I’ll apologize up front for the length of this post, but there is a lot that I want to cover that I think would be valuable to many of you.

There have been many posts lamenting the economy, and complaining about folks who will play gigs for cheap or nothing, having a negative impact on number of gigs and price paid. Having worked in Sales for several large corporations who have provided training in such areas as “Negotiating From a Position of Power”, “Strategic Selling”, and “Solution Selling”, among others, I’ve found that a lot of these principles have been valuable in my musical endeavors, not to mention other aspects of my life. We’ve all discussed the virtues of acting professionally, the value of using a well-written contract, etc. I’d instead like to focus on some general concepts such as value vs. price, and rules for entering a negotiation, then apply them to a strategy for maximizing income in our business.

Price vs. Value

Regarding those who play for cheap or free, ultimately it should have no effect on you if you model your business properly. If you compete solely on price, you will be paid the lowest market price – period. You should compete on value. A lot of you are probably rolling your eyes right now, but that is only because most people who say such things don’t really understand value. The fact is, you may not be valuable, and thus may not command much of a price. But if that’s the case, understanding how to increase your value can be helpful.

The easiest example is a bar. Your value is their net profit. It doesn’t matter if you cost them $200 or $2000. At the end of the day, their net profit is your value, so arming yourself with that information will enable you to maximize your price when it comes to the negotiation stage (discussed later). I’ve discussed many times before the need to gather as much information from door guys, waitresses, bartenders, even managers, to know how you compare to other bands, what their typical bar ring is, etc.

So what about a private party? There is still value or else they wouldn’t pay you anything, right? So what drives that value? Well, think about a corporate party. Why do they throw parties and pay for entertainment? For some, it is likely as a benefit to their employees. As they compete for labor, rather than pay higher salaries, they may try to find other ways to entice employees to come on board, or stay despite higher offers. It may sound silly, but something as small as an annual Christmas Party where they have great live music every year may make someone decide not to leave a company. There are many intangible benefits that will increase employee retention. So when you start to consider the cost of higher wages, increased turnover, etc., all of a sudden you can begin to realize the value in having high quality entertainment at a company event. The challenge is doing your homework and understanding the value for each client.

Negotiating from a Position of Power

Sounds strange, but what it really means is being prepared to enter the negotiation. The more you know about their position, your value to them, and what concessions they are willing to make, the better position you are in to stand your ground and ultimately get what you want. I’m sure from my training there were many rules, but the ones that stick out in my mind are:

1) Be prepared to walk away
2) Enter a negotiation asking higher than your goal
3) Know what concessions you are willing to make PRIOR to entering negotiations
4) Do not make a concession without getting one

Be Prepared to Walk Away
This is difficult to do if you are desperate. But the fact is, if you are not prepared to walk away, it is not a negotiation – you will take whatever they ultimately offer. If you’ve done your homework and know your value, walking away shouldn’t be a problem because you will have other opportunities.

Enter a negotiation asking higher than your goal
If you want $1000, ask for $2000, or whatever, it doesn’t matter. You’ll offer, they’ll counter offer, you’ll meet somewhere in the middle. If you play your cards right, the middle will be what you wanted in the first place.

Know what concessions you are willing to make PRIOR to entering negotiations
A concession is anything you give up. So if you go in asking $2000, know ahead of time that you will absolutely not go below $1000 – that’s when you’ll walk away. You don’t want to try to figure that out on the fly – you have to know up front. Be prepared for other concessions as well – time playing, start time, drinks, food, production, whatever – the more prepared you are, the more successful you will be. Know when to walk away, and what each concession is worth to you.

Do not make a concession without getting one
Absolutely, under no circumstance, give something up without getting something. If you ask for $2000 and they say “I’ll give you $1,500” and you say “OK”. That tells them that you’re only WORTH $1,500 and that you were just trying to overcharge them. Next they’ll be trying to see how much lower they can get you. Force them to make a concession – any concession – no matter how small. “Well, I can’t do 4 hours for that, but I can do 3-1/2 hours”. Or, “throw in free drinks and food for the band and we have a deal”. Even if the concessions are not equal, they will feel like you are worth $2,000 but that they managed to negotiate a deal that works for both parties but lower their costs – after all, in the food/drink example, their actual cost is less than what you might normally pay. Production is a great place to make concessions. “OK, I can play for that, but I can only bring out half the lighting”, or less PA, or whatever. You could end up bringing what you would anyway, as long as they feel like they saved money by giving up something that wasn’t of value to them – to them, it was a successful negotiation, and you did not diminish your value in the process.

