11. Beyond Numbers: Advanced Pricing Strategies for Calligraphers

In this week's episode of Calligraphy Biz Corner, we dive deep into advanced pricing strategies for calligraphers! These are strategies that we believe aren't talked about enough, so we're bringing them to light!

We cover the importance of investment minimums, the added value of design and project management fees, and discuss when and how to do work for free. Learn how to confidently set your prices, boost your business profitability, and avoid common pricing pitfalls!

🔗 Links to resources mentioned in this episode:

• For a comprehensive, actionable guide plus worksheets that walk you step by step through setting your prices, check out our Pricing Toolkit

🎙️ In this Episode:

• 00:00 Introduction 
• 04:28 Our Pricing Framework and Formula
• 16:21 Pricing Strategy #1 - Doing Work for Free 
• 28:06 Pricing Strategy #2 - Investment Minimums 
• 41:23 Pricing Strategy #3 - Design and Management Fee
• 50:33 Let Your Values Be Your Guide

Transcript

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Introduction

alane_1_05-30-2024_133102 0:32

Hello and welcome to calligraphy biz corner. We have another super exciting episode today where we are kicking this episode off by celebrating a huge business achievement with Xiao Chen. Do you want to tell everybody what you accomplished last night?

shaochen_1_05-30-2024_113102 0:48

Yes, at 3am, I finished my free masterclass for calligraphers three steps to booking your dream wedding clients and it's now available on my website This doesn't sound I feel like I need to give a little bit of context because I feel like it doesn't sound like it's that big of a Deal, but the way that I wanted to set it up was for it to be More automated for people to access it at any time. And even though I wasn't they're live with them for them to be able to, have a kind of chat experience to ask me questions. So there was a lot of tech involved, a lot of automation, a lot of stuff I had never done before that I had to learn. And so every step of the way, there was like troubleshooting and way more questions than I thought there would be. And a lot of like. Logic and processes and figuring out workflows in my email automation system and stuff like that So it really was like a big stretch for me and something i've been working on behind the scenes for over a year Which is kind of crazy to say but just for all the different components of it to come together To make sure my content was really good Obviously that was like the most important part of it to deliver really good value to everybody But I think why we wanted to talk about this. Was that this is just something that's been on my business bucket list for so long. And I just felt like I have no idea what's going to happen from here, you know, like, I don't know how well it's going to be attended or anything like that, but It just was something that I knew I had to do because if I didn't do this in my business, I would never know how it went. And so I just really had to push myself to get to that finish line. Even though the finish line kept moving for me, as I discovered more and more things that I didn't know about this process, but I reached it. And I think that was like, The most important thing. And so we're just talking about it because I think it's important to celebrate these milestones, even the ones that people don't necessarily see posted on Instagram, it's more of like something that you've been working really hard on yourself in the background. And we just want to celebrate that for me. And also make sure that you're celebrating those kinds of milestones for you and your business too.

alane_1_05-30-2024_133102 2:59

yeah, I mean, I can attest to how hard you've been working because I've been hearing about it and like taking a peek at, you know, copy and things like that. You just sent me your workflow map, which was insane,

shaochen_1_05-30-2024_113102 3:12

Yeah.

alane_1_05-30-2024_133102 3:13

but I'm super proud of you for launching that. And I, it is, it's such a huge accomplishment. And I think it is a good reminder that like, sometimes the work that we do is it's so quiet or it's a little bit more of a slow burn and there's a ton of work and time and money that goes on behind the scenes Before you actually see like the fruits of that, you know, labor. And then, like you said, you don't even know how it's going to go, but I also just think it's so important that like, it's. The testament to if there's something that's inside of you. That's like, I want to see how this is going to go, or I just need to try it because if I don't, I'm going to regret it more than I think always listening to that and going for it and putting the work, the time, the money, whatever it is into it is going to be worth it. Cause you're going to learn something like it's never going to be a waste. You're going to walk away a different person at the end of

shaochen_1_05-30-2024_113102 4:01

exactly. Like, I just don't want to walk away being like, what if I had done this? What would have happened? You know? So anyway, yeah, I think that's a great reminder. And also it's really great to have people like you in my community who are encouraging me to share this, to celebrate it. Because honestly, if it weren't for you, I would have said nothing and just gone to take a nap. So.

alane_1_05-30-2024_133102 4:23

you should definitely take a nap after recording this and then you should celebrate.

