High price = higher satisfaction: except when selling books (+a defense of Hugh Howey)

A cou­ple nights ago I met up with Hugh Howey Fan Fic writer Wes Davies over pizza and beer in Tainan, Tai­wan; as indie authors we dis­cussed mar­ket­ing and pric­ing strate­gies. The best plan (I con­tinue to affirm) is cheap or free — espe­cially at the begin­ning, and espe­cially as a lead-in to a series. Lower prices = more down­loads, more chances for reviews and word of mouth trac­tion. It’s not about the money, it’s about grow­ing a plat­form. Cheap pric­ing is a mar­ket­ing strat­egy. Even though Mark Coker at Smash­words ana­lyzed the mar­ket and con­cluded that $2.99 is the “per­fect price” (with the bal­ance of down­loads gen­er­at­ing the most income) I counter that greater income now is not as valu­able as more read­ers. Like the Face­book movie: “A Mil­lion dol­lars isn’t cool. You know what’s cool? A BILLION dol­lars.” Don’t worry about “mon­e­ti­za­tion.” Instead, become cool. But there’s an even bet­ter rea­son to start off pric­ing low: because you will get bet­ter reviews. This isn’t straight­for­ward, and in fact in most other con­sumer areas, higher prices lead to higher cus­tomer sat­is­fac­tion. They’ve done stud­ies that show, the more expen­sive the wine, the higher our appre­ci­a­tion: sci­ence proves we actu­ally PHYSICALLY enjoy the higher priced wine than the iden­ti­cal wine we think is much cheaper. In most busi­nesses, high end, lux­ury prod­ucts result in higher cus­tomer sat­is­fac­tion. When peo­ple spend more money, they’ve ratio­nal­ized the deci­sion. They are pre­pared to love it. They pay more atten­tion to the details.

Except for books.

For sev­eral years I’ve had a hunch that, although a high price would make peo­ple trust and value your book more, they would also be more crit­i­cal, lead­ing to neg­a­tive reviews. Whereas with a cheap self-published book, read­ers start with­out high expec­ta­tions, so they may more eas­ily be “pleas­antly sur­prised” lead­ing to bet­ter book reviews. And now the data backs me up:

ReviewPrice 800x443 High price = higher satisfaction: except when selling books (+a defense of Hugh Howey)

A new report from AuthorEarnings.com shows that lower priced, indie pub­lished books receive higher reviews than higher priced, Big Five pub­lished books. It may be because indie authors are more sup­port­ive of each other and more direct about ask­ing fans for reviews. Indie authors are usu­ally more respon­sive and in tune with their fan­base. They often seem more gen­uine and approach­able than tra­di­tion­ally pub­lished authors. But those are just guesses. The data speaks for itself. Although the ‘aver­age book price’ is just a lit­tle over $3.00, I’m will­ing to bet that a sig­nif­i­cant por­tion of those pos­i­tive reviews are com­ing from the very low (.99, 1.99, 2.99) books — cheap books get more read­ers and often more reviews. Hav­ing peo­ple “dis­cover” your book with­out a bunch of media hype, false flat­tery or self-promotion also tends to lead to more pos­i­tive reviews. Ask­ing peo­ple to review your book and give it 5 stars is a mis­step that leads down the road of fail­ure. All reviews, even bad reviews, are good reviews. If the bal­ance is over­whelm­ingly neg­a­tive, then you’ve learned you’re either: A) Mar­ket­ing to the wrong type of peo­ple B) Encour­ag­ing mis­lead­ing reader expec­ta­tions, lead­ing to dis­ap­point­ment C) You wrote a book there’s no mar­ket for D) Your book is bad. Stop mar­ket­ing it and go write a bet­ter one.

Can we trust the data?

There’s been a lot of con­tro­versy over this data, and crit­i­cism for Hugh Howey and the con­clu­sions he’s drawn such as: “Our data sug­gests that even stel­lar man­u­scripts are bet­ter off self-published.”

