What good are ebook “daily deals” & other deep discounts?

Wikert

I admit it. I check Amazon’s Kindle Daily Deal every day. Every single day. Why? As a publisher I’m curious to see what they’re offering and as a consumer I don’t want to miss out on a great deal. (In the spirit of full disclosure, at O’Reilly Media we offer an ebook or video deal-of-the-day too. In fact, our program was in place long before Amazon started theirs. Everything I’m about to say below pertains not only to Amazon’s program but O’Reilly’s and everyone else’s as well.)

As a publisher I worry about the mindset we’re reinforcing that content needs to be deeply discounted to garner customer attention. Amazon started this thinking by pricing so many Kindle edtions at $9.99 even when they took a loss on each sale. And now the Kindle Daily Deals are often priced at $1.99-2.99 or less, so the effective discounts off digital list price are 80-90% or higher.

You might ask, “what’s the harm?”. After all, brick-and-mortar retailers of all shapes and sizes have offered deep discounts as a way of getting the customer into the store. That’s why a grocery store sells a gallon of milk at a loss and hopes that you’ll pick up several other profitable items between the dairy section and the checkout counter. And that’s the problem.

When I go to the grocery store I always wind up buying something more than what I went in for but that never happens when I buy online. I find I’m willing to let more items catch my eye in a physical store than an online store, so impulse buys are the norm for me in a physical store. When I’m online I’m much more of a destination shopper. I have something in mind. If I find it at the right price I buy it and nothing else.

So I’ve now bought 3 or 4 of the Kindle Daily Deal titles but they were all bought alone as single-title transactions. Each day when I check the Daily Deal I’m greeted by plenty of other products and offers on amazon.com but I don’t bother with any of them.

You might still say the deal is good for both Amazon and that day’s publisher/author. I’m not so sure. One way of measuring that would be monitoring how long the discounted title continues to sell through at higher levels after the discount ends. I don’t have any statistics to prove this (since Amazon doesn’t share the data) but just watching Amazon’s Kindle bestseller list tells me the daily deal titles typically stick around the top 5 or so for another day or two and then pretty much disappear from the top 25-50. Maybe they’re still selling at a higher rate than they did pre-promo but if that’s the case you’d think Amazon would be playing that up with publishers and authors. I haven’t heard a word from them about it.

Meanwhile, the Amazon program is causing me to change my behavior, but not in a good way. I used to take a closer look at the Amazon home page for other campaigns but now I pretty much check the Daily Deal and head out. To make matters worse, one of the recent Daily Deal titles was one I paid full price for several months ago. That one left a bad taste in my mouth all day.

I should point out that I’m a fan of discounts and promotional campaigns…as long as they lead to something more meaningful than a one-and-done transaction. So why not make these deals part of some membership program? There are a lot of directions that could head in. For example, if I buy five books at regular price I get the sixth one of my choice for only 99 cents. Or what if the Amazon Daily Deal was always priced at $2.99 to $4.99 but if I’m a Prime member I get it for 99 cents? In that model the general public still gets a deal (albeit not as deep a discount as today) but customers are encouraged to join a membership program which should lead to even more purchases down the road.

That’s all I’m asking for. Let’s get away from these one-product deep discount campaigns and start thinking about how to build a much more extensive relationship with our customers.

P.S. — Again, since O’Reilly offers an ebook deal-of-the-day program I’m going to see if I can grab our head of online, Allen Noren, to join me in a TOC podcast where we can talk further about our results, what works, what doesn’t, and how we might want to think about tailoring it for the future. Stay tuned for more details on that podcast interview.

Via Joe Wikert’s Publishing 2020 Blog

7 Comments on What good are ebook “daily deals” & other deep discounts?

  1. In my mind, the benefit is in promoting work. I have many times sought other books by an author after reading a free ebook version (usually the first book by an author or first in a series). Steve Berry and David Liss are just two example that pop into my head where I then went out and got later books because I liked the one I read for free. Maybe I’m the exception …

  2. As a reader I find this kind of article, by a publisher, to be basically just a self serving piece of insider analysis.

    What value a publisher’s assessment of his personal buying experience from Amazon ? Let’s face it, it isn’t in any way similar to the experience of an every day reader. So as such a reader I find the analysis and conclusions from that experience of little value in the grander scheme of things except to confirm my views on how industry insiders think.

    “Let’s get away from these one-product deep discount campaigns”

    This strikes me as a bit of an odd call to his fellow publishers, who are now no longer the single minded edifice that they used to be. That ship has sailed. High quality self publishers are flying high and selling well at a reasonable price. Amazon is keeping the pressure up on low prices.

    And as a reader the article is clearly an insider, profit driven, call – aimed at keeping high prices and low value for the reader.

  3. You raise some good points/questions/possible solutions here, all of which suggest to me that the dialogue re: deep discounting has just begun. And, as a writer, I would add this: does the proliferation of cheap and free e-books have a way of diminishing the value of a single book? Here are my thoughts — ‘What’s Your Writing Worth?’ http://amwriting.org/archives/5911

  4. J Sweet hit it on the head – it’s about exposure. Tracking sales of that specific book a week after it was discounted is meaningless. If you want a useful metric, look at what happened to *related* books (other books by the same author and books that come up in the recommendation engine “If you liked [Discounted Book] you may also like [Regular Price Book”) over the next month or two, minimum (keeping in mind that people may not get around to reading their one-day-discount purchase that same day).

    Posts like this reinforce my belief that the biggest threat to the publishing industry isn’t file-sharing, or discounting, or giant retailers, or whatever excuse is currently in vogue – the biggest threat to the industry is that so many people, from publishers and editors to agents and writers are so aggressively ignorant about *what people who buy books want and how they behave*. The survivors are going to be the ones who can get past the mindset that publishing is only about how many units you can move to Ingram and Baker & Taylor and then trying to find a landfill big enough to hold the 50% of the print run that got returned.

  5. Unlike Joe, I *do* impulse buy at Amazon, but only books priced less than $5. I have gotten very good at skimming over prices that start with numbers bigger than that- I don’t register the covers or the authors’ names, just the price. My eyes stop on the lower prices and then I look at the details. I’ve found some terrific reads this way (and yes, a few turkeys but at least I only paid a few dollars for them). I check the KDD daily but have yet to buy because the ones I like I have already read from the library due to their high original prices.

  6. Kindle Daily Deal does not harm anyone.

    For readers it just means 365 opportunities a year to check in at the ebookstore (=get in contact with a book). KDD is in my opinion much more appealing to occasional book buyers. A good effect is that returning to the ebookstore has a chance to become a habit.

    For publishers it absolutely doesn’t mean the devaluation of the title featured at KDD. What readers will remember is not a price, but *how much they saved*. Having in mind that there are 900k books at Kindle Store and only 365 of them can be offered via KDD, being there is more of an exclusivity.

    Opposite to deals on electronics, where the purchase is done occasionally, the deals with $1-$3 price tags become instant purchases and they are bought as such.

    I’m keeping an archive of Kindle Daily Deals http://ebookfriendly.com/kindeals/ (for the purpose of having a working RSS and e-mail feed) and in the near future will publish stats and analysis on that.

  7. Without “discounts” or “sales” on ebooks, I wouldn’t buy them; but then, I didn’t buy the printed versions either. I spent most of my book money in the USED book store, or got books from the library. So publishers are now actually getting my money, even if it’s only a few pennies. Plus, as others have point out, I’ve found several new authors and actually purchased more of the ebooks — and not all at the discounted prices. I think publishers need to change their attitudes.

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