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[John M. Roll]

We're adding a few pieces to my small light rig. Right now, we're the least expensive sound and light company in my area. I want to keep the costs to my clients as low as i can,since this area is economically challenged. The clubs aren't paying the bands what they should and have gone to an earlier 3 hour format. At what point do my additions warrant a price increase? I'm doing this to make the company more attractive to prospective clients.
Thanks,
John

[Jeff Lelko]

At what point do my additions warrant a price increase?

Hi John, to me the one true answer to this question is when your customer sees a tangible increase in the value of the service they're paying for.

As example - and speaking in lighting terms - if all I'm doing is providing some basic uplights for atmosphere, my customer won't care if I'm controlling them with a rented MA3, my own ETC Congo Kid, or Qlab on my Macbook Pro through an Enttec interface.  If (when) I retire my Congo Kid and replace it with some flavor of MA3 I can't justify tripling my price to the client even though I replaced a $5k desk with a $50k desk.  The end service stays the same and so must my price.

To say this a different way, how do you feel when your shop rent, phone bill, car insurance, etc. increases without any perceived added value to yourself as the end customer?  That's how your client will feel if you raise your price to them even though you might have upgraded equipment under the hood.

Now...if the customer is requesting specific equipment for a job or an additional service from what you usually provide then this is absolutely grounds to renegotiate price - especially if the requested equipment is rented or requires more vehicle/crew/logistics to transport and deploy. 

Hope that helps!

[Tim McCulloch]

Clients tend to pay for the things they can see, less for things merely heard.  More than once have LX paid for audio improvements.

Also, John, I understand working in 'challenged' markets.  But NOT raising your fees guarantees you will go out of business.  Trust me, a former employer made that mistake, and was one of the reasons I doubled down on accounting and management and spent the last 25 or so years managing other people's businesses.

[Brian Jojade]

Also, John, I understand working in 'challenged' markets.  But NOT raising your fees guarantees you will go out of business.  Trust me, a former employer made that mistake, and was one of the reasons I doubled down on accounting and management and spent the last 25 or so years managing other people's businesses.

Bingo.  If you're spending money on more equipment for a bigger show, but not charging for that extra equipment, it's going to be tough to maintain profitability.

If your client base wants low costs, then they need to accept smaller rigs.  Pricing below market rate doesn't help you OR anyone else in the industry.

[Caleb Dueck]

If your client base wants low costs, then they need to accept smaller rigs.  Pricing below market rate doesn't help you OR anyone else in the industry.

This here.  One production company I was at had systems for budgets like this - a pair of used EV SX100 speakers, a pair of subs (for extra cost), and a lunchbox analog mixer - all bought used for pennies on the dollar.  The clients that paid for real production received real equipment. 

Undervaluing yourself and the market simply because others (bar owners?) are cheap only rewards them and harms you and others for their bad decisions. 

[ProSoundWeb Community]