The data was taken from Ama­zon only, and from one day only — so it’s pretty lim­ited and can’t fore­cast spe­cific trends (if an author is sell­ing well today, it’s no guar­an­tee that they will sell the same).

There’s an in-depth and well writ­ten cri­tique on Dear Author called “How (not) to lie with sta­tis­tics.

But I think the crit­i­cisms fall short.

Crit­ics com­ment that Ama­zon is not the pub­lish­ing uni­verse and that there are lots of other places to sell books.

So data from Ama­zon is “like look­ing at data on pol­i­tics from Alaska and then draw­ing con­clu­sions about the USA; or data on pol­i­tics in China because it has the biggest pop­u­la­tion and then draw­ing con­clu­sions about the world…”

Except, it totally isn’t.

Book sell­ing across plat­forms doesn’t vary nearly as much: it mostly comes down to a sim­ple formula.

Cover+book reviews+traffic/exposure+sales description=sales.

That for­mula is going to be about the same no mat­ter what plat­form we’re on.

For every 100 peo­ple who see that book, let’s say 10 buy it. Unless the cover, reviews or descrip­tion changes, that ratio isn’t likely to fluc­tu­ate much over time (hence, the neces­sity of mar­ket­ing, to increase the traf­fic — which most authors do instead of fix­ing the cover or sales description).

HOWEVER — the major­ity of books right now are sell­ing much faster as ebooks. Peo­ple are buy­ing more ebooks.

And most ebook pur­chases come from Apple or Ama­zon — and the way peo­ple buy those books (find­ing the book, look­ing at the cover, read­ing the reviews, read­ing the descrip­tion, down­load­ing to their device) is just about the same — and the book’s pric­ing should be the same across platforms.

SO draw­ing con­clu­sions about ebook sales from Ama­zon is not a bad move, since there won’t be much dis­crep­ancy from other ebook sites.

Print books are a lit­tle dif­fer­ent, because SOME aca­d­e­mic books will be bought by spe­cial dis­trib­u­tors (ie to libraries) and SOME print books will get into book stores, which is a dif­fer­ent expe­ri­ence and should really have it’s own data (although it’s much harder to get the sta­tis­tics, such as “how many peo­ple per day enter the book­store and are exposed to THAT book?”)

But since nearly all self-publishers will use POD and sell through Ama­zon or online book­seller sites, their POD print books won’t dif­fer that much from the ebook stats.

Tra­di­tion­ally pub­lished books don’t do as well online, because A) their ebook prices are com­par­a­tively much higher and B) few peo­ple want to order online and pay ship­ping when they can just go buy it in a store. So gen­er­at­ing data about book sales from Ama­zon isn’t likely to be very accu­rate — except the fact that many book­stores are going out of busi­ness because peo­ple pre­fer to A) buy online where things are cheaper or B) buy an ebook.

So one could argue that the out­ly­ing data doesn’t mat­ter very much because there’s a def­i­nite trend towards ebooks and online shop­ping; in other words though the data may not be totally accu­rate right now, it’s likely to become even more accu­rate as Ama­zon con­tin­ues to grow and eat up a big­ger share of book sales.

As for con­clu­sions — sure maybe draw­ing defin­i­tive con­clu­sions is “log­i­cally unten­able.” But what good is the data if we don’t look at it and guess what it might mean for us as authors? What’s the point of being reserved, impar­tial and slow to draw con­clu­sions when the pub­lish­ing world is chang­ing quickly and we all want to write and sell books as quickly as pos­si­ble to make as much money as we can (agreed, if money or book sales is not your pri­mary goal, then the data doesn’t mat­ter much — do what­ever you like).

But if you dream of sell­ing 10,000 to 100,000 books, the dif­fer­ence in earn­ings can be significant.

What do you think about all this?

