Saturday, February 16, 2013

On the Pride of Pricing

The Bible says that Pride goes before a fall. Even the ancient Greek tragedies usually revolved around hubris or inordinate pride. Unfortunately, a lot of writers today, especially those self-publishing, are letting the Pride of Pricing put them out of business.

I remember talking to a woman awhile back who asked about my self publishing efforts. I told her a bit about the novels and books I had up on Kindle. When I told her that I set my price at 99 cents, she very proudly told me that she would never set her price that low. She went on about how many hours she spent writing it and editing. Then she said something like, "You demean your writing offering it for that price. I have my pride." Unfortunately, a few weeks later when I was reporting out a couple hundred sales that week, she didn't have any. She had her pride. What she didn't have were readers.

Too many writers come from an hourly wage mentality. This is natural. Most people work an hourly-wage job. We measure our success by how much per hour we make. Coming from education where you get paid the same if you work eight hours or you work 18 hours, I'm maybe not quite as tied to the hourly wage perspective. I'm more of a bottom line person. I don't care if I make $5.00 an hour or $50.00 if I have X amount of money at the end of the month. After all, I would be writing either way.

But the real danger of hourly-wage thinking is that it undermines one's business. You are no longer working for an employer. The freelance writer is selling a product. You have to sell the product for what the customer is willing to pay. If you are a well-known author with a huge following, you can charge the same for an ebook as for a paperback and get it. However, if you are an unknown quantity, you have to reduce the uncertainty of your reader by setting your price lower than those "name brand" people.

Think about it this way. I go to the store. I have acid reflux. So, on the shelf is Prilosec and the Store brand generic. The store brand is half what the name brand is. Which am I going to buy? They both have the same active ingredient. Well, that's a nobrainer. I'm going to get the generic. Now, some people simply are not going to believe the generic is as good. Or their pride makes them assume that costlier is better, but at the end of the day, I can be pretty sure at that store, the store brand will sell more units. The name brand and the store brand will produce similar profits, but the store brand will have higher sales.

Now, the store could get all prideful and say, "We have the same active ingredient. We are just as good as the name brand. After all, we have our pride," and charge the same as Prilosec. Now, who would be making the sales? Well, given the choice between the name brand and a no-name brand at the same price, most of us will go with the name brand, if for no other reason, than familiarity.

I know, it can offend our "artistic" sensitivities to compare our baby, our great work of literature, that literary offspring we labored over for years to a heart burn remedy, but sales is sales and customers are customers. Money is one aspect of making a buying decision. If you let pride in yourself and your work make you stupid about how consumers make decisions, then you will be like my friend. Full or pride, but empty of wallet.

[Pricing is one aspect of self publishing I discuss in Point of Sale: Secrets of Supercharging your Sales on Kindle. And, of course, it's just 99 cents.]