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Topic: Repeat Client Raised Price Question
Message: Posted by: Decomposed (Feb 1, 2019 08:55PM)
Does anyone have advice on raising a price gently for a repeat customer? Rather, how to raise the price without sounding bad. For instance, with inflation and the market, my prices have gone up since two years ago. I do get emails from former clients regarding a repeat performance which usually is out of town. With so many inquiries at the corporate level, I just cannot accept former bookings at the same price. Its a dilemma for me, albeit grateful I have the business. Thanks.

Decomposing Prices-Not

PS: I understand I can just turn down the gig but I do not want to do that
Message: Posted by: Dannydoyle (Feb 1, 2019 09:39PM)
Give prices without explanation. You will never give them what they want to hear. Don't try. Prices go up. It is a fact of life.
Message: Posted by: Decomposed (Feb 2, 2019 12:38AM)
Good point Danny....well received, thanks..
Message: Posted by: Mindpro (Feb 2, 2019 07:11AM)
What's good about repeat clients is they should now already know you, your performance, and your established value. So, if established properly, your value should make this a non-issue with them. By this point, they should not be shopping on price, and unless you raise your price by 50-100% (a significant amount) that would be a drastic change, you should be fine.

Especially since it's been two years since they've last booked you. Very few corporate clients expect pricing to stay the same from two years ago. Even in consumer markets, this should be viewed the same and quite acceptable.

Most understand things just get more expensive or business costs (if nothing else) always increase.

Rarely will this be an issue to even be noticed/mentioned, however, if it is, and you feel the need (which as Danny said really isn't necessary) you can, of course, state your increased value if needed, but I too would prefer not to do that. At this point, you should not be a commodity that should be booked only on price. They've booked you, seen you, their guests responded to you favorably, and all of this has lead to wanting to re-book you again two years later. The price is $XXXX period.

This is also an area in entertainment business where many performers shoot themselves in the foot. They try to offer a low price initially just to get the booking or account. If they do well and blow them away, and are pursued for a return booking the performer doesn't always realize what they have done (to themselves). They have established their value to the client at the lower price (offered to initially get the booking). So for the sake of example let's say your regular price is $1,000. If you initially accepted that first booking at only $500, in the client's mind that is your value. You are a $500 performer. And it doesn't matter if you even say "well since it is a first time booking for a new customer I will do it at a one time special price of only $500." It doesn't matter, from that point on you will always be seen as a $500 performer. So then next time when you try to get your "regular" price of $1,000 to them you are asking $1,000 for a $500 performer/value. I see guys do this all the time and not get why they don't get rebooked or why the client may have a problem with this. If you ordered a happy meal for $5 once and the next time you ordered it it was $10, this can create a problem even at the low price points. Imagine how it is seen at greater price points.

Where most fail, is to establish full value first, then price from there.
Message: Posted by: Decomposed (Feb 3, 2019 03:34AM)
I hear ya MP, good point. I never price low. Not anymore at least. Just raising a few hundred these days I sometimes feel like I am obligated to let them know why but that is just me I guess. Sometimes when I say I am available, they will say same price?
Message: Posted by: MikeRaffone (Feb 12, 2019 02:33PM)
My prices went up a few months ago. In this situation, I let them know my prices went up on such and such date and that usually resolves it.
On a very rare occasion I have to let go of the past client who can't go with the new pricing and move forward. About 98% of past clients don't voice any concerns about the new pricing.
Message: Posted by: Mindpro (Feb 12, 2019 06:15PM)
I agree. I know many actually try to keep the news of raising prices on the down low and try not attracting any attention to it. I, of course, understand this. However, several years back we had decided to raise our pricing in the school market after years of steady pricing, but we decided to choose to do just the opposite.

We decided to raise our pricing October 1st of that year. Starting in mid-August we announced a promotion with calls to action of "book your dates now to get last years pricing" and "book now before the price increase." These types of promotions actually drove many schools to book sooner than they regularly would and many actually booked two or three dates for the year allowing them to save hundreds of dollars.