 

About Derek Murphy

I help authors and artists turn their passions into full-time businesses, make a bigger impact, and blaze a luminous trail of creative independence. Right now I'm in Taiwan finishing a PHD in Literature, writing several books, and managing a handful of online businesses. Find me
  • Christo­pher Ford

    I fear this is a fact, that to break­through as an author, you may have to give your con­tent away until such time that you have a read­er­ship will­ing to pay. But is free really the answer, is it pos­si­ble to stand out in such a crowded mar­ket that the free book rep­re­sents, with so many great (and lets face it not so great) books on offer. Has kdp/amazon sim­ply cre­ated a pub­lic slush­pile? I guess if this is a fact then I sup­pose it is a fairer, more level play­ing field than the pre­vi­ous encum­bant… I per­son­ally feel you need to:
    1. Ensure your book is well writ­ten, edited, proofed, etc
    2. Get your book look­ing as great as you can — cover, inte­rior, blurb, etc
    3. Offer it in as many for­mats as you can — e-book, paper­back, audio
    4. Sell it at a fair and rea­son­able price for each for­mat
    And then go after one reader at a time, offer­ing them your con­tent for free, in the hope for reviews and that they’ll tell their reader friends. With any luck it will snow­ball, per­haps indie authors will be the new pyra­mid salespeople!

    • Derek Mur­phy

      You missed the huge, most impor­tant thing! It’s got to have a great story that touches read­ers and leaves them think­ing about it after­wards.
      1,2,3, and 4 totally don’t matter.

      A good story that screwed up those other con­sid­er­a­tions will still be suc­cess­ful, and a mediocre story that crushed those four will fail.

      (OK… “well writ­ten” kind of counts, but it’s ambigu­ous. You can write the shit out of a very bor­ing and mediocre story. It can have bril­liant writ­ing, but no plot, no path, no drama or con­flict, no con­clu­sion. STORY mat­ters. Write a bet­ter story).

      After that, yes it’s just a mat­ter of get­ting it in front of enough read­ers, and if they all love it the snow­ball will hap­pen — and the EASIEST way to do that is free. Pric­ing shouldn’t be a con­sid­er­a­tion — remove pric­ing vari­ables from the equation.

      Get it in front of peo­ple and make it dead easy — and don’t assume “Free” is enough to over­come reader resis­tance or hes­i­ta­tion. Get it in front of them and then WOW them with your cover and your descrip­tion, so they are com­pelled to down­load it!

  • Stavros Hal­vatzis

    Thanks for the great arti­cle. There’s no doubt that sell­ing at the lower price of .99 cents pumps up sales. It’s a pity that ama­zon only grants 35% roy­alty at this price point.

    • http://www.creativindie.com/ Derek Mur­phy

      Yeah, too bad… I’m going back and forth between .99 and 2.99 to see what’s “best” — but prob­a­bly neither.

      .99 wins for expo­sure and new read­ers… The trick is hav­ing enough other books to still make income.

  • Stephen Leather

    I’ve found that low prices (espe­cially free) tends to gar­ner more bad reviews than hav­ing the book at a higher price. Self-publishing suc­cess John Locke observed the same thing hap­pen­ing and sug­gested that it was because when you sell some­thing at a very low price (or free) you attract read­ers from out­side your tar­get mar­ket and they are more likely to be dis­ap­pointed and give a bad review. That’s my expe­ri­ence absolutely. Free books espe­cially can bring you to the atten­tion of new read­ers, but unfor­tu­nately some of those new read­ers will not like your work. The fact that they got the book cheaply, or free, doesn’t seem to stop them post­ing a bad review!

    • http://www.creativindie.com/ Derek Mur­phy

      Thanks Stephen, def­i­nitely some­thing to keep in mind. I’ve also found that pric­ing at 2.99 (rather than .99) brings in 5X the income, even though it sells less well. Maybe the price isn’t as impor­tant as prop­erly qual­i­fy­ing read­ers with a pre­cise cover and descrip­tion text, to get rid of those who wouldn’t be inter­ested, and set up rea­son­able expec­ta­tions… but I sup­pose it depends on the tar­get read­er­ship and what they con­sider a ‘fair’ price for the book.