Authors are becoming increasingly dependent on deep discounting of their books in order to attract new readers. There is a corresponding proliferation of websites and services which claim to provide massive exposure to new readers as long as authors reduce the price of their books by 50% or more. This strategy is very much like the one employed by restaurants and other businesses that offer "Groupons" to encourage new customers to try their products or services. Promotions of this kind may result in a short-term increase in sales but they may not be in the best long-term interest of businesses (authors).
The discounting strategy is designed to work in the following way. An author slashes the price of one of her books and uses a service to promote her book to an audience of price-sensitive readers. Some of those readers take a chance on the book and become hooked on the characters and/or story. These readers go on to buy the remaining books in the series or other works by the same author. In addition, these readers write positive reviews of the book and these reviews generate additional sales from readers who are influenced by the reviewers. The book moves up the sales charts which exposes the book to readers who primarily discover new books by browsing the bestseller lists. This creates a virtuous cycle in which sales beget more sales.
To believe that the discounting strategy works, however, one has to believe that price-sensitive readers will become advocates for an author and her books. Is this a likely outcome? Are these readers willing to follow an author away from the bargains list and become long-term readers or will they simply move on to tomorrow's cheap read?
Furthermore, will an author's "natural" audience (i.e. those readers who would otherwise become lifelong readers) be discouraged from trying a new book at a low price because of the implied lack of quality?
Quality not price is the dimension on which authors should compete. Instead of deep discounting, authors should adopt a strategy of fighting for every new reader with the goal of creating an enduring relationship. This strategy takes longer to achieve but the reward is a loyal readership which is highly likely to purchase each of an author's new works at a fair price.