The Pricing Balancing Act: From Kohl’s to Entertainers

The Pricing Dilemma in Entertainment Business

Kohl’s is a retail store that offers everything at discounted prices. When I was a child, Kmart had a special in-store discount called the Blue Light special, which required a physical presence. Additionally, some stores even promised to match prices if you found the same item elsewhere for a cheaper price.

In the entertainment industry, some companies offer new clients a 10% discount or dollar savings as a promotional incentive printed on their business cards.

Khloe’s marketing strategy has made me and others think and consider. “Is everything deliberately marked up, only to be discounted to the regular price?”

I worked for a trick shop that acquired a competing Halloween business. While cataloging the merchandise, we discovered that the prices at the rival store were three times higher than our regular prices. The rival store would negotiate every Halloween season, offering deals to sell off all their Halloween merchandise. Salespeople would haggle with customers over prices, and if a customer hesitated, the clerk would quickly suggest, “I’ll take $5 off the price.” By the conclusion of the sale, customers would leave content, thinking they had saved $30. However, had they visited our store, which aimed to be the most price-competitive, they could have saved an additional $20.

Disparity in Entertainers’ Pricing Strategies

So how are prices developed?

It is common advice in the industry to keep your prices competitive. But what does that really mean? Essentially, it suggests matching the prices set by your competitors. Interestingly, some entertainers have maintained the same prices for a decade, while others charge five times more. The latter group caters to lavish events and consistently attracts new customers.

Recognizing Thresholds within a Budget

Through my experiences, I understand the significance of recognizing thresholds, mainly when operating within a client’s budget. For example, if your client is accustomed to dining at high-end restaurants, they may consider a $15 hamburger to be reasonably priced.

Their needs and desires influence the psychology behind consumer buying behavior. Although a $250K car may not be a necessity, if one can afford it, the decision to purchase it becomes more about fulfilling one’s desires. They may justify the expense by asking themselves, “Why not treat myself and make such a purchase?”

Niche Marketing and Pricing

Niche marketing can help set prices. By analyzing the behavior of your target audience, you can quickly learn how much they are willing to pay for your services. For example, while a country club member may be happy to pay your standard rate, a blue-collar worker may include an additional 20% tip at the end of the event. Understanding your clientele allows you to establish fair and competitive pricing while meeting their expectations.

Different Budgets and Thresholds

Different organizations, such as libraries, park districts, schools, trade shows, and corporate events, operate within distinct budgets and thresholds, assigning different values to entertainment. A skilled entertainer’s objective is to grasp these thresholds and comprehend the unique needs of their clients. Once accomplished, concerns about a competitor’s pricing become less relevant, as the entertainer can tailor their pricing strategy to align with the identified niche price level, ensuring a more seamless fit with the client’s expectations.

Pricing Adjustments based on Budget Changes

Finally, please note that the pricing thresholds on a chosen niche depend on the budget. Therefore, if you select a niche experiencing a decline, i.e., schools have less money for assemblies, the prices are more competitive, and the market may pay less for your entertainment services.

Conversely, the prices will be adjusted if budgets for other niches increase. The tip-off to these events is when the client asks, ” What’s the cost for this year’s event?” Communication like this tells me they are projecting a percentage increase and have budgeted more money.

When it comes to pricing, it’s important to have a strategy. You shouldn’t just randomly pick a number or assume that your competitors’ prices are accurate. Take the time to develop your niche and understand the clients you want to work with. Figure out their specific budget and market to them based on their consumer buying psychology. By doing so, you’ll be able to set a price that is both reasonable and profitable.

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