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46709 Posts in 5588 Topics by 13297 Members Latest Member: - Shane786 Most online today: 32 - most online ever: 429 (November 03, 2007, 04:35:43 AM)
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Author Topic: Price targetting  (Read 2578 times)
Graham W
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« on: July 16, 2008, 05:53:41 AM »

Someone asked me about price targetting, so I thought I'd explain. It's rather fascinating. I'm not an expert in this, you understand: I've read a book on it, which I found helpful.

So! This is how I understand it.

You've got a book. You're wondering how to price it.

Now, there's some people who will buy your book at $20. There's some who won't buy it at $20, but will buy it at $15.

To maximise your profit, you ideally want to sell it to the first group at $20 and the second at $15.

If you just set a flat price, you can't do this. You either set the price at $20 and sell only to the first group. Or you price it at $15, sell it to both groups, but miss out on $5 per copy, which you could have made by selling it to the first group at a lower price.

But there's ways and means.

For example, you could start selling your book at $20, then discount it to $15 after a month. That way, the first group buy it straightaway, and the second snap it up when the price falls.

Or you could sell your book at $20, but offer a discount from time to time. For example, cut the price to $15 for one week. The first group have bought it already and the second group get it when the price falls. I've done a bit of this with Play Unsafe.

Obviously this all relies on getting word out about the price drop.

Supermarkets do something similar by selling different versions of the same product. Our local Sainsbury's, for example, sells three types of steak: "Taste The Difference" (expensive), normal (mid-priced), and "Basic" (low-priced). People who don't mind paying extra buy expensive stuff; the budget-conscious by the lower-priced stuff. Is it possible to do this with games, selling a cheap-looking "budget" version? I don't know.

So there you go.

Graham
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Ron Edwards
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« Reply #1 on: July 16, 2008, 06:03:22 AM »

Hi Graham,

It seems to me that this is already under way with PDF vs. book presentations. We've found over and over that this tactic doesn't "steal" book sales, but rather adds to them. The other version would be to offer deluxe editions, as a number of RPG publishers have done over the years - I cheerfully bought both the paperback version of HeroQuest and the custom-made deluxe hardback with the rune of my choice printed on the cover, for instance. Call of Cthulhu's been issued this way at least a couple of times, right?

What doesn't seem to have been tried is to offer a low-budget book version and a spiffy shiny version as an ongoing policy. Since the same principle works as an ongoing policy for PDF/book, it seems a decent option for books too.

Arguably, perhaps I should be offering Sorcerer as a hardback (or perhaps a very spiffy boxed set of the core book and a combined-supplements book, all hardback), and as individual paperbacks including the core book, and as PDFs, indefinitely. Especially if I were to vacuum and scrub various phrasing throughout all the texts, as a "Ron means it precisely like this" sales pitch for the new books. There seems to be no evidence at all against this idea and plenty of support for it, both direct and indirect.

Best, Ron
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GreatWolf
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designer of Dirty Secrets


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« Reply #2 on: July 16, 2008, 07:33:35 AM »

Evil Hat did something similar to this with its hard-cover and soft-cover editions of Spirit of the Century. I'd be interested to hear from Fred how this affected sales.
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Seth Ben-Ezra
Dark Omen Games
producing Legends of Alyria, Dirty Secrets, A Flower for Mara
coming soon: Showdown
David Artman
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« Reply #3 on: July 16, 2008, 08:25:00 AM »

(or perhaps a very spiffy boxed set of the core book and a combined-supplements book, all hardback)
Yes... yes, you should. Today. I'd buy in a heartbeat.

Why are you still reading here? ...Go on, go... "Lulu.com," in case you forgot. ;)

-----
Ah... pricing tiers. I love this topic. Here's how I plan to monetize GLASS:

Free - shotGLASS core rules as a PDF - all you need to roll your own game, but with no advice, minimal examples, no art, and no pre-written genres (and no 'lame fan fic,' I believe you call it, Graham?).

Free - GLASScutters.org - game- and character-registration database, with ad banners. If all goes well, not only will GMs design, manage, and accept players for a game that they are running with particular GLASS rules options, but the database itself would enforce those options, obviating most GM review and approval, though not eliminating it. I also want it to be able to generate a PDF (or some other, open-format document type) on the fly, showing ONLY the rules for a particular set of options (i.e. that GM's game). A sort of customized shotGLASS, just for that game, just for the rules in effect. I think I'll call it... "ourGLASS" (get it?).

Cost+Static Profit - GLASS soft cover (double laminated, perfect bound) and GLASS hard cover--note that Cost of hard cover will be higher, but I do not plan to charge a premium. I also want to set the cover MSRP (and individual sales price) at an amount where I can offer a bulk or retailer price which still pays me something reasonable, but allows a retailer to make their expected profit for selling it. I will follow this model for all future setting supplements, and will require a similar model for those wishing to put the GLASS logo on a supplement--i.e. you can't put the logo on a product which either gouges customers OR undercuts your fellow GLASS product publishers. However, as shotGLASS is CC licensed, so long as none of its content is replicated in another product, folks can do with it what they wish... they just don't get the Zero Budget Games (working name for publishing brand) Seal of Approval (the logo).

