Negotiating Higher Fees
Last time I talked about how to find more bookings by creating repeat clients. In this post, we’ll discuss something that many kids entertainers want to do but find tricky: charging higher fees.
We all dream of making more money, don’t we? For not just magicians but also for most people, life would be great if we could make more money and work less at the same time. This simple equation of less work and more pay should easily be possible if we would only charge more per show.
This was why many years ago, I had tried to charge more for my services. A few of the reactions I got were:
- Are you crazy?
- You’re kidding right? How much is it really?
- Who do you think you are, Copperfield?
As discouraging as it was to hear these reactions, my prospective clients were right. I was crazy to try and raise my fees. What I couldn’t understand though was how some of my peers managed to charge higher fees without any problem. After much pondering, I decided the only way to find out was to ask one of them, so I turned to someone I knew well, Dave S., my friend and mentor.
Dave had been performing for many years. He was well-established as the professional in the city while I was only starting out. When I approached him, it was on the premise that I was new to the market and had not “paid my dues.” A rookie is not justified in charging as much as a seasoned and well-established professional. That was my first mistake.
Dave taught me that negotiating higher fees wasn’t about experience. Don’t get me wrong, experience is necessary and important and it usually shows in your performance. But what one really has to consider were two things: 1) the market and 2) your perceived value.
The Three Types of Market
Let’s go to the first one. Certain markets can only support certain fees, while other markets are open to higher negotiations. Take the birthday party market for example. The birthday party market is a low fee, high volume market. You can do a lot of parties, but you can’t justify charging high fees for them—most people just don’t have the money for them.Presently in my market area, birthday party shows range from $150 to $225 for a 45–50 minute performance. This is an acceptable range in this area as people are comfortable with such a fee. Now imagine charging $750 for that same party. I can’t imagine anyone paying that much in my marketplace. It’s too shocking and unjustified.
If you want to charge more for birthday parties, here’s a tip: try to offer add-on services such as making balloon animals after the show, giving loot bags, teaching basic magic tricks, or selling small kits and DVDs.
Now let’s imagine a mid-range market. Schools fall in this class. Based on the school districts in my area and available funds, I can charge anywhere from $500 to $1500 for a one-hour school show. Sure, the show is longer than a birthday party, but the fee is anywhere from 5 to 10 times as much. If you tap on this market, you are on the right track to higher fees for less work. The only thing is, schools are still a limited market as their budgets don’t allow for much more than that.
The place where you can really negotiate high fees is the high-end corporate market. Large businesses have larger wallets. When a big company puts on functions for hundreds or even thousands of people, they expect to pay big bucks for it. This is where you have a chance to really make money. You can charge thousands, even tens of thousands for this type of shows. Remember, however, that shows like these don’t come along every day.
So is that all? Just do high-end corporate shows and you can charge more? It’s not that simple. We still have to consider one more thing.
Your Perceived Value
Your perceived value is the manner in which you can justify charging higher fees for your show. What does that mean exactly? It means that the more you look like you’re worth large fees, the more people will accept that you’re worth large fees.I shared this bit of wisdom with a friend who said “So all you need then is to look good?” To this I replied, “Not quite.”
You see, in order to project an image of talent, you actually have to have talent. If you are a terrible or inexperienced performer, your perceived value will remain low. You must have talent and a great show first and foremost. Once you have that, then you can concern yourself with how people will perceive you.
To help people have a good perception of you, always project yourself to be bigger than you really are. I can imagine that many of you probably disagree with this right now, but indulge me for just a moment.
Seeming bigger does not mean being cocky and arrogant. Seeming bigger means that you should behave according to the perceived value you wish to be viewed as having.
Let me draw on a real-life experience. Very early in my career, I was a birthday performer first and a small corporate magician second, but I was aspiring to do large stage shows. I had the ability and confidence but I did not have the opportunity, so I searched for it.
I started attending numerous business networking events in my city, putting myself in front of CEOs, owners, and marketing and sales people from large corporations. I projected myself as a corporate entertainer for large scale events such as annual sales meetings, conferences, conventions, and product launches, just to name a few. After several months, this became my main source of income, and this was because I could walk the walk and talk the talk. I had the talent and the show to back it up. If I had not created this perceived value about myself, these corporate people would not have taken me seriously.
Since my perceived value had significantly risen, I could justify asking for high fees from high-end corporate clients. I could quote between $2500 to $6000 a show.
Now imagine a large company looking for talent for their next event. One performer’s perceived value is that of a birthday magician, while the other’s perceived value is of a corporate entertainer. Who do you think will get the contract? It’s not that one performer is necessarily better than the other; it’s just that their perceived values are different.
I am reminded of a story that a well-known illusionist shared with me. A large multi-national company had wanted a quote for his biggest show available. Not wanting to scare them off and lose the booking, he quoted $50,000, thinking that he is worth such a fee. The company didn’t book him and later found out they hired someone else whom they paid $150,000. This company had the deep pockets to pay that kind of money and figured how good could he be if he only charged $50,000. The other magician created a higher perceived value. This, of course, is an extreme example but you get the drift.
To sum it up, negotiating higher fees comes down to this: You can only get higher fees from markets who can support higher fees. Also, you need to justify those higher fees by the perceived value you project. Nobody will pay top dollar for an unknown, untested act, no matter how talented the performer is. People want their money’s worth. The more you look like you are worth it, the more willing people are to pay big bucks for you. Just be sure that come show time, your act is indeed worth it.
And remember, don’t ever let anyone steal your dream.
Elliott
P.S.
Are you reactive or proactive in your marketing and sales? Stay tuned next month to learn more about “Waiting for the Call.”
P.P.S.
Want more useful tips on how to grow your kids entertaining business? Check out my other posts in this series.
Developing Your Hook: Tips on How to Get Media Exposure
