Edit to Add: Ironically, Kris Rusch talked about a related issue this week. I suggest you go read her post on the massive amount of data we writers can collect on readers and our interactions with them.
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Indie writers have this tendency to freak about modern marketing. They generally seem to go one of two ways: either they promote the hell out of only one or two books or they panic and don't market at all.
The really big mistake I think a lot of writers make is failing understand their own work and target it to an inappropriate audience. I see a lot of new writers in the game make the same mistake the Big 5 make--they through spaghetti at the wall and see what sticks. But they have no idea why something sticks.
I will say this, and it is just my opinion--permafree isn't working like it used to. Too many readers feel they've been burned by the writers, but bad writing and incoherent stories weren't the only problem.
A subset of readers will only accept or download free books. I'm not talking about folks on a limited budget. I'm not dissing those people. I've been there. I know what it's like when you don't have a choice between food and heat. When even having a TV was a luxury out of my reach. I was lucky my county library was within walking distance. And I ended up buying copies of the very same books I enjoyed through the library system.
I'm talking about those folks who feel entitled to anything they want for free. Those who mock anyone for being stupid to pay. Those who openly pirate. Those people are going to pay you anyway, so including them in your marketing plan is probably not in your best interest.
And these types of folks are an example of what I mean. You need to target your marketing efforts towards people likely to have an interest in and the wherewithal to buy your book. Not everyone on the planet will want to read your book no matter how great your book is. So get over the idea that your book is for everyone NOW!
Let's start by looking at my own family. Mom's into sweet romance. My father-in-law reads military history. Genius Kid loves manga and military sci-fi. Dad secretly reads my X-men comics. My sister is a major horror fan.
Now, let's pretend none of these people are my family. How would I market my sword-and-sorcery novels to them?
A lot of indies would say that since my heroine and hero are in a long-term relationship emphasize that aspect to my mother. My protagonists are fighting demons so highlight that element to my sister. And, you get the idea. And that lovely plan will probably fail.
What's wrong with this plan? Well, first of all, I asked the wrong damn question. My question should have been how do I market my book to people who already LOVE sword-and-sorcery. The people who are actively seeking the exact type of book I wrote.
Does this mean that other folks won't like my book? No, but you'll be wasting your time and money going after people who aren't likely to make your book their first choice.
So how does this apply in real life?
If you decide to run a Facebook ad, you don't include everyone who loves books. You narrow it down by genre and subgenre. I could can even narrow it down by looking at people who are fans of the type of sword-and-sorcery I emulate, i.e. Mercedes Lackey and Barbara Hambly, not Roberrt E. Howard.
One of the best examples of how NOT to market your entertainment is John Carter and the Gods of Hollywood. Michael D. Sellers does an excellent job of detailing the screwed-up marketing on a movie that had a ready made audience.
The best thing you can do though is understand your potential audience before you do any marketing whatsoever.
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