I know most wouldn't draw attention to their price increase but doing it this way achieved several things - First, it clearly and openly announced prices would be raised on a specific date, and secondly, it created a sense of urgency and the opportunity to book multiple events at the same time for a great savings. Also as part of this effort, we demonstrated improved and greater value to our programs which contributed to our continuing top of the market positioning. The negative news turned into an opportunity to many, while establishing the coming price increase. For us, it was a win-win-win in an area many dread and often fear.
Message: Posted by: Mary Mowder (Feb 12, 2019 07:03PM)
I raised my prices a lot last year but I didn't' worry because they were way too low before. ( I had not raised them for @ a decade ) I was worried about such a large increase for my regular Library clients.

I did as MindPro suggests and told the Library of the price change but that they could still book at last years rate if they booked before the new year.
I had more library bookings before the new year than I'd had in the entire last year.

I didn't expect that. We'll see how it goes for Summer Reading shows and in the next year when the discount is not available.

My other repeat customers have reacted well with no explanation.

-Mary Mowder
Message: Posted by: Dannydoyle (Feb 13, 2019 12:43AM)
I have always used if they are asking about price as sort of a way to help see things. I mean if they are worried about the price this "might" and I do mean MIGHT be an indication of them not feeling you are providing them with the value they expect. Now this in no way means that you are NOT providing such a value to them, but perhaps it simply means you are not COMMUNICATING that value TO them. A VERY important distinction and one to hash out asap.

One way to look at it is if you want to move up and keep moving up in markets, you need to increase your price and your value. Unless, as in the case of Mary where she was working on the same price sheet for a decade, you increase your price as you become more valuable. (NOTHING wrong with that Mary, just re stating your position is all.) As your price increases then by necessity clients will indeed drop off. That is provided you are increasing them for something other than simple cost of living inflationary reasons.

I think we all should raise our prices to be in line with our perceived value. If that value increases then a price raise is in order based on that. When inflation hits then a price hike is also necessitated if for no other reasons than good business. A price raise scares so many people in our industry but I never know why. Look at what it costs to go see a simple movie today! God help you if you want to take the family to a baseball game and have a hot dog. So many forms of entertainment are so expensive.

DO NOT be afraid to know your value. DO NOT be afraid to demonstrate your value and certainly DO NOT be afraid to ask for your value! I am willing to bet that the value most people have is higher than they think. It is simply a matter of communicating that effectively to the client.
Message: Posted by: lou serrano (Feb 13, 2019 03:04PM)
Danny,

I couldn't agree with you more. Most people don't realize the value they provide, and even fewer are able to COMMUNICATE that value to their prospects and clients. We can make no changes to our show, but do a better job of communicating the value that we bring to the table, and in many cases raising prices won't be an issue. At the same time, we can also create a better show that connects with our target audience, communicate that increased value, and raising prices will be even less of an issue.

There are times when we will have to let go of some of our clients. If they aren't willing to pay the new price, maybe they are no longer our ideal client. It's something to think about.

Lou Serrano
Message: Posted by: Dannydoyle (Feb 13, 2019 05:46PM)
[quote]On Feb 13, 2019, lou serrano wrote:
Danny,

I couldn't agree with you more. Most people don't realize the value they provide, and even fewer are able to COMMUNICATE that value to their prospects and clients. We can make no changes to our show, but do a better job of communicating the value that we bring to the table, and in many cases raising prices won't be an issue. At the same time, we can also create a better show that connects with our target audience, communicate that increased value, and raising prices will be even less of an issue.

There are times when we will have to let go of some of our clients. If they aren't willing to pay the new price, maybe they are no longer our ideal client. It's something to think about.

Lou Serrano [/quote]

It is definitively something to think about.
Message: Posted by: Mindpro (Feb 14, 2019 11:31AM)
There are many great points at play in this discussion. The problem I see after working with hundreds of performers, is they don't see, know or understand the concept of value. Sometimes they think they may, but it is often only the way THEY see what THEY THINK should be their value. They will say things like "I've been doing this for 15 years, I've done over 1000 paid full-length shows, I should certainly be worth $600 a show." This is how they see value - as it pertains to THEM - from their perspective.

