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Smarty Pants World
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Just posted my latest column on BalloonHQ regarding the Power of Effective Pricing. Give it a read here:

http://www.balloonhq.com/column/spants/nov12/
Bridgewater
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I've seen this reasoning often on these threads and I'm not entirely sold on it. Let's suppose the "King Magic" you describe charged the bottom end ($200) for all the 204 shows he performed for that quarter. He'd make $41,600 between June and August, working (excluding travel and set up) one to two hours a day. I'd jump on that deal, and I doubt I'm alone. I am also a disciple of "The more you work, the more you work." If I'm available, and the client meets my fee, I'm there. When I become so busy that I am turning away as much as I book, then it's time to raise prices. I suspect the guys who say "I won't get off the couch for less than $xxx" spend a lot of time on the couch.
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Thank you for posting and thank you for the article.
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Smarty Pants World
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Hey Bridgewater, thanks for your comments. Please give the article another read - when I met Marvin for lunch, he was actually completely exhausted and looked like crap - because he was so busy all summer working gigs, all day, every day. Part of his issue was that he has no set prices so he'll adjust his fee to meet any client budget so he keeps working. My point was that he could be working less gigs for more money and still be earning the same income without killing himself. If he wasn't busy, yes, then I'd suggest cutting your rate.
magicofCurtis
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Now having a set basic fee and working within a clients budget are two different aspects.

-Some clients will pay almost anything you ask
-Some clients can only pay xxx amount and will ask you to work for that price
-Some clients has xxx amount to spend and they want something customized or not typical for any regular pricing structure and this is usually 10X to 1,000x your set fee, but requires lots of preparation

Now, one can work themselves to death and make a lot of money or one can choose their clients by reflecting their prices.
now a $200 act needs to book 20 gigs a month to bring in $4,000
now a $1,000 act needs to book 4 gigs a month to bring in 4k
now a $5,000 act only needs to book 2 gigs a month to bring in 10k
now, a $10,000 act only needs to book 1 gig a month to brink in 10 k
See the huge difference? But even the 10k act will pick up a 5k show sometimes to add to their bottom line or fun factor of things to do in life.

Now creating an act and a rep in order to bring in that kind of fee is another story.

So, back to one of my statements;

"Some clients has xxx amount to spend and they want something customized or not typical for any regular pricing structure and this is usually 10X to 1,000x your set fee"

Now some clients has very little to spend, but will want something customized or not typical for any regular pricing structure, but this will allow you to be able to charge more for future gigs because now you have a cool resume! take these jobs, because they are unique or the client is willing to take the risk at their event for you to do something stunning and those are hard to come by clients.

Best wishes to all
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Call me crazy but I think its totally unethical to charge two people different prices for "almost" the exact same show or the same thing.

Contractors and car salesman are constantly caught by hidden cameras by the news media for this very practice.

Have set prices that are clear and in writing that treat everyone equal.

Regardless of who they are, where they live or how much they make.
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I hear what you are saying Kevin but sometimes adjustments have to be made. If you keep working at a high rate and no one is willing to pay that rate (economy etc), you have to make allowences to continue working.
Kevin Ridgeway
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Quote:
On 2012-11-16 23:37, Kevinr wrote:
Call me crazy but I think its totally unethical to charge two people different prices for "almost" the exact same show or the same thing.

Contractors and car salesman are constantly caught by hidden cameras by the news media for this very practice.

Have set prices that are clear and in writing that treat everyone equal.

Regardless of who they are, where they live or how much they make.


Kevinr, I agree in principle with your statement. But there are factors that come into play. I'm gonna be all over the place here, so bear with me.


-I'll use other industries. Gas stations even within the same city and even the same zip code, charge different prices.

-Walmart, Lowe's & Home Depot ask you to put in your zip code online to get your local pricing. Pricing varies on locale.

-Doing a public show that make be ticketed or underwritten, where the host or promoter directly benefits from your services. Should they have the same price if they have 100 people as when they have 10,000 people?

-You state 'its totally unethical to charge two people different prices'. I assume if you charge someone more, you believe it's unethical correct? That means by that definition, if you charge someone less it is equally unethical. Follow me here for a moment. You charge $5,000 for a show. You charge this amount all the time. However, a major client, with tons of contacts wants to book your show. He is looking at other acts as well. To him it comes down to price. You really want the gig. You don't even really care that much about the money. You know the contacts you will make, the exposure you will receive will greatly benefit you for years to come. So you decice to charge him $4,000. By defenition this would be unethical? Why is this not just plain 'good business'?

-Plenty of people do one off TV shows. MOST the time those pay less that the normal price they would charge any other given day. They feel it is in their best interest to do the show and get the exposure, credentials, etc. Is this unethical to charge them less?