Our Pricing Framework and Formula

shaochen_1_05-30-2024_113102 4:28

So let's dive into today's episode. We are going to be talking about a topic that we get asked a lot about as business educators, which is pricing. And when it comes to pricing, there really is so much that we can cover. And way more than we can talk about in one episode. So what we want to do today is give you kind of a high level overview of our pricing framework, and then also talk a little bit about our pricing toolkit, which helps you go more in depth and actually set your own pricing. But for the majority of this episode, we want to talk about more like advanced pricing strategies, or just strategies around pricing that we don't hear Discussed as much that can actually have a really big impact on how you price your work and how much you make Yeah,

alane_1_05-30-2024_133102 5:18

I'm actually really excited for us to do a pricing episode. And I'm kind of like shocked that this is, we're already at, what is this going to be episode 11? And this will be like the first real pricing episode that we've done because Pricing is what brought us together.

shaochen_1_05-30-2024_113102 5:31

that's true. Yeah.

alane_1_05-30-2024_133102 5:33

So it's like a full circle moment here. And like we, we connected over that pricing webinar that I did back in 2020, but then it's also so cool. Like how. Much are, you know, conversations and connections and, you know, interests and whatnot in the business world have expanded since then way past pricing. I'm excited to go back to our roots with this episode. The number one thing that we want you to remember as you are listening to this episode is that pricing is going to be personal. So there are some like baseline industry standards, but unfortunately we can't and won't be sharing with you a one size. That's all strategy because that just honestly, it doesn't exist. And I feel like that's part of what makes. Pricing your work super daunting or really challenging for business owners. But instead of being overwhelmed by that, we want to encourage you to look at it in a positive way, because it means that you are in charge of your pricing. So our high level strategies will hopefully serve as a framework, but at the end of the day, your pricing definitely needs to take into account your aspects that are personal to you. So that would be things like where you live, your personal financial needs, what maybe your life. goals are or, you know, how you're planning for the future, things like that. So just as an example, like if I was doing calligraphy as a hobby and not really charging for profit because it was just a hobby for me, I wouldn't want you to base your pricing off of mine. So at the end of the day, just make sure that your pricing actually puts money into your pocket and covers whatever bills you either need it. Or want it to cover and that you can also support future plans and dreams. If that's what you want out of your business.

shaochen_1_05-30-2024_113102 7:15

Yeah. I think we're just often so tempted to look at somebody else's pricing and base our pricing off of that. But for all the reasons that you just shared, that's really comparing apples to oranges. And it's doing ourselves a disservice because we have no idea what went into that person's pricing, what their costs were, what their priorities are. And so that's just like blindly using somebody else's pricing Priorities and everything as our own, and we don't want to do that. And so while pricing is personal and can be daunting for that reason, there can still be an objective framework that kind of sets the foundation for your pricing and essentially uses math, which I think is so much easier to justify than just kind of using our gut this is so important because when I hear calligraphers say that they are insecure about their pricing, a lot of times it's because they don't feel like they have a way to back it up. So if someone were to like, ask them about it or question it, they feel like they're not confident to stand behind those numbers. When you're picking a number that's based on feeling it, it makes it challenging because number one, you're not your own ideal client, like your ideal client can't do calligraphy. And we're going to talk a little bit later about how your skills and expertise increase the value and your pricing, but you're using your own feelings. Which aren't the feelings of your client to create your pricing. So that doesn't really make sense. And then two, since you're basing it off a feeling, it's also easy to second guess yourself and then start discounting your price before you even present it to your client.

alane_1_05-30-2024_133102 8:49

That's so true. I feel like that's how I was when I first started my business and especially when it was a hobby and then kind of transitioning to like, Side hustle because that money wasn't actually paying bills at that point. So like, I didn't have any clear reasons. Whereas like now I'm so confident in my pricing and if people don't want to pay it, then they can go find somebody else because I know exactly how much I need to make to cover my personal expenses, my business expenses, safe for the future. And I know exactly how many clients I want to be working with. So I know like what I need to bring in on a per client basis in order to reach my, you know, income needs and then additional goals. Because I know all of that, it's like, I have no problem just being like, no, this is my pricing. And if that's not in your budget, that's totally fine. Like here, maybe some other people that will be able to work with you with that budget.

shaochen_1_05-30-2024_113102 9:44

Yeah. You have a lot more skin in the game when it's literally your livelihood, right?

alane_1_05-30-2024_133102 9:48

Yep, exactly.

