Here we are facing the darkest of winters in the United States. Ho ho ho, more than 3,500 people in the U.S. will likely die from COVID on Christmas Eve. Millions upon millions more will contract the disease between now and then. And yet there is hope that Spring will bring a rebirth like no other if we can put this horrible disease under wraps with a vaccine. Talk about doing what it takes to get to the other side. Darkest of dark before lightest of light.
So here is how the thinking goes. Make sure you price your work when the tide rolls back in to make up for all that was lost in the CF of 2020. Perhaps you have to honor delayed business but the new has to make up for all that was lost. Sounds logical right? If only you were selling toothpaste.
What if we fully grasped that the essence of our psyches has fundamentally shifted, that getting back what was lost is a fools errand since it is, in fact, lost. While you are busy looking in the rear view mirror to justify what tomorrow looks like, the Mack truck coming at you is just going to run you over.
Let’s do some simple math. If you lost two in 2020, you will need to charge four in 2021 and maybe 2022 to get back to where you were. Then what are you going to do, go back to two? Stay at four and ride the “getting back to square” train as long as you can? Or actually justify your value?
Oh and who said the end of a calendar year is a time to recalibrate pricing? Do you think that magically the world will change course on January 1, 2021? Just silly. If you want to adjust your prices for inflation every year, you go. That would be 1.4% as of this month in the United States. Anything more than that requires an explanation as to why exactly you and your creative business are worth more. Passage of time other than adjusting for inflation just says nothing.
If you were your client, why exactly would that make you feel good and valuable if you are going to go with the “making up for lost business” as a justification for four? If anything, you are rusty, as are your production partners and the risk of performance is higher than it was when you were running as a well-oiled machine. That is the thing about the fly wheels of creative business, getting started again is not so easy as flipping a switch. Let me get it straight then, you want your clients to pay more money for a rusty and/or likely overworked you? Good luck with that.
Instead, how about we erase the box? Erase the box means quit being derivative to what has come before as it has very little value with regard to what is to come. Yes, you will be doing events, performing, cooking, printing, etc. just as you did before. Except the world has fundamentally shifted. Think you will ever be able to ignore digital again? Engagement on a whole other level with opportunities abounding within that engagement. If you see value at say ten, then being limited to four just to get even prevents you from investing and shifting to manifest that value. Not investing has huge implications as it will lock you in to your old (dead) model.
So let’s get down to brass tacks. What part of your creative business do you love the most? What part do you know your clients love the most? How much do you charge for that love? What if you charged five times for that love (and if you do not charge for that love right now, what if you charged sizably for it)? What would you invest in to make that love stronger, richer, deeper for you, your client, your employees? What if you decided that the level of quality, talent and commitment you provide would be what your clients had to pay for?
I give this example a thousand times to Sunday. If you have a hundred dollars for labor and you have a choice to hire ten average workers at ten dollars or two rock stars at fifty dollars, almost every creative business owner I know would choose the rock stars. And yet the illusion of more is better persists (not true of design and not true of production) so clients might think the exact opposite. What if you could educate and justify the necessity of the rock star? Then you would have the rock star on your team. Erase the box because it provides the platform for value today and tomorrow regardless of what happened yesterday.
Last, let’s talk about value. Nobody buys anything because they expect less in return. You buy toothpaste for two dollars because you believe it will help you keep your teeth clean for the time you think it does. Awesome if it does even more because you will then go back and buy it again. If not, you will move on until you find a toothpaste that does.
For creative business the value is not in usage or financial return, it is in emotional satisfaction. Joy. Transformation. For your client, you must be cheap for the price because their joy has to outweigh what they paid your creative business to create and manifest for them. Otherwise, you have failed.
The relationship of price to joy is ephemeral at best, which makes it all about investment in ourselves. Your clients invest in you and your creative business to bring them to another place. They are simply asking what is it going to take to make that happen. Your responsibility is to look only forward and answer accordingly. Erase the box.