The difference between cost and price.

“WHY IS YOUR PRICE SO HIGH?”

Price vs cost

Most of the time, you don’t see the costs that determine the price.

This is a question that performers get a lot.

A friend of mine posted this recently on Facebook– I don’t know who originally wrote it-  but it’s a great parable about the invisible costs of putting on shows, and why hiring a professional makes sense.  This story is about being a DJ, but it easily translates to almost any performance medium.

A TYPICAL CUSTOMER SCENARIO ABOUT PRICE

HIM:  So how much will it cost for you to come DJ our event?
ME: $ 1500
HIM: Wow!, That’s so expensive for this job!
ME: How much do you think it SHOULD cost you?
HIM:  I don’t know, $ 800 maximum… This is a pretty simple job right?!
ME: For $ 800 I invite you to do it yourself.
HIM: But…. I don’t know how to.
ME: For $800 I’ll teach you how to. So besides saving you $700, you’ll get the knowledge for the next time you want to do it.
HIM:  Okay!
ME:   Alright, to get started you’ll need tools: Music library, computer, turntables, a mixer, speakers, wires, etc.
HIM: 
But I don’t have all these equipment and I can’t buy all that  for one job.
ME: Well then for another $300 more I’ll rent my stuff to you so you can do it.
HIM: OK.
ME: Okay! We can meet up on Tuesday, and I’ll start teaching you how to do it.
HIM: But I can’t on Tuesday I only have time today.”
ME: I’m sorry, but I’m only available on Tuesday to teach you and lend you my stuff.  Other days are busy with other customers events.
HIM: 
Okay! That means I’m going to have to sacrifice my Tuesday, and do my work on another day.
ME:  Also, before I forget,  to do the job yourself, you also have to pay for the nonproductive factors.
HIM: I’m sorry, What is that?”
ME:  You know, Bureaucratic, record pool fees, tax, security, insurance, fuel etc.
HIM:  But to accomplish these tasks, I’m going to have to spend more money and waste a lot of time that I don’t have.  Can you do that for me?”
ME:  I guess I could do it for another $100.  
HIM: Okay!
ME:  Alright, I’ll provide you with all the gear and production you need. The Truck loading is done Monday evening or Tuesday morning–you’ll have to come by 6am to load the truck. Don’t forget to be on time to avoid traffic
HIM: At 6am???  But that’s really early.  I usually get up at 8.
HIM: You know, I’ve been thinking.  I’d rather pay you the $1500. If I had to do it myself it wouldn’t be perfect and it would cost me a lot more.”
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Here’s the thing: when you are purchasing a show, you are not just purchasing an hour or four of somebody’s time.
You are purchasing these hard won commodities:
– Knowledge
– Experience
– Study
– Tools
– Services
– Time
– Punctuality
– Accountability
– Professionalism
– Accuracy
– Guarantee
– Sacrifices
– Safety and security
– Payment of tax obligations
All those are unseen costs that matter for the job.  Being a good clown is not just about putting on a nose and a crazy costume and getting amped up on sugar.  It requires all of the above to make a performance memorable.

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