I will say it before and I will say it again, how I price my product will determine the questions that arise from clients. If I charge a lower rate they will demand why and if I charge more they will demand a lower rate. I wrote this article to help explain it because it’s happened on a few occasions where it’s difficult to explain put on the spot.
Now before I say anything I don’t speak for any other DJ companies I can only really assume and give reasons to those assumptions. They may have different reasons.
Lets start with why I personally choose to charge less with pro’s and cons.
– Less Advertising Expense. By charging less I don’t have to go to every wedding show or pay lots of websites to advertise and promote my business. My theory is in the summer I will get booked anyway, just because there is higher demand and the less popular season is full of bargain hunters who will shop around anyway and will probably find me so excessive amounts of advertising isn’t really needed.
– Saves Time – By spending less time advertising I have less time time doing administrative work. It may not seem like a lot of time but 50 events per year at a higher rate means at least 150 more inquiries, which means like hundreds and hundreds of more emails, meetings and phone calls. This also saves clients time and money in that I can focus on my actual clients and not as much on perspective clients.
– You sell more packages – Simple supply and demand, a lower price increases demand.
– Clients are happier with end product. If someone gets a good product at a good price they are more likely to tell friends and family about it. I also like to call this an advertising surplus, in that an impressive setup is kinda like advertising through referrals. Personally if I don’t feel comfortable with the price at the end of the day I feel ripped off, so I work hard to try and avoid it.
– Clients are more likely to buy an add on. If someone buys a DJ package and has shopped around and gotten a good price, they are more likely if they need or would like an add on to buy it. This is one way to give clients a lower price and collect the same revenue in the end as long as a certain percentage upgrade. As well by giving more and having the same price clients will be happy because they got better value when they upgrade.
–Less Stress. Everybody knows stress is one of those things that makes things less enjoyable. Let’s be honest nobody is a DJ simply for the money, it’s because they must love what they do. A client is kinda like your boss, for the night and a bad boss can make or break a situation. By charging less people won’t expect as much and my goal is to have them pleasantly surprised, it also means they are probably more easy going. Everyone has had an uptight boss vs a casual boss and the work is always more enjoyable with someone who is casual. Ok, so he’s not perfect (nobody is) but he had a great set-up was professional and everyone had a really good time.
– You still get to be your own boss There are some companies out there that will do the administrative work for you but it comes at a steep price. It ranges but can be anywhere from 90 to 50 percent of revenue. I have never seen a middle man DJ company who takes less. So if they are billing me out for a $1000 the most I would ever get is $500 so essentially I make the same or more and I get to be my own boss and make my own decisions. I get why the companies do it and it is somewhat fair, cause what company doesn’t mark up their employees work by 50%. If I were a carpenter working at a large carpentry company they would mark up the same labour I could do on my own at 50% or more.
–Your efforts go towards building something – Kinda similar to being your own boss but if you work on your own, do a good job you are building your company not someone else’s. It’s similar to buying your own home versus just renting. Every gig you do for another company is like a rent payment where as every event you do on your own is like a mortgage payment. You are building a brand and a reputation, and at first most of those payments are interest but as the company grows it becomes more established through each event and becomes paying principle (equity).
Cons to charging a lower rate
– Less possible revenue. By charging less you have forgone the opportunity to possibly get more. It’s a choice I have made and accepted as I am still making a profit and a living so it’s a deal, just not a big deal.
– Trust Barrier – Charging a lower rate will immediately pop into a consumers mind as to why it is lower and likely they will have concerns regarding it. Overcoming the trust barrier is a hassle but necessary to make a sale and although it never feels good to not be trusted this is a barrier you must overcome if you have chosen to charge a lower rate in any industry.
Lets move on to why Other DJ Companies Charge more? I can only assume…not a mind reader lol!
– Because they can. They have a more established business, people know who they are more and more willing to pay extra. People eat at mcdonalds cause they know mcdonalds.
– Because they have to. With larger advertising costs means you must charge more to make up for it with higher prices.
– Retail Prices. They hire a DJ for $350 an event then with 50 percent minimum mark up you are now at $700. More hands in the cookie jar means you need more cookies. On a side note don’t hire a cookie monster :-S
– More experienced people expect more – Think of any line of work if you are more experienced it is assumed you should get more. I think even at simple jobs like Safeway and Costco work the same way. DJing is no different.
– Older people have older responsibilities – As you get older you need more income to keep up with your older responsibilities. Such as wives, kids, health and retirement expenses. No place is truer than Vancouver in that regard.
– Technology givith and technology has takith away. DJing is a technology industry and as such profit margins change. Think Virgin music makes as much after napster? Think Sony makes as much after the ipod? Think Dj’s make as much after Serato…another topic all together don’t want to get into it lol!!!
Anyway I hope this article will help inspire trust in me and to help me explain cause it is hard to explain when put on the spot about it without talking for an hour. Lots of great DJ’s out there with lots of great choices. Be sure to pick the right one for you for your big day or event!
All the best,
Clodion aka DJ Universe