I used to think 99 cents was a good price for indie books. Sure, they're worth more than 99 cents but if you want to sell a lot of books then it seemed reasonable to price them affordably, and at 99 cents a lot of folks don't think twice before clicking the "download" button.
Things have changed.
Two things happened. First, Amazon changed its ranking algorithm to favor higher priced books and therefore 99 cent books no longer have the competitive edge they once did. Second, I think the novelty of being able to buy a book for 99 cents has worn off and consumers don't download 99 cent books as readily.
For years Dean Wesley Smith said an author should never price her novel at 99 cents. I now agree with him. Yesterday he posted a comment one of his readers had submitted and I've reproduced a small part of that, below. I think this is a fantastic analogy.
He [an pricing professional] would look at all the short stories and say ‘It takes 15 minutes to read? And it was fun? Okay. charge 5 bucks.” And when writers squawked in horror, he would say “Starbucks sells fancy coffees for $5 that take 15 minutes to drink. They sell millions every day. Did you enjoy the story as much as the coffee? Yes? Well, no problem.”Read the rest over at Dean's blog: The New World of Publishing: Book Pricing from Another Perspective.
And the writers would come back with “but there was actual substance in the coffee… cream and coffee beans and sugar…” and the he would respond with “yeah, and if I really like the story, I can read it again. I can’t drink the coffee again. I can lend the story to my friends. I can’t say to my friends, ‘gee you should taste this coffee, it was really good, you can try it when I’m done with it.’
He would tell you that it is not good practice to set anything, no matter how ‘small’, at regular price at the very bottom of the price structure.
The bottom price should be reserved for sales exclusively, and used only in an integrated, strategic way to give you more sales traction and build your brand.
If people said “oh, well I’m new, and I don’t have name recognition so I have to sell cheap to make sales” he’d say, no. Set the price you want to regularly sell at. From that price have sales, or other promotions that give an incentive to the consumer to try your new stuff. You’re telling the consumer that you know they are taking a bit of a risk on a new, unknown quantity, so a price break makes it more appealing. Once they’ve tried your stuff, then they know if the regular price is worth it to them.
You are always educating the consumer as to what your product is worth. The regular price will come to be perceived as its true value. You don’t want to set that too low. You steal from the consumer the thrill of getting a deal, you steal from yourself the flexibility to build and expand your brand appropriately.
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