shaochen_1_05-30-2024_113102 9:50

So what I'm going to share now is a basic formula for pricing so that you can set the foundation for your prices based on math. and not your feelings. So basic pricing for a physical product is your hourly rate multiplied by the time it takes to create that product plus whatever your cost of materials is. And that number should give you a baseline For what you're going to charge, like that's the minimum for what to charge for that. All those different factors that Elaine just talked about you know, that she knows how much she needs to pay her bills to cover her rent, stuff like that. All of those kind of components are things that should go into your hourly rate. We're not going to talk on this episode. about how to come up with your hourly rate. But in our pricing toolkit, we do have an income planning worksheet that helps you break down some of the components of how you're going to generate money from different income streams and what your revenue goals are and things like that so that you can come up with an hourly rate that supports your life.

alane_1_05-30-2024_133102 11:00

There's like a really easy to understand formula that like we have that they can actually fill it. And that's like, if this is how much you want to make, and this is how much you want to work, then this is what should be your Hourly rate.

shaochen_1_05-30-2024_113102 11:12

And then also in our pricing toolkit, we have a price book template, which is basically like a pricing calculator that walks you through the different variables for each of these products. So it makes it really easy for you to price out your products and send out quotes. One important thing I want to clarify is that when we talk about pricing using an hourly rate, like in that equation, we're not actually sharing the hourly rate with our clients. So we're not saying like, I estimate five hours for a hundred dollars an hour or something like that. We're actually giving them the overall total price of the product because there's also additional factors to consider before you share the final price, which is what Elaine is going to actually talk about more in a second. And then another reminder with that equation I shared is that As your experience and your skills increase, you need to make sure you're raising your hourly rate, if you don't raise that hourly rate and you get faster at something over time, which you probably will, the way that equation set up, you're going to end up charging less. So in order to make up for that speed you gain, you need to increase the rate you charge per hour.

alane_1_05-30-2024_133102 12:22

And I just want to clarify one thing. We are talking more specifically about wedding. Calligraphy or like calligraphy services like commissions and stuff, not necessarily on site events because I know on site events that they do give hourly rates more often, or they may give like a flat, you know, a day rate or something like that. But I just want to clarify that if anybody is in. The live event on site world, it is kind of standard in that world to give like, you know, it's 150 an hour for me to be there and do calligraphy. So

shaochen_1_05-30-2024_113102 12:55

Yeah. We'll have

alane_1_05-30-2024_133102 12:56

you can use your hourly rate as a foundation, but then the other important thing to remember is that as service providers, which is what, you know, wedding calligraphers or calligraphers who are, you know, doing. Business to business service, anything like that. We are selling our skills and expertise, not just our, time. And that can really increase our perceived value and the price of our services. In addition to figuring out what you need to charge per project in order to pay your bills and support your financial needs, You can then also start to identify the value that you actually provide to your client as a part of the service that you are giving to them. So like, think about what is it that you're bringing to the table? That's, you know, unique to you. Like maybe you specialize in large scale installs. Not everybody does that. Or, you know, maybe you can do like, pet portraits or something in addition to your calligraphy. Like that's something to take into consideration. Are you an expert in your field? Do you provide a really great customer service experience? Like, is it easy for your clients to book with you? Is it easy for them to get information over to you? All of those Things start to factor into your pricing. So again, that's why we say like the hourly rate equation is a really good place to start, but then you also want to think about all of these other things that you're bringing to the table and make sure that as these things are increasing, like your skills are getting better, your expertise is getting better, et cetera, that you are increasing your pricing accordingly. And then the other thing that I just want to touch on when it comes to calligraphy services is that our clients are investing in our services because of the emotional. Return that they're going to receive from their investment. So as an example, if you are creating a welcome sign for a wedding, your client is most likely investing in you because of the unique piece that you've created. It's something that maybe they can even use in their home. For years after their wedding, every time they look at the welcome sign, they're going to be reminded of their wedding day and it's going to create an emotional feeling inside of them. The last component of that pricing toolkit is in addition to those two worksheets, the price book template and the income planning worksheet, there is an ebook guide. And that goes into way more depth on this idea of hourly pricing versus value and project based pricing. And it also covers things like how to find your confidence when pricing your work, how to handle clients who aren't willing to pay your prices, how to raise your prices. So, Creating that added value around your services, giving discounts and so much more. So in that pricing toolkit, we'll make sure that we link it in the show notes, but you would get the actionable workbook and both of those worksheets all for a bundle price of one 27. And we wanted this resource to be really accessible, like at a price point that you could easily make it back honestly, and just one project, like we said a project or two, but. If you are putting what you're learning in this guide to use, you will make your money back plus with one project. And it should help you continue to make more money by raising your prices. So we'll keep that in the show notes. If you want to get more of these like in depth strategies and actionable, you know, worksheets and stuff so that you can really start to put a pricing strategy in action for your own business.

