By Randy Bartlett
Here’s a great throw-back to this classic article all the way from the year 2002 by one of my idols, Randy Bartlett (The NEW and IMPROVED).
Read this again with today’s mindset, and then ponder: Does this narrative still apply? I’d like to think it DOES.
NIMBY. It’s an acronym which stands for “Not In My Back Yard”. It’s usually heard in connection with some sort of social project, such as low-income housing, half-way houses, cellular towers, power lines and the like. The idea of NIMBY is that while everyone agrees that the idea itself is good, just NIMBY-Not In My Back Yard. Yes, we know we need a group foster home for troubled teens, it just won’t work in my backyard.
But the NIMBY principle also applies in the DJ world, as it relates to pricing. I have rarely met a DJ who wouldn’t like DJ prices to increase, it’s just that they think it is not practical where they live. The DJs in Idaho, Kansas, Montana, think it is a great idea if you live in California, New York or Texas, where the standard of living is higher. The Texas DJs think it’s great if you live in California, where the weddings all have budgets created by the celebrity world. The California DJs think it’s a great idea if you live in Kansas or Idaho, where there are not pages and pages of low end DJs in every phone book, and rows of DJs competing on price at every bridal fair.
The truth is, geography has almost nothing to do with what you, as a professional DJ can charge. What you are able to charge is based solely on the value, as perceived by the client. When you are able to raise the value to an amount greater than the price you charge, then you will be booked. That is true no matter whether you are charging $250 or $2500. In order to make the sale, you must convince the client that they will receive at least as much value as what they have paid. Think of a old fashioned scale. On one side is price and on the other side is perceived value. Until perceived value outweighs price, the sale will never be made.
One common misconception is that the local market will dictate what local DJs can charge. This is the classic “which came first” debate. The “market” does not dictate what DJs charge. DJs dictate what the market is. It is the same in market after market. The way prices are raised in a market is that somebody decides to raise their rates. At one point, $300 was the most any DJ charged in my market. Then we went to $400. Suddenly, the most the market would bear was raised by $100. Later, we decided to charge $500. Suddenly, the most the market would bear was $500. For years, $100 an hour was seen as the top end of what DJs could charge. Once that barrier was broken, we soared. Now, $100 is considered the low end in my market, at least among the major players. There remains in my market, as well as virtually every other one, a veritable plethora of DJs who charge amateur rates. That is because they are amateurs. They do not compete with me. They are of no consequence to me or my business. Taco Bell does not compete with Morton’s of Chicago, even though both businesses provide food to their customers.
The thinking among many DJs is that California DJs charge more because the cost of living is so much higher here. In fact, the cost of living is really not that much higher here. The cost of housing is much higher here than in most areas, but the other costs are pretty much the same. How much does a Toyota Camry cost in South Dakota? The same as in Los Angeles, California. How much does a Rane mixer cost in New Mexico? The same as in San Francisco or New York. And most importantly, how much does a wedding reception cost in Missouri? The same as in New Jersey, or at least very similar. It is certainly reasonable to expect that the largest cities will have more of the extreme top end wedding receptions. Where is it more likely to find a $75,000 wedding reception, Arkansas or New York? New York, of course. But that reception is unlikely to book a DJ anyway! They don’t figure into the equation. Who books DJs? The average wedding reception. The $7,000-$25,000 wedding reception. The average wedding reception in the U.S. now costs $20,000. Can it be done for less? Of course, and it is done all the time. Average means some are higher, some are lower. In fact, I would venture to say that the average reception in my market is probably more like $12,000. We are in a relatively small market, and we don’t have very many extravagant receptions here to drive up the average. Cities like New York, Chicago, Los Angeles and the like will have more of the extravagant receptions, but they will also have more of the middle to lower end receptions, which is where DJs work the most.