Summary

Ultimately, information is your friend. Be prepared; know what they value and how you can provide it. If you know your value, don’t be afraid to stand your ground on price – however, be prepared to quantify your value to them and compare/contrast yourself to your competition. This may all sound adversarial, but in fact, the client is in most cases a business partner. You are either there to make them money, or ensure their success in some other way – a successful party or fundraiser, succeed in providing the right image to their clientele, etc. There is value in that, and the better you understand it, the better you can position yourself to successfully negotiate a good price.

Well said, Dan.

Also, something that few band members seem to appreciate is a good business manager: one who can lead, think on his/her feet, stand his ground; one who understands the value of the band, and who can educate, persuade, and close the deal (without agreeing to work for next to nothing.) That person puts food on the table for the entire band.

Excellent post.

In fact, I'm going to bookmark it.

Thanks for the advice!

@Dan, eloquently and succinctly put. It deserves a sticky IMO.

Didn't someone recently say that if you ever get out of playing you could get into band management?

Thanks, Dan!

Being prepared to walk away is probably the most important thing.

Here are a couple of other tips:

Most people lose in negotiations because they are trying to 'be fair' and 'consider the other side'. It is well and good to do these things, even smart to do them, OUTSIDE of the negotiating table. But when negotiations commence, YOU need to be focused on YOUR NEEDS. IF YOU AREN'T, then the odds are against you, 1.5 to .5, as half of you is on their side already. You are going to lose, or at least, not get what you had hoped. YOU NEED TO BE FOCUSED ON WHAT YOU NEED! WHEN THEY TRY TO TALK ABOUT ANYTHING ELSE, SAY, "YEAH, BUT I NEED...."

It is important to understand that there is always someone else who will work cheaper than you. So what. You need to set your worth to yourself, and not go below it. (or you could end up on a corner in a red mini asking sailors for dates...) One of the nicest lines I heard a guy use, said in an 'aw, shucks' tone, was along the lines of "I can't really ask my guys to gas up, load up, show up and play for four hours for less than $nnn a man." like, gee whizz... it was great.

Desperate? Like desperate how? Maybe the wolf is at the door, the wife is tied to the railroad tracks in front of an oncoming train, you've just fallen off a cliff with Wil E Coyote holding dynamite and pulling a bolder behind you and Sweeny Todd is your barber, but most guys really just want to play, they don't make a living from it, and they are desperate to feed the ego which equates playing ANY gig with 'making it'.

Exposure. Playing for 'exposure' will do as much for your band and its reputation as exposing yourself in the street will do for your sex life. Everybody knows the nights that the free acts play in each club. Nobody is impressed but your mom. Once they see you play, they'll hire you for a decent buck? They already know that they can get your for free, why would they do that? There are a handful of clubs that have a big enough built in audience that they can get away with this, and they really don't care if there is a band on that night or not, they'll rake it in anyway. But MOST clubs just string the losers. Ask yourself, out of all of the bands that play the free night at a given club, how many get to play the hot nights for real money? Chances are good that their hot nights are booked with local faves that are a solid draw at any club in the region, not any band that played on a Monday or Tuesday for 'exposure'.

Don't fuck other bands. Musicians regularly fuck each other. Why is that? Are you guys all so stupid that you can't see that as long as you're willing to do this, the clubs can take advantage of you?

Dan, I knew this thread was coming. Well worth the wait and read mayne.

Bill, in your straight-forward manner, your addendum contains very real nuggets too.

Over several threads, I've advocated musos doing a better job in handling their business. I will continue in that regard.

There is a reason I beat that drum. Many years ago, I was in those trenches in which many of you do battle today.

Whether it is for the love of music, paying bills, establishing relationships, etc., I've seen excellent musos get screwed over way too often.

For a number of reasons, musos are taken advantage of by managers, promoters, booking agents and even their very own i.e. other musos/bandleaders.

Musos have to eliminate negative vices that ultimately compromise their position. There is no easier mark than a great muso with a habit. A 'band' of them will definitely get exploited.

