Getting E-Book Readers to Dumpster-Dive (It’s a Good Thing)

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shutterstock_41708071“Eww! Ugh, God!”

“Yuck!”

No, these are not the two latest reviews of my novels. Rather, this is an exchange between Gil (Steve Martin) and Karen (Mary Steenburgen) Buckman from the 1989 movie Parenthood. The pair is standing in the alley of a Chuck E. Cheese-type restaurant, looking through the garbage for their son’s retainer. In the background are yowling alley cats; in the distance you can hear the rise and fall of sirens. Both of them are up to their elbows in slimy napkins and rotting pizza.

“Let’s just go!” says Gil.

“Gil they’re two hundred dollars!” says Karen. “If you dropped two hundred dollars in here, you’d look, right?”

Gil sighs and mumbles, “Right.” And he keeps on digging.

Before I go on, let me tell you a bit about myself. I am the bestselling author of two independently published e-books, The Frog Prince and Sleeping Beauty. Over the past two years, I’ve become a “reluctant expert” of sorts on the business of independent (“indie”) publishing, especially as it regards e-book pricing and marketing, the changing relationship between readers and authors, and consumer purchasing psychology. Since these topics normally elicit a great, big yawn from most people, I try to present them in interesting, humorous, and colorful ways.

Back to the Dumpster diving already in progress…

Now, I’m not suggesting that your novel is analogous to rotting pizza. But what is almost certainly true (shocker!) is that not everyone will like your e-book. At that point, one of three things is likely to happen:

  1. They will do nothing, chalking it up to “you win some, you lose some.”
  2. They will return your e-book for a refund.
  3. They will find your review page and slap a one or two-star review on it, with varying levels of vitriol (my favorite negative review is titled “I HATE THIS BOOK!!!!!!!!!”)

Of course, you might prefer that they do #1 or #2, slipping quietly into the night with or without their refund, the business equivalent of “pulling their hands out of the garbage and going home.”  But is there a way to actually encourage readers to do #1 or #2?

Actually, there is: strategic pricing.

Pricing of e-books is, in my opinion, one of the most understudied aspects of indie-publishing. Yes, we hear all about the e-book pricing wars, and price-fixing schemes among the Big Six, Apple, and Amazon. And no doubt you’ve had to listen to someone talk your ear off (especially if you’re an author), complaining about the high price of traditionally-published e-books. Lost in that white noise is the pricing war taking place over the pricing of indie-published books, particularly those novels lurking in the $0.99-$1.99 range.

While there are plenty of soldiers in the trenches on both sides of the “99 cent pricing = more sales” debate, there are few discussions on how or if pricing affects reader reviews. And what I’ve found—both by accident and by experimenting—is that it does. Why?

Well, before we get into that, let’s take a look at what else you can buy for 99 cents. A quick internet search turned up: 1) a Snickers candy bar; 2) a travel-sized tube of mint Brush Buddies toothpaste; 2) Gotye’s hit “Somebody That I Used To Know” on i-Tunes. (That’s right, someone can literally snap up your 99 cent book “for a song.” Go crazy, marketing people—and you’re welcome.)

Let’s say you price your literary masterpiece at 99 cents. A reader settles in to read a product you’ve bled, wept, and sweat over for months or even years. Pretend that they finish your book…and they hate it.

Now, Amazon return policy gives customers seven days to return an e-book, but I can tell you from personal experience that it’s not intuitive, and it’s not easy. Once you figure out how to actually do it, you have to slog through a bunch of fields, filling out the whys and wherefores of your return.

In other words: It’s a pain.

For many readers, 99 cents just isn’t worth “digging in the garbage” for. Amazon makes it a whole lot easier to just mosey on over to your review page and leave a big, fat, one-star review for posterity.

I often argue that indie-authors should never price their books (with the exception of short-term promotions) lower than $4.99. “But,” I can hear you saying, “$4.99 is only about five times more than 99 cents! Logically, of course, you’d be right, but logic is irrelevant when it comes to consumer psychology.