This is not real value. Value is your value/worth as seen and experienced by the CUSTOMER/PROSPECT. One of the things I see most with performers is they set their prices based on little more than what they think they are worth or what they want to charge. Little more. Maybe a touch of thought is on what others in their area are charging, but that's it.

Value should be determined and established BEFORE pricing. In reality, how can you truly create proper pricing without knowing and understanding the value of something's worth? You wouldn't price a new 2019 Caddy at $21,000 or a Chevy Spark (their budget car) for $59,000. They aren't in line or accordance with their value. Same for performers. They need to create and determine both their legitimate value and the perceived value first, then the pricing based on this. People will pay the price for the value they perceive, expect or understand.

So then the next question I get is "how do I know/determine may value? How is value created?" Most come up against this wall, can't find the proper information and understanding and then simply pull back and go to their default thinking - of what they feel. I see this so often with kids/family performers. Little value is created or established, which is why many are all seen virtually as interchangeable commodities.

This is also something that kills me about many of these magic marketing courses and speaking courses out there - almost every guru will proclaim - "simply raise your prices! Four or five of these guys actually say "the first thing I want you to do is DOUBLE your current pricing." Why? Based on what? You telling them to do so? These guys can say that all they want but it is setting these guys/gals up for failure. If they are having problems getting enough bookings at their current price, do you think it will be easier to get more bookings at double the price they can't even get now? It is absurd!

Of course, none of them even deal with the concept of value. Most of them don't know themselves how to truly create true value. Look at all of the puffery guys that have made such claims here in the past. Where are they now, lol.

Value is one of my key concepts that one should spend their time and efforts in truly understanding - from the right perspective - the customers', not their own. Once you know and understand value and operate from a value-based system, pricing rarely becomes a concern.

Then as Lou mention, you must learn how to communicate, present, and sell based on this value. I remember several years ago a member here from Michigan claiming there was no money in his market, businesses were dying and closing, schools weren't booking shows, festivals and community events were cutting back or ceased, companies weren't having events much anymore, and there is no way anyone could get more than a few hundred dollars cap for school shows. As he was proclaiming this, I was in his city and two other cities nearly doing shows for $1,500 each the very same week he was saying this. Why? Because my value precedes me. It was and had been well established properly, long before this. Of course, he didn't believe it and said I was FOS. The difference was in the value and it being communicated properly.

This is also one of the major difference between consumer markets and professional markets. Consumer spending habits and methods are much different than in professional markets. Again, all of this has to do with the business behind the performance. It is not about marketing (that comes later once all of these foundational elements are in place and not before) as many of these guys will tell you, it is about just this. If you are out doing shows before doing this you are leaving money on the table and damaging your performing business with every show you do.

We have all seen guys that are average performers at best, yet they can be quite successful and often earning more than you even though you feel you are a better performer. Value and perceived value (two different things) are the reasons why.

This is why it is crazy when performers get so hung up on "social proof," as their efforts would be much better focusing on the value concept than getting testimonials, etc. Trust me, once value is established, these kinds of things come naturally, organically and consistently. You need to ask or beg for testimonials.

Social media and such is much more powerful and beneficial when done in the proper time and order - after value has been established. So many spend time trying to create pretend or fake value if any at all.

This topic is some of the best advice one can ever receive. Don't spend your time, efforts and money on the latest tricks and releases, shiny marketing materials, wrapping your mini-van, or buying a half a dozen animals for your kid's show - no, invest in this concept of fully and completely understanding value - then how to position and capitalize on it. This is where you will get your greatest ROI.
Message: Posted by: Mary Mowder (Feb 14, 2019 12:40PM)
I get that you are saying we need to assess our value but beyond that I'm not getting what you are saying we should do.

What are the areas one would assess and how would you place a value on them?

Like for instance I entertain and get good reviews, I've won a few contests and my friends say I'm good. How does that translate into value?

I'm not trolling here, I honestly haven't a clue. Those of us in this position feel like we are marks for the afore mentioned marketing systems that just say double your prices.

Any advice on how to know which directions on assessing our value are on the up and up?

-Mary Mowder
Message: Posted by: Dannydoyle (Feb 14, 2019 12:51PM)
When you see a performer who might not have as good a show as you think you do and wonder why he gets SO much work or gets it at the price he does, the answer is in the ability to communicate his value to clients. It is THAT simple. In reality it is this skill that most call "sales" or "marketing" but it breaks down to a simple ability to communicate to the client what you wish them to see.

