Fear does not only mean there is a gun pointed at your head or some similar threat. In fact, physical threats are not the deepest fear we all face for the simple reason it will be over one way or another. No, the deepest fear is being seen, or worse, ignored for the essence of who we are even if the very reason the relationship exists is BECAUSE of this essence. This fear is pervasive and all too often never ending. For me, this is the genesis of most “isms” when it comes to creative business, the biggest being sexism (gender and/or sexual identity/orientation) and racism.
Intimidation and bias is baked in and becoming sensitive to that fact in an effort to improve the business of creation is always a worthwhile endeavor. We have to challenge what exists, sometimes (ok, often) break it down before we can rebuild it more strongly in an artist’s image. We have to move through “I am doing it wrong” to the place where we can definitively say the voice of the art is stronger because of the path paved by the business behind the art.
There is no emotion here and our humanity into the overlay of culture and its impact on all of us leads to consequences that force compromise. If you do not want to be perceived as “difficult” or “rigid” or “pedantic”, you shave off the edges. And the risk of you not being able to do your best grows. Literally, you silence the voice of your business that exists solely to be your champion. Like throwing down the shield to hope that the arrows will not hurt. No, no and no.
The wisdom of universal creation — faith that your ability to transcend the knowable with your art — is behind every single creative business I can think of. It must be honored if you are to find lasting success, both for you and your client. The fight today is to compel the intrinsic value that lies within universal creation so that it might become manifest. Today though, more than ever, we swim in the sea of creation with those who do not appreciate either the depth of the water or its ability to transcend. These are intimidating people and is a powerful basis for fear and a reason to hide in the “easy to understand”. COVID has forced our hand here though and demanded that we call out these bullies for what they are. “Getting to yes” sucked pre-COVID and is a disaster now. In the context of creative business, it means that, regardless of who you are as a person, your business needs to speak loudest of the truth it represents.
How we go about getting to the essence of why you and your creative business exist, ironically, is to honor the humanity in the relationship — the power within each of us to touch another with our gifts. To transcend the known. No doubt, some may not get there and that will just have to be. For the rest of us, be present to the relationship in front of you, frailty and strength all at once and hold the center for where it might bring us all. To be clear, this relationship is, by definition, imbalanced, you must earn the right to hold all the power, to extinguish authentic voice of your client beyond the idea stage and to move unimpeded in the journey’s path that your creative business alone has set.
Hard, mindful work is its own reward. My naïveté is that we can level the playing field to give all creative businesses a chance at finding those who care most about their work and vice-versa. If a black heterosexual female wedding planner is the best artist to handle the wedding of two white men, then my hope, my deep unbinding prayer, is that that is exactly what will happen. We have a long long way to go, no doubt. This is the work though and how we can do better tomorrow. Clients will have their own biases and that is on them, it is just that great work finds its own audience, most often bigger and broader than imagined.
Practically, though, it means that every creative business owner needs to do the deep, intrinsic analysis on their businesses first. Why should I entrust the essence of my very life — my home, my wedding, my building, my image — to your business if you do not know your own narrative, how to take me on the journey that I need to go on with you for me to experience the world as you would have me? I might be the subject of the story, but you are the story teller. It is not hard to do good business if you have the courage to own the story of your creative business as only you would tell it. And if you do not have that courage, please forgive yourself, ask to find it and, if not possible, just get out of the way for those that do.
As we tear down the biases and seek to heal the gashes at the fabric of our society, we will all want the placebo of saying look at what we are doing. That just is not good enough. No one needs a gift, we need authentic connection and real opportunity to express that connection across all platforms. This will take time and conviction.
There is no part of me that does not understand millennia of indoctrination of other as being superior and the systemic, powerfully cultural underpinning to perpetuate the imbalance of power and its awful consequence. As a people, I pray we move to find a way to dismantle this construct and will support anyone who works to achieve this goal.
However, when it comes to your creative business, you must let your business speak for you, plainly and true. It boils down to this: you and your art change the world when you are given the stage to do your best work. No client ever pays for your best under the circumstances. As you know your art is bigger than you, so to your business. If it is beautiful is when it is done, how you get to done is entirely up to you. That is your truth, your reality. Your clients have the choice to live there or not, they do not have the ability to change it. Let that be your North Star.
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.
All luxury is not the same. We as creative businesses need to better at saying what area of luxury we inhabit. There are three categories that come to mind: luxury, power luxury and ultra luxury. Each of these markets demand a different business model to reflect the needs of the clientele who inhabit each level.
This post will be a lot of what I covered in my very first post for The BBC Collective last June but has become ever more important today. We have yet to define markets to create models that serve those markets. We are still a hodgepodge and it needs to change.
Critical to the conversation though is the fundamental idea that all creative businesses have a subjective component and an objective one. The subjective are those ephemeral items like design, concept and vision. Objective is the cost to implement the subjective in real time. Smush the two together and, I do not care who you are, subjective becomes worth zero. Today, more than ever, no one sees the value of design in its production. In fact, quite the opposite. And even more than that, if you do not charge specifically for the subjective, it is worth what you say it is – nothing. Free is free.
