Mark Coker, CEO of Smashwords, shares some terrific insight into pricing strategies for ebooks.
There’s not a single secret magic price point that's most effective for ebooks. Some authors fixate on price alone, but it’s important to consider price as only one of several factors that influence a reader’s purchase decision. We have many free ebooks that earn few downloads, and many priced books that get more paid downloads than some of the freebies. In the end, if a book doesn’t honor the reader with a great read, you can’t pay a reader to read it.
The pricing decision should be made within the context of these other important factors:
Full length books command higher prices than shorter length works. Our best-selling, highest-earning authors are doing full length books, usually 80,000 words or more. Some authors try to game pricing by breaking a full length novel into multiple shorter serialized chunks or series novellas, but this strategy usually fails. Such tricks jeopardize reader trust.
2. Reader passion
The most powerful marketing secret is to write a super-fabulous book that markets itself. If a book can’t market itself through the passionate word-of-mouth of readers, the author’s marketing will be less effective. How does an author create a book that markets itself? The secret is to write a book that that touches the reader’s soul. The reader must love it, and this holds true for both fiction and non-fiction. If they feel passion for the book, they’ll leave you a five star review, not a three star review, and they’ll tell all their friends and family to purchase it as well. Reader passion gets you word of mouth and social media buzz, and this drives sales.
3. Author platform
Do you have the ability to efficiently reach a large number of readers? They might be fans, readers of your blog, people on your email mailing list, or the audience of your talks. That’s your platform. The author platform helps authors place their book before readers for their immediate consideration. True fans are likely to be less price sensitive. They’re a fan because they already consider your work valuable to them.
It’s easier to lose a reader than gain a reader. Most authors, even commercially successful authors, are unknown by the vast majority of potential readers. This means every author must earn the reader’s trust every step of the way, and never stop working to earn it and deserve it. Trust building (or trust loss) starts the moment the reader first glances at the ebook cover (does the cover image scream “amateur” or “lazy,” or does it scream “enticing” and “professional”?).
Next, they read the book description (is it crisp and engaging, or written like slop?). Then, if you’re lucky, they download the sample. The first thing they see is your front matter. Is the formatting consistent and attractive? Then they read the first sentence, the first paragraph, and the first chapter.
At each step of the process, the reader makes a decision to continue forward or give up. With each worthwhile sentence, paragraph and chapter, reader trust builds. An author earns reader trust with each full length book. Each subsequent book is an opportunity to build deeper trust, or to squander trust.
Nyree Belleville, a successful Smashwords author who writes under the pen names Bella Andre and Lucy Kevin, told me she wakes up every morning paranoid that all her success could evaporate in an instant if her next book fails to live up to her reader’s expectations. She’s 100% focused on satisfying her readers. She’s meticulous about every aspect of reader experience. Successful indies have a relentless focus on earning and deserving reader trust.
5. Series or not
For fiction, full-length series do best. The power of series is that the reader becomes emotionally invested in the characters, and they want to join the character on an ongoing journey. The series starter must hook the reader. Brian S. Pratt’s series starter for his epic fantasy Morcyth Saga series is 140,000 words and priced at free. A good percentage of readers who complete the first book purchase the other six books in the series for $5.99 each. We’ll often see readers purchase the remaining six all at once. This is the level of trust every author should aspire to. Your name is your brand.
6. Author marketing
Marketing is the process by which an author builds awareness about the book and the author, and generates demand for the book. If an author can create an urgent, strong desire to read the book, then price becomes less important. If everyone you know is telling you NEED to read title XYZ from author ABC, are you really going to care if it’s priced at $9.99 or $.99? A book worth reading is a book worth reading.
7. Perceived value
In the previous tip, I said a book worth reading is a book worth reading. Yet customers don’t have limitless pocketbooks. In the end, each individual customer’s purchase decision is driven by a complex and personal multi-variate equation of inputs that define perceived value. Perceived value is all about what will I, the reader, will get from this book above and beyond what I invest. Readers invest their time and money.
For fiction, readers want emotional engagement with a great story. For non-fiction (and with great fiction as well), they’re looking to gain knowledge, information or insight.