While many of us are talented, clean, sober, educated, humble, etc., some folks still stigmatize musicians for the sins of others. Especially depending on certain styles of music.

As a result, all musos have to represent themselves extremely well. If networking and negotiating are not a strong suit, give that job to somebody else.

Still, when it is time to go to work, be a professional. Your image and art don't mean a hill of beans to the average person writing checks.

The outward appearance makes an impression. I'm not suggesting tuxedos, suits, slacks or a hair cut. It is possible to be neat and clean in a T-shirt, jeans and tennis shoes.

Professionalism is not only reflected in work ethic, knowledge, skills and abilities. It is also a state of mind, body and spirit.

Stay on top of the game from every angle. That doesn't mean musos have to be experts in every aspect of the music business. Just aware.

Also, musos should not rely solely on their talent either. There are a THOUSANDS of badass musos walking around. Finding them isn't difficult. Getting them to play for little or nothing is even easier.

The trick is being that muso with whom folks want to do business. Successful negotiation starts there.

Why are people who download music for free going to be interested in paying a band a fair & equitable rate to play music they've already downloaded for free?
Music's free, shouldn't musiciains be playing for free as well?
Seriously, this is a mindset that needs to be squashed, but I fear it's way too late.

A few years ago, someone asked me if our band would be interested in playing at a 40th birthday party she was organzining for a friend.
Me: Sure, what's your budget?
Her: Oh, you guys would charge me?
Me: This conversation is over.

DanS, it would appear that folks do have that 'music should be free' mentality. I'm glad you ended that conversation on a high note.

Before folks could download music, they taped vinyl and shows. Also, radio was free up until subscription services became available.

Still, folks were willing to buy concert tickets and pay to get into clubs to hear live music.

My belief is that music has cheapened in perceived value because it is everywhere.

Everybody has access to the resources enabling them to share their musical ideas with the world i.e. compose, burn CDs, upload to the internet, etc.

Even bands can either self-record or pay a low studio rate to get their music recorded, mixed, mastered and distributed.

Yet, even within a crowded field and competing forms of entertainment, musos with a real business plan can build a following and get paid.

I teach law courses in negotiation and think that Dan presents excellent negotiating tips. Nice job Dan and thanks for sharing!

Been there, done that.

I hope you're right Mr. D.

I was in the Montreal HMV megastore a few weeks ago. HMV is like a giant music store. I went upstairs to my favorite section, le jazz.
It was gone.
In it's place were rows & rows of DVDs.I ask the guy what happened to all the jazz?
It's in the classical section. I head across the hall to the classical department, and jazz has been gutted to a row and a half. I was so shocked & disappointed that I walked out wihtout buying anything.

The huge record stores have either disappeared or shrunk here too. Strolling through Best Buy, I noticed Classical, Jazz and World music were lumped together on a few shelves.

Yet, I have to remain optismistic in my belief that folks still want to hear good music and will pay for it.

If I start believing otherwise, that music has totally lost its viability in the marketplace, I'm faced with having to sell my Motif and learning how to play golf.

Much of the downloading that happens today is paid downloading - iTunes, etc. People are still buying music, they are just doing it online instead of flipping through records at a store. I wouldn't use how much stock a record store carries of a particular genre as any kind of gauge.

In terms of market size, that is partially our job - to build and expand the market for our product. In fact, if you have influence on your local market for Jazz for instance (i.e. - build a following), that puts you in an even better position to demonstrate your value to a client.

Bravo Dan!

A very ironic benefit of being fully prepared to walk away, is that the other side will sense it in you.

It's kind of like you can't be "half-pregnant" - - you can't be "kind of" prepared to walk away . . . but not really. It has to be deep within, and all the way.

This creates, and reinforces your value in their eyes.

Excellent post, Dan. Good work.

It sure feels like this out there.

I've found that along with this, music has simply become less and less of a "foreground" element, and more of a "background" companion. There's more downloading, but a lot less active listening. More "having music on" during activities. I think there are probably fewer concerts, in the traditional sense.

Also, it seems much of society has combined their worship AND their more active music listening into one experience. Really - - how many concerts would you need/want/afford when you can go to a mega-church every Sunday?

