““Yeah, but what happens when I stick to my guns on price and they hire someone cheaper?”

Competing on Value: A Price Strategy for Performing Musicians and DJs

This may be the comment I hear the most on social media:

“Yeah, but what happens when I stick to my guns on price and they hire someone cheaper?”

I can give an honest, informed answer because I lead a community of hundreds of musicians from all over the US who charge premium pricing.

My answer is simple: Let someone else do it cheaper. You don't want that gig.

If you compete on price, it's a race to the bottom. If you compete on value, price isn't an issue. At least it isn’t the determining factor.

Tell me if this scenario sounds familiar.

You’re planning a date night with your spouse. You look at restaurants by cuisine, then by reviews, and lastly, you look at the price.

If the cheapest price is your first criteria, then you’re going to Taco Bell. And if you take your spouse to Taco Bell, you’ll probably have to sleep on the couch that night.

In all seriousness, let’s say it’s an important occasion, like an anniversary.

How much are you really looking at the price?

Yeah, it can still factor in, but it’s not your first criteria. You’re willing to spend a lot more than usual for something you look forward to and will be a memorable occasion.

So, the deciding factor is probably going to be reputation, which is really reviews and/or recommendations from people you trust, i.e., Perceived value.

The same goes for live entertainment!

If I’m having a special occasion and I want live music for my party, I’m not looking at price first. If I am, then I’m going to ask the college kid who plays open mic at the coffee shop to do it for free. No one does that!

As a customer hiring live entertainment, my focus is on a memorable experience; I want my guests to have a great time. Maybe I even want to impress my guests, so I want the best entertainment I can find.

Do I have a budget? Yeah, but it’s flexible if the act I want charges more than I was expecting.

The act I hired has a great presentation and great reviews/recommendations, just like the restaurant. So both can charge a premium, and I’m happy to pay it for the value I perceive I’m getting in exchange.

I believe the price trap most performers get caught in is situational. They’re probably in the wrong market. Let’s play devil’s advocate and explore the price criteria further, continuing with the food analogy.

Think of your weekly grocery store trips. Your budget is probably your number one criteria. You may still buy that premium coffee because you need your morning buzz, but maybe you go cheap on most stuff like paper towels because they’re all the same to you, i.e., you don’t value them as much.

The same goes for venues that hire live entertainment like bars, restaurants, wineries, etc. They don’t pay premium prices. And if you don’t like the price they pay, someone else is willing to take the gig, and maybe even undercut you.

When venues hire live entertainment multiple times per week or month, they have to have a budget, and they're looking for a Return On Investment. So if you’re not helping them sell alcohol, they don’t care how talented you are or how many reviews you have because they don’t value that. Again, the key word is value.

TL;DR: Don’t compete on price. Compete on value.

If your market truly can’t afford your price or isn’t willing to pay it, change markets, e.g., play private events instead of bars.

Last, how can you provide value to your customers that will make them happy to pay your premium prices?