Monday, November 18, 2013

Artisan Writers - Rewarding Loyal Readers vs. Luring New Ones

This fall I've stumbled across two pricing strategies which are the reverse of the Common Wisdom.  They both make a great deal of sense to me.

The first one makes sense to everyone, actually: And author of a regularly published serial had a particular problem. The serial episodes were a little too short to sell for $2.99 each, but when anything is priced lower than that at Amazon, your royalty is cut in half. Furthermore, customers tend to avoid every price point below 2.99 except 99 cents. So she's making 1/6th of the income on those books at 99 cents than she would at 2.99.

She came up with the idea of pricing the episodes at 99 cents only when they first come out.  Then once there are three episodes out, she collects them into a larger volume, which she can price high enough to get the better royalty. Once the collection is available, she raises the price of those individual episodes to 1.99 -- which is a fair price for the length.

This rewards the loyal readers who buy the episodes as they come out.  It allows new readers to catch up with the whole story at a price that's still a bargain.  And people still have the choice of buying the individual eps if they want to.

Of course, this strategy was design specifically for a serial -- something with frequent new publication and an audience which needs to actually catch up with the story in order to follow it at all.

Then I came across a blog post about reversing the common wisdom in pricing, and I realize it is kind of a variation on this technique.

The Common Wisdom

Traditional publishing has always done something we call "windowing" with prices.  You release something as a high-priced hardback, and maybe even let people pay extra for a special pre-release version.  The idea is to reward those who are willing to pay the most by letting them have the book first.  Then you release lower cost versions later, one at a time, filtering through your audience.

The idea is to get the most money possible out of each price point.  People want to pay the lowest price will have to wait the longest just to be sure that you got more money out of those ahead of them.

The problem with this is that it actually doesn't reward those loyal, eager, first readers -- it punishes them.  It rewards the people who don't care so much about your work.

Which is okay.  I mean this strategy works.  The people most eager and loyal want to support you.  The other folks feel good getting a bargain.

And yet, when readers acknowledge this strategy and talk about it, they often say they feel used by it.  They accept it, but it feels manipulative.

First Book Free

The other common strategy is what my friend calls the "first rock of crack is free" -- the idea that most of your books are at the full price you think is fair, but the first book in a series is free.

The idea here is that you can lure in new readers with a free book.  Once they're hooked they will pay for your other books.  The fact that it's your oldest book makes it a variation on the "windowing" that other publishers do -- except no manipulation where your most eager readers pay more than your new readers.

This strategy rewards those who are willing to experiment.  But it does depend on having a large number of books in a series.  If you're giving your first book away free, permanently, then you need to have enough other books to make up for the income lost.

But the real down side of this strategy is that you are luring people in with your first book (or the first in a series): and your first book is likely to be your worst book.  You'll be more experienced, and have a better idea of what is most fun about your series later on.

Also, this strategy doesn't reward your loyal readers any.  They've already bought and read your first book.

Reverse Windowing

The idea here -- as proposed by Ed Robertson in his blog post -- is that you release every new book at a lower price: a bargain price. Then raise it to the price that you've set for the long term.  This sounds kinda like the "Free First Book" strategy, except with this strategy, it won't be the first book at the lowest price, it will be the latest book. Your first book will be at full price.

There are several reasons why this might be a good idea.  The Ed mentioned that it would give your first couple weeks of sales a bump and work the algorithms, and get you reviews, etc.  And those are good reasons.

However, too me, the very best reasons for doing this are these:

*It rewards your most loyal readers.  They're the ones who will buy right away.  Getting a deal on the book they've been waiting on will only make them happier, and all that much more eager for your next release.  Happiness will make them happier to talk about your book too.  More word-of-mouth. More reviews.

*It lures new readers to your most recent book.  Of all the books you've written, your latest book is the one you wrote with the most experience and understanding. It's likely to be the best book you've written so far.  Furthermore, it's going to be only book of yours that's on the "new books" list.  That old backlist book is not going to get on a "New and Hot Releases" list.  So why not have an alluring price on the book for the short time it's got that exposure?  Readers who look closer will notice that the price is discounted over the past books.