We left Gil and Karen at the beginning of this post haplessly digging in the garbage for their son’s two hundred dollar retainer. Most of us would probably dig in the trash for two hundred dollars. But what about one dollar? What about five dollars?

A phenomenon called “the denomination effect” suggests that you’d probably at least make an attempt to retrieve a five-spot, but you’d leave a dollar bill languishing in the trash. According to this theory, consumers view larger bills as “real money,” while single dollar bills are “throwaway cash.” Similarly, readers are more likely to view an e-book priced at $4.99 as “real money” while a 99 cent novel is more likely to be viewed as a “throwaway.”

I experienced this concept firsthand with my romantic comedy The Frog Prince, which became an Amazon bestseller in December 2010 at $5.99. In June 2011, I did a pricing experiment, dropping the price to 99 cents for two weeks. Before that time, my “return rate” for The Frog Prince was a respectable two percent, and “negative reviews” (one and two-star) were uncommon. When I dropped the price to 99 cents, the return rate dropped to almost zero, while the number of negative reviews went up.

What was happening? Well, at 99 cents, readers weren’t as heavily “invested” in my novel, and were less likely to go through the hassle of returning it. This is not to say that they didn’t voice their displeasure; however, rather than a passive return, they actively sought out my review page and left a negative review.

$4.99, on the other hand, is the equivalent of a five-dollar bill—something worth “digging in the trash” for. And while as an author you hope that most readers will enjoy your novel, the fact is that there are some who won’t. This is the point at which you need to take off your “author hat” and put on your “business cap.”

In an ideal world, a businessperson would want customer feedback—good or bad—in order to improve a product for future consumers. But the Amazon review page is the publishing equivalent of

Consumer Report, and those stars matter. So, as a businessperson, your job is to keep those negative reviews off your page. Price your e-book higher—$4.99 or even $5.99—and encourage dissatisfied readers to “dig in the trash” for their refund, steering them clear of your review page, and resulting in a higher review average for new readers to see.

Let’s revisit the opening conversation, slightly altered:

“Eww! Ugh, God!”

“Yuck!”

“Let’s just go!” says Gil.

“Gil, e-books are five dollars!” says Karen. “If you dropped five dollars in here, you’d look, right?”

Gil sighs and mumbles, “Right.” And he keeps on digging.


 

Money falling on tablet image via Shutterstock.
Screaming man image via Shutterstock.
Hand holding money image via Shutterstock.
Person in Dumpster image via Shutterstock. 

Elle Lothlorien

About Elle Lothlorien

A “military brat,” Elle Lothlorien was born in Germany and spent her childhood in such far-flung places as Puerto Rico, Charleston, S.C., Italy, and Washington D.C. Sadly, the only language she ever became semi-fluent in is English. Elle’s first two self-published romantic comedies, THE FROG PRINCE and SLEEPING BEAUTY went on to become Amazon bestsellers. She is considered a “reluctant expert” on the business of electronic, independent publishing (also called “indie-publishing”), and frequently writes and speaks on the topic. Elle lives in Denver, Colorado. She keeps two dachshunds around the house to provide comic relief. Find out more about her and her books by going to her website, or by following her on Facebook and Twitter.

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14 thoughts on “Getting E-Book Readers to Dumpster-Dive (It’s a Good Thing)

  1. Interesting – another example that everyone’s experience is different and there is no right answer, because my returns skyrocketed when price dropped to .99. I had virtually no returns when at $2.99 and up, as in less than .5%. At .99, return rates hover around 2-3%. My $4.99 have much lower percentages, but that’s not fair comparison because they’re later books in the series.

    As for reviews, many start out saying, “Great find for 99 cents!” I haven’t seen an increase in negative reviews at all. On the other hand, when they’re priced higher, there have been a couple who were ticked they spent the money on it.

    So, every book and reader-base is different. Your experience is something to test, but results will vary.

