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This theory is called "penetration pricing," and most research shows that it works very rarely, and only in specific circumstance. It's intuitive, and mostly w

This theory is called "penetration pricing," and most research shows that it works very rarely, and only in specific circumstance. It's intuitive, and mostly wrong. Which is why I recommended the book Pricing with Confidence to Sascha when he made that same argument in the comment thread of the OP. And why I blogged about this book several times: http://unicornfree.com/2011/will-low-prices-sell-more/ http://unicornfree.com/2011/will-low-prices-sell-more/ http://unicornfree.com/2011/when-customers-bitch-about-your-price-biz-book-friday/ http://unicornfree.com/2011/when-customers-bitch-about-your-... http://unicornfree.com/2011/biz-book-friday-cost-plus-pricing-price-obsession/ http://unicornfree.com/2011/biz-book-friday-cost-plus-pricin... It's a fantastic book. Everybody who cares about their business should read it.

stock_toaster 15y ago
I have seen several fiction writers starting to do something like this on amazon (for books in a series): * sell the first book in a series at a low or free price * sell additional books in the series at a higher price I think the assumption is that the initial sale "hooks" the user into the story, as well as giving the reader a taste of the writing style, and the thinking is this leads to additional sales in the follow-on books that would likely have never 'converted' to that first sale. Would this be a case where "penetration pricing" of the first part of a many-part story would work? One of the special circumstances? Thoughts?
- ahoyhere 15y ago
  The sale process & rationale for education and tools is very different from fiction. With a few exceptions, it's much easier & powerful to sell on value (learn this, do this, get better at this, fix this, eliminate this and you will earn more/spend less/get a better job/waste less time) than emotion (find out what happens next!). That's why you won't terribly mind paying $100 for a compiler textbook, but definitely wouldn't pay $100 for the novel from your favorite author. (Unless possibly it was signed, or charity.) Sascha's ebook isn't a story, it's a standalone tutorial. There's no burning need to find out What Happens Next. Meanwhile, when you sell software or educational ebooks cheaply, what you do is attract cheap customers. And pretty much the universal experience of folks selling things to cheap customers is that the cheap customers are more annoying, more demanding, less likely to actually make use of what you sell them (and ergo less likely to buy again), plus price sensitive.
  - zaidf 15y ago
    when you sell software or educational ebooks cheaply Sorry, but I know far too many people who enter new niches with an inexpensive ebook and then once they have built a solid list of customers interested in the niche, they go on to sell products worth thousands of dollars per copy.

stock_toaster 15y ago

I have seen several fiction writers starting to do something like this on amazon (for books in a series): * sell the first book in a series at a low or free price * sell additional books in the series at a higher price I think the assumption is that the initial sale "hooks" the user into the story, as well as giving the reader a taste of the writing style, and the thinking is this leads to additional sales in the follow-on books that would likely have never 'converted' to that first sale. Would this be a case where "penetration pricing" of the first part of a many-part story would work? One of the special circumstances? Thoughts?

ahoyhere 15y ago
The sale process & rationale for education and tools is very different from fiction. With a few exceptions, it's much easier & powerful to sell on value (learn this, do this, get better at this, fix this, eliminate this and you will earn more/spend less/get a better job/waste less time) than emotion (find out what happens next!). That's why you won't terribly mind paying $100 for a compiler textbook, but definitely wouldn't pay $100 for the novel from your favorite author. (Unless possibly it was signed, or charity.) Sascha's ebook isn't a story, it's a standalone tutorial. There's no burning need to find out What Happens Next. Meanwhile, when you sell software or educational ebooks cheaply, what you do is attract cheap customers. And pretty much the universal experience of folks selling things to cheap customers is that the cheap customers are more annoying, more demanding, less likely to actually make use of what you sell them (and ergo less likely to buy again), plus price sensitive.
- zaidf 15y ago
  when you sell software or educational ebooks cheaply Sorry, but I know far too many people who enter new niches with an inexpensive ebook and then once they have built a solid list of customers interested in the niche, they go on to sell products worth thousands of dollars per copy.