Here is where the laws of supply and demand come into play. While most DJs understand the basic concept of supply and demand, they miss the most important point, which is that they needn’t count all the DJs into the supply side. They only need to include those DJs who are their equal. On any given Saturday, there are more brides who want the “best” DJ in their market than there are “best” DJs to go around. In fact, one of the most important realizations that any DJ can make is that the supply of “me” is very limited. How many brides, if they knew what level of service YOU can offer, would want to book you? It is your job to become the most sought after DJ in your market, and then to make potential clients understand why that is so.
Put another way, there are more clients who want the top performers than there are top performers to go around. So why do we bid on their business as if we need them, when in fact they need us? The truth is, we need each other, and we need to restore that balance of supply and demand. We, as the top performers in each market, are not in great supply. We are in great demand, and should be charging, and acting, accordingly.
The one thing about local markets which will be true is that larger markets present more opportunities to get higher priced events. If only one out of 20 clients is willing to spend $1,500 on wedding entertainment, and your market only has ten receptions per week, you’re not likely to book more than one of these every two weeks. But if your market supports a large number of receptions, you will have plenty of opportunities to book the higher priced events. And I will concede that there may be a little bit of geographical differences based on local factors other than population, but it will be minimal. A market of 500,000 in Kentucky may have an average wedding reception cost lower than a market of 500,000 in California, which would lead to a lower chance of getting the same high price in both markets. But it certainly wouldn’t be three times as expensive in California, so the California DJ isn’t automatically going to be able to charge three times as much. It is up to the Kentucky DJ to raise the bar in his own market.
How much are typical wedding receptions in your market? Let’s take a look. I’ll list the numbers as I know them, you make the adjustments for your market. This is for a reception of 125 guests at a medium priced facility, without frills.
How much is food? This varies greatly. For a catered event, about the lowest possible amount you can expect to pay is $12.00 per plate. This is cold cuts, veggies, etc. Realistically, a typical bride should expect to pay $20.00 to $35.00 per plate. $20.00 per plate will get you a very basic chicken and rice buffet at a low to medium priced facility. $25.00 per plate is more typical of an average reception at an average facility. You’d be surprised how many people go far beyond that. Let’s use the low price of $20.00 per plate.
125 guests @ 20.00 per plate $2,500
Tax & Gratuity (Not optional) 625
Note: There are no appetizers listed above. That would typically add another $4.00-$10.00 per person.
Next is photography
Like the DJ business, prices are all over the place, but the average wedding photographer charges $1,500 for a basic package. Some charge double that rate. Again, let’s use an average figure of $1,500.
Tax @ 7% 105
Let’s look at a cake for this group. Again, each cake can vary but a low priced cake will cost about $2.50 per guest. The facility will typically charge at least $1.00 per guest to serve. These figures often go as high as $5.00 per guest for the cake and $3.00 to serve, for a total of $8.00, or $1,000. For this exercise, we will use the combined total of $3.50 per guest.
Cake 125 @ 3.50 437.50
Tax ($250 @7%) 17.50
Flowers are another area where figures vary greatly. A very low amount is $400, and $3,000 is not uncommon. Let’s use a very low figure of $500.
Tax @7% 35
Most of the receptions in my area are no host bars. However, most clients still incur costs for sodas, punch, coffee, etc. A hosted bar can run into the thousands. We will take a very low figure of $200 for this exercise.
Tax @7% 14
So far, this low cost wedding has spent $5,934. We’re not even close to the end. We still have to add church fees, minister, rings, wedding dress, formal attire, attendant gifts, videography, favors, balloons, limo, cake top, champagne glasses, hall rental, rehearsal dinner, bridesmaids dresses, invitations, postage, guest book & pen, marriage license, honeymoon, music for the ceremony, and on and on. We haven’t even gotten to the luxuries yet. What about people who spend hundreds, or even thousands of dollars on ice sculptures, candy bars with the bride & groom’s picture on it, matches, napkins, engraved cake knives, butterfly or dove releases, mariachi bands, horse & carriage, etc. And let’s not forget, we still haven’t discussed entertainment.