But here is the key. IT IS NOT ABOUT telling lies, it is not about puffery, it is not about any of that. It is about being able to establish a value for a service and then knowing that the client NEEDS that which they find so valuable. The fact is that many can see the value in a Ferrari. No doubt. Many see the value in custom made clothes. BUT can you communicate not only that value, but why that value is what the client wants?

It is the next step. I mentioned communicating that value and yes that is important. THEN you need to establish why this value is of use to the client. Why that value MATTERS TO THEM. The idea that you have better props than another performer is just not going to cut it. Why will that matter to a client who wants to hire you? Having a value is one thing, communicating it is important as I said. BUT communicating it is a value they NEED or one that will fill a need better than any other is the key.

We are getting to the heart of the matter of why I HATE doing 1 night shows and single shot client stuff. It just makes it SO hard to get these things across, and if you want advice on how to do that for the one night client base don't PM me for ANY reason. I HAVE NO IDEA how to go about it. I never tried. It is just not easy to do. Apple as a brand has spent decades establishing these things. Every major brand has.

I can go on forever about these things. But it is boring.
Message: Posted by: Dannydoyle (Feb 14, 2019 01:05PM)
[quote]On Feb 14, 2019, Mary Mowder wrote:
I get that you are saying we need to assess our value but beyond that I'm not getting what you are saying we should do.

What are the areas one would assess and how would you place a value on them?

Like for instance I entertain and get good reviews, I've won a few contests and my friends say I'm good. How does that translate into value?

I'm not trolling here, I honestly haven't a clue. Those of us in this position feel like we are marks for the afore mentioned marketing systems that just say double your prices.

Any advice on how to know which directions on assessing our value are on the up and up?

-Mary Mowder [/quote]

Mary this is NOT trolling, it is the heart of what I have been preaching for decades. The thing is many ARE marks for the systems you speak of and it is why I get so enraged by them selling to people who ARE marks for them! You hit the nail on the head, and maybe finally after a decade or so people can understand my frustration.

Your value is based on many things. Most of all it is based on what you provide to the client. Reviews are just proof that you are not some sort of goof ball with a business card and the url of a magic shop. They provide very little in "value" to a client in the end. This is why I do not really think they are such a great thing. Same with a blog, same with a vlog, same with a Facebook fan base and so forth with all the things the gurus tell us mean SO much. A blog provides almost no value to a client. Having a good SEO in no way provides value to your client for a magic show.

It has always been my contention that almost all the marketing systems focus on things that are current buzz words and want to sell snake oil and promise quick turn around. Which is why I HATE the "If you just get one idea from this it will be worth it" line of thinking.

So the first thing is to find out what your "gimick" is. What exactly do you provide? If you want to REALLY start out right the first step is to NOT be a mark for your own gimick. TOO MANY magicians are! Don't fall for your own press clippings. OK what do you provide for a client? What "need" will this gimick provide for the client in general? Before you get to what is special about you, figure out what the client needs. Now that you know what need your gimick fills, figure out what about YOU that does it better, or in some special way as opposed to everyone else in the business. Many refer to this as a USP. (In reality it is NOT unique at all. I have clients who believe that nobody BUT us can do what we do. In reality it is simply not the case.)

Once you have those things (And it is NOT an easy process.) then you work your gimick and prove to them during the process that you are THE choice for them in every way. This helps you down the line because they feel they have THE BEST whatever and then your prices go up and up organically. It takes time. It takes a LONG time and the process is slower than most want. This is why most won't do it. But it is not necessarily about marketing brochures, or about a great web page or anything that we are so constantly told by those who sell those things. YES they help, and YES reviews help. But those EVERYONE has! Nothing about those set you apart from the herd.
Message: Posted by: Mary Mowder (Feb 14, 2019 03:07PM)
Thank you Danny.

