I got involved in a discussion the other day about book pricing, covers and marketing profile.
In the process it seemed clear to me that there are many misconceptions about how books actually sell. The idea being argued was that if a particular book got a better cover and the price was dropped – maybe even to free – then it would start shifting copies.
Another argument was that the real benefit of this book wasn’t to sell copies, but as a sales device for other books associated with it. Both ideas were off-beam. I felt obliged to say so.
I’ll tackle the issues in sequence. They apply, in spades, to anybody trying to sell books.
Yes, good covers DO sell books – especially online where the cover is the front end and, with any preview, the only tangible aspect that a buyer gets to see.
But (and here’s the thing) covers only sell the book to somebody who happens to stumble across it cold. Good if they do, but it’s a bit random (last week Amazon sent me a promo urging me to buy one of my own books). What counts more are the people going looking for the book. People who know about it.
Sometimes, dropping the price also helps sales. One of the principles of economics is the law of demand, which states that – all things being equal – demand rises as the price falls.
However, that’s often quoted in isolation as if it’s the sole answer to improving sales. Actually it isn’t. What counts isn’t the price, but the ‘demand curve’, which is affected by a range of other factors, including perceived value and the notion of getting a bargain – and, most crucially, knowing about the book.
I recall a debate I had, years ago, about a periodical I was producing for an organisation. It was very specialist and hardly anybody wanted it – to the point where it cost more to administer the subscription system than the system was actually returning. I suggested making the whole thing free, seeing as the marginal cost of production was a fraction of the total cost of authoring the content, which wasn’t being recovered anyway. ‘You can’t make it free,’ one guy said to me (tongue firmly in cheek), ‘demand will be infinite!’
My actual argument was that free wouldn’t increase demand at all – which they agreed with for sound reasons. And, indeed, making it free didn’t shift demand, because the demand curve wasn’t solely guided by price.
In strict economic terms, the PED (price-elasticity of demand) was zero for that magazine – you can calculate that via a formula (percentage change in quantity demanded divided by the change in price, which in this case was 0/∞ = 0).
What happened? Well, demand wasn’t just a factor of price. The real arbiter was interest in the content – which in the case of this magazine, was limited to a specialist audience. It didn’t matter whether the mag was free or not. They were going to follow it up anyway. And people who weren’t interested – didn’t.
The other factor when it comes to pricing is perceived value. If a Kindle title is either 99 cents or permanently free, it’s telling buyers that it has no particular value. Whereas if it’s a reasonable price, it tells buyers that the vendor places worth on the product.
It’s a psychological thing. The buying decision then revolves around affordability versus utility (what will I get for my money?).
But there are ways to tip that, such as by periodically dropping that price. This, of course, is what the Amazon selling model is geared to, and with good reason. It’s a standard sales approach, and it works. People are more likely to buy if they think they are getting something valuable at a bargain price.
But that still pivots around people knowing about a particular book in the first place. And THAT is the challenge. Discovery. It’s getting harder as the world is flooded with self-pubbed titles. Books sell in bulk because people know about them – are talking about them – and through word of mouth. And a book that has plenty of buzz about it will sell at a reasonable price.
As for associated sales? This is known, technically, as cross-elasticicity of demand. A change in price of one item affects sales of another – variously through demand curve, through profile, and so on.
The killer is demand. If demand for Book A is zero (because nobody knows about it), then no amount of price-shifting will affect demand for related Book B. In other words, dropping the price on Book A won’t make much difference to Book B, though (for the reasons I’ve stated above) it will kill Book A.
Demand for books comes from several places, including the appeal of the book. More on that another time. But the key factor is knowing about the book in the first place. Having one title considered ‘free’ as an advertisement for others is certainly a technique for doing that – and can sometimes work for a series. But it’s not so effective for books in general. It’s better to treat each title as a ‘profit centre’ of its own and apply proper marketing methods to uplift ALL the books in a publisher’s list or author’s ouvre.
So – the take-home lesson? Yes, a good cover is essential, and it helps shift the book to casual browsers. And yes, price counts – but not in the simplistic ‘free = infinite demand’ model of non-economists. Marketing and pricing is a lot more complex and subtle than that, and publishers – which includes authors self-pubbing, these days – need to understand it in order to get realistic return on their work.
Returns on work? Sure. Nobody else works for free, so why should authors and publishers give away their time and resources? And in terms of pricing, don’t forget that you’ll pay $4.99 for a cup of coffee that a barista takes 30 seconds to make. The barista’s time isn’t the only factor, of course – but it’s still way less than what you put into writing a book. You need to shift thousands of copies to get equivalent returns.
And that won’t happen if your hard-written work is given away for nothing – or even 99 cents.
Copyright © Matthew Wright 2016