There are people in your field working for free. If you’re trying to keep up with them, your value ( no matter how important, experienced, imaginative, skillful you are) is $0.
If you’ve ever been angry at people providing good quality work for lower prices, I am writing to you. If you’ve ever been pissed that someone has hired a crappy entertainer because they are cheap, this is for you too.
Since most entertainers don’t get into showbiz from the biz side… and it’s almost seen as unartistic to do good business, I’ll define some terms.
Cost-based pricing
You figure out how much something is worth by the parts that go into it. I’m setting up a lemonade stand. It costs me 25¢ for the lemons, 25¢ for the cup, the water is free, so I’ll spend 50¢ and charge everyone $1.
Market-based pricing
You set the price based on your competition. My friend has a lemonade stand 4 blocks down. She charges 75¢ per cup. I can decide to charge more or less than her. I’ll charge 75¢ so everyone knows my prices are fair.
Value-based pricing
Decide based on how important your SERVICE is to the customer. My lemonade stand is at the edge of a desert. People are dying of thirst. I’ll charge $25 / cup.
Correct pricing
Using these styles can be helpful in different ways, but the main way to get ahead and get away from the cheapness race is to go value-based.
Throw out a price to avoid rejection, this is the path to poverty!
Cost-based is helpful initially when you’re determining how to not lose money on a gig. If you’re a magician and you’ve determined your time is worth $50/ hour. Every show, you burn through ropes, cards, candles and baloons totalling $50. If you cost-base your pricing, you will charge for the 5 hours of prep, admin, commute, soundcheck, performance, and packup ($250) plus $50 for expendables ($300) plus gas and car wear and tear $25 ($325) plus insurance $60 ($385).
Market-based is good for understanding what your potential clients might be expecting. That doesn’t mean you have to give them what they expect, it means you’re on the same page when you start the conversation. If your price is lower or higher than your competition, it will be your job to communicate why. The two questions are basically…
- Your price is higher than your competition. Are you a waste of money?
- Your price is lower than your competition. Are you not good?
Value-based pricing is good for you and for the client. It helps you both appreciate what is provided. It helps you determine if you’re doing something that’s worth it in the first place — because if you can’t get paid what you think is right, maybe you’re not really offering your clients as much as you think.
When I toured with Brooks & Dunn
In some ways I lucked into being hired by the highest-grossing country music tour. My friend juggled at an awards show. Brooks and Dunn approached him and said “We want to do a Cirque Du Soleil for hillbillies.”
My friend called me and a few other people. We got paid well to tour, eat catered meals, drink unlimited beer, and perform for 10s of thousands of people at a time.
While I had done professional shows since childhood, I was only full-time for one year when this started. I was unpredictable, immature, and more on -brand with a Warped Tour (punk rock).
The reason we got paid and treated nicely was because of the value we provided. It was worth more than it cost them. We…
- Were there where they needed entertainers. We were on the edge of the desert. The tour directors were not connected to the circus world, so when my buddy showed up with a posse, they were grateful it was so easy. They didn’t have to go through a tough discovery and casting process. This saves time, money, and headaches
- Were willing to leave on a bus, work in the heat, be kinda the side-show. If they don’t have to spend a lot of time catering to egos, or setting up elaborate safety / hospitality stuff for circus people, life is easier. This saves time, money, and headaches
- Were energetic. We were pumped to be traveling, creating, and collaborating on such a level. More experienced performers may not have been so enthusiastic and willing. This saves time, money, and headaches
- Were interesting. We brought weird skills and personalities to the tour to differentiate them from anything their audience had seen. They didn’t need to spend a bunch of time in creative development because we brought that with us. This saves time, money, and headaches
The results of the service are important
In the list above, we gotta focus on the results for the client. Me being young, wild, having no roots, weird, and energetic are not worth money. Saving time, money, and headaches is worth money.
It’s not easy to determine value
Unless you’re working for the same kind of clients doing the same kind of thing every time, you don’t know what the value is. That is, until you have a real conversation.
Serve the client what they need. When you find out what the client needs, you can figure out what’s cost them time, money, and headaches in the past. You can compare the time, money, and headaches of the other options they have.
Hangups
- You might think that a client wants more value than they do. You think they need vanishing tigers at their 5yo’s birthday party, and basically they want a 45 minute babysitter with a top hat. You set your offering and your price too high.
- You might think the client needs less value than they do. You think they want a fun crazy show and they want a magician who is professional enough to not ruffle any feathers and have the production value for a Fortune 500 company.
How to communicate your value
It’s up to you to communicate the value you’re offering and understand the client’s value need.
These things can be clarified through conversation. The abridged version is listen to the client and what they need and what they’re expecting. Then, tell them how you’re going to save them time, money, and headaches. Then, tell them the price. This is hard to do when you’re afraid of losing a potential gig, but it’s the way to avoid poverty.
If you listen well to what they want, you won’t be so off track when you establish a value. If you tell them what you’re offering, and you’re off track, it gives them an opportunity to say, “Oh, no! We don’t need you to show up well rested, freshly dry cleaned and with a tiger truck. Just be here on time and try to keep the kids alive.”
Finding money other places
Quick thought: In these conversations, you might find money in other parts of a budget. Like if you know all the other magicians the client is comparing leave a big mess, you can save them money on cleanup by explaining to them your policy of leaving the place clean. If they have to pay a $50 cleanup fee for a messy venue plus go through the headache writing that extra check, you just added on more value than $50. Put some of that in your fee.
The client might think they only have $1000 to spend on a magician, but suddenly they have $1040 to spend. This is a small example, but it can get fun to find these things.
You think you only have $20,000 to spend on a car, but then you get a guarantee from the dealer that you won’t pay for maintenance or gas for the first two years. Suddenly, your purchase budget is magically higher.
So these are the steps to not going into poverty
- Understand what your client actually wants
- See if you can anticipate more of what they want
- Figure out how much of that you can give to them
- Figure out how to give them more of what they want
- Communicate to them how much you’re giving them
- Charge them less than the value you’re giving them
- Find more clients who need more