Commissions

I spoke this morning on Periscope about commissions in creative business; specifically non-transparent commissions. The topic is such a hot button, I thought I would also write about it again here.

I have long been out there saying how much I am against commissions where the client is unaware of the practice and has to pay the price by getting less for their money than they otherwise would without the commission. That much has not changed in the perfect world.

What has changed is my acceptance that we do not and cannot live in a perfect world. The practice of non-transparent commissions is pervasive. In the event world, it is almost impossible to find a name player who does not engage in the practice. In the interior design world, “trade discounts” are the worst kept secrets at any vendor of hard goods. And on and on for other industries.

Here is the thing: until we create a better mousetrap, the practice will live on. Rather than vilify those that engage in the practice, I am going to choose to take another approach. Yes, there are those who are enormously greedy and do not care who suffers so long as they get theirs. There is no point in talking about reforming these folks. Instead, I am going to presume the vast majority of creative businesses in the practice of taking and receiving commissions, transparent or not, are attempting to make what they need to make to support their businesses.

If you need, in general, 20% on your projects but believe the market will only support charging your client 10% and receiving the rest in commissions, so be it. The point is that we as creative professionals have not been collectively engaged in education and transformation, both to the client and within our industries. You can say that it is because we are invested in the way things are, that it is easy or maybe a bit of both. It makes no difference, the urgency to change just is not there. Yet.

Until clients understand what is necessary for a creative business to create its art and appreciate the value provided, the commission practice will continue. If you want for the practice to change, you have to offer a compelling alternative.

In the event world, I very much applaud what folks like Marcy Blum and Valerie Gernhauser are doing. Marcy with her EPIC Collaborative Course to show the power and value of what an ultra sophisticated planner can and should do in the ultra-luxe market. Valerie with her Sapphire Sessions – trying to teach wedding planners across the country how to charge their true value.

Valerie owes a debt of gratitude to Tara Guerard who has long been transparent about her business practices and has set the mark for what wedding planners ought to be charging (i.e, between 20% and 30% of a budget). You need only look at the vitality of the Charleston market and the strength of the players there to understand my point. Tara had a huge hand in establishing the value provided by wedding professionals and the market benefitted. Great work paid as great work begets great work by many great artists. Social media amplifies that statement exponentially.

If creative businesses can get paid what they need, the power of commissions diminishes. The power will disappear when the information economy becomes the ultimate gatekeeper.

We can rail all we want at the practice of non-transparent commissions. However, when it looks as if a client is paying substantially less to a commissioned player, it is almost impossible to compete if those in the game refuse to acknowledge its existence.

The way out is not shame. The way out is a better educated client on value and process. Even more, the way out is a better mousetrap. Those with the power to garner commissions have to be able to see opportunities to use that power to generate more than they can with commissions. We all have to be invested in figuring out what that is and showing the way there.

The beauty of the world we live in today is that great work is its own reward as bad work is its own demise. If you suck, paying a commission is not going to help you. Such is the power of our information age. And that is what has changed in the six and a half years since I wrote my first post on commissions. You might have to pay a commission to get in the door, but you have to stand on your own two feet to stay there.

That changes the game. For everybody. The question is, what are we all going to do about it? Not as a question of good/bad, but as a way to become ultimately self-sustaining beyond anything the commission structure presently offers. Translation: time has come to create a better way and we all need to get to work.