- Mary
Message: Posted by: lou serrano (Feb 14, 2019 04:21PM)
Very interesting discussion here. Communicating value is obviously important in charging top dollar for our services. Unfortunately, in many cases we establish our value with our customers on our very first gig. If we charge $500 for an event, it will be difficult to then charge $5,000 for a similar event with the same customer (although not impossible). Going from $500 to $700 may not be difficult. A birthday party mom will also place less monetary value on our services than a corporation that is trying to keep a client who may be worth millions of dollars in future sales.

As to not derail this thread, I'm starting a new thread on business models and the communication of value.

I'd be interested in your thoughts.

Lou Serrano
Message: Posted by: Dannydoyle (Feb 14, 2019 04:34PM)
[quote]On Feb 14, 2019, lou serrano wrote:
Very interesting discussion here. Communicating value is obviously important in charging top dollar for our services. Unfortunately, in many cases we establish our value with our customers on our very first gig. If we charge $500 for an event, it will be difficult to then charge $5,000 for a similar event with the same customer (although not impossible). Going from $500 to $700 may not be difficult. A birthday party mom will also place less monetary value on our services than a corporation that is trying to keep a client who may be worth millions of dollars in future sales.

As to not derail this thread, I'm starting a new thread on business models and the communication of value.

I'd be interested in your thoughts.

Lou Serrano [/quote]

BINGO!!
Message: Posted by: Mindpro (Feb 14, 2019 04:57PM)
Correct but you have to create, have, and establish value first before you can communicate it.
Message: Posted by: lou serrano (Feb 14, 2019 05:12PM)
[quote]On Feb 14, 2019, Mindpro wrote:
Correct but you have to create, have, and establish value first before you can communicate it. [/quote]

Mindpro,

There's also one key question EVERYONE must ask BEFORE they can do all of the above.

In the thread I started about business models and creating value, I asked another important question. How do you KNOW what your clients value? If you'd like to share your response in that thread, I'd love to hear it.

Lou Serrano
Message: Posted by: 55Hudson (Feb 14, 2019 09:06PM)
Lou and Mary,

There was a concept I studied in business school 25 years ago (reunion in May!) called Economic Value to Customer. You can do a quick internet search, but basically it is understanding what your customerís alternatives are and how important the offering you have is to them.

Think about a corporate sales meeting. The national sales team of 70 will be in town for three nights. You are hired for strolling magic and an after dinner show one evening. Whatís a reasonable price?

Obviously canít give a concrete answer, but think about it this way. Assume flights are $500 each and hotel rooms are $200 per night. Thatís $1100 per person and excluded meals - $77000 for the event, before you even get to professional program or entertainment. This is a $100,000 investment on the part of the company. If your price for the evening is $1000, then you are just a rounding error in their budget. (Not suggesting $1000 is an appropriate price, just putting that number in perspective)

Pretty simplistic, and certainly guys like Lou, Donny and Mindoro who have been doing this for years understand in much greater detail, but thatís the basic business theory.

Hope that helps.

Hudson

PS. Suspect most coaches/consultants recommend doubling price is because thatís a mistake that almost every magician looking for business advice is making.
Message: Posted by: Mindpro (Feb 15, 2019 09:51AM)
[quote]On Feb 14, 2019, Mary Mowder wrote:
I get that you are saying we need to assess our value but beyond that I'm not getting what you are saying we should do.

What are the areas one would assess and how would you place a value on them?

Like for instance I entertain and get good reviews, I've won a few contests and my friends say I'm good. How does that translate into value?

I'm not trolling here, I honestly haven't a clue. Those of us in this position feel like we are marks for the afore mentioned marketing systems that just say double your prices.

Any advice on how to know which directions on assessing our value are on the up and up?

-Mary Mowder [/quote]

I do not think you are trolling at all, but just trying to gain a better understanding of the issue. Among other things, value comes down to how others (customers) see and perceive your significance and worth. It is not about how you see your value but how your value is seen, felt and experienced by your prospects and customers. It is their reception of the value you project that matters. It is all about them and from their perspective.

My first bit of advice is stop thinking in terms of your show or performance. There is a place for that but that comes later or even last. First think in the terms of benefits and expectations. What is different, special or unique about you, your business and what you offer?

