Pricing

Last week I told you I was going to be doing a series on the Four Ps of Marketing. This entry is about Pricing.

Too often people assume that pricing is simple. It all comes down to supply and demand like they told us in Economics during our senior year of High School. If you aren’t getting the number of shows you want, lower your price until you get as many as you can handle.

The reality is that pricing is MUCH more than how much you charge. We will ignore the fact that (contrary to what your HS Econ. Prof told you), people almost NEVER buy based exclusively on price. I’m not going to get into how to raise your fees, how higher prices often INCREASE responses, etc. (Although I do have an article about it on my web site at www.JulianSpeaks.com, just click the link to "Free Stuff")

Instead, we’ll go right into the fact that pricing is much more than just your fee. If you want to break out of your rut, you need to think about “Pricing” as much more than just your fee. Pricing can include almost ANY fee the client pays in order to secure your services and/or any compensation you might receive in exchange for your services. And these two are not always the same.

Just to clarify what I’m talking about, your corporate client might need to rent risers for your performance at the annual awards banquet. That’s a cost to the company and is thus part of your “pricing” even though you never see that money. Conversely, when you sell magic sets at the back of the room after a scout banquet the money from those sets is not a direct expense of the scout group, but arranging the opportunity to sell is part of your pricing.

Pricing also includes how you structure your fee (per day, per hour, per show, custom quote for each event, etc.) Does it vary depending on the venue? Does it vary depending on who the purchaser is? All these things are relevant factors to your business model and you need to think about them from the perspective of the BUYER, not from your role as a seller. What does your prospect think when confronted with your pricing structure?

Mileage and travel fees are also included in your pricing. Under what circumstances do you charge these fees and how do you assess them? In some areas it would make you look like an amateur NOT to charge them, and in other venues it might make you seem like you are “nickel and diming” the client. This is something that deserves some thought.

What discounts (if any) do you offer? What stipulations, if any, are attached to getting the discounts? Discounts can often motivate hesitant buyers to take action, but if not used properly they can give the wrong impression. You should have a very clear purpose when using discounts if you decide to use them. But regardless, be aware that discounts are a component of your pricing.

This is all pretty complicated stuff that really does take some time to think about. If you don’t, then you are leaving all these factors to chance. With something so critical as to be considered one of the four cornerstones of marketing, all aspects of your Pricing deserve your rational and strategic thought.

--Julian Franklin