I am an advocate of value-based pricing. If the entertainment we provide is so simplified, generic, automated, and scaleable all customers get the same price, then that’s a wonderful load off. Unfortunately, that’s nearly never the case.
I know it’s hard to look at one’s self and see all that we put in. I see this issue over and over in my clients. It gets easier after someone’s guided us through the process with our own specific details. Here is a template, though.
We can devalue ourselves easily by thinking we’re offering one thing.
If we think “I’m offering one thing. It’s a singing telegram. Therefore, my singing telegram is worth as much as any other singing telegram.” This is where we get into this whole terrible mindset that I fight so much against.
Not all singing telegrams are the same
We wouldn’t expect a singing telegram from Rihanna to be the same price as one from Lady Down The Street or a character actor from a Disney show.
This is not just arbitrary telegram price + added celebrity expense. By breaking down and understanding that value is full of lots of parts, we can make it easier to see our value.
Lady Down the Street
- Booking / Administrative costs : cheap she does it all the time
- Desire to do the job : cheap she loves her moment in the spotlight
- Time scarcity : cheap she has lots of free time
- Guarantee that it will be her : If you really need to make sure it’s her, then you might pay more, but most likely she could send a replacement if she’s sick and nobody will care
- Travel : free
- Security : none
- Planning of material: free she sings the same 20 songs. You just pick one
- Costume : free she never cleans her costumes.
Rihanna
- Booking / Administrative costs : includes lawyers, agents, managers all getting paid
- Desire to do the job : it would probably take a lot of money to motivate her to do this
- Time scarcity : expensive for her and her team
- Guarantee that it will be her : this is built in to hiring her and very expensive. Nobody can replace Rihanna
- Travel : expensive. she’s not flying coach either
- Security : yes
- Planning of material: coordination, maybe licensing, tech setups will be required
- Costume : something stunning I bet + wardrobe person + hair and makeup person + stylist / planner
Finding the pricing
There’s no set way to find the pricing of these things, but this kind of breakdown helps to understand that the parts (and there are more than I’ve listed here) are not free.
If we’re looking to make a scaleable business, it could be helpful to think about how much it would cost to replace us. Let’s say I got too busy to manage the tech side of my zoom show. How much would it cost to pay a digital stage manager?
For the things where we can’t be replaced, we consider what are likely things that could drag us away from the gig and what are those things worth to us?
- a higher paying gig
- our son’s baseball game
- dinner with a friend
- our neighbor needing a ride to the hospital
This is the cost of commitment, and often it’s higher than we would like to admit.