I know we talked about pricing extensively during the seven day training course and also in some of the follow up articles here on the website, but last night on the conference call with the gold members we started talking about pricing and what all the different terms mean.
So I thought it would be useful to follow up here with an article with some more information about pricing and how it’s spoken about and dealt with in the industry.
Thumbs in the pie – that’s what it boils down to. How many people have their thumbs in the pie between the money you see when you get paid for your show, and the money the end clients actually pays for the performance. There are a couple of people along the way that might have their thumbs in the pie and some you might have to pay afterwards.
So let’s break it down a bit. The way you can get the most money is to book directly with the end client. There are no agents, producers, or speaker bureaus. There is no one between you and the paycheck. Those are great if you can get them, but as I pointed out in other articles, there is a lot of work involved in those gigs and it’s kind of a one-off thing. They are not the best way to build long term relationships.
Producers – are everyone from speakers bureaus to meeting planners, convention bureaus, or sales associates. All kinds of people fall under the category of producers. Those are just people who produce income and all kind of opportunities for you to perform.
Now typically those people do what’s called a buy/sell. They buy you for one price, and sell you for another. You’re not really too concerned on what they sell you for. If they can get more money for you, it means that they are better sales people because chances are other people are going to be pitching you to a lower price at a lower price possibly. So, it behooves them to find out what your fee is, add there standard rate, which we will talk about in a minute, and pitch you at that price.
Agents those are people typically that you will pay a commission to off the gross fee the client pays. So that client will pay, whatever ($10,000), and you will have a deal with the agent to pay 10, 15, 20, whatever the percentage is. So the words they use it that world are net and gross.
What do you net for doing the performance? What is your end pay? That is your net pay, and the gross is the total amount the client is paying. So the difference between the gross and the net is usually what other people make off you. Often times they speak about rates as far as commissionable; especially if you are working with a speaker’s bureau. They will ask what is your commissionable rate? What they are looking for is what you want to end up with after they take 25 percent. As an example, say you want to end up with $10,000. That was our fee for a long time. We wanted to net $10,000, so we quoted $13,500 to speaker’s bureaus ($13,500 less 25 percent leaves just about $10,000). That’s what you have to ask for when someone asks you about a commissionable rate. Take a gross then take 25 percent away from that and what you end up with after that is your net after the commissionable fee.
Other things to consider, of course, are rider costs, and those are always additional above the fee. Don’t count them in your fee unless you’re doing something that is becoming more and more popular and that is flat fee pricing. We have flat fee pricing for certain cities (San Francisco, Las Vegas, etc.) where we know what the costs are. It’s one flat fee for the performance, air, hotel, everything. It’s becoming more popular to do that kind of thing. So consider doing that for cities where you understand the costs of working there.
So that’s the buzz on pricing, some of the terms used in pricing, and some of the people who have their thumbs in the pie.