Please know I am not directing this at you. Just trying to point out while I agree in principle with your statement, there are other factors that come into play...and I don't believe they are inherently unethical in and of themselves.
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Kevinr
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OF COURSE

YES if you were an honest ethical person you would charge more for different areas based on how far they, travel or tax purposes. (as in the zip code example you gave)

I would also agree that you might have a special wholesale price that's again the same for all corporate accounts that buy a bulk amount of shows.

I don't think this goes against an ethical way of doing business of treating everyone equal with the same prices.

I have seen many many magician training programs and classes. Some even suggest if a client gives you all there information first and books the show WITHOUT even asking the price first to charge them extra. Others suggest for magicians to charge extra for last minute distressed clients since there options are limited.

I personally know magicians who charge one side of town (high income neighborhood) that is closer to there home more money than they charge for events much further away because they know they "think" they can't get that much. Where is the logic in that?

I know other entertainers that look at there schedule and as there schedule fills up they raise there prices by double! The logic is: "I really don't wanna work that much but if they really want me I want double now since my schedule is almost full!" Then the very next week they have a slow week with no jobs and panic and prostitute themselves out for less than half the original price.

The media should do a hidden camera sting on guys like this.
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Did anyone factor in the law of supply and demand?


Kevinr .. can I call you crazy ;-)
We are (for the most part) all own corporations and can/should/will charge what the market will bear or what we decide our fees will be on any given day for any given client. How can another business person suggest what we charge or that we should all charge every client the same fee for a similar show? It's not unethical, the odd few shows in late January are much different than the Holiday performances in December.

Am I unethical because I extend a substantial discount to 2 charities I am involved with and smaller discounts to other charities I feel are worthwhile, while other fund raisers I teach (and help with promotion) how to be able to afford my full fee? It's a similar show


Do I pay more to live in the neighborhood I am in? Yes,
Shouldn't all neighborhoods with similar homes be priced the same?
By your logic all houses regardless of where they are as long as the are similar in features should cost the same.


We all have the morals we can afford ;-)
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Kevinr
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Quote:
On 2012-11-27 01:01, Vick wrote:
Did anyone factor in the law of supply and demand?


Kevinr .. can I call you crazy ;-)
We are (for the most part) all own corporations and can/should/will charge what the market will bear or what we decide our fees will be on any given day for any given client. How can another business person suggest what we charge or that we should all charge every client the same fee for a similar show? It's not unethical, the odd few shows in late January are much different than the Holiday performances in December.

Am I unethical because I extend a substantial discount to 2 charities I am involved with and smaller discounts to other charities I feel are worthwhile, while other fund raisers I teach (and help with promotion) how to be able to afford my full fee? It's a similar show


Do I pay more to live in the neighborhood I am in? Yes,
Shouldn't all neighborhoods with similar homes be priced the same?
By your logic all houses regardless of where they are as long as the are similar in features should cost the same.


We all have the morals we can afford ;-)



The Definition Of Price Discrimination:

"The practice of one company charging different consumers different prices for the same good is called price discrimination."

This practice is the same thing fought for with the Jim Crow law (if you don't know the Jim Crow law look it up)

Vick, I hope you feel the same way when the plumber comes to you house and feels you out then rips you off when he charges you $800 to install a garbage disposal but only charges your neighbor $400 for the same exact garbage disposal. That's exactly what magicians are doing when they take two calls from two equally distant parties (not talking about travel fees) requiring near identical services (similar shows) but charging one way more than the other because they either feel like they can "get away with it" or choose to charge double because there schedule is almost full and wanna try and get more.
TonyB2009
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I am with Kevinr. Prices may vary according to the nature and location of the gig, but if two gigs are similar, I will always go out for the same price for both gigs. No one will ever accuse me of ripping them off.
DWRackley
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I think to some degree we may be talking apples and oranges. There are benefits beyond money involved in working with particular clients. Publicity and good will are not without value. Who’s going to be in the audience? What kind of coverage will be present? I’d have no problem charging a private sports club 3 to 5 times what I’d bill, say, a church youth group, especially if it meant that for one I might be the host’s “proprietary” guest and the other might land me an interview on the six o’clock news.

The Bible warns against “divers weights” (charging unequally), but some things of value can’t be measured simply. In a very real sense, it’s not inappropriate to ask “What’s it worth to you?”

My two cents.
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Jesse Lewis
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Consider this as well, many clients are harder to work with in general and for this some people may charge an inconveniance fee. it happens is it ethical maybe not but it does hit home.

