My last post was about honing all that you, your art and your creative business stand for, recognizing the opportunity in front of you for 2011 and then putting yourself in the best position to seize that opportunity. Lofty, overarching (but such worthy) goals to be sure. This post is about two very practical things you can do as you prepare for 2011. Things I hope will improve your existing creative business and help you prepare for a larger future.
The first is to understand the arc of the service and/or product you provide. Your arc is the level of value your clients perceive during each phase of their time with you and your creative business. For instance, if you are an interior designer working on a residential project, you start with trying to understand what the project entails. Not much differentiation there. Then you present your ideas, a huge value point – your client will love it or they will not. As you source and price everything, you will certainly keep your client’s respect the more professional you are, but the sizzle of the initial presentation is not there. Same with shipping and delivery. Then comes the installation, when hopefully your clients are blown away.
Now think about how your arc of service matches with both your pricing model and how you collect payment. Going back to the same interior design example, which works best: flat fee, percentage, hourly or some combination of all of them? And when do you collect payment? If you charge a flat fee and take payment in incremental percentages (i.e., beginning, middle and end or beginning and end), what are you missing? You might be taking a lot of money from the client before they have seen anything (i.e., your presentation) and then not again until you are ready to install (i.e., when they are excited but with the sizzle of the presentation long gone). Might it be better to collect a smaller fee upfront, a large fee after the presentation and then an ongoing percentage during the production process? You would be matching getting paid (maybe the largest portion of your bill) to when your clients are most excited by your work. Even if you do not charge more, simply improving your pricing and collection model to match your arc will make your life sooo much easier.
All of which leads me to two points.
First, the business of your creative business is theater. How you manage the business process of creating your art is as important as creating the art itself. Your clients are hiring you to take them on a journey. So why not make the business journey as entertaining as the creative? Just like a great actor cannot save a horrible script, neither can awesome art save a boring business process. Process matters.
Second, there is no such thing as absolute under-charging or over-charging for what you do, just mispricing relative to value offered. Translation: if your client knows what they are paying for AND are paying for it at the time they value it most, you will be able to be paid appropriately. However, if all you are working on is making sure you charge enough, you are missing the whole point. Today’s consumer is far too smart to pay $2 for the same thing they paid $1 for yesterday. It is up to you to show them the value you are offering for the $2 (even if it was included in the $1 yesterday) and then collect it when you deliver that value. Timing (including a dramatic pause) is everything.
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The dramatic pause has proved to be pivotal in how we think about our process from our clients’ perspective, as opposed to running our production time line from our perspective. It sounds simple, but making one little change in our delivery resulted in a complete value shift, in terms of how our clients view us. Thank you!
wonderful posts! thank you!
Great article about how to think of the business aspect of our creative worlds which goes unattended to 99% of the time. Keep up the great work Sean!