The Perils of Pricing
posted August 24, 2013
Some time ago, a fellow bellydancer posted on a social media site that she needed professional dancers for several unpaid shows and one was from a client organizing a “celebrity party”. It seemed strange that a party for celebrities would not have an entertainment budget. Another dancer explained,
"…is not that they have no money, but is promotion for u, thats how they see it. I used to dance for syrian embassadors and the first times we werent payed but then we were hired for other private parties, so it worked out very well…sometimes if u dont dare u dont get anything back."
This argument is missing something more than punctuation and capital letters: There is a difference between "daring" and "working for free, undercutting other dancers, and misunderstanding the economics of pricing whilst mindlessly genuflecting to celebrity culture."
Value Brand Bellydance
The most obvious problem with price-dropping and freebies is undercutting, even if you don’t mean to hurt someone else’s business. Offering a show for little or nothing means a client will almost certainly choose you over someone who’s requesting the market rate. But why are they choosing you? Not because they like you. Not because they think you’re the best dancer. They’re choosing you because you’re cheap. You’re presenting yourself as the generic Value Brand of bellydancers. Don’t be that guy.
I am frequently asked to perform at “celebrity” or “VIP” events. Being in the presence of an alleged VIP is assumed to have monetary value, as is my ability to reference my performance for said VIP after the fact. VIP events are also expected tolead to future paid work, a fallacy I’ll address later.VIP shows do have monetary value, as people are more likely to book an artist who "performs for the stars", but that value is often exaggerated. As for the fame factor? I’m sure I’m not alone in being indifferent unless it is a very specific celebrity I want to meet. When I ask “Which celebrity?” the person on the line often gets confused, as though I should be excited to be near any famous person. But I’m only asking in case the answer is something like “We’re calling you because Salman Rushdie is throwing a house party with Nobel-Prize-winning economist Daniel Kahneman”, which is sadly never the case (but would get a discount).
Furthermore, these requests seem unfair. Having fame doesn’t make one deserve a free performance when teachers, delivery men, bank tellers and the guys running the local kebab van are expected to pay for the same service. Celebrities who are generous patrons of the arts set a much finer example than those who exploit their social position to get freebies.
I was stuffing my face with rather hard Jordan almonds the other day and as I result I now need a filling repaired. Would it be reasonable for me to call my dentist and ask him to do a repair in exchange for the free publicity? After all, I’m a performer and I am constantly being looked at and photographed. I meet a steady stream of new people and many of them compliment me on my teeth or my smile. Could I promise my dentist that I would repay his work by responding to all these compliments by giving out his business card? Many of the complimenters would no doubt have their own dentists or would have no need for such services in the near future. But my dentist might gain a client or two – maybe even a celebrity or a Saudi prince! – and would be able to brag that he does Caitlyn the Bellydancer’s teeth. Do you think he’ll go for it?
Just as I would never ask my dentist to give me free fillings or a teacher to give me free classes or a salesman to give me a free car, I would not expect a professional dancer to do her job for nothing. In addition to the practical consequences (if I made a habit of free shows, I could not afford to eat or pay my student loans or keep a large stock of glitter in thirty colours), free high-quality performances devalue professional shows as a whole by implying that such a service is, in fact, worth nothing.
The Anchoring Effect
Free shows produce a shift in budget expectations. a client or guest who sees a show and knows it cost nothing will be influenced by that knowledge in future negotiations with performers. In economics, this is called the “anchoring effect”. Anchoring is an irrational cognitive bias in which a person uses an initial piece of information, which may not be logical or even relevant, to make subsequent decisions. Even if a person knows a bellydancer normally costs more than £0, if she sees a bellydancer perform at a party and the host says the show was free, her expected expenditure when she wants to book a dancer will be strongly biased toward £0. This may result in lost work for performers (and frustration on both sides!) as the person trying to hire them will have an unreasonable idea of what she should pay. It also helps explain why those free or discounted jobs that promise to pay the full fee on future bookings always find a reason to keep paying little or nothing. Once your client’s payment expectation is biased toward £0 or even £75, it’s very hard to drag it up to £150.
Dancing at a Premium
Free shows at private events lead to a lowered appreciation for Middle Eastern dance. By reducing or removing its monetary value, one removes the status of the dance as a decadent luxury and an art worth paying for. A dancer who says "This dance costs 250 pounds" communicates, "I have invested a great deal of time and money to bring you this luxury: a performance of high aesthetic and artistic value" whereas a dancer who says "I am professional—but don’t pay me" communicates "This dance is worth nothing, even when performed by a master".
Several dancers I know practice “premium pricing”, also called “prestige pricing”: keeping the cost high to encourage value and respect for themselves and the dance. While this can have its own drawbacks (eg. excluding people below a certain income level from one’s clientele), it is much more helpful to the dance than performing for free.
But for you, special price!
That doesn’t mean discounts don’t exist. I have performed gratis at events for organisations such as the Oxford Middle Eastern Dance Society, for which I am a teacher. I also perform for a reduced rate at restaurants because such businesses struggle to make a profit in this economy and my full rate would be financially unfeasible without the kind of advance advertising beyond the ken of the average restaurant proprietor. And very occasionally I will agree to drop my rate because a job is very convenient: a ball I’m planning to attend anyway or a nightclub show perfectly en route home from a highly paid wedding gig. In the final case I will always make it clear to the client that s/he is lucky and getting a discounted show. What I will never do is dance for free just because it might lead to future work or allow me to bask in the radiance of a celebrity. If one is to give performances for a reduced or nonexistent fee, I think it is important to consider the impact the price has on ones’s future work, the work of other bellydancers, and the public’s perception of the dance.
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