If you’ve done everything possible to maximize factors 1-6 above, then price is the final lever under the author’s control. Fiction buyers are typically more price-sensitive, simply because they have near-unlimited alternatives for low-cost, high-quality books.
If you’re a new author, or you’re an established author but looking to aggressively expand your platform, then price some of your work very low to encourage more new readers to take a chance on you, and give you a chance to build reader trust.
8. Platform building or harvesting?
A $.99 ebook will usually sell more copies than a $2.99 or $4.99 ebook, yet the higher priced ebook is likely to earn the author more income. When selecting a price, an author should ask themselves what their objective is. Is it to harvest maximum income now, or is it to build platform, or is a combination of both?
I think the most successful pricing strategy is a blended one where the author participates with multiple price points. For authors to take full advantage of the blended strategy, it requires they have a backlist of multiple full-length titles. Think like a fisherman. Fishermen chum: they throw buckets of free bait in the water to attract a lot of fish, and then mix in hooked bait to catch the fish attracted by the freebies.
Free or low cost books act like chum in the water for marketing and platform building. Authors can price other books higher to harvest income. Many authors make the mistake of believing every one of their books is worth at least X price, and refuse to price lower on principle alone. They miss out on the opportunity to use free and low-cost to make it easier for a large number of customers to take a chance on the author.
Other authors price too low so they miss the opportunity to harvest with some books at higher prices. It’s a balancing act. The most successful indie authors are simultaneously pricing to chum and harvest, always looking to introduce new readers to their works so they can sell them priced books.
The Impact of Free Ebooks
I’ll often hear from authors and publishers concerned that free books devalue books. They fear readers will be conditioned to demand free and won’t pay. This isn’t the case. Authors who don’t utilize low price points for some of their catalog are missing out on the biggest, most underutilized marketing secret.
Readers today have access to tens of thousands of free public domain classics, thousands of free indie books, and millions of pieces of free Internet content. Yet readers still buy books. Why? Because readers, once they trust an author to give them a great read, will pay for books worth buying. Every author’s worst competition is not other authors or low-priced or free books. Your competition is staring you in the mirror. Write the best book you can.
Every author has the opportunity to create something that is entirely unique in the world, and because it’s a one-of-a-kind readers will pay for it if it’s worth paying for. Writers confident in their ability should find this fact encouraging.
Fiction vs. Nonfiction
The pricing dynamic for non-fiction is different from fiction. Often with non-fiction, the reader is looking to solve a problem, or address an opportunity. This problem or opportunity has a perceived value attached to it in the mind of the reader, so the greater the perceived value of this outcome, the less sensitive they’ll be to price.
We have one author who has been successful selling $79.00 non-fiction ebooks. Their books provide investment recommendations, and the author is well-known, has a large platform, and is trusted. For investors making multi-hundred thousand dollar investments in the stock market, $79.00 is a small price to pay for knowledge.
We have another author who does well selling a diet book for $29.00, and we have a nationally known expert on high school football coaching who sells well at $25.00.
The Bottom Line
The freedom indie authors have to price free and low represents a significant marketing advantage they have over traditional publishers who don’t have the same pricing flexibility. Ultimately, readers will determine the value of an author’s book, and price is only one of several considerations.
See Mark's previous post, What's New with the Smashwords Ebook Publishing Platform. Want to learn more about ebook publishing? Subscribe to this ebook publishing blog.
About Mark Coker and Smashwords
Mark Coker is co-author of the novel, Boob Tube, and founder and CEO of Smashwords, a leading ebook publishing and distribution platform for authors and publishers. You can follow @MarkCoker on Twitter.
Mark is currently working to complete his next ebook, The Seven Secrets to Ebook Publishing Success, which examines the best practices of the most commercially successful Smashwords authors. The ebook should be out in October.
To learn more about how Smashwords works, read the How to Publish on Smashwords page or the publishing FAQ, and be sure to download a free copy of the Smashwords Book Marketing Guide (how to market any book) and the Smashwords Style Guide (how to format and publish an ebook).
Visit the official Smashwords Facebook forum to engage with Smashwords authors, publishers and readers. Several Smashwords authors are also posting their personal tips and tricks for publishing at Smashwords as part of a coffee mug promotion at Smashwords. Read the entries here.