    • Thanks for the comment, Kristie. Personal anecdotes are not the same thing as a scientific sample-size of evidence (very hard to come by to say the least), this is very true. I’ve explored this topic before and received responses ranging from “Like Elle, I’ve found that my worst reviews or comments are when I’ve lowered the price to 99 cents. The higher priced book is getting the most fantastic, breath-taking reviews” to “I tried this, and it didn’t change my returns or my reviews.” Of course, for indie-pubbed authors, there is another good business reason to consider pricing higher: Imputed value. I wrote about this concept in my guest blog for JA Konrath on 12/6/11: “Why Your Novel is a Tall, 6-Pump Vanilla, Breve Latte Grande, Extra Hot, Heavy Whipping Cream, Extra Dry Cappuccino (Or It Should Be)” at http://jakonrath.blogspot.com/2011_12_06_archive.html.

  2. Thanks for the good info, Elle. I’m just diving into this, so very pertinent.

    Another point about a higher price is that if you do go KDP Select and offer a free day or two, the value is greater (say $4.99, but now free for a day). Not much difference from $.99 to free.

    • Thanks for your comment, Rich. “Not much difference from $.99 to free.” I disagree. The people who download free e-books 1) are not necessarily your target audience; 2) aren’t necessarily ever going to read the book; 3) are definitely not invested–AT ALL–and may never leave a review (good or bad). I gave away 46,000 books on Valentine’s Day and received a very small number of reviews in the month that followed in proportion to the number given away. Things that make you go, “Hmmm…..”

  3. I’m in the middle of my first novel, though not my first book. Writing a novel is such heavy lifting that I believe an author deserves a reward just for finishing it; assuming they crafted it into something worth reading.

    I agree that 99¢ is too little. However, for an unknown author, I’m experimenting with a model I hope will be rewarding for writer and reader. I’m publishing it free on-line as it’s being written. Once it’s finished, newcomers will pay. I’ll remember your advise Elle when that time comes.

    Thanks

    • Thank you for your remarks. I agree that the 99 cent pricing of indie-pubbed books is creating a real “pricing gulf” between indie-pubbed authors and traditionally-pubbed. Unless your book is in the Kindle Top 100, you have very little chance of making up with units sold the money you’ve lost with low pricing.

      Experimenting is key! Like I said in a previous response, there is no “one size fits all,” just indie-pubs sharing their experiences, and each of us deciding what works best for us. Good luck to you!

  4. Having been in marketing for over 20 years, I can tell you that best pricing practices changes from one market to the next (say, YA vs. erotica) and will change (sometimes quickly) over time.

    That said, I think it is a shame so many authors choose the .99 route. It devalues their work as well as bringing down the market overall. I have only one book at .99 and that is because it is a novella. It has the highest return rate of all my books (I’m guessing because it can be easily read in under 7 days, but that’s just a guess.) When I have run promotions lowering my other books to .99, I never make up for the lost profit in gained volume. After the promotion, sales at the higher price continue at a good rate.

    I’d urge authors to look at the sales in their categories and see what’s selling well. They’ll probably find pricing all over the place. A really good book will sell, even if the price is higher. It may take a while for the audience to find it (hence, my occasional price promotions), but once it is discovered, sales will be steady.

    • Thank you Terry. I agree that the “best pricing practices” change–CONSTANTLY. And I should point out that my argument for higher pricing to create value and to reduce negative reviews is more applicable to the new indie-author with one or two novels. Once you have, say, 74 mostly 4-star or 5 star reviews under your belt (as my novel FROG PRINCE does), you don’t really need to ” create” value; at that point your novel HAS value customers can see for themselves. (Segue to relate a story about an amusing, recent review of one of my novels–can’t remember which one–in which the reader wrote that she didn’t like my novel, and suggested that it must be “the author’s friends and family posting reviews.” I don’t know if YOU have 70+ friends and family chomping at the bit to write glowing reviews, but I most definitely do not!)