So there's more music out there, more technology to bring more music in the background of more situations. Music is simply being re-packaged. I think the key to making money in music is just recognizing the packages, and making sure you fit into one, or more of them.

Thanks for sharing, Dan. Sales negotiations do not come naturally for me, and you have distilled what seem to be the critical concepts/principles in a way that I can access them and use as a guiding structure when I occasionally become involved in band negotiations.

You guys are all missing something important here.

It has NEVER BEEN easy to ask for money.

The guys who preceded me in the business worked really hard to get the pricing up to where this was a worthwhile endeavor. I started out stupid, but someone took me under their wing and showed me the actual business elements involved... hell, I was a kid, I just wanted to play, and for whatever reason I was stupid enough to believe that the club owner was treating us fairly.

Learning how to ask for what you are worth is the ticket.... just like learning how to play a part in a song. It doesn't come natural, though it seems to come more easily to some than to others. But it is still a skill that can be learned.

The same mindset that destroyed the record store and the record labels has destroyed much of the pricing structure in clubs today ... I started out making $400, $450 a night when Coke was 5 cents. When I left club work, $2k was average, with some paying as much as $3200, when Coke was 50 cents. Now it seems that you're lucky to get $400, and coke is a buck fifty. Even accounting for the change in bottle size from 6 oz to 20 oz, you're still getting screwed. (Oh, water was free, and cofee was a dime.... but we've obviously shifted priorities...)

BUT! People still shop at Tiffanys, even though KMart sells diamonds. People still buy Audis and Mercedes, even though Kia and Honda are cheaper. It is obviously possible to get paid, if you know how to present yourself and how to ask.

Bill is right on the money!

And by the way, my degree is engineering. My personality type is introverted. I'm not one of those Type A aggressive go-getters that people look for in sales. These were concepts I had to learn over the years. I'm very successful at it now, but it is still not something that comes naturally to me, which is why I always have to remind myself of these principles. And confidence will take you a long way!

What you make is really just a reflection of how much power you have. According to Dan, his 80s band is one of the top two or three bands in the greater St. Louis area - a metro area of around three million people. So whatever club he's negotiating with has only one or two other choices if they want to stay in the same caliber of entertainment. That gives him a lot of power.

If on the other hand your draw is the same as a dozen other acts, you are forced to take whatever's offered you in my experience. And walk away glad that you got the gig.

The only real negotiating power that I have personally at the present is not with my music gigs but with this karaoke job that I've been doing on the side. For reasons that I won't go into in this musician's forum, I've made it into the largest karaoke show within an 80 mile radius. The room is constantly packed - even on weeknights.

Every club in the area is trying to steal me away and I quietly let my current owners know that. It's scary - when I ask for a raise they just ask "how much?"

Fear is the greatest negotiating tool of all.

"If on the other hand your draw is the same as a dozen other acts, you are forced to take whatever's offered you in my experience. And walk away glad that you got the gig. "

The club owner only knows this if you've played there before, and if it is a sub-standard draw, then you've got a product quality issue, not a negotiating issue. Look at what you're doing, and ways to improve it. But when negotiating from scratch, you still need to have a self-worth and be willing to walk away of you do not get it, confident that you will get it elsewhere, and eventually, the word will get around.

Actually if you are a sub-standard draw negotiations are over. You don't get asked back.

The fact is that most clubs have a very narrow pay schedule for their entertainment, and will hire the best available for that price. If you don't like it you leave it. There are exceptions - name acts that will fill the place with double or triple the normal cover.

That's where I think a lot of people are mistaken. I think you'd be surprised at the range of pay schedules at many of these places. I've seen as much as 4:1 ratio of top to lowest rates paid to bands at the same place on comparable nights, with most bands getting about 1/3 to middle of the scale. This goes for pretty much the entire "A" and "B" club scene around here. They will always try to get the best price, but if they have only cheap bands playing there, they won't do very well in the long run.

Also overlooked is that VALUE comes in forms other than monetary. If other bands are less professional, less punctual, less reliable, or don't fit the image they see for their establishment, even if they don't make more money, they may be willing to pay a premium for what you offer. That is where it is valuable to understand their source of pain as well as their vision for their business, and become a partner in reducing their pain and helping them succeed. Even if this has not been accomplished yet, just letting them know that you are working towards the same goals may be enough to command a premium.