Setting the Right Price
Pricing Strategy for Artists and creatives
Price is one of the most important decisions you`re going to make as a creator of anything. Setting the right price is an artform. It requires putting a value on your skills, your time, your creativity, and it can be very hard. Making sure the price you set reflects both your value and your costs along with being in line with your goals is complicated and critical to being successful.
Let’s take a moment to review some good rules and thoughts on setting prices. A pricing strategy for your creativity and creations.
Pricing Awareness
Your price isn`t just about what you sell your services and goods for. It is a very tangible representation of your brand, your position in the marketplace, and your value. Clients and users will learn a lot from your prices about you and how you perceive yourself and how you see yourself. Likewise pricing needs to be done in the clear context of your business realities, costs and goals. Set the prices too low, sends a message of cheap and replaceable goods/service, that can undercut your value and value message, additionally having too high prices can alienate some of your customers, or work against your business strategy and cause intermittent sales.
Definition
A pricing strategy sounds fancy but it’s just about making conscious choices about why your price is what it is, while making sure that the price reflects your brand and your value. Ultimately covering your costs and representing your value.
Pricing Strategy considerations
Professionalism, believe it or not but in many causes, people will look at a price and have an expectation as to what it might cost. It`s therefore important that you do too. Knowing your worth and setting your price in that context helps show that you understand your work and you take yourself seriously. Being too low might make them wonder why, believe you may not have experience or knowledge. Setting it too high may have then believe you are out of touch.
Be consistent, make sure your prices on your services make sense, in context. Make sure that items that are big and complex are more value than those that may be small and simple. Where things are not obvious explain the reason why the price reflects work/cost or value.
Your Market, who are you selling too and who is buying your products, where are you selling them. Are you selling at pop up markets or in luxury hotels, are your clients normal people or tourists. Understand what your competitions is selling their time and services for and benchmark yourself vs. them.
Prices have a purpose.
You are turning your skills, knowledge creativity and time into a product and you need to sell it, for food, shelter and beer. Prices are how you turn the intangible into something that has a common understandable value. That`s hard and complex, however ultimately it`s why we do these things.
That is why we need to ensure that your prices are ultimately working for you.
Covering your costs? It doesn`t matter what you make or the time you use, or the materials and effort you put into creating if you don`t sell it for at least what it cost to cover all those elements that go into making it. And to be clear your time is valuable and needs to be covered. Now don`t be surprised many times things are sold for less than their cost to produce but thats not sustainable and won`t be for you. Make sure that you´re covering your costs, and you`re profit.
Financial goals should also be covered by your prices. This means that you shouldn`t limit your prices to just the cost or value of a product. You need to be thinking further, your time doing development of new products? You saving money for lean sales times? Want to take a holiday? Want to move to a bigger studio? All these things need to be paid from your sales of daily products, so remember to include your long-term goals and desires in your prices.
Value, what is the value of your product, not just to yourself but to your client. This is the secret sauce, and it`s important to look at your audience and the market you`re looking to sell in. It`s critical to ensure that your pricing is reflective of the value you want it to have as well as ensuring that you`re selling it to the audience that sees and understands that value.
Steps for setting your price.
So now you`ve heard me ramble about pricing and its importance so let’s give some practical steps and considerations that should go into your price strategy.
Step one:
Calculate your costs, it starts with knowing what you spend and what your product costs to product. This includes everything, from materials to the roof you do it under, to your salary expectations and more. Identify everything you spend in doing your gig. Daily monthly and annually costs.
Step two:
Define the financial goals of your business, that I mentioned above. Do you take a salary out of your company? Are you able to take a holiday? Do you have off seasons or periods of down time? Are you investing in your tools or similar long-term investments? Set out your goals that go beyond the production and creation. Even if these are broad numbers, they are critical, and very often forgotten.
Step three:
Look over the shoulders of your colleagues and competitors, what are they charging, what are they pricing their goods for. Are the services and products the same? See where you fit in the market and make sure your place in the market is consistent what you believe it should be.
Step four:
Test your price out. Put a number out there and give it a try, and adjust it as needed. You can see if you have business coming in by simply trying it. And make sure you adjust your prices as your reality changes. Prices are dynamic by their nature, and you control it entirely. Increase the prices if you need too.
Step five:
Tell your story and the story of your product. Value is a nebulous term, what one person values the other may not see. You have an obligation to ensure that your value, is clear and well communicated. This includes both tangible parts of the product if it`s a physical media but also the value of services and the narrative of full-on art pieces. Many parts plays into how people perceive value and understanding who your clients are is a great first step.
The Right Price
Setting a price on your work is hard, and getting it right is very important. With some of the details we´ve outlined above you`ll have a better framework for doing that going forward. With good and strong pricing, you`ll help you have a sustainable and more pleasurable experience in your creative life.
If you are in doubt of your prices or need help setting financial goals or understanding your costs, we can help. Department 45 has experience working with creatives on understanding costs and reviewing the difficult task of financial business management.
Please reach out to us on I encourage you to follow us on Instagram @Department45.eu.
Department45 can support you with setting pricing and cost management. We`ll design for you an understanding and spreadsheet to support your knowledge and decision making.
Tim H.
THANK YOU!
