Last Sunday, I spoke on the 4P’s at Event Solution’s Idea Factory Conference in Las Vegas. The room was filled with amazing event professionals of all kinds – caterers, planners, florists, designers, lighting companies and musicians. While I was talking about Process, a lovely woman raised her hand and we had a conversation that went roughly like this:
“How can this work when I have to send out a proposal of what everything will cost right after I meet a potential client? Are you saying do not send a proposal until after the client decides to work with you?”
I asked, “Are you providing a service or delivering a product?” She said, “Product” (she was a designer).
“No proposal until you are hired then.”
“How can I do that when all of my competitors are doing it? How will my client be able to compare what I am offering to my competition?”
“Why would you want them to? If you are in the social market, for the most part, you have an un-educated client. Just how many weddings has a bride organized? So how can you expect her to be able to truly compare what you offer to your competitors? And you are not in business to provide $300 worth of goods and services for $299. You are in business to provide the most value for $300. Oh, and how can you say what your art will cost when you have not made it up yet? The 4P’s dictate value, not price.”
I do not know if I was fully successful in persuading the audience that sending a proposal first thing if your creative business provides products is usually a very bad idea, even though I did make some headway. So I thought I would try to seal the deal here.
First, a distinction. There is a huge difference between selling creativity and selling creative products. I am talking here about selling creative products. The price of selling creativity alone is whatever you need to make it up. If you are a graphic designer, how much money do you need to be able to devote your time and energy to creating a logo and brand identity for a client? A photographer, how much for you to shoot an event? You are artists looking to be commissioned. So when a potential client asks you for a price, you can certainly provide it as soon as you know what the scope of the project is. You are getting paid to make it up. Not to say that these creative businesses do not fall into the trap of making the subjective objective, it is just that it is easier for them not to.
If you get paid to deliver products – flowers, lighting, custom cabinets, food, etc. – sending a proposal before you actually design the product undercuts your credibility. How can you know what it costs to make if you have not designed it yet? The only way you can with real certainty is if you have made it before. Problem — your client is paying for a custom design. Sure, you might be able to come close based on experience, but is that the message you want to send – close is good enough?
Which, of course, leads to whether you believe your value is your art or your price. If you believe the latter, unless you are Wal-Mart, good luck to you, you are in a race to the bottom. For those of you who know (or want to know) that the value is in your art, then you will never say to a client that you will create more for less. You create the best art you can for the money they have to spend. So rather than sending a line item proposal with prices that are guesses, why not send some preliminary thoughts of what you think you can do for the budget they gave you? Just a glimpse to let them know you heard them and provide a window into the direction you would like to head. If they would like to see more, they need to hire you and pay you to fully design and produce what it is they want.
The last concept is probably the hardest and most controversial – talking to uneducated clients. Those of you who deal largely in the corporate market have the benefit of having clients who know exactly what you are offering. However, creative businesses focusing on the social market have clients, for the most part, that have little or no experience with what you offer. And yet you ask them to understand and evaluate what you offer as if they did. For instance, I have seen a florist send a line item for a beautiful plinth. Even if the client knew what a plinth was, my guess is she would not know what it should cost. So what happens is that comparisons become self inflicted. Your client might come back and say that your competitors will do the plinth for $3 less than you. Now you are negotiating price with someone who you have not educated as to the value of YOUR plinth or even what a plinth is for that matter.
In the end, uneducated clients will do their best to reduce your art to price. They really have no other choice as it is the only way they can rationalize their spending decision. Your job is to understand that your value is, by definition, irrational. Trying to make it rational is like trying to explain how you create what you do. You cannot and you should not apologize for it by putting your proposal before your art.
{ 9 comments }
Great insight. Thanks for sharing your expertise. It’s the magic that we’re selling and that is incomparable.
This is a great post…I think we all run into this daily. How much information is enough. We know we don’t want to giveaway to much and competing on price sucks. Myself, on webprojects, I almost always provide a client with a rough $$$ range. But not gobas of detail. I am busy enough I do not try to underbid. Nothing good can come out of it. And I always ask a few questions in advance that waves a redflag if I think price is the issue.
What you need to do is determine what value you offer and how to present. The dollar amount should be secondary.
