When lowering your prices actually works!
Robert ‘put your prices up’ Craven reveals why lowering prices to drive sales and increase exposure can be worthwhile after all
I have developed a reputation, I am told, as Mr. Robert ‘put your prices up’ Craven. I cannot deny that I endlessly encourage audiences to put up prices and sell on the added value that they offer. One of my favourite lines is “competing on price is a mug’s game”. So, imagine my horror to see that a recent book of mine is available on Kindle at £1.29 (including delivery)!
Bright Marketing for Small Business has a retail price of £12.99 (excluding delivery) for the standard paperback edition. At that price is has sold very nicely. A big flourish at the start and then consistent but not remarkable sales. And if I was true to my “put your prices up” tagline then really the price should have been nearer £25. That way I would make a few less sales but the profit would be greater.
So, what of Kindle? Well, the price of manufacture and distribution is a tad more than zero but what people are buying isn’t simply an electronic version of the paper version. They are also buying access to my IP (intellectual property). What they get is “a book that will change how you do business, now and in the future” as one reviewer has written.
On its Kindle launch the book was available at £7.71 and sold a steady handful per day. I ranked around the 120/130 mark for marketing and sales books. Nothing to be ashamed of but not exactly world-class or cutting edge.
Lower prices and increased sales
And then the book was entered into a price promotion. The price was dropped to £1.29. You could buy all that hard work, wisdom, experience, worksheets, thought pieces and exercises for just £1.29!
However, I don’t feel totally miffed. Quite miffed, but not totally!
The stupid/insulting/ridiculous/bonkers/mad/crazy/lunatic price has made a number of things happen. First and foremost, the book has bounded from number 127 to number 17 to number one in all marketing and sales books in the space of 12 hours. I repeat, number one! In other words, when people go to the Kindle shop and look for business books they see mine on the front page (= more sales). When looking for sales and marketing books on Kindle they see mine on the front page (= more sales).
I reckon that sales have increased at least tenfold, (price has reduced less). So if you assume that my royalty is say 25% then I am in credit financially. But the real benefit is the exposure to so many more people (even if they are cheapskates) and, even more importantly, my ideas and ‘ologies’ are getting exposed, shared and discussed – by people who may never have come across the work without its ridiculous price tag.
Finding new customers
So, maybe I need to eat my hat about always putting your prices up. Already we have seen new enquiries about our other services as a direct result of the exposure. Not only that, but we are also seeing increased sales of my print books.
The £1.29 price tag has exposed me and the book to a brand new audience. As a result, the up-sales and cross-sales continue. And I have lost nothing in the process. Meanwhile, having the accolade of being a number one bestseller reassures future buyers that they should hit the ‘buy’ button. What we achieve now is a positive, self-reinforcing virtuous cycle. High sales create the bestseller tag which creates high sales and on it goes.
So, what can I say? In this instance the low price has paid dividends. And as I write I am aware that I have just been asked to deliver a highly-paid keynote presentation (based on the book) and I have also been asked to apply the book’s principles in another business. Time to go and eat my hat!
P.S. The £1.29 price tag is including the VAT (Kindle sales attract VAT) so the real price is £1.07… What else can you get for a pound these days?
Robert Craven is an entrepreneur, businessman and author who has run Mastermind Groups and action-centred learning with Warwick Business School, Business Growth Programme and London’s Accelerated Growth Programme among others. His latest book, Grow Your Service Firm, is available now . He is managing director of The Directors’ Centre.