If you’re going to test a niche book, what you really need to know is whether the buyers will buy enough copies and pay enough per copy to make the time, energy, and money needed to produce and market the book worthwhile.
So you need to set a price to test. Better, three prices in the first test, and maybe two prices (or three) in the second test.
There’s another important consideration too. If this niche book is simply part of a much larger empire of products and services you are offering to the niche, then it needn’t carry all the profit freight alone. But if it’s simply an important positioning book, will it be seen and bought by enough people (best, leaders in the field) to get them to buy the other offerings too?
A quick example. If you’re a professional speaker and you earn, say, $2500 a pop, then a $25 book is 1/25th your speaking fee, and if you give 15 books away to get the booking and you sell 100 books to the listeners, you are way ahead of the game. And if you speak 15-20 times a year and sell books each time (or they are bought and provided to the listeners by the sponsor), then the book is a nugget of gold—and the pre-test is probably more a matter of testing the title and you as the author than how many mail sales you will make.
In any sense, the best way to start testing a price is to see what other experienced writers in the niche are charging for similar books or like products, then see, if sold at that price, will you make enough profit to write and publish yours?
Let’s say that a similar product sells for $149, and you want to earn $100,000 in sales to earn $50,000 in profit, and you have a niche buying universe of 54,000, your buy response at $149 must be 1.244%. And if you are going pre-test to 500, you then need 6.2 positive postcard replies.
Is the test worth doing before you write and publish? Let’s say the test costs you at most $700 (see the next Blog Bundle #7). Then if you sell only five books you will have paid for the test.
(If your book will sell for $24.95, with the same universe of 54,000, you need 28 sales to pay the test cost and your buy response to reap $100,000 must be about 7.45%. Tightly-targeted buy responses often top 10% so this ratio—and the low price of the book—is very much in the likelihood of possibility.)
A legitimate question is whether that buy response to your pre-test will in fact equal the number of sales you will receive. Usually it is, approximately, if your book does what you promised in the flyer for the amount stated and there are no other variables, like a changed table of contents or a different author. The lowest return my firm got was 85% of the test buy ratio; once it topped 150%. Although some buys take much longer to get than others!
So the questions you must ask yourself are:
• what kind of profit return must I receive to produce the book?
• what percent of the sales price will be profit?
• what is the most likely price the buyer will pay?
• how many of them will pay that amount?
• what other income will this book generate that will lower my must-have profits solely from the book?
My suggestion is that if you are going to conduct two pre-tests, each to 250 niche buyers, you guesstimate the absolute lowest price you can ask to receive enough profit. Is it $105? Then you don’t test below that amount. Your second tested price in the first test might be the $149 we mentioned, and the third $179. That is, you will send about 85 ZIP Nth selection test packets listing the price at $105, another 85 at $148, and a third at $179.
Responses to the kind of test I suggest are usually quick. You usually have a solid sense of the buying ratio in about 10 days. Let’s say you estimate a 5% buy rate at $179, 7% at $149, and, oddly, another 5% at $105.
Do the same test again, but this time divide the remaining 245 into two groups, and test again at $149 and at $179. (You could even divide it in three and test at $149, $179, and $199.)
Then it’s simply a matter of calculating the response ratio times the total 54,000 universe times the respective price they are responding to, and you will have your book price. Or if you discover that the book alone will not carry its own weight, then you must see what other information dissemination products like or related to your book are likely, and ask if the book will justify its existence so it can help make that greater income possible.
We will look at those testing tools in the coming weeks: the pre-test cost next, followed by getting a (free) mailing list, the test flyer, the test note, and the postcard. In Blog Bundle #12 I will wrap up the process in 25 steps.
Thanks for taking this journey with us.
Author, Niche Publishing: Publish Profitably Every Time
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