I also tend to bid high..in fact I want my prices high enough that it stands out. Because then they ask WHY you are so high and you can then make the value argument. I don’t want to be the volkswagon / walmart option. I want to be the Porsche option. Again, if there truly are a trillion plus websites in the world, my attitude is surely I can find someone willing to recognize VALUE.
Last comment – people will review a proposal and even if its come via a RFP process, people will steal ideas and use rough pricing. Don’t make the mistake of giving out too much. Alternatively I will review a clients needs and if I see they really need an education, offer to consult to them for $100 – $200 ( a couple of hrs). You could save them a pile of money and position yourself as an expert that will best represent them. Again, its about perception!
:+)
Floral designers seriously struggle with this. I have gotten much better at interviewing my clients in terms of their style, budget, etc. before sending a proposal, however I do feel that I should provide a pricing proposal before booking to make sure we are on the same page–to protect both of us.
I don’t want the client to think that they can get x,y, z for $5,000 when really it gets them x and z only. I don’t want to enter into a contract with someone who isn’t clear what I am offering. I am sure there is still room for improvement on my part, but it’s been a step in the right direction. I have had very few proposals go out without being accepted (usually b/c I could not meet their budget) and the clients I’ve booked are all sincerely interested in working with ME…but the fact remains that price is still a consideration when hiring wedding vendors.
It would be nice to book a wedding without writing a proposal, but isn’t it in my best interest to make sure the client’s expectations will be met before we enter into a contract? How can I effectively do that without giving up some info before taking a deposit?
We all have to find a way to convince an uneducated client that our work will pay off. But it’s hard when they see all those zeroes and they know someone down the street who will do it for one zero less and at the same time can’t see why it matters.
I can understand not wanting to be compared to your competition, but how can a client know if they can afford you if you only provide a bill after you’re hired?
All clients have budgets — your job is to figure out what that number is and then describe what you can do for that number. Even provide your assumption — something like — “During our meeting you mentioned your budget range to be around $X. So here is what we are thinking…” No numbers, just general ideas.
YES YES YES. Still trying to figure out exactly how to implement this, because brides ARE so uneducated (which I try really hard to change) but I LOVE the concept and it’s so true. Thank you Sean, you’re amazing! 🙂
Sorry, I have to disagree on this one. There is a real art in a creating proposals. The proposal is proof that you paid attention and have the ability to craft the unforeseen. The proposal is worth your paycheck , it should be worth at least 20% of the price of the event, it’s 33% for us. Once you receive that deposit, you have to figure out how to make the remaining profit with the balance. This should be easy because you have gained experience and you should be intuitive enough to know all the costs involved to get that $1000 centerpiece up a freight elevator and on the table in time.
Not knowing what the budget after the meeting is my fault. If I failed to detect an unrealistic budget and ended up proposing numbers that were realistic then I deserve not to be hired by my client.
Granted unless you are someone of recognition, 99.0% of us are basically unknown to a client until they have an occasion. A well presented consultation and a well crafted proposal perfectly designed and presented is your product. It’s proof that the potential client has found a qualified vendor. Follow up on this by following every word you sold and going above what was promised and you will survive on referrals and recommendations.
“You cannot and you should not apologize for it by putting your proposal before your art.” Love this.
I’ve run into this issue with pet portraits. It’s not the bread and butter of my business, and not even what I particularly feel compelled to do. I’ve actually stopped publicly offering them because it’s often more complicated than it should ever have to be.
But I have had that situation where a potential customer wants an estimate. And the ‘value’ really varies because if someone has a poodle, that fur is going to take an awful lot longer to get looking photorealistic than a silky coated guinea pig. If the pictures they send aren’t nice and crisp, from a good angle with accurate colors, the artwork is going to be more tricky to ‘guess’ where the missing details should go, etc. etc.
Some customers do understand the true value of artwork, and others don’t. Some people think $50 is the right price for an 8 x 10″ piece that takes hours upon hours to make. Other people don’t bat an eyelash at a $250 quote. So it’s a tricky situation for sure.
But I really like what you said at the end about putting a proposal before your art. I never thought of it that way and I like it! It kind of returns the concept of my artwork to me and doesn’t give others the liberty of devaluing it unintentionally.