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That is an interesting perspective, and that strategy seems to work quite well for our good friend, A Sparrow.
At first, I had put it at, "Pay whatever you want." At this point, I hadn't done all that much marketing. So for the first not quite a month, I had about 75 or so downloads. When I put it to just plain, "free" that skyrocketed. Now, about a month after that, I'm at close to 1700.
Granted, at the same time, I renewed my marketing efforts, which saw probably caused quite an upswing in numbers.
One of the main distinguishing factors of the 'pay what you feel like' verses 'free' on Smashwords is that you don't need an account for a free one. For the perusing passerby, it's a lot easier to just say, "Oh, I'll download this," rather than mucking about through the process of creating an account (even if it's also free to do).
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