Does Value = Price?

So how do pric­ing and value relate? One way is when we sit down to fig­ure out what to price our stuff we go about it either by way of our gut as in guess­ing based often on how we feel about that thing we cre­ated. Another way is to do so ratio­nally by fig­ur­ing our costs and profit require­ments and adding in a fudge fac­tor. But each of these prac­tices is based on how we feel about our stuff not how poten­tial buy­ers might see it.

The first thing we have to do is to get a han­dle on what our stuff means to the folks who buy it, what does it do for them? What are their expec­ta­tions of the results of own­ing it?How do they think it will affect their lives?

Unless you know the answers to these ques­tions you’ll be more or less oper­at­ing in the dark. The result of oper­at­ing in the dark and depend­ing totally on your gut is that your buy­ers will con­tinue to be ran­dom and as such will look mostly at price and not at value or ben­e­fits. The key and most impor­tant fac­tor about pric­ing espe­cially for artists is to take the focus off price by know­ing how to empha­size the value of your stuff.

Expec­ta­tions

Buy­ers have expec­ta­tions of what  prod­uct can do for them and their abil­ity to value that prod­uct is rel­a­tive to its assumed qual­ity. For exam­ple your repeat buy­ers have already assumed the qual­ity of your stuff by virtue of how it made them feel, how it affected their  lives. How­ever, when a stranger drops by to by your stuff and that stranger has never seen or expe­ri­enced the ginor­mous ben­e­fits it has to offer a funny thing hap­pens. How we price our stuff can make a major dif­fer­ence to both the repeat buyer and that stranger, the repeat buyer already has estab­lished the great pos­i­tive ben­e­fits of your stuff but that stranger…not so much.

The kicker here is that because the repeat buyer already knows the great­ness of your stuff a dis­counted price will not have a neg­a­tive effect on her desire to buy, instead it will be seen as a ben­e­fit of lov­ing your stuff, or it may be seen as not worth not­ing. On the other hand the stranger, who has never owned your work and ben­e­fited from its great­ness will see a dis­counted or lower price as a neg­a­tive. See, while buy­ers tend to rate the qual­ity of an item by its price only those who know and appre­ci­ate its value will really buy at a dis­count. Those strangers have no clue about the qual­ity so they imme­di­ately assume that it lacks qual­ity (this is kind of an auto­matic process) and there­fore are less likely to buy it.

The les­son here is not to assume you need to dis­count your work because doing so might guar­an­tee loss of sales. On the other hand it also exposes another fac­tor that is unique to art fair artists, the ten­dency for poten­tial buy­ers to have expec­ta­tions of bar­gain prices.

This is why it is really impor­tant to develop a fol­low­ing and in the case of art fair artists a fol­low­ing in all your venues. It is also impor­tant that you remain ware of the line between to high a price and to low of one.

What do you need to do to ben­e­fit from this crazy stuff? Well you can choose to use it as a tool that will help rein­force the value of your stuff and in the process gain more sales. Or you can choose to ignore it and go your merry way because it is to much of a risk.

Three things

If you choose to take the risk you should try to do some research based on your per­fect buyer pro­file, and dis­cus­sions with peo­ple who match your per­fect buyer pro­file. Three things you should focus on are:

What are the spe­cific ben­e­fits your buy­ers get from own­ing your work?

Is price the pri­mary deter­mi­nant for their buy­ing deci­sion or do they also con­sider such things like qual­ity, your per­son­al­ity, reli­a­bil­ity (cus­tomer ser­vice), or non-physical things like emo­tional impact, envi­ron­men­tal or how your work effects their liv­ing envi­ron­ment and lifestyle.

What value do your buy­ers place on own­ing your stuff and what sort of ben­e­fits to they receive from own­ing it.

Don’t Price in Isolation

Finally, you should remem­ber that value and pric­ing work together and your pric­ing should reflect and be inline with the following:

The cost to pro­duce your stuff

The price is reward for mak­ing such awe­some stuff and the price should include that reward in the form of pay­ment to yourself.

The value of your stuff is directly linked to what your buy­ers believe it is worth to them not you.

Once Again.…..

Pric­ing is impor­tant so don’t con­sider your pric­ing in iso­la­tion it is part of your over­all mar­ket­ing strat­egy. The best way to gain long term suc­cess is to ignore ten­den­cies to dis­count unless they are part of your over­all strat­egy. If you want to build your busi­ness based on a rep­u­ta­tion for qual­ity and ser­vice then low pric­ing is not a good idea espe­cially if you don’t pay your­self in the process.

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