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The Pursuit Of The Right Price



 Price Advice

  Mark Ferell

When I first got my start as a mobile DJ in 1989, the first bit of "advice" I received was from a highly respected wedding resource owner who told me that no DJ was worth what I was charging. Then there was a high-ranking wedding coordinator who told me she couldn't sell my services because my price was too high. Then an agency. Then the attacks by other DJs. Thankfully, I don't depend on what others think to form my sense of value and self-worth.

Knowing and respecting your sincerity, I'll indulge your query further.

I expect that everyone will, individually, grow at his or her own rate. Some will decide in an instant that they're worth $1200 or more and will go about making it work. Others will take it slower. Success - to me - is the progressive realization of pre-determined, worthwhile goals. It's an ongoing journey. It's not a destination. $1200, $1900, $2500, $3500, are just milestones we pass as we grow - a way to keep track of our progress or to keep score.

When I'm skiing in the beautiful Sierra Nevada, if I'm not falling down, I'm not learning - I'm not getting better. So, I must ski harder. Likewise, when it's easy for me to get my current fee, it's time for me to raise it to an uncomfortable range. If I'm going to suggest that others do something that makes them uneasy, it's incumbent upon me to place myself in a situation that is equivalent, otherwise I'm just a "windbag" with nothing to risk - a General commanding from the comfort of the bunker. I have never gotten muscles watching someone else lift weights.

If Walt Disney had believed the majority, we wouldn't have Disneyland and full-feature animation films.

FedEx wouldn't exist if its founder had believed his business professor.

Who really believed in 1958 that we could land a man on the moon and return him safely to Earth?

Thomas Edison failed over a thousand times before he had his first successful electric light bulb. And then he had to invent the electric company and convince everyone to switch from gaslights!!

Our task doesn't seem so daunting when compared to these amazing examples.

The Consumer Price Index is an economic indicator published by the US government consisting of the averaged costs of a variety of goods and services including food, fuel, utilities, shelter, apparel, transportation, medical care, commodities, and energy to name a few.

In 1984 the index was adjusted to "100". In 1990 the index had risen almost 31% to 130.7. In 1995, it was up 52% from 1984 to 152.4.

The latest figure is from 1997 and is at 160.5 or a 60.5% increase in the cost of living when compared to 1984. This is an annual increase in the cost of living of 4.65%, which would bring today's index to 174.4 or 74.4% up from 1984.

In 1984, the average rate for a Mobile DJ was about $400 for a four hour party or around $100 per hour.

Today, the average rate for a Mobile DJ is about $400 for a four hour party.

In today's economy, a Mobile DJ charging $400 is making a gross income that is 74.4% less than it was 16 years ago, which equates to $102.40 for a four-hour party.

The questions I would pose to those who would refuse to charge their full value is: Why don't you believe you are worth more? What don't you do? What services don't you provide? Why would you fight for your limitations rather than stretch and grow?

Market strategy is important. That's why it's important to work collectively. But, are we "cars" - just a commodity? Or are we individualized services - unique - different from each other? If a consumer is getting the exact same product or service, he'll go for the best price - every time. Is that a concern to you? Then re-think what you provide. Refuse to be "just a commodity".

Am I having any less fun commanding a $2500 price tag for my services? Is Dave Letterman having a horrible time getting 14 million a year? How about Oprah? She must be miserable. Do they give away their services? Do they leave money on the table? Does Bill Cosby do the Jell-O commercials for free because he's having fun and has too much money anyhow?

If I didn't make a decent living, I'd be of no use to the charitable causes I support. The answer is: "One cannot carry another when one is weak." I have an obligation, which is bigger than my selfish excuses.

For 11 years, I've consistently charged 2 - 3 times the "average" rate in my market. I'm thinking that's long-term. Is it the market? Or am I just the best DJ on the planet? Neither. I'm a pretty average DJ. And the market is saturated - 6,000 DJs (many whom are very talented aspiring actors). You can choose to remove yourself from competition and, instead, concentrate on yourself and your clientele rather than worry about what the "other DJs" are doing.

The subject I spoke on at the Mobile Beat DJ Show in Las Vegas is the result of using the principles of which I speak. These same principles have allowed the average rate in Southern California to go from a stagnate $450 (five years ago) to $850 today. That $450 rate had remained the same for over 15 years previous. Why? Because the naysayers created a reality of competition and market pressures, which held the rates down for nearly two decades.

Don't worry, you're prices will come up as other DJs apply these principles and raise the status quo. DJs who vehemently opposed what I spoke about 5 years ago, who argued to keep their prices down, who stated that their prices would never come up, are now enjoying a higher standard of living having raised their rates. All we need is a threshold. All we need is 5,000 like-minded Professional Mobile DJs nationwide to shift reality.

Personally, I look for someone who has the results in life I'd like to have. Then I do everything I can to learn how they did it. I gladly pay their price because what they offer is worth it. If I stand to earn $20,000 - $30,000 more per year as a result of what they teach me, it's worth $1,000 to me. That's a 2,000% - 3,000% return on my investment! I've given that much ($1,000) to a magazine that only paid for the cost of the ad and netted me $1,000.

If you applied these concepts and increased your income by $300 per party doing 100 parties per year, it would mean a $30,000 profit increase. What could you do with $30,000? Vacation? House? Go full-time? Support an orphanage? Build homes in Ecuador?
Send Bibles to China? Reinvest in your business? IRA-SEP?

It's important to understand the true value of things. It's important to understand the true price we pay. That's what the "Getting What You're Worth" series is all about. It's what my clients understand when they write me a "deposit" check for $1250. It's what you're clients will understand when you understand.

Thank you for the opportunity you've afforded me to be of service. By doing so, you've allowed me to fulfill my purpose and have honored me with your openness, honesty, and intelligence.

Courtesy of DJchat

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