-----
OK, if I may expand the topic a bit:
Does anyone know what an FLGS expects in terms of per-book-sale profit, on an book-only RPG product?
(I think that's germane to the discussion, albeit a bit broader than "how to pull sales with price fluctuations.")

Thank;
David
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Designer - GLASS, Icehouse Games
Editor - Perfect, Passages
Thunder_God
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« Reply #4 on: July 21, 2008, 12:33:24 AM »

What doesn't seem to have been tried is to offer a low-budget book version and a spiffy shiny version as an ongoing policy. Since the same principle works as an ongoing policy for PDF/book, it seems a decent option for books too.

It has been done, with the "Spiffy shiny version" as the normal version, and the "low-budget" being the addition.

Guardians of Order had "Cheapies", versions of their books in black and white, possibly lower quality paper.
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Guy Shalev.

Cranium Rats Central, looking for playtesters for my various games.
CSI Games, my RPG Blog and Project. Last Updated on: January 29th 2010
Double King
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« Reply #5 on: July 21, 2008, 07:31:41 AM »

Could this / Should this be done at Cons?  I don't know - and don't presume to.  I wonder if it's prudent to mark down units at conventions because of the audience, competition and incentive to drive volume.
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iago
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« Reply #6 on: July 21, 2008, 12:45:40 PM »

Could this / Should this be done at Cons?  I don't know - and don't presume to.  I wonder if it's prudent to mark down units at conventions because of the audience, competition and incentive to drive volume.

Convention specials are de rigeur.  You can certainly get away with doing that.
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iago
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« Reply #7 on: July 21, 2008, 12:46:19 PM »

Evil Hat did something similar to this with its hard-cover and soft-cover editions of Spirit of the Century. I'd be interested to hear from Fred how this affected sales.

Could you ask something more specific about that?  I'm having trouble figuring out where to start with an answer. :)
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GreatWolf
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designer of Dirty Secrets


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« Reply #8 on: July 21, 2008, 01:47:11 PM »

Could you ask something more specific about that?  I'm having trouble figuring out where to start with an answer. :)

Sure!

Um, let's see....

As I recall, Evil Hat did a hard-cover and soft-cover release of Spirit of the Century. I'm curious about the following:

1) Did having two versions seem to drive up sales at all?

2) What was fan feedback about the two versions?

3) What other effects did having two versions have on the Spirit of the Century line?

4) Was this a successful experiment for you? How so?

5) Would you release other Evil Hat games in a similar way? Why or why not?

Just a couple of easy questions before GenCon. *grin*
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Seth Ben-Ezra
Dark Omen Games
producing Legends of Alyria, Dirty Secrets, A Flower for Mara
coming soon: Showdown
iago
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Posts: 863


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« Reply #9 on: July 21, 2008, 03:10:17 PM »

As I recall, Evil Hat did a hard-cover and soft-cover release of Spirit of the Century. I'm curious about the following:

1) Did having two versions seem to drive up sales at all?

2) What was fan feedback about the two versions?

3) What other effects did having two versions have on the Spirit of the Century line?

4) Was this a successful experiment for you? How so?

5) Would you release other Evil Hat games in a similar way? Why or why not?

1) I don't know what the driving up of sales would be compared to. SOTC was the first product of its kind that we tried, and it blew our "we might sell a hundred" expectations out of the water.  We ran a Hardcover and Softcover preorder simultaneously.  What "drove up sales" if anything was the fact that we offered the PDF for free when folks preordered either, and they got it immediately, giving them instant content satisfaction as well as a reason to be patient about when the actual physical books shipped.

2) Folks liked having the choice.  Those that knew it was POD were concerned about the hardcover's possible (lack of) quality, but I was able to reassure those very few who voiced it.  Feedback was overwhelmingly positive, though I don't know that I cataloged mentally how much of it was specifically about the hardcover/softcover split choice.  Honestly I don't know how much that was a factor, though it did mean we got some pretty hefty cashflow, since the hardcover was priced a premium due to the heavy cost of hardcover POD.

3) It's just different formats, the way I look at it. The content didn't vary between them, so I don't feel like it had much impact on the line at all.  There might be margin cases where the fact that there was a hardcover option helped make a sale to that rare customer who "won't ever buy anything that's softcover", but I doubt that's an appreciable percentage.  I feel that the presence of PDF options has a bigger impact on things than offering a hardcover and a softcover.

4) Our preorder went for, hm, something like 300-400 units, as I recall, with a 2:1 softcover:hardcover split, or thereabouts.  So, yeah, it was successful.

5) Not necessarily.  Each product is pretty different, and most of them don't need a hardcover edition -- or should be ONLY hardcover.  Much like many companies, I might consider doing a softcover release of DFRPG after we sold out of a hardcover printing, should that come about when we release that game.  But at the end of the day, long-term, I don't think we got that many more sales due to the second format -- but it did mean I had to do two product setups, two separate printings, etc, doubling some certain kinds of work.  Would it be worth it to eventually offer the hardcover?  Sure, I guess.  But necessary, no.   

That said it's worth looking at what John Wick did with Houses of the blooded -- a 100 copies only ever, hardcover limited edition printing, alongside a "standard edition" softcover that would be his evergreen version.  Those 100 copies sold out *fast* in preorder, despite being priced pretty high (in part because they include a CD chock full of really intriguing extras, I think).  Creating scarcity can be an interesting strategy to goose sales.
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