5 Triggers that Influence Price

We’ve all seen the pricing formulas.

They're usually some combination of materials and time. They can get a little confusing too. Should we add the cost of wasted materials? How about the time we spent marketing ourselves on social networks? As an artist I feel, why not? Our time is precious. Our materials are precious. We’re precious.

However, after a little digging, it seems like what's important to me—the artist—isn't quite as important to me, the customer...why, that insensitive twit!

While I care about the logical stuff like time, materials, and effort, the customer is guided by intuition and other nebulous triggers. Which is why the relationship between artists and customers can feel a lot like “You’re from Mars / I’m from Venus” (don’t think anyone has used a John Gray reference since the nineties).

In short, each look at pricing with a totally different lens. So what influences price in the customer’s mind? Here are five triggers I have identified:

Status

The definition of status has changed. It’s not about expensive cars and diamond studded necklaces. Today, the question is:

“If I posted this item as a status update, would it get a reaction?”

Social currency influences real world currency. And that can determine if a customer is willing to pay more. There’s no bulletproof formula for acquiring status. Sometimes, the least likely product will capture our imagination.

Here a pencil takes a stand against digital dorkery. Nobody cares that it only takes a few cents to manufacture. Since it is status worthy, people are ready to pay an unusually high markup.

Scarcity

This is one trigger we as artists address by default. There are only so many items one artist can make at their studio, which naturally creates scarcity. But if too many people start making similar stuff, then the price automatically drops in the customer’s mind irrespective of how expensive the raw materials may be. It's the same reason limited run items work better.

Relevance

What is important to people right this moment? It could be a certain style that's trending. Or a certain material. Expensive items may lose some cache during a recession. Or it's possible that items made in the US or even made locally within a 50-mile radius might be what people are looking for.

These wallets by Heathered are made from old maps. They're relevant to me as an East Bay resident. But I may also look for maps of places I've visited in the past or plan on visiting. The wallets are also very well executed.

Story

Can the product carry a three-minute conservation? The speaking points would have to extend beyond the product. What inspired it? Who made it? Why? These are bike earrings by Kendra of Girl on Bike. Clearly the artist rides a bike. The story is authentic which gives the product a lot of depth.

To top it off, they're original (never seen earrings made of bike tubes). And relevant. There's a lot to talk about. How much time went into making these and the costs of materials take a backseat (no pun intended).

Practicality

This is the most rational of all triggers. We all want something we can use. If an item covers some of the triggers mentioned above, AND it's practical then looks like you just climbed a few notches up the value curve.

So how do we set a price when most of these triggers are beyond our control?

Here are a few steps that may work.

Ask

Ask your target audience and other artists. If you ask the right audience, you will get the right answer. But you must give them permission to tell you the truth. If the price I hear from them isn’t worth my time and cost of materials, I’ll move on and make something else. However If it's an item I enjoy making, for the pure fun of it, their opinion on price doesn't matter as much.

Test it

Some artists test market their stuff at a few different price points and see what moves the product. It may take a lot of trial and error, but at least it's accurate.

Trust yourself

Whenever I am torn, I give my artist side a timeout and channel the customer in me. He's available 24/7 and can bring a refreshing amount of objectivity to the whole process.

Try it out. It may just work. And please share what works for you. Thanks!

Posted by Vinit
The Whiteout (Junk Rescue)
Kaamchor (Art from Stolen Office Supplies)

This is part of a monthly series on the touchiest of all subjects, pricing! The first post can be found here.