The issue, as he explains, is that every product—book, or otherwise—generally follows the same path of market segmentation: the early adopters buy first, then the general customers, then the ‘laggards.’ The difficulty is in balancing your pricing so that you don’t lose too many potential customers at every stage.
The problem, Celeb Mason asserts, is that the publishing industry doesn’t really have too much data on when and why people ‘leave.’ Netflix does. They released data last year on some of their original shows which measured the episode at which people who got that far were pretty much hooked on the whole thing. The publishing industry lacks this data.
So, let’s say you start with 1,000 readers who all want to read the book. And you price it at hardback paper levels. How many of those 1000 will wait? What percentage of these potential buyers will go on to the next stage, the trade paperback price level? And what percentage of those will wait around for the mass market paperback?
Nobody knows. And there isn’t really a way to measure it, to, as the article calls it, conduct an ‘exit interview.’ If I have a book oh my Amazon wish list for a year, and then I remove it, why did I do that? It could be that they priced me out of it. Maybe, while I was waiting for the price to drop, it came in at the library. Maybe I found another book to read on that topic. Maybe I simply lost interest. Or maybe—and this is the dangerous part—I spent the money not on a different book, but on a different media offering altogether. Maybe I bought a movie, or a game.
That’s bad! Convince yourself that I am buying some other book instead of your book, and you can still make up that lost sale. That’s what happened in the old days. I’d go into a store which sold only books, and I would make the choice to buy this book, or some other one.
But we don’t live in that world anymore. If I am buying on a tablet, you aren’t just competing with the other books. You’re competing with music, apps, games—heck, I can even order food, all from the one device. I can decide not to buy a book, and spend the money on pizza without even getting up from the couch.
So, where does that leave publishers? It leaves them facing an uncomfortable question. Do the laggards they priced out of the game at the hardback price point still have any money left to buy the book, at this point? Can they make up enough sales in that tier to offset the ones who dropped out early?
Photo credit: Here.