      I agree that you’ll almost never make up “lost profit in gained volume.” There are only 100 slots on the coveted Kindle Top 100, and the odds of your novel being on it out of 750,000 books is very small (no matter how amazing).

      I have had a really good experience with huge sales after free promos, but I know it’s not true for all authors. You can read about my Valentine’s Promo here, after which I sold about 4,200 copies of my 2 rom-coms in two weeks, which translated into about $10,000 in those two weeks. http://blog.wavecloud.com/why-facebook-has-cooties-your-fans-should-shampoo-and-you-are-a-pimp/

      Appreciate your response, thanks so much for sharing such good advice!

  5. I loved the article. I fully agree. I and author friends of mine have found when we participate in the Kindle Prime free for 7 days option – offering our ebooks free for 7 days – we get a lot of one and two star reviews that don’t make sesne, where they say they didn’t even read the book but still they review it. They are upset becasue it’s a historical or becasue the heat level is too high or too mild – since it’s free they think they should read it even though it’s a genre or heat level they know they won’t like – then they are mad that it’s not the type of genre they like to read.

  6. I have experienced the same data with my titles, but my explanation of my identical anecdotal data is completely different.

    I don’t think this is about people complaining more about 99 cent titles. I think it is that people are more willing to spend 99 cents on books that are out of their comfort zones. That means if you price your book at 99 cents, you’re more likely to get people reading it who may not like it. At $4.99, people are way more hesitant to pull the trigger, and so they’ll do more research upfront. 99 cents is an impulse buy–some regret it, some don’t.

    But for every person I’ve seen who gives me the \ew, yuck!\ response, after having purchased my book at 99 cents, someone else says, \I never would have read this book, but after I bought it, I went and bought everything this author has every produced.\

    I think negative reviews are a good sign: they’re a sign that your product is strong enough that it is reaching new readers who might otherwise not have picked up your book. If the only people who buy your book are people who think you’re a safe bet, you won’t grow your readership as quickly.

    I also disagree with the premise that negative reviews are something to be avoided. I think that negative reviews help readers realize that the reviews on your book are honest. Negative reviews help sell books. Now, if all you have is negative reviews, that’s not a good thing. But a few don’t hurt sales, and there’s some evidence that they might help.

    • I have to admit, this is the way I became a Courtney Milan fan! I’d heard your ebook “Unlocked” was $0.99 and was rather popular. I bought it, LOVED IT, went back and bought the rest of the series…

      …and then I bullied all my friends to buy the $0.99 book, too. :-)

      If the book had have been $4.99, I would not have purchased on a whim…

      BTW, thank you! for several great reads!

    • I do agree with you that negative reviews are NOT a bad thing in and of themselves. If you have nothing but 5-star reviews, it can appear suspect! Negative reviews provide balance and legitimacy, and may illustrate the flaws that you as an author didn’t realize were even there. However, this piece is written as a “business of e-publishing” piece. What I would advise as an author and what I often advise as a businessperson are very often two completely different things. As an author I say: let the bad reviews stay. As a businessperson I say: What can I do to make this customer happier? I really appreciate your comments, and I thank you for reading!

  7. What a great topic! In my experience, I’ve found the 99c price point to be a double-edged sword. I gain more exposure (and hopefully, readers) when I use it but also receive more criticism. I think if you can take the heat, the criticism is worth it and in some cases the very thing one reader hates can entice another reader to buy the book.

    For example, I have a one star review on my print book because the reviewer hated that there was “too much sex”. This is despite my -WARNING: Heavy orgasms ahead- disclaimer that I include on every book! My sales have only gone up since the negative rating and I’m sure my target audience, erotic romance readers, will not be put off by a “this is too sexy” review.

    So, I wouldn’t let the fear of bad reviews stop me from pricing below a certain point. Used strategically the 99c price point can be an amazing sales tool.

    Although, I think it’s one best used sparingly.

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