June 2022 Message
June 6th, 2022
This Month’s Money Message: Capture“That’s a lot of work!”
Her comment was met with laughter in the room, but she was exactly right: It is a lot of work to develop a comprehensive pricing strategy, especially in the arts.
We had just finished going over the basics of a pricing strategy: Calculating business costs; understanding what customers were willing and able to pay; reviewing the competitive landscape; and gaining clarity on the true value of what each person provides.
But for someone that has multiple revenue streams – say, workshops they lead in their studio, commissions from select clients, and multiples they sell online – a complex pricing strategy triples in complexity.
It is a lot of work to capture your value. Because that’s what we’re really doing, isn’t it? We’re assigning a number to the value you provide. That should take a lot of time and work. You’re not selling a commodity or something that is easily available everywhere else.
It’s work. But it gets easier. I promise.
If you are setting your prices for any of your revenue streams for the first time, or if you are developing a new revenue stream from scratch, there will be lots of upfront research and even more real-time learning, especially at first. Give yourself plenty of time to do the research upfront and plenty of grace to adjust your approach until you settle into a strategy that works for you.
If you are revisiting your pricing, your research process might be a bit quicker. Instead of starting from scratch, you are probably updating what you’ve learned. And instead of relying on publicly available information, you probably have core customers you can reach out to for a chat. You probably also have some peers that might be willing to chat about their prices to help you understand the overall landscape.
But you probably still need to give yourself some grace, especially if raising your prices is something that comes with big feelings of uncertainty, underqualification, nausea, unease, terror, or something else entirely. The research and the data can help combat some of those big feelings, but it may not be enough. Talking with trusted peers, giving a notification period (with an automatic increase set up), and using a celebratory moment to re-anchor your new rates can help.
So with that in mind, here are three things to keep in mind this month as you capture your value:
Know: The research and your numbers.
Make sure you know what your customers are willing and able to pay and what your competitors are charging. Then look – really look – at your own costs to calculate your break-even point. It’s easy to use “ish” numbers here, and normally, I’m totally fine with that approach. But for the sake of doing the hard work to sort out your pricing strategy, giveyourself the time and space to really (really) look at your costs.
Do: Update your rate cards, your website, your contracts, and conversations with customers.
I might actually do this in reverse: Start with conversations with your existing customers and then update your rates wherever they are listed, captured, noted, or referenced.
Believe: What you do has value; it is okay to capture it.
You have spent a lifetime cultivating your creative skills, experiences, and insights. And you continue to cultivate, grow, and exhibit those skills and perspectives over time. Your value continues to increase. Your prices should too.
What We’re DoingJune is a month of long days, lingering sunshine, and plenty of conversations about money. I get to travel to New Orleans to kick-off the Joan Mitchell Foundation’s 2022 Fellowship program, I head back to Indiana for a collaboration with Be Nimble, and I finish off the final one-on-one conversations with 2022 On-Ramp participants. I truly am incredibly lucky to be doing this work.
Thank goodness for longer days and lingering sunshine. My brain is enjoying extra hours to get to do this work.
What We’re Talking AboutIt is a lot of work to develop a comprehensive pricing strategy! And you do have better things to do. So maybe let us help with some of the work? Or at least with the accountability piece. Bring your research to the conversation – including any roadblocks you’ve found – and we’ll help pull the pieces together.
CREATIVE COACHING (1 HOUR, $125)If you’d like to chat with me to answer your own questions, feel free to find a time that works with your schedule.
CaptureAs I have been reflecting on the word “capture” in writing this, I’ve gone back and forth about whether it is too aggressive. Merriam-Webster includes includes “by force, stratagem, or guile” in its definition of the word. And certainly in the context of capturing value, force, stratagem, or guile have nothing to do with the process. So I’m leaning into the second definition they share: “To emphasize, represent, or preserve” something. That’s what we’re really doing, aren’t we? We’re representing the true value of your creativity using currency. No guiling required.
Until next month…