Are Free eBooks a Good Idea?

Smashwords-free-books-selectionThere is little doubt, based on the statistics, that “free” books are an excellent way for an author to gain exposure and potential fans. Smashwords analysis reveals that “free” books receive 92 times more downloads than those with costs. So if your goal is “fame” then giving away your work is certainly the quickest path to exposure. That is not to say, however, that “free” doesn’t have disadvantages for both the author and the Indie industry as a whole.

Anchors: There is a fair amount of research on consumer behaviors. One tried, tested and true law of influence is that consumers become “anchored” to certain aspects of products and services. One of the strongest anchors is “price.” Once we “see” a price for something, similar products will be valuated based on the first experience. For example, in one experiment a pool table business was studied. In the first experiment pool tables were lined up from lowest price (in the front of the store) to the highest price (in the back of the store). Potential buyers were therefore, first exposed to the lowest price. Using that display system, the majority of purchasers bought the lower priced tables. In the second experiment, the order was reversed so that consumers saw the highest first and the lowest last. The results were interesting. Using that display system the majority of purchasers bought…the middle priced tables.

Psychologists contend that by being anchored to the higher price first, every subsequent table appeared as a “discount.” As opposed to the experience of “rising” prices in the first display. The reason is that as consumers we don’t really “assign” value, but determine value through a comparison of other “like” items. If anchoring also occurs in book sales, then there is the possibility that the consumer will perceive “any” price above “free” as an increase because they have become “anchored” to the idea that eBooks are “free.”

Value: No doubt people like “free.” Most people don’t give any thought to “taking” something, even something they don’t need, if there is no cost. The problem with “free” is that those things have less perceived value. Consider the Rand experiment on health care. When participants were divided among different payment levels – ranging from “free” to 25% copay – those with zero cost visited doctors more often and had more hospital admissions. The co-pay or no co-pay experiment found that the “cost” had little impact of the overall health of the participants and no impact of treatment for serious conditions. Where the “value” was really demonstrated was the service use for minor issues. Participants with “free” health care visited the emergency room 8 times more than pay participants for “headaches.” In other words, when people have to pay for something – they consider the value of the exchange more carefully.

Even a small amount of money, like a dollar, increases the value of something. And the law of endowment says that once we have paid for a thing – our opinion on the value of that thing greatly increases. Which is also why children learn to take care of things when they have to in some way “work” for those things. So your book may in fact have greater “value” to the reader…if they pay .99 cents for it.

Obligation: Humans are social creatures. We are wired to interact and in those interactions we subconsciously keep score. We prefer “balance” in even simple relationships. The law of obligation states that when someone does something for us, we feel a psychological need to balance that obligation by doing something for them. Interestingly, it does not matter the difference in value of “what” was done, so long as we do something. Car dealerships have used the law of obligation for decades. There is a reason they offer you a soda or coffee during the selling process. When you accept, you feel obligated to do something for them…like buy a car. That may sound extreme, but remember the brain does not calculate the value difference between the exchanged items, only that an exchange has occurred.

So one would presume – Hey if I give them a free book then they will feel obligated to write a review or buy the next one. The problem is that in the exchange, the free book doesn’t create an obligation. The author set the price to “free” and the reader paid the asking price. It is the same with Good Reads give aways. A “give away” does not create any obligation because it is a contest. Authors report (non-scientific poll) that perhaps 10 to 30 percent of recipients ultimately write a review.

Scarcity: People are motivated by fear of loss more than by a desire to save. When something is the everyday price and quantities are unlimited, consumers feel no sense of urgency to purchase. Consider how many people get in line at 4 in the morning for a “Black Friday” special or stood in line to get a Nintendo Wii, a Tickle Me Elmo, or a Furvey.. Today, many of those  holiday specials are everyday prices and the “must have” items are no longer “must have.” If “free and unlimited” is your book offering, readers don’t feel the need to immediately “run out and get a copy.”

So how can you generate a lot of book downloads, show the value of your work, receive reviews on free books, and give readers a sense of urgency? Well you can use psychology to your advantage.

* First pick a fair and reasonable price point for your work. You can’t charge $9.99 for a story that has 150 pages and is in the same genre of a renowned author who offers her book at or below that price.

* Offer some of your works for free and others at a price. This gives readers an opportunity to “try” your stuff and pay for other “stuff” if they like it…so you provide a free sample of your total body of work, but also demonstrate that your writing has “value.”

* Obligation is important, so let the reader know that “free” does have a cost. You can offer your book for free to “anyone willing to post a short review.” Readers who accept the offer will feel obligated to pay it back…with the review.

* The only phrase as powerful as the word “free” is “For a Limited Time.” Offer your book for free but announce time limits on it. Like pricing the quantities and time limits need to be reasonable. I often see authors offer 3 free ebooks. That’s a mistake, offer them to anyone and everyone who is willing to read them. And don’t offer it for one day. People are busy. Do a week or better a month and use that time as a count down for reminders…just 5 more days to get your free copy.

Smashwords coupon program is an excellent way to promote “free” books for a limited time. It allows you to display the “regular” price, offer the book for “free with coupon” and create an “expiration date” for the offer.

Smashwords Coupon Manager

There are thousands of books on the market. And authors are competing with the marketing of every other author. Free may be the hottest thing in books, but it doesn’t mean you can’t join the party with a better strategic plan. Using these tips may not shoot you to the best-seller list, but it is a far better approach to marketing than taking a “build it and they will come” approach.

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