Pricing Strategy #1 - Doing Work for Free

shaochen_1_05-30-2024_113102 16:21

All right. So let's dive into some of the more quote unquote advanced pricing strategies that are beyond kind of the formula and these considerations that we talked about that can also help you raise your prices and factor into your overall strategy. So the first one is actually doing work for free. I know this could be a little bit controversial, which is actually why we wanted to talk about it today and just share our perspective because we do get this question. Like, I have a friend who asked me to help with her wedding. Do I do it for free? Do I get for some kind of discount? of course, These kinds of decisions are subjective. Remember, you're the business owner, you're in the driver's seat. So what we're sharing today is kind of how we are thinking about these things. And you can apply our suggestions or not.

alane_1_05-30-2024_133102 17:07

Take it or leave it.

shaochen_1_05-30-2024_113102 17:08

yeah. And, and the way we think about free work is that it differs based on where you are in your business, what stage you're at. I think that when you're just starting, Doing work for free can absolutely be more beneficial and the things that it brings to you are more valuable than money For example, when you are just starting learning and building your portfolio, That's more valuable than money because both of those things can bring you more paid work and make more money faster if you have those things. So I'm going to give a couple examples of free work that I think makes a big impact and can help like propel your business forward when you're just starting. So if you are looking to do weddings, Participating in a styled shoe, which is basically like a fake wedding where all the vendors come together to donate their services and they get to showcase their creativity. And then also get professional photos for their portfolio in return for the work that they put out there. And I looked back at this tracker that I had for style shoots, and I had done like more than 15, I think, in my first two years. Yeah. I know. I mean, okay. I also started my business during a pandemic. So there were like more styles, unusual. Everybody was like, what can we do with this time? But that was awesome for me as a new business owner, because I got so much value from the network that I created doing those style shoots and actually getting to meet some of those people in person who then continue to refer me for paid work. And then I got so many photos from all those shoots I could use on my website and my marketing, my social media. And then several of the shoes got published as well. So then I got to like put those badges on my website, like doing that free work really made a huge impact for me. And then the other type of free work I did was I reached out to engage friends and for some of them, I did paid work, but for other folks, I would gift them items that I needed in my portfolio.

alane_1_05-30-2024_133102 19:11

Oh,

shaochen_1_05-30-2024_113102 19:12

Yeah, so it was like a win win because like my friend got a free welcome sign and I got pictures of the welcome sign for my portfolio so I could sell more welcome signs, right? Like, I didn't want to waste, you know, my time and my work and throw away a wedding sign because it was fake when I could just gift it to my friend and get to see it at her wedding, right? I think that's, that's a pretty awesome use of free work. The third idea is that you can reach out to non profits to offer to help them for free, and this is actually an idea from Suzie's episodes from Lost in House in episode 9, she talked about working with non profits basically donating her time to them. But highlight here is that when you do free work for them, you can still get the photos. You can still get reviews from a real business, right? Those are things that are valuable to you. And I had actually forgotten about this until she brought it up on the episode that that was one of my first projects too, I was in a symphony at that time, a community symphony, and they were having a, like a gala fundraiser. And so I donated a piece of my work for a silent auction. And I was able to get some cool pictures. And then from that auction, somebody at the gala saw my work and then commissioned me to do a piece. And so that led to paid work, right? So I think in the beginning, a lot of it's about getting yourself out there. That's more important. Um, So my last idea is Is that you can run a giveaway, which is also giving away free work. And this gives you exposure, which is something that's really valuable to you when you're new. One thing I love doing as far as the giveaway is actually giving away a certain amount of credit towards your services, which means that there's actually going to be a good chance that there's still be spending money with you as well over, you know, whatever credit they've been given.

