{PRICING} The two most important factors that determine the success of a product are: (1) the perceived value that the product delivers to customers; and (2) the costs to the producing company for delivering this value. Now consider reputation (brand) in relation to this difference between value and cost. A positive reputation directly and indirectly increases the perceived value of a product. It increases product awareness, signals quality, and instills confidence among buyers. While a reputation has the potential to affect perceived value, there are often no direct costs with building a reputation because it’s typically a byproduct of delivering and communicating customer value. A reputation can even reduce costs because it may substitute for other expenditures (e.g., marketing, recruiting expenses). If you deliver superior value to customers, you not only enhance your reputation with those customers, but you also have an influence on their network and their network’s network through word-of-mouth marketing. And if you continue to deliver significant value over time, your reputation will be further amplified, having a broader impact on product adoption as well as your company’s other activities, such as the ability to attract new employees. Finally, unlike physical assets, which depreciate and must be replaced at a cost, a reputation can increase in value over time, so long as you continue to provide superior value to new and existing customers. In closing, the two most important factors that impact a product’s success in the market are the perceived value that it delivers to customers and the costs to the producing company for delivering this value. A positive reputation has the potential to substantially enhance the perceived value of a product, without a commensurate increase in costs. By increasing the perceived value of a product, a company can attract new customers and charge premium prices. And by maintaining or lowering costs, a company can maintain or increase its margins and overall profitability. Its a very simple economic equation... If you can calculate the variables, you will come up with the right result. cost + time + reputation = value For example, my estimated COST per client is $300, that includes disposable materials cost, transportation cost, and administrative cost. If you charge in the $300 range you are coming up even... If youre charging less than $300, you are actually loosing money. (this cost calculation DOES NOT include your base equipment, tools, and makeup supplies, which you know can be in the thousands). I spend an average TIME of 12 hrs per client, that includes trial time, wedding day, and any direct communication. I pay myself $125/hr. REPUTATION is extremely important as it determines your hourly rate. The better the reputation the higher the hourly rate. A new makeup artist should try to make at least $25 per hour, most $50, and very experienced artist with a great reputation $75-$150. So for me is: $300 (cost) + $1200 (12hrs x $125)= $1800 We all deserve to make a decent living for our trade. I hope this is helpful for all artists. In kindness, Maria Chang
Posted on: Mon, 31 Mar 2014 03:28:54 +0000
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