Wednesday, June 3, 2015
What a Difference a Dollar Makes
Forty years ago, when I was a small-town newspaper reporter, people would call the paper all the time asking for information or trying to get us interested in their problems for a news story. There was one call that I remember to this day, because it made such an impression on me.
It was from a man who lived out in the country, and whose neighbors (he said) were illegally using their property in a way that was causing spillover damage and loss of property value to his land. That’s one of those he-said-she-said things that we couldn’t readily get to the bottom of, so I suggested, because he stood to lose thousands of dollars from his neighbor’s actions, that he should report them to the county planning department, and if they found a major violation, we would do a story.
His answer blew me away. “But the planning department is in Salinas,” he said. “That’s a toll call.”
What’s It Worth to You?
So to recapitulate: We have someone who claims to be in danger of losing thousands of dollars due to a neighbor’s law-breaking, and he won’t spend a quarter on a toll call to the government department that could enforce the law in his favor. Go figure.
The point that drove home — one that’s been repeated many times since — is that people are absolutely weird about what they think something’s worth, and it’s hard to figure for that irrationality. In the internet era, the problem is getting worse, particularly in the information/publication area, where people often resist paying for information or content because they’re used to getting it free.
As a self-published author, this phenomenon is of more than usual interest to me. When I published my first mystery novel, TheMcHenry Inheritance, on Amazon, I priced it at $2.99 because that was the lowest price at which an author could qualify for the 70 percent royalty. Last year, when I put out the second mystery in my series, Wash Her Guilt Away, I kept the price at the same level.
The Caffe Latte Pricing Theory
Talking to friends, I jokingly referred to it as the Caffe Latte Pricing Theory of book publishing: You had your book cost less than a latte on the theory that it could be an impulse purchase for someone who had never heard of you.
That seemed to work fairly well. The books haven’t been bestsellers, but they have sold steadily over time and gotten largely positive reviews. They appear to be building a modest following with growth potential. So with the third book in the series, Not Death, But Love, coming out last month, I considered a price increase. Logically, there was no reason not to bump the price up by a dollar, but I kept thinking about that guy who wouldn’t make a toll call when he had thousands of dollars on the line.
In the end, I decided to go for it and price the book at $3.99. It’s a reasonable amount of money for a book that provides five or six hours of pleasure, and with Amazon’s loan program cutting into author royalties, it made business sense. The book’s been out for a week, and its first-week sales have been double those of the last book. So far, so good, and all I did was go from the price of a small to a medium latte.