Plus you can combine this with your "Free First Book" strategy!

Your latest book is discounted, and it gets attention.  The new customer looks for your first book, and, hey, it's free! (Or also discounted.)  So they buy it.  Or maybe they buy both -- especially if they believe that your latest book is on special.

Loyal Readers Vs. New Readers

Word of mouth is important for all writers, but I think it's especially important for the artisan writer, and extra-especially for those who really are taking a path less traveled.  Reader loyalty and enthusiasm is something you have to build over time.

The best way to build it is to produce books they love on a regular schedule, but for some of us, our imaginations don't cooperate with that.  So it's best to reward them in every way you can.

This is one of the reasons I put off my experiment in higher prices. I'm waiting until I have enough books in a series so that I can use this "lower price on latest book" to reward my existing readers.  When I have that, I will raise the prices on my backlist -- the books they've already read.

Now, I can potentially use the strategy that serial writer uses -- raising the prices on short individual works after they are made available in a bundle for a bargain price.  You don't have to have a whole serial for that.  One more Mick and Casey novelette and I can bundle the trilogy.

I think this is also something to consider for those authors who have been selling at super low prices for a long time, and maybe want to start raising prices: both of those strategies are a good way to change your prices without punishing your customers or creating sticker shock.

See you in the funny papers.


stu said...

I'm just coming up against pricing questions, since I'm putting out one of mine without a publisher. I may well employ a cheaper initial price, particularly because it's a stand alone novel.

Elizabeth Spann Craig said...

I've played around with this some. I definitely always have a book's not always the first book in that series (although it's not a bad book...but I'd published other books prior to that one). Sometimes I'll have the latest book as the free one.

I recently ran a .99 sale on my latest release and was pleased by the bump in sales and the fact that I felt I was rewarding some loyal readers, too. Haven't done that right out of the gate, though, and you've raised some interesting points that make me rethink that.

The Daring Novelist said...

Stu: when you only have a book or two to work with, pricing strategies are all theoretical anyway. But I think starting moderately low can only create good will. The only mistake you can make is to jack up the prices way high.

Elizabeth: yes, I think rotating has a certain value too -- especially for hybrid authors, since lately a lot of publishers have been using the rotation method.

That one is harder, though, when you're using price matching to offer free books, because Amazon won't always match in a timely manner so you can let your readers know. I've got two books which have been free for 6 weeks and Amazon has declined to match them yet.

Kyra Halland said...

The low release price is something I'm experimenting with now, too. I launched my latest novel at 99 cents, making it clear that that was a limited time special price, ran that for a week then raised it to $4.99. I had a lot of sales that first week and cracked the top 50 Hot New Releases in Epic Fantasy on Amazon. No way to know how many sample downloads I got out of that; some, I hope. I know at least a handful of those purchases were new readers, who I hope will check out my other books (I put generous samples and links in the back of the book).

I'm going to try the same thing with my next stand-alone novel release and see if that builds a little more momentum, and I'm planning to use the same strategy with the series I'll start releasing next year.

I like the idea of rewarding loyal readers who are eagerly waiting for my next book (I do have a few!), as well as getting some momentum up that Hot New Releases chart :D

The Daring Novelist said...

Yeah, all strategies have validity, but the idea of rewarding the loyal readers makes the most sense to me.

(Now I've got to go write some things to reward readers WITH.)

Joel D Canfield said...

As a long-time marketing guy, been a long time since I read new thinking on pricing.

I just might have to adjust my advice to my readers and clients.

Newslettering this. Super stuff.

The Daring Novelist said...

The great thing about the rise in Indie Publishing is that you have so many more people thinking out of the box.

And new good ideas spread fast these days -- from other authors to me to you to your audience.

We live in wondrous times.