As an exercise, start by thinking of and making a list of 20 things that are unique or special to you OR things that are of significance and importance to the customer (from their perspective, not yours) even if it is not unique as others may offer it as well, but these are things that would be seen important or of value to your customer. This will not likely happen in one sitting, so take a week to two to continue to think about it in your mind. Then look at your list and see how many are unique to you? If the answer is none or only a few, this is an area that you should give some attention. What could or can you do that is special or unique to your customers that could be seen as value?

You should also remember that there are two types of value - Physical/Tangible Value and Emotional/Psychological value.

As you go deeper into the understanding of value you will discover there are other types of value as well such as implied value, invisible value, assumed value, imagined value, and more. I have so many stories that I could tell about these, some are hilarious. But that is for only after there is a basic or foundational understanding of value established first.

Getting nice reviews, winning a few contests and having friends say you are good is of little value to the paying customer. These are not enough to create true value. Anyone can have these (or similar). I receive promo all the time from performers proudly boasting and using the line "Voted #1 by my customers!" So what? What does that mean? And in reality there was no voting, no formal poll - it is just uneducated performer boasting looking for something to say because they either donít have anything of value to really boast about or they donít know how to create value.

Then on top of al of this there is Perceived Value. Several here have performed at the White House Easter Egg Roll. They use this as one of the 20 things on their list that is special or unique to them. While it is not unique or exclusive to them, it is something few can claim. And while we may all know it only really means they offered and submitted to do a free show outside of the White House for the staged event for media purposes, to their customers it seems impressive and creates the mentality of if they were good enough to perform at the White House for the President and First Ladyís event, they must be good. Not necessarily true but that is the perception.

Same for getting and using press and media coverage with articles in newspapers and magazines on you and your business, clips of you on television programs or news programs. I cover all of this and so much more and of course how to use and monetize this in my Press & Media For Entertainers book. This creates perception and that perception has perceived value, and in many cases actual value (if done correctly)

Let me give you another example of value and perceived value working together. Many of us grew up in the 60's and 70's when many television stations had local programming. Many markets had a local clown, kids show, cartoon show, etc. Many used performers including magicians on these show. Many were hosted by kids performers. Every kid in town watched these locally produced shows and they had a huge fanbase. Most were hosted by local kids entertainers and performers. Their show created value for them. Now lets say the host of one of these shows was a magician. Now lets understand in reality he was really only an average magician at best. You know you are better, more skilled and experienced. You also know a dozen others in your area (say a 30 mile radius) that are clearly better and more talented than the t.v. host. Yet, you were only getting $250 per booking, while he was getting $1,000 or more per booking. It is not because he is better, heís not. It is because of the value and perceived value he has because of his positioning and the benefits of the media and mass exposure.

Same for these guys and gals in America's Got Talent. They arenít always the best, but they use their appearances to create value to the customer (again, if done right).

These are just a few examples of value, the different types of value, and how to create and use value. It doesnít have to be television, media or the White House, I just used these as examples. As we regularly see here many here in Tricky Business often buy into this by seeing the White House, media clips or articles and such as a big deal and impressive even within our community.

This all must be created and designed. If you just sit back and think your value will establish itself you will be wrong (not you Mary, but in general.)

Like I have discussed in the press and media threads here, we must take control and create this ourselves. There are many ways to create value. Start thinking in terms of value and thinking and operating from the customer's perspective. They are uninformed, minimally informed, or often misinformed. Understand that. Use this as an opportunity to educate them while positioning yourself and creating and establishing value.
Message: Posted by: Mindpro (Feb 26, 2019 12:15AM)
Just curious if anyone has progressed in creating their value as a performer and a business? There have been some good things offered here so I just wanted to see if anyone followed the exercise or had any questions?

Several have commented the "just ask the customer for your value" is not creating actual value which I would agree. Plus "customer" needs clarification - in stating this to you mean the event planner that booked you, are they the customer you are referring to, or the audience who receives your show? Two different targets with two different set of levels and expectations. More times than not the audience is not paying for you or purchasing a ticket (unless you do theater shows, or 2/4 wall models, so value to them may be different than to those your business is targeting as customers.

All of this plays into your pricing, how and when to raise it and the price you may be able to get within your markets.