How much do your customers spend on weddings in your market? Ask a local bridal consultant. Talk to your local caterers and find out how much your next reception will cost. No matter where you live, it is now almost impossible to hold a wedding reception for less than about $7,000, and few are that low. If you can show me a market that doesn’t charge these kinds of rates, then maybe you can convince me that your market isn’t big enough to support a professional DJ wage.
The basis of what a DJ can charge has nothing to do with the cost of housing in that market. It has to do with the cost of weddings in that market. My house payment is undoubtedly higher than a DJ in Wyoming, but that just means I have less to spend on my wedding, not more. Clearly, the DJ accepts the majority of the responsibility for the success of the reception. My clients tell me I am responsible for over 80% of the success, yet I typically charge only about 5-10% of their total budget. What % of the budget do you get? Let’s do some more math.
Let’s assume the average reception in your market is $12,000
Let’s assume your price for this reception in $500.
Your % of the budget is just over 4%.
If you doubled your rate to $1,000, your % of the budget is now just over 8%. Ask your clients if they think you will contribute more than 8% to the success of their event.
Now, let’s be more realistic. The average wedding reception in the United States is now over $20,000. If you charge $500, your % of the budget is 2.5%. If you charged just 8% of their budget, you would be charging them $1,600. Now ask that same client if you are worth 8% of their budget. In future articles, we will discuss how to get them to switch their budget priorities to accommodate the best possible entertainment.
Don’t just guess about weddings cost in your market. Do some real research. Go to your top end facilities and ask for their pricing packages. Ask your top photographers what their average clients spends, after all their pictures are ordered. Ask several of these people, and then determine what piece of the pie is reasonable for your role in the event.
Probably the most convincing evidence of my point is the following. If it were only based on markets, then why don’t all, or at least most, or the DJs in these big markets charge the top end? In Los Angeles, there are thousands of DJs. I know of only a few who charge more than $1,000, but I also know that a few of those DJs charge over $2,000. If it’s the market, and not the DJ, why are those thousands of Southern California DJs still charging $400-$600? In my own market, I charge three times what the “average” DJ charges. I am told frequently that my prices are too high. There are two reasons why I know my prices are not too high, though. First is that I am booked every weekend. Second, and just as important, the people who tell me that my prices are too high are not my clients. Nobody ever tells me that my price was too high after I do their event. They only tell me that before they book another lower priced DJ. But there is rarely an event that goes by where somebody doesn’t come up to me and say “Wow. I wish I had you at my wedding.”
In talking to DJs from around the country over the last few years, I’ve been amazed at how many of them tell me about how their markets won’t support the high rates. But I’ve traveled to many of these cities, and performed in many of them, and they have everything they need to get top dollars, except one thing. They need a brave DJ to raise the bar. They need somebody to go beyond what everyone else is charging. What is accepted as the norm is that price which is set by the top performers in each market. Are you the top performer? How much better are you than average? Are you $300 better than other DJs? Then charge that. Use that as a selling feature. You don’t need to book every client. It’s okay if some people won’t pay your price. It only matters who will pay your price. Will one or two customers each week pay your price? If not, you need to reexamine your performance or your communication skills.
Too many DJs get hung up on specific numbers, thinking that if they can’t charge $1,200 today, then they just can’t raise their rates. But you needn’t go from $400 to $1,200 or $2,000 in one jump. Can you go from $400 to $500? Or from $500 to $575?
Often, when DJs say “People won’t pay that price”, what they really mean is “I wouldn’t pay that price”. Well, I know what I do, and I would pay my price in a heartbeat. When my daughter gets married, I will pay whatever price I have to in order to get the best possible DJ for her wedding, because I truly understand how important a role he or she will play. Do you?
Note: This article originally appeared in the January, 2002 issue of Mobile Beat Magazine