Prices vary by client and scheduling I even know some restraunts that have different pricing for "bad" customers is it right or wrong to charge more for inconveniance?
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Kevinr
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Quote:
On 2012-11-28 00:40, DWRackley wrote:

The Bible warns against “divers weights” (charging unequally), but some things of value can’t be measured simply. In a very real sense, it’s not inappropriate to ask “What’s it worth to you?”

My two cents.


I have a question for you. Is it ok for a plumber to charge you $800 for the same make and model garbage disposal that he charged your neighbor just $400 and he spent the same exact time at both jobs and used the exact same parts? Both of you live on the same block by the way. Is that ok?

What about a guy who comes out and charges you $500 to unclog your kitchen sink and he is only there for 60 minutes. Then he goes to your next door neighbor and unclogs his kitchen sink for just $100 and is there for 55 minutes (almost the same exact time) later in the day you talk to the guy next store and you both laugh that you happen to have the same problem on the same day and both used the same guy. You get around to asking what he charged and your shocked to find out you where charged $500 for what he had done for $100 for the same time with the same company. Can you really justify this in your mind that its ethical?!?

This will be my ONLY post on the bible but I could go on and on to explain where your wrong. Here is just a "few" of hundreds I could dish out. However, again I am done fighting n the bible with this subject. I will stick to the 1. The facts 2. The legal law and 3. The definition.

The Bible teaches that God does not discriminate or show favoritism (Acts 10:34)

The Bible also teaches we are all equal (Gal. 3:28)

The Bible says to treat others how you wanna be treated (like my plumber example above) (Matt 7:12)

God himself is impartial and so should we be. (Romans 2 11)

The Bible says don't show favoritism (James 2:1-4)


If you wanna charge churches 50 percent less or any specific group or type 50 percent less and that's your policy for everyone to see that's totally legal and fine just like offering a senior or military discount. That is offering everyone still the same price. However, I will not repeat myself the definition can be read above and is clear as day to God, you, a court of law and everyone else. If a entertainer needs to make themselves feel good about justifying charging two separate people in the same exact zip code different prices for the same exact show with some sort of excuse beyond a specific discount available to all (church, military, senior etc) or charging more because of travel fees or trip fees for the exact same time and exact same show? Beyond this its called its called "price discrimination". Its wrong to God and everyone else and it's against the law.


Again, put yourself in the shoes of the guy in my story above with the clogged sink and then look deep in your heart and realize you can NOT honestly justify it.
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Quote:
On 2012-11-28 02:32, Jesse Lewis wrote:

I even know some restraunts that have different pricing for "bad" customers is it right or wrong to charge more for inconveniance?


Charge more for what one individual "might percieve as a bad customer? Are you kidding me? Where?!? NO that's not legal nor is it ethical. If entertainers are gonna use this as an excuse to charge someone more money because they can get away with it than someone else for the exact same show it really shows how low we have gone in the barrel.
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I agree that if you are providing the SAME service to two different clients on opposite sides of town, that they should be charged the same rate. But I would argue that it is rare in this business to provide the same service for two clients.

Using the popular plumber analogy: If the plumber charged me $500 for unclogging my sink at my house after performing the exact same job for my next door neighbor for $100, then yes I would be upset. However if the plumber had to do more work at my house then I would expect to pay more. Maybe at my neighbors house he spent 55 minutes watching Drano work on a call that was scheduled during the week and at my house he was elbow deep in sewage for 61 minutes after being called out of bed at 2 AM on a Saturday.
Or perhaps my garbage disposal requires more work because the sink is on the third floor and there's extra materials and time to install the product. Again I would expect there to be a price discrepancy between the two jobs. What about if the plumber had to use a special tool at my house, but not at my neighbors?
Anybody that charges two birthday moms in the same town different rates based on what they think they can charge each one is asking for trouble (and being unethical). However, if a client has special requests or expresses that there is more work involved than in a typical show, they I have no problem charging different fees (based on the value I provide)

Examples where different rates should be expected:
1)A show for 10 kids vs. a show for 30 kids.
2)A third story walkup where "parking is a problem" vs. parking in the driveway and "my husband will help you unload" on the first floor.
3)A client who wants the regular show vs. a client that wants an all new custom show where you have to buy new props and rehearse new routines.
4)A show where you just have to show up and perform the show vs. a show where they want to meet you ahead of time.
5)Outdoor shows at night vs. indoor shows. (If I'm providing lighting for the show, you better believe I am going to charge appropriately)

Unethical resons to charge different rates:
1) Because I feel like it, or think I can get away with it.
2) Because most women don't know anything about vehicles (read as stereotype) and they were "dumb enough" to pull into my service station.
3) Because they sound rich (or live in the rich part of town)
4) Because that's how much the client wants to spend.

By all means if they have $5,000 they want to spend, I can add on other services to build the value of what I provide, but I would never charge $5K to a client for a $200 show.

