Wednesday, July 25, 2012

Going Indie - Day 7: Tweaking Prices for Free Promotions

Grab a Copy of Adorable Dogs: Beagles!
It's about time I woke up and smelled the virtual coffee.

Back in May, Amazon changed their algorithms, making it more difficult for lower-priced e-books to achieve higher rankings. I knew this was affecting my free giveaways, but I wasn’t sure exactly how. For a moment, forget about the fact that three of my works are currently free, and consider the value that I've assigned to them.

The titles are:

At 3:00 PM today, I checked the numbers and was surprised by what I had found. Here are the three same titles, ranked by numbers of giveaways:

1. Adorable Dogs: Beagles (351 copies)
2. The Most Beautiful Flower (138 copies)

At this point, Adorable Dogs: Beagles had two and a half times as many giveaways as The Most Beautiful Flower and three times as many as Alphabet All-Stars: Clever Cards.

So what did the rankings look like? Take a gander at this:

That’s right. Adorable Dogs: Beagles was nearly 500 spots behind Alphabet All-Stars: Clever Cards despite moving three times as many copies. In no way does this reflect reality. Right now, my beagle book is my most successful giveaway. Period.

So what did I do about it? I raised all my prices to $2.99. That seemed to straighten it out immediately:

1. Adorable Dogs: Beagles (711 copies, #284)
2. The Most Beautiful Flower (249 copies, #777)
3. Alphabet All-Stars: Clever Cards (191 copies, #907)

As part of my new process, I'm going to raise all my prices equally to $2.99 (except collections) the night before, and lower them on the final evening of the promotion. No doubt this is what kept My Little Pet Dragon out of the Top 20 last week. It was $1.99, while many others were $2.99 and higher.

If these e-books are going to return to their normal (lower) prices, aren't I going to run into the same problem later? Yes, and most definitely once I get closer to the higher paid rankings.

But what is the goal of a free promotion? To give away as many copies as possible, right? And why do we do that? Because the numbers show that the more copies you give away, the more you sell in the weeks following a free promotion. The e-books that have been promoted always have an uptick in sales, while others that haven't had exposure eventually die down, sometimes to the tune of a couple copies per day.

What is going on behind the scenes? And why does a book magically receive sales after its free promotion? It's a good question, and I don't pretend to have all the answers, but it has something to do with Amazon's recommendation system.

When you give away 1,000 copies of your book, you're creating over a 1,000 new patterns to associate with prospective buyers. You’ll eventually be recommended to them on behalf of Amazon at some point in their shopping experience. This directly leads to sales. The more patterns you have, the more sales and borrows you will get. The more sales you get, the higher your visibility (ranking). And when you start showing up on the higher lists, this new visibility combined with recommendations leads to tons of new sales. Slowly it will fade, but you should be able to get a few solid weeks of sales out of it.

So if you're going to kick off a free promotion, why do it crippled? You need those free giveaways, as many as you can get. The higher your numbers, the longer your tail will be (though I suspect that the maximum effect is about 4-5 weeks before sales return to a normal levels, which still might be higher than what you had before).

Since visibility is the key component to sales, what can you do about it? According to Amazon, you have to raise your prices. But as I've seen before, it may not be in your best interest to do so. If you raise your price too high, no one will buy your product. It has to be a reasonable for the price assigned to it when compared to other products.

Some products are meant to be 99-cent e-books. There's really nothing you can do about it. If you raise the price too high, the customer will turn a cold shoulder on you. If you set it too low, Amazon prevents you from getting too high up their lists.

So you can either:

1. Extend the content and make it worth a higher price (may or not work, but worth a try)
2. Accept the lower rankings and continue to sell as many copies as you can
3. Accept fewer sales and try to make as much money as you can per copy

Personally I’ve found that #3 doesn't work too well, but it depends upon the title. I tried this with My Little Pet Dragon and it wound up tanking in sales at the $2.99 price point.  I’d gotten too greedy; $1.99 was the perfect price for it.

With #2, you also have to consider all the other things that your title is doing for you. Is it your top seller? Is it a gateway to other products?

With My Little Pet Dragon, I found that it had a tendency to push my entire catalog as long as I kept prices reasonably low. Once I raised my prices, my sales dropped and I lost the add-on sales it was triggering. Without decent rankings or cross-promotional sales, it eventually died. Big time.

As for #1, shouldn't we be trying to do this anyways? E-books are living documents. They can continue to evolve and be improved upon. Is it worth investing time in older products rather than putting out a new one? If it's your top selling product, yes. And if there’s a way to offer your entire catalog at $2.99 and above (assuming that customers are willing to pay those prices), why shouldn’t you do it?

Providing value is at the heart of what we do. If it no longer makes sense to create content that sells for less than $2.99, then we need to change our philosophy. Perhaps we should be putting out less content and publishing only larger works. Of course, if these works are meant to be compiled, then who cares how bad the individual components do as long the collection sells?

I don't pretend to have all the answers, and different people will come to different conclusions based on the DNA of their catalog. For me, it makes sense to play the game of adjusting the prices for free runs, and dealing with the lower rankings on a case-by-case basis.

But if there’s one thing that you take away from this, it’s that you should always strive for a higher price point. If you can justify it, do it. If not, when you roll back your prices, customers will acknowledge that they’re getting an exceptional value, and your products will begin selling by the virtual truckload.

Learn and adapt,

Scott Gordon
Children’s Book Author

No comments:

Post a Comment