Raising Your Prices
How
much to charge for your service?
How can one DJ charge £600, whilst another only earns £150 for a similar event?
There are a number of factors that can affect price, one of
which is Supply and Demand.
Supply
Get to
know your colleagues. Although they are in competition with you for
business, they can also be your allies by passing work your way and vice
versa.
There are some DJs who prefer to go-it-alone and find out what their rivals
are charging by making fake enquiries; this is a practice that is not
recommended. It is far better to get to know them and then simply ask!
So now that you know how much other discos in your area are charging,
why not just undercut them all and take their work?
Before doing so bear in mind that we're in a service industry and most people relate cost to quality.
(Of course there are those clients who always want the cheapest of
everything and if you want to provide for this sector keep your prices at
rock bottom; but this is a limited, and crowded, market).
If you
want to charge more you also need to offer a service that reflects this
extra cost.
Demand
The next item to look at
is your diary.
How many enquiries are you receiving? How many of these translate into confirmed bookings?
If it's close to 100% then you should consider raising your prices and, if
it's as low as 10 - 15% you may be attempting to charge too much. (The term
'may' has been used because those who target the very top end of the market,
which is relatively small, don't require a high conversion rate).
Next, how many times are you out each month? How many gigs would you like to
do?
You may want more, or less, depending on your circumstances. Of course there
are many factors that will affect the number of enquiries you receive such
as how you promote your business, referrals and advertising.
These areas
will be covered in-depth in our Marketing Digests.
Another way
your diary can come in useful is to ascertain how many enquiries you have to
turn down for a date after it is booked. Most businesses have peaks and
troughs during the year and you cannot expect to be as busy in January as
you are in August or December. However, if demand is sufficient to increase
your prices, you could then consider offering a discount for off-peak
periods.
Up next - The Price Formula - Working Out How Much to Charge