So if we are going to value the subjective, we have to make it plain that that is what is getting paid for. Regardless of the category of luxury, all luxury creative businesses have to get paid in some form for the subjective. Easy enough, but not nearly good enough. On to the different categories we go.
Luxury. We live in a fluid world and we have to recognize that variables have to be in relation to expectations and project size until they are not. Overall cost of luxury in the wedding market should not be less than $700/pp all things being equal. Really it is closer to $1,000/pp, but I will let the floor be slightly lower. So 200 person wedding, base $140,000 cost. Less than that is not compelling as luxury – just not enough there there. What that means is that to support a creative business with projects lower than this sort would require a volume that takes away the attention that luxury clients demand. You can do beautiful work there but the level of specialness and trust in the relationship between client and artist just cannot be there. You have to work too much to make this promise of specific attention a reality. All of you should work in your markets to define the floor but I am not going to be too far off.
The floor is the easy part. From the floor to a certain level where power luxury will begin, all the stars align for luxury – you get to make the money you need relative to project expense and work as much as you would like to make it. Expectation and relative cost of a project align. Let’s say your average wedding is $150,000, you make your 20% or so and you would like to work 15 times a year. $500,000 in fees with a 50-60% margin and all is good. You take home $250,000. For those businesses with no or little cost of production, fees for these events also make sense. $15,000 for a photographer, $7,500 for a DJ where margins are much higher (say 80%) and it works.
The value for professionals in the luxury market is predicated on expected attention (i.e., how much you want to work) and relative value to the project (how much you cost relative to budget). This is the meat of the bell curve. What this looks like in each respective market should be absolutes and known. And all of you should set them. For instance, a luxury DJ in Toronto spins 35 times per year and on a $200,000 wedding deserves 2.5% of the budget or $5,000. Those are the easy standards to set.
However, to make those standards effective in the luxury market, we have to define the next strata of luxury, power luxury, where the relationship between subjective and objective breaks, where expectations and scarcity become the primary drivers.
Power Luxury. For weddings, events from $2,500-5,000/pp I would consider power luxury. Pretty outrageous but not ultra anything. Here we are starting to see the need for a new model focused on the relationship to expectation as opposed to relationship to cost. Relationship to expectation is: what should something like this cost from a creative business like yours? If the steak should be $75 in this category, pricing at $50 excludes you from the category. This has to be paired with scarcity – how much time are you willing to devote to each project so that the premium client gets the attention they deserve.
In the power luxury category, you can still bastardize the luxury model, but only to a point. 20% can become 15% and design fees can rise. Your fees can grow incrementally and still make some sense. Just know you are pushing it though. Power luxury looks a little like luxury and a little like ultra luxury. It is a valuable market and allows luxury players to stretch and ultra luxury players to dip down. Completely dangerous though as it is neither luxury or ultra luxury. The model has to be a specific hybrid and needs to be well defined by everyone. There has to be a design/subjective component that is far more substantial than any objective one. For instance, in the power luxury category, design itself needs to approach 10% of a budget. Think about it. Execution is relatively static in the luxury/power luxury world, it is not multiples harder to do a $1,000/pp wedding as it is a $2,500/pp one, harder sure, but less than 2.5 times. However, the pressure on design is enormous. These clients expect original and special and should receive it. So you HAVE to charge a premium of design to fulfill your promise of couture. Percentage on production just does not get that done.
Ultra Luxury. My presumption is that we are at $6,000/pp and up for this category. Here it is all about expectations and scarcity. My position is that there should be absolutely no relationship to cost of production here. It just makes no sense. The conversation should be that it needs to cost $x to do this work with ALL costs of production shifted to a monthly fee. How many of these projects undertaken per year matters too. Let’s say we are talking about a $3mm wedding, I would start with the premise that there will only be 5 events like this per year and target revenue for your business for these projects is $x. For arguments sake, let’s say $x is $2.5mm. Design would be $300k per event with production running at a monthly rate necessary to produce the event and based on a 4 month production schedule. Call it $50,000 per month. Presuming this makes sense as a business and relative market expectations, there you have it. If the event takes over the ability to do 5 (say it is a $9mm event), everything adjusts accordingly. Think about it as if the $9mm client is buying 3 events: $900k design fee, with $150k/month production fee. For the ultra luxury market, we are talking about being commissioned as a high artist and the price for that has to be almost entirely skewed to design (aka, the creative aspect of what you do).
Can you inhabit more than one level of luxury? Sure. I just do not think you can inhabit all three. Way too confusing and you will just wind up cannibalizing yourself. Better to focus on what you do and how you fit in the market(s) you wish to call your own. Knowing whether you consider your creative business luxury, power luxury or ultra luxury gives you permission to act accordingly. It also gives you permission to tell clients who are in the wrong market that they are comparing the wrong metrics. Ultra luxury has no substitutes, luxury does. If you are in the ultra luxury market and compare yourself to any other creative business, you are lost. Likewise, in the luxury market, you are allowed to be at the top of that market but not act as ultra luxury. Lanes matter for everyone and set the stage for better art and better business.