How is it OK to give certain groups a discount to charge different rates but not charge some clients more than others. Is senior pricing acceptable at the movie theater? After all, that's about as close to the definition of price discrimination you can get. Same room, different people charged different rates for the same product. I refer you to the wiki pages on "price discrimination" and "sliding scale fees" for further examples.

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iwillfoolu
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As far as the OP. I couldn't agree with Smarty Pants more in his expressing that Marvin working 200 shows in 3 months is a lot of work, and time on the road. I've never done close to that many shows in that time frame and the mere thought of it makes me want to crawl under a rock. That's a LOT of work. While I applaud him for being so "in demand", part of me is genuinely concerned for this guy.

Someone mentioned that at $200 a show, he made $41K. You say that you would love this kind of busy schedule until you actually do it. I bet he turns away twice as much work as he accepts because he's already booked.

He averaged over 2.25 shows a day. The problem is that you can't keep that pace up for any extended period of time with out the show (and your health) suffering. In that time frame, he had to replace his act from the wear of 200 shows and put something like 18,000 miles on his vehicle (just a guess, I don't know Marvin), and fill his gas tank at least twice a week. He had to return 2000 phone calls/emails and drive all over the place, at all hours to fit all the shows in (think about doing 3 shows at different venues an hour apart each: that's up at 7AM back at 11 PM). He probably looked like he lived in his car and ate at McDonald's everyday because, essentially, he did. What's worse is he might have damaged his reputation (and health) by not taking care of the star of the show. Worse yet, he didn't get to enjoy any of the spoils of his work.

The top names in the business understand that it takes a LOT of time and energy to perform a show (they say a 1 hour performance can expend the work of a laborer in a full shift). They usually only perform 10 shows a week. At most that's like 126 shows in 3 months. Copperfield has quite the stretch coming up of two and three a days at the MGM Grand (57 shows in December, 49 in January) but even he takes a week off every once in a while. Lady Gaga performs her touring show every other day usually and still takes long stretches off to enjoy herself.

Why?

Because if you work too much (either because you charge to little, or because you don't have set pricing and take every offer that comes your way) you will be busy, but you are setting yourself up for health problems and lack of energy and enthusiasm (AKA burnout)

I did 32 events (most 1 show gigs, some 2 show gigs and a couple of balloon gigs) in July and it was pretty tiring, but that was only for one month. There's no way I would attempt to keep my schedule that full if I had to travel to each show.

Marvin should have a set price or hired an assistant to deal with all the non-show activities, he would not have run himself ragged. He might lose some business, but he will gain some sanity.

Alternatively, he could just be "unavailable" for a vacation every once in a while.

Either way, if it works for him or you, who am I to argue.

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charliecheckers
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Quote:
This will be my ONLY post on the bible but I could go on and on to explain where your wrong. Here is just a "few" of hundreds I could dish out. However, again I am done fighting n the bible with this subject. I will stick to the 1. The facts 2. The legal law and 3. The definition.

The Bible teaches that God does not discriminate or show favoritism (Acts 10:34)

The Bible also teaches we are all equal (Gal. 3:28)

The Bible says to treat others how you wanna be treated (like my plumber example above) (Matt 7:12)

God himself is impartial and so should we be. (Romans 2 11)

The Bible says don't show favoritism (James 2:1-4)


What about Matthew 20: 1-16 The parable of the workers in the field? I am not sure anyone can speak for the bible when it comes to pricing. Your examples above do not really answer the question. Perhaps many would believe that charging according to affordability is treating others as they would like to be treated. Perhaps charging on ability to pay is treating people equally from a percentage point of view. Perhaps Christ would frown upon one who took someones last $300 for a show because the performer had charged a rich person $300 that same day and believed all should pay the same rate regardless of circumstances.
DWRackley
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Pretty sure Kevin missed my point. If a plumber comes to unclog your drain and then finds out that you tried to do it yourself before calling him and broke the “P”-trap, he very well might charge more to fix your mess. No two jobs are EVER the same, not even if you're working on an assembly line.

And if I find a “surprise” when I arrive on location, I may not change the price for that single show, but I may change it for future performances, or refuse to do the gig entirely.

And why not charge by what part of town? Some places I’ll need more to cover my travel time and gas. Other parts of town I might not go into at all. This is real life. Go to five different locations in five different parts of town and buy the same loaf of bread. I’ll BET you pay different prices in each place. To think otherwise is just not in keeping with the way the economy works.

For that matter, why should a retailer offer a discount just because somebody cut out a coupon? Isn’t that overcharging everybody else?

I provide a service. That service is worth exactly what I say it is. If the customer doesn’t agree, he has the same freedom I do.
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