alane_1_05-30-2024_133102 20:59

That's a great idea. Cause especially if you do already have an investment minimum, which we're going to talk about that after. But if you like have a 500 investment minimum and you're giving away 250 for your services, it's like, they're still going to have to pay 250 to work with you. And you'll still get a job that hits that investment minimum. And then maybe even get photos from that wedding or whatever the case may be. So that's a really good idea. So I agree with Xiao Chen that when you are first starting out doing work for free can be super beneficial for all of those reasons that she shared. Like I also did a good handful of style shoots when I first started out and they were Fantastic. Not only for my portfolio images, but I was also able to use them to kind of explore more of my own, like artistic and creative style and decide, like, what did I like creating play around with new calligraphy styles, all that kind of stuff. Like take some risks that maybe you wouldn't necessarily want to take with paying clients. Right. And then I also was able to make connections with vendors that I still work with today. So the most important thing to remember when it comes to doing work for free is just weighing what are you going to get in return and how is that going to benefit you? And like, what is the. Value of that in exchange for the time effort and maybe even money that you're going to be putting out. But then we also wanted to chat about like, as your business becomes more established, what kind of happens there? So. I do believe that when you are more established, you do have to be a little bit more strategic about if and when you decide to do work for free. Because I'll be honest that once my business started to really gain a steady stream of clients and I felt like confident in that flow, I just stopped offering any work for free. And this was mainly because I just didn't have the time to do free work. Like my calendar was full that I didn't even have the, availability to participate in styled shoots or like do more creative projects like that, which was actually kind of a bummer because They can be really fun if like the vision and the team really aligned well with your business. So when I actually look back, I'm like, I should have been charging more for my services so that I wasn't overbooked. And I had time to do the quote unquote, like free creative projects, whether they were styled shoots or something personal or doing a wedding for a friend or whatever the case may be.

shaochen_1_05-30-2024_113102 23:25

Okay, so on the topic of doing work for friends, the friends and family discount is something that we get asked about, too, and the way that Elaine and I think about it, in general, is that if Someone, you know, a friend or family member is looking to support your business. The best thing that they can do for you is pay for your work and pay your prices. So when a friend comes asking me for work, I do quote them my regular pricing without discounts, but depending on our relationship and what I feel is appropriate, sometimes I will gift them a piece in their package. Or maybe I'll add something else as a gift, like I had a friend who, I think she ordered some like coaster type place cards and a couple other things, and then I gifted her a set of vow books, so it wasn't a gift that was something in her order, but something that was like on top of her order. And I always make sure they know what is going to be gifted and what they're paying for. So I make that, you know, all itemized in their invoice and talk to them about it as well. The other thing I will do for friends and family I'll be a little bit more lenient with my time if they have, like, last minute changes. So try to be a little bit more flexible. Like, something I might charge a rush fee for, I might waive that for them if it's not going to, like, put too much pressure on my schedule. Obviously, I try to be, like, reasonable and also protect my boundaries. So this is where we get into like gray areas of pricing where it does have to do more with your gut. But as a general rule, I don't offer discounts for work up front for anyone, even if they're friends or family.

alane_1_05-30-2024_133102 25:04

Yeah, I think the biggest thing to remember is to make sure that you're establishing whatever the boundaries are or whatever is going to be the quote unquote gift upfront. That way there's no gray area it's just going to be easier to handle that interaction and exchange as well. Just to kind of continue on discounting in general. So like not talking family and friends here, just talking general public. Personally, my rule of thumb is that I don't discount my services. Especially when it comes to custom work, which. As a calligrapher, it really always is custom because I just viewed discounts as devaluing my time. I don't think that giving a 20 percent discount or a 10 percent discount because, maybe it's like a, Oh, if you book before the end of the summer, you'll get 10 percent off of your wedding package. It's like, it's still going to take me just as long to create that wedding package. Whether they booked before the end of the summer or not. Um, agree with that when it's this type of a service providing business. If people are looking for something or, you know, they're looking to work with your budget, then it's like maybe instead of doing all of their place cards and hand calligraphy, maybe they're printed and that's how you help cut costs. Like I try to think of what can I offer for them instead Instead, that will help either get down to their budget or do something that's kind of doing them a favor, but like, it's not costing me any of my time. Or I also really love your idea of throwing in a vowel books or like something that's easy that maybe you already have made or something like that, that you could throw in as an additional gift as opposed to an actual thing. Discount on your services. That being said though, something that I have done in my business is offer a lower, like quote unquote introductory rate for things that I haven't ever done before, but that I want to start offering. So like, I've done this before when I was first teaching myself how to engrave, like I wasn't charging people what I'm charging them now for my engraving services because I was like, I don't even know if I can do this. I also did this with the very first round of mentorship offerings that I had launched. I priced it very, very low because I really just wanted to gain A little bit of experience there. I wanted to see if I enjoyed doing it. I wanted to make sure that people were getting value out of it. I wanted to be able to have some testimonials to use. So for me at that point, like offering an intro rate made sense because it was mutually beneficial to both myself, as well as the people who were kind of taking a chance on me so the number one thing to remember is that if you offer something for free, it should be because you want to do it for free, not because somebody else is asking you to do it for free. Right? And doing something for free doesn't mean that your value isn't worth anything. It means that you just want to gift your value to someone else or you see it as having a beneficial return to you.

shaochen_1_05-30-2024_113102 28:01

All right. So that's our take on free work. Let DM.

