Every Price Comes With A Price – Upholding Your Company’s Service Rates in Times of Crisis

March 9, 2021

By Scotty O’Brien

2020 was nothing less than a challenging year for everyone in the hospitality, live entertainment, and meetings and events industries.  The COVID-19 pandemic has taken such a significant toll on our financial well-being, livelihoods, and the market as a whole.

An Overview of My Companies

I own two companies: Sunshine Entertainment Group and Visionwork Group.  Being in the hospitality industry for 30+ years has taught me a lot about people and clients, advertising and marketing, and the rollercoaster nature of this industry.  My companies have been through many ups and downs, and I have personally rebranded and rebuilt myself countless times to stay relevant.  Clients are more demanding, expect more for less, and want only the best.  Some of that makes sense, but I am a strong advocate in an old saying that goes like this: “You get what you pay for!”

Starting as a wedding DJ company in 1997, I am relieved I expanded into the corporate market as tremendous changes started happening in St. Louis. For a city of two million people, there are currently 450+ mobile DJ companies, and many of these sole operators start and go out of business rather quickly. I have easily priced myself out of the extremely competitive wedding market in St. Louis over the past 15 years or so, and I know that the prices in this market are much lower than the rest of the country for the same exact services. St. Louis boasts a whopping average of $850 per five-hour wedding gig.  I firmly believe that start-ups wanting to make an easy couple of hundred bucks through their part-time weekend gig rob the true professionals who built this once very talented industry from the ground up.  I am 100% sure that this scenario is true around the rest of the country.

Continually Lowering Prices

This last year, I went from having what was going to be a record year of over a million dollars on my books -which is a big deal for my size of company- to living off of a government-mandated supplement. Besides learning about humility and the privilege that I had, I have also watched the already super low average of the St. Louis wedding mobile DJ industry price go down even more than it already has. That being said, mobile DJ companies are fighting for breadcrumbs that are raked off the table and swept under the rug.

So, what is degrading the value of the entertainment industry? The lack of concern for skill and talent that yields superior entertainment for once-in-a-lifetime events. Consumers are looking for the lowest price available, disregarding one of the most important pieces of the puzzle.  We are all guilty of doing it!  Many groups now just hire whoever can deliver the lowest price without any concern to the quality of equipment, time spent in planning, or the skillset that it takes to move a dancefloor and rock a mic.

The factors above, combined with the COVID-19 pandemic, have calculated a skewed pricing formula that has misguided consumers even more so to believe that independent suppliers who do business with the hospitality, live entertainment, and meetings and events industries are desperate. If we, as an industry, want to make a comeback this year, we must stand our ground. Businesses aim to grow in profit year after year, not to go back 10-15 years!

Upholding Pricing Standards

I will speak to my particular industry alone and exclude the companies that started up for small, supplemental income. In a time when we are all hurting and struggling to survive; do your best to have pride in your industry and uphold it. Keep the pricing standards that the true professionals have worked for so many years and which are so hard to establish.  My father-in-law told me a long time ago to buy the best that you can afford -on anything- at the time you buy it.  As an industry, I plead with you to protect your company’s pricing; it will be hard to raise your rates if you show that you are willing to knock them down significantly. We can make it past this pandemic hurdle and come out ahead if we all stick together. Trust me, people are ready to party face-to-face!

If you are only willing to offer a much lower price to an entertainment company to sign their contract, this will become the norm. You will, unknowingly or not, contribute to the devaluing of my proud industry, and that is not the direction that I want to see my or other companies’ business models head. Have some chutzpah and stand your ground. For the true professionals in business, do not settle to seal the deal. The client does not dictate your pricing; it is supposed to be the other way around. I guarantee you that Paul McCartney’s concert ticket prices aren’t going to drop just because of a crappy search engine or a whiny bride, and the live music industry ticket prices will not fluctuate. Why? Because people are willing to pay for real talent!

How Do We Solve This?

The answer to this conflict is two-fold. Marketing and sales is the first key. Your first job is to get your face in front of the people that want and need your services. A very wise and rich business associate once told me to spend the most when the times are worst. That does not mean to not feed your family; it means to make wise investments in your advertising and future, staying in touch with your clients and industry friends, and do whatever else it takes.  Remember, word of mouth will always be your best form of advertisement.  The second is to stand your ground on when it comes to pricing. Remember why you, the real professionals, got into the industry in the first place.  We are here because we love what we do!  The cool thing is that you can make some great cash as a reward!

We, as venue/service suppliers in the meetings and events and entertainment industry, will need to get creative in these times with how we continue to make a living.  As your company innovates new ways to generate revenue, be mindful of how your tactics are impacting these industries as a whole. Find ways to retain your company’s value and make it clear to potential and current clients that you are ultimately in charge of setting your rates, not the other way around. This brings me to reiterate my three-word takeaway once more. Stand. Your. Ground.

MM&E

Scotty O’Brien is the Owner of Sunshine Entertainment Group and the Visionwork Group.  To learn more information, visit visionworkgroup.com or call (636) 207-9999.

About the author

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