, I did start trying to wrangle all the thoughts together after you asked how to find your reader demographic. You are the inspiration, as well as a great writer.

    I may not get to responses tonight, though. Between 9 hours at new job and splitting headache from the pressure change (no doubt why, when I can see the western sky turning black and flashing, with promised hail), coherent thought is hard.

    To all the readers, fans, and writers (and all writers are readers and fans of someone) no disrespect was intended. Rather, trying to establish a framework for categorization – because the first step to finding your readers is to find a way to split up the vasty deeps of the market so you know where to look for what and how. Will elaborate when can think.

  9. Ray

    Labels like this are a best guess based on your experience. Are they perfect? No. Are they based on statistical data? No, unless your Amazon. They are a way to look at your market to develop a marketing plan. The ones above make sense to me and are good enough.

    The key point is you need to test. Pricing is just one variable for your product.

    Some variables:

    – price
    – genre
    – reviews
    – covers
    – keywords
    – category in Amazon
    – related works that customers buy
    – advertising
    – social media presence
    – author referrals
    – promo sites
    – sales run rate / velocity

    My guess with Amazon reviews have a huge impact plus sell run rate.

    There is done gaming of reviews, sigh, but as a book buyer this is one of my major criteria.

  10. Ok I confess I am a habitual purchaser of Baen’s eARCs just like in the day before eBooks I bought the hardback because I didn’t want to wait for the paperback

  11. cirby

    Once I finish writing this darned book (This month? Maybe…), I’m selling it at the $3.99 point. I figure that’s a decent price, and I’ll be making more per copy than most authors would by selling paperbacks.

    I’ve noticed that most of my book purchases are either Amazon daily sales ($1.99) or regular-price books that hit the $3.99 point, with a very few for more. John Ringo is one of the few current authors I’ll drop $9.99 on.

    The one thing that a lot of people miss about the ebook revolution: Books won’t ever go out of print. This may be more important, in the long run.

    That first novel will always be available, without having to go to the publisher and beg them to print up a few thousand more for co-marketing with the second and third books. I know of more than a few people who wrote really, REALLY good books that didn’t sell well, that are still locked up in contract hell.