Since I became a magician in 2006 there have been two recessions. During these slowdown periods companies will start saving money by reducing how much they spend on their corporate entertainment budgets, and private individuals reduce their spending. Even when economies are growing people still like to have a bargain.
a rule of thumb people (at least in the UK) don’t haggle, but pay the price on
the label. There are exceptions where is it actually expected such as buying
cars, houses and double-glazing. No one asks for a discount when doing
their weekly grocery shop.
It tends to the ‘big ticket’ items where people haggle. This is likely to be because the higher price means a higher profit margin for the seller, and hence more room to negotiate. The cost of service that a magician provides is mainly made up by profit with little expenditure (perhaps just fuel and new deck of cards). Couple this with the fact that the magician isn’t a large corporate machine and it is no wonder that people try to get some money off.
The two ways to countering this is to have fixed prices, and offering a fixed discount. (Offering Last Minute Discounts is covered in a separate Lesson, here we are looking at discounts at the time of enquiry.)
Instead of using term “quote”, use the term “price” or “fee” when giving people your costs. A quote implies that this is not a fixed cost, but a preliminary cost based on initial projections and is subject to change. By providing a ‘quote’ you are essentially saying, “here’s my fee, what do you think?” and opening the door to haggling.
Another term some use is ‘investment’; the idea that referring to fees and cost feels quite harsh, whereas investing your money psychologically lets your customer know they are getting something in return. Personally, though I like the theory I don’t feel it works in practice and if anything comes across to your prospective client that you attempted some sort of verbal trickery, and can even give the impression that you are embarrassed by your high fee and possibly open to negotiation.
My standard fee structure is set, and it is from this that I work. I don’t adjust my standard fee depending on the enquiry, though discounts and extras may be added or taken from it if required.
My standard fee for 2 hours of close-up mix & mingle magic is the same, regardless of the type of event. Who they are, the number of people attending and how expensive the venue is to hire makes no difference to me. If it is local, a charity, a repeat booking or a recommendation I may offer a discount. If it is further afield I may add travel costs on top of the standard fee. However, I make it clear what the standard fee is, and what the reductions/additions are.
Personally I find the whole procedure of fishing for clues to maximise the quote quite vulgar. I also don’t like the method of offering a price, waiting for a reaction; and then following with “and travel costs are extra…” or “but as I’ll be in the area…”
The problem with these strategies is they not only come across as strategies designed to maximise the fee and close the deal quickly, they also have the potential to open further price negotiations and can confuse matters at a later date. For example you may have an email exchange which results in you providing a quotation, the client sits on this for a few days then has some questions they want to ask before booking and calls on your mobile. Will you remember the fee you quoted last week? It won’t look very professional if you have to ask the client what fee you quoted them. By working from a set structure you know what you will have quoted.
Create a Price Matrix
I have a price matrix next to my desk and stuck in my diary with my fees for my various packages and option, such as 2 hours of close-up, 3 hours, additional hours (for longer corporate events), short cabaret, long cabaret, PA hire and travel costs for various regions. This enables me to instantly calculate a package cost.
next column gives the fees for each of these with a 15% discount, the next a
25% discount, and finally with a 33% discount. I also have how much each of
these saves from the standard fee. No fumbling on the calculator, you can
concentrate to selling the booking and closing on the merits, not the cheapness
of your act.
If a corporate client calls regarding a standard 2 hours I can immediately give that fee, if a bride calls for local venue I’m the recommended supplier to I can quickly give a 15% discount as incentive, and if a company that have booked me before want to book me for 1.5 of close-up and a 30 minute cabaret for a weekday evening I can quickly build a package giving them a combined 25% package discount and tell them how much they’ll save in the process.
33% is very rarely used but is good to have as a reference. Personally it
serves as my absolute bottom line that I will not drop below no matter how last
minute the booking is, how local the venue or how much repeat business booker
Having access to all this information whilst on the phone ensures you are not caught out in the heat of debate. You don’t want to find yourself in a situation where you close the deal then look back on it and realise that you’ve severely undersold yourself. As the song goes, you “gotta know when to hold them, and when to fold them.”
also offer my discount first – assuming I’m happy to offer one in the first
place. As mentioned previously I don’t like putting the price (or ‘quotation’)
out there and seeing if it gets a bite or opens up a discussion. I explain that
my standard fee would be x, but because they saw me at a wedding fair/booking a
venue local to me/were referred by a previous client I am happy to offer a 15%
discount of y, which saves them z. They now no longer feel the need to haggle
because they’ve already got a discount, and a discount they weren’t expecting.
It’s important though to have a genuine reason for the discount – simply reducing your price to get the business is not good enough and transparent. It’ll show you’re eager to secure the business and open to negotiation. However, explain that as a professional magician you travel nationally, you are benefiting from it being a local event so will pass the saving on. Similarly, explain to the client that referrals save you money of advertising costs also endorses the reason for the discount, and often your generosity is appreciated and helps build rapport and trust.
a client come back requesting a further discount it is an easy matter to
explain that you have already given a discount from your usual fee, and again
re-iterate the monetary saving you have offered them. However, as you have
already sold the benefits of your services and offered the generous discount it
is unlikely they will counter offer. Should the client insist on more money off
seriously consider walking away (or at least putting the deal on hold until
closer to the event). If they can’t afford (or think you are worth the money)
you with a 15% discount, just how much under your standard rate would you need
to drop? Often the difference between a 15% and 20% reduction is only a small
amount so shouldn’t have a massive impact on affordability, if cost (real or
perceived) is the main issue you’ll need to reduce by at least 30%, possibly
more, to make a significant difference. (For example, if someone had set a top
end of £275 before contacting and you quoted £345 with a £50 reduction to £295
then it’s only £20 over their initial budget so should accept the deal. If they
had £200 in mind then you’ll have to do a big reduction before you even get in their
You should not discount purely to undercut another magician. Give your costs based on your merits and on supply and demand – seeing the previous Lesson about Setting Your Price, and this has also been covered in the first Section when you were creating a Business Plan.
If your business model is based on getting business by this method then you are unlikely to find the information in this Course useful. You’ll likely miss out on income you would have secured if you’d just quoted a standard fee. Essentially by undercutting you aren’t selling yourself as quality, but the cheapest, and I can assure you no-one buys Tesco Value food when catering for their wedding.