Last Friday, S&P downgraded the credit worthiness of the United States for the first time in our history. Unemployment hangs at over 9% (the highest it has been since the Depression). On Monday, the stock market had it largest decline since 2008. We are facing financial crisis after crisis and prospects for our economy do not look good at the present. And yet demand for luxury goods has never been higher. Everything ultra-luxe, from shoes to cars to clothing is enjoying incredible growth with little evidence that demand will slow. Forget about the social statement this implies (more than a few women will spend more on a dress, handbag and pair of shoes than a lower middle class family will make in a year (if someone in the family has a job)) and your judgment of it. That is as it is – pro or con. The thought has to be what it means for your creative business and how you are going to negotiate the dichotomy. Is this 2008 all over again and will you remain an artist or become a servant to those with the means to fuel your business?
Your instinct might be to say this is in fact 2008 all over again and you do not ever want to be back there. You might think that if you make yourself look cheaper than your competition now you will survive better than you did then. You might even start talking about price front and center to drive the point home — the same or more for less. You will send the message that you will do whatever it takes to keep your client’s business. Except your instinct is not instinct at all. It is panic.
For those of you who are focused on the corporate market, your panic might be justified save for the fact that most of these corporations are very lean at the moment, sitting on a lot of money and have adjusted to the reality of our economic situation long ago. What further adjustments corporate clients might make will be incremental in terms of spending on creative services. In other words, while there might be a dip, it will not be the close of the floodgates that happened in 2007-8.
And for those of you focused on the social market, if you buy into the panic, erase your boundaries and your value as an artist, welcome to servitude. You will be at the mercy of those clients who will treat the work you are doing for them as a favor to you as opposed to value to them. I fear that many creative businesses and business owners will act like stampeding buffalo heading for the cliff. I pray you walk another way and live on the other side of the dichotomy.
Art is a splurge. Nobody needs what you do. We can all live with Arial font, ceremonies at City Hall, Ikea furniture, cellphone pictures and template business cards. Your clients hire you because they want something more; something only you, your art and your creative business can give them. At all times, especially these, your mantra has to be about the value you provide relative to the vision and budget a client has, not about doing it for less. You should never apologize for (or compromise) the value you deliver or its cost. Yes, clients might choose to splurge less, but to assume they are no longer splurging is fools play. A client’s splurge – be it a wedding, a new kitchen, beautiful photos, shiny stationary or an updated logo– is a reflection of their desire to make a statement about themselves. This desire is not going anywhere and is intrinsic to our culture if not our nature. Whether that desire costs $2 or $2 million to create is only a function of budget, not art. In these unsettling times it is so easy to confuse the two. Please do not.
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i had a client who treated me like “the work you are doing for them as a favor to you as opposed to value to them” and it taught me a great lesson. i’m pretty sure she came in to my life to teach me just that, and i learned just as you said above. great post.
“Art is a splurge” and we are a splurges to our clients. Most splurges feel good and make us feel as if we are worthy of them…and that is how as creatives we must carry ourselves. We need to know our worth and it is our job to show our clients that worth as well. Thank you once again.
I went to an hourly rate, like most interior designers I know, about 2 years ago. Whenever I had a flat fee or percentage, clients just constantly pushed the boundaries of my contract and took forever to make decisions. Even my friends who used my services! My time meant nothing to them and they used it freely for every little thing, working more and more consulting and time into the job, moment by moment. When I went to hourly it was amazing how fast people could make decisions and were ready for me when we had a meeting. They made valuable use of their time with me. It was a totally different mindset.
Thank you, thank you, thank you!! This post has pinpoint perfect timing and is so vital for the next year. Honestly, I was in “panic mode” yesterday, and thinking about my pricing structure and if I should change. After much thought and your noteworthy post, now, I know that it’s very important to stay firm and ride out the storm.
I needed to hear this today – thanks Sean….must stay the course!
Thank you for this thought! Definitely something I’ve been struggling with and thinking about as of late. So great to hear AND comprehend this prospective!
While I agree with you that people should charge what they are worth, I disagree that this time going forward won’t be worse than ’08.
The housing market has not recovered – heck, they have not even done anything to actually fix it, The market continues to be manipulated by the FED/govt – which creates an inefficient market, and there continues to be the mindset that no one pays retail for anything – except the ultra high end, and even then they’re looking for a discount/good deal. Not to mention, that 9% unemployment rate is off – it doesn’t count those who don’t file for unemployment or those who are underemployed. I’ve seen many job descriptions that offer ‘internships’ to those with 2-3 years exp, and Bachelors required, Masters preferred.
Everyday I am bombarded by people who want me to do creative work for less than I want, or (better yet) to do it for ‘exposure.’ What am I saying here? I don’t know – I just hope that we can all find our way.
Love the comment Amy. Actually agree with you that we are deep in the weeds and whether it will be worse than 2008 is a distinct possibility. My thought is that we have already experienced 2008 and are not coming off any sort of bubble like we were then. I believe that now is more about optimism about the future evaporating whereas 2008 was about the end of an era. A darker shade of gray.
Doesn’t change my thought though that creative business owners must resist the urge to engage in wholesale discounting, but rather work harder to identify the value of their art and keep the integrity of that value intact.
I agree with you wholeheartedly Sean in regards to discounting. I’ve turned down a multitude of ‘offers’ from potential clients for that very reason. The unfortunate thing is that across the board, there are always people there to swoop in to do the job (not necessarily better) cheaper.
Sean,
Haven’t been here in awhile. Way to get the conversation started. I agree with Jacin’s comment above that every one seems to think that they are doing me a favor. As if it is a honor to be mistreated.
I very much agree with Amy. Every one wants a discount these days. What I find most disheartenening is that they want a discount, but refuse to see what retail costs cover. Creative business is a business, and it doesn’t come cheap. I had a client who insisted on a discount for a $50K job. I stupidly agreed, but refused to pay for the credit card fees, shipping and delivery. In the long run, I ended up paying for the delivery and half of the credit card fees because the client was such a bully and really mistreated me. What should have been a profitable job ended up costly me a $7K loss by the end of the project.
It is really difficult to be creative, make money, and deal with clients who feel they are doing us creatives a favor. In the past year, like Amy, I have turned many jobs down due to red flags. But it has severely cost me. I have had to make cut backs in my own company, cut staff, and make major changes in my business practices to afford the ability to “cherry pick”.
With the media and government controlling the masses with fear based intentions (and successfully doing so) It is really scary to think what this fall holds for us.