Pricing Lesson and Strategies

February 11, 2012 at 12:20 AM

A friend reminded me of this pricing lesson from Picasso:

A woman was strolling along a street in Paris some years ago when she spotted the world famous painter Pablo Picasso sketching at a sidewalk cafe. She plucked up the courage to approach him and asked him if he could do a sketch of her and charge her accordingly. Picasso obliged, and minutes later she was the owner of an original Picasso. She then asked what she owed him. “Five thousand francs” he replied. “But it only took you three minutes” she politely reminded him. “No,” said Picasso, “It took me my entire life.”

It takes us musicians more than a few years of lessons or college to be professionals at our instruments. It takes YEARS of practice, lessons, classes, solo practice, small ensemble practice, large ensemble practice, recitals, shows, more lessons, etc. Rarely does an adult who begins music in adulthood ever become a professional musician. It is something that has to be taught throughout childhood and fostered through adulthood.

So what are YOU worth? As a musician, it is up to YOU to set what you are worth. Granted, the marketplace plays a role in what it will bear, but it really is up to you to decide how much you are willing to accept to play a gig. But HOW do you price yourself?

First and foremost, check your local musicians’ union price list. Make sure you are making at LEAST the minimum scale, plus your expenses. This price list usually reflects what are the going rates and the market for the area covered. Let’s assume the minimum price for 3 hours is at $200 total for a solo act, and $100 total for a sideman (these are NOT the actual rates in my area; I am using these for ease of comparison). If you are playing in town (no long-distance driving), then these rates are a good start.

After you have the initial amount you want to make, you must add in your expenses. Add 15% contractor fee for the leader/solo gig ($30), plus work dues (around 3% in some areas = $6), plus pension contribution of 10% ($20 - you do want to eventually retire, don’t you?), plus insurance (estimate another 10% = $20), plus advertising and self-employment taxes and SSI and other taxes (estimate another 30% = $60). This now makes the minimum price you should charge for a solo gig at $336.00.

If you are a “sideman” on a gig, find out if the leader is paying pension, work dues, insurance, etc. Many contractors do pay these on your behalf and do NOT subtract them from your minimum payment. If you are considered “independent contractor,” make sure your payment is enough to cover your taxes, too. Assuming the amounts above, the sideman should be paid $130.00 ($100 plus 30% for taxes). If your leader is NOT paying the other items on your behalf, then your total should then be $153.00 since you are not getting a contractor fee.

If you have to drive/travel, be sure to add these costs to your quote. If you have to bring a lot of gear, then that, too, should be added to your quote.
You should NOT go below the minimum scale rates just to get the gig because the end client will then expect it from then on, and that can harm you for future work. If you are the contractor, then you need to be aware of your overall quote to include these costs of doing business, including how much you pay your musicians. Besides, not many musicians will work for you if you don’t pay them enough or what is considered “fair” for the area.

Setting your pricing above these minimums can be a very good idea, too. Once you are established as a good musician and easy to work with, word will spread. Supply and demand can then play a role – if so many calls come in, raise your rates until you are comfortable with the number of requests you can accommodate and make the amounts you want to make. If you raise your rates too high, then be willing to negotiate if you want more work. It can be a strange game for many, so please use this strategy with caution.

Experience is worth more than most education. I don’t really care how many degrees you have; if you cannot sight-read and play well with others, I probably won’t hire you. If you only have a high school diploma, but have played in multiple bands or even done street gigs, AND can sight-read and play well with others, I will definitely hire you. In fact, I could use you right now if you play violin, viola, cello, bass, or keys. Feel free to contact me!

Pricing can also tell a lot about you. If you are lower than average, the client then wonders, “What’s wrong with this person? Are they just now starting their career? Or are they all washed up and no one wants them?” If you are average, the client then wonders, “How good are they compared to X? They all seem the same to me.” If you are higher than average, then client then wonders, “Is this person really that good? If they are getting this price, they must be better than the rest.” It’s like name brands – people buy Tiffany’s not because they have better diamonds than the local jeweler, but for the reputation, customer service and the name. The perception then becomes the reality, and it is up to you to prove it to them by being the best musician for the job. By setting a higher price, the client expects a higher level of service, dedication and performance, and you have to be prepared to deliver all of these.

Overall, remember that it is up to YOU to determine your worth. It is up to others to decide if they really want you by paying that price.

From Paul Deck
Posted on February 11, 2012 at 1:01 PM

Michelle, great post, but I think your closing statement that "... it is up to YOU to determine your worth [and] up to others to decide if they really want you by paying that price" is perhaps too idealistic. Actually it applies very well to me, but that's because I'm an amateur with a day job. But for a professional musician in a market economy, it's also up to the other musicians in your locality (including the amateurs) to decide whether to undercut you.

How many venues do you know that only hire union musicians? Very few I bet. This will only change when the musician's union can secure solidarity with the other labor unions in your locality, for example when the food service workers and the truck drivers refuse to serve venues that hire non-union musicians, or when the big unions put out full-scale boycotts on a bars that hire non-union bands. And I do not see that happening anytime soon when unemployment in those sectors is well over 10% and when the political trend is toward the "right to work."

From Corwin Slack
Posted on February 11, 2012 at 4:16 PM

I am a contract worker who bills an hourly rate. I have to choose a rate and a service level that allows me to sustain the lifestyle I desire. I compete with young workers from overseas and to some extent with workers still overseas. They drive rates down. In general I do much better in rates than they do because of differentiation in my skills and service offerings. But I also take more risk than they do. My point is that although I set my rate the market determines whether I will get it.

If I cannot get what I am worth in my area of expertise I will choose another field of work.

Were I a professional musician I could tell you that I was worth $500 a service but the customers could quickly find people who can play virtuoso showpieces and sight read Beethoven String Quartets for far less than that so perhaps I cannot decide what I am worth by myself.

From Elizabeth Kilpatrick
Posted on February 13, 2012 at 3:28 PM

I'd come play with you - only it's just a touch of a distance!!
Great article...lots to think about. Thanks!

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