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

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:


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?



  • Christopher Ford Posted

    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 Posted

      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 Posted

    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.

    • Derek Murphy Posted

      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 Posted

    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!

    • Derek Murphy Posted

      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.

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