Pricing products and services is something I have been informally learning about here and there while exploring business podcasts and blogs.
One theme coming up over and over again is the role of complex insecurities, especially in regards to generous and altruistic women. This can lead to undercharging for services and not understanding the market value of an item.
In addition, charging less than what something is truly worth can put business owners in a downward spiral, probably accounting for why ½ of businesses fail within the first five years and 96% fail within 10 years.
Enjoy it? Do it For Free! Give it Away!
When I think back on my time as a full-time musician, I definitely felt the prickly impact of trying to put a price on music and performance. Maybe people think being an independent musician is based on luck (and anything based on luck doesn’t deserve to be well paid)? Maybe if you enjoy doing something you should do it for free? Whatever the logic is coming from a few people, it’s a permeating force and generates a sticky issue.
Even the other day, a musician acquaintance of mine with a decent Instagram following received criticism selling tickets for online shows and not giving all of her income to charity (she was giving 20%).
Do you consider that a ridiculous jab from a fan? I couldn’t believe it! Especially since I know a little bit about her tenuous financial situation. Thankfully, a bunch of people came back to defend her choice (since she can’t tour full-time and needs to support herself somehow during the ongoing COVID crisis). I don’t know why that man had the nerve to say such a thing when he clearly wasn’t a full-time artist going through this unstable time.
Basically, if you are going to do anything creative in a public space and be paid for it, these reactions from others can be expected.
A Short Story: Pricing CDs
As I mentioned in an earlier post, purchasing inventory to have on hand can be tough to gauge.
I wanted to get rid of my 5,000 self-produced CDs before I quit playing live shows full-time. In my mind, I thought I would lower the price of a CD from $10 to $5 and get rid of more.
You know what happened? I kept track of it and sold LESS. Less CDs overall at each show for a summer straight.
It was almost as if people couldn’t trust the recording quality of something priced so cheap (even if it did contain 13 songs). I knew what my logic was - I felt better giving away the CDs than finding them in heaps and boxes in my future house. But other people? They think they get what they pay for. And they’re willing to pay more.
The summer after that? I had to go against myself to raise the price back to what it was. But the proof was in the experiment. I sold more. It’s a short story with a big lesson in it, especially if I’m trying to learn from my past business failures.