Pricing Strategy #2 - Investment Minimums

shaochen_1_05-30-2024_113102 28:06

The next topic we're going to talk about is around investment minimums. Elaine, you mentioned investment minimums a little bit earlier in this episode. So tell us what those are.

alane_1_05-30-2024_133102 28:17

Yeah. So an investment minimum is the minimum amount that you charge for a particular service or offering. So I like to think of an investment minimum as my like, Get out of bed fee. So I think to myself, like, what's the least amount of money I am willing to take to get out of bed and do this job. I have investment minimums in place for my wedding services. Do you have any in place for your services?

shaochen_1_05-30-2024_113102 28:43

Oh yeah, absolutely. And obviously these have changed and increased over time, which we'll talk about in a little bit, but currently my wedding minimum is 1500. And then for live events, I have a three hour minimum. And those minimums are like based on my specific goals and the clients that I want to work with. For example, if I wanted to do more large scale installations, my minimums would be a lot higher. Most of the calligraphers in my area who are doing that kind of work have minimums that are like 4k plus, right? But I don't want to do that kind of project and I'm actually really happy doing some of the smaller projects So I feel like the 1500 is kind of a perfect sweet spot and I'm able to find my ideal clients in that space and then with the live calligraphy as another example, a lot of the calligraphers I talked to you have four to six hour minimums, or they're moving more towards half day, full day jobs, and I personally just don't really want to be at events for that long. And it's hard to do that with my schedule with child care and things like that. So even with investment minimums, you can see that there's some very personal decisions. So going back to that idea, that pricing's personal, but let's talk about why minimums are important and no matter what they are, we think that you should have one. Because ultimately there is going to be a minimum amount of time that you spend on every single project, no matter how small it is. Let's say somebody asked you to address 10 envelopes, you're still going to spend roughly the same amount of time communicating with the client, putting together their proposal, coordinating to get the envelopes from them, mixing and testing your inks. All of those things are kind of overhead things that are probably still going to take you roughly the same amount of time. As if it was a hundred envelopes that you were addressing the overhead time doesn't go away, even though the number of envelopes is much smaller. When I think about, how much your minimum should be, my advice, and this is again, like super baseline, The very least that you should charge as a minimum is I think two hours of your time. So two times your hourly rate, because I think it's really unlikely that a project, no matter how small is going to take less than two hours of your time between the admin, the creation, the packaging and shipping. I mean, we could easily argue that it should be more than two hours. Like, I don't know what is time. Time goes by so fast.

alane_1_05-30-2024_133102 31:01

say everything always takes longer than you

shaochen_1_05-30-2024_113102 31:03

Yeah,

alane_1_05-30-2024_133102 31:03

to too.

shaochen_1_05-30-2024_113102 31:04

yeah. So truly that is like the floor. The other reason that minimums are important is that they make pricing easier for you, and they help you hone in on your ideal client. So, for example, if you do get a really small, project inquiry come through, it makes it really easy for you to, say to the client, well, this is my minimum. Is that within your budget? Instead of like going through the mental gymnastics of being like, is this small project going to be worth my time? And how much should I charge? Because I feel bad. It's such a small project. I feel like I'm charging too much, right? Like we all go through that internal dialogue. So with the minimum, you basically have a line that's drawn in the sand, maybe even like listed on your website. So it's externally communicated and people. Already have the expectation that they're going to be spending that much with you no matter what they come to you with It helps save time that you would spend wondering if you should give somebody a deal, right? So to give you a story Early on my minimum was 75 for like custom projects and somebody wanted an index card Size piece of card stock that had calligraphy written on it, and that was going to go underneath like a painting that was going to be displayed in the gallery. So I had like a little bit of information about the painting and the artists I told them my minimum and they were fine with paying 75 for like an index card, basically and this is why minimums are important to it helps to raise your average project value. Because if I didn't have that minimum in place, I would have probably second guessed myself and said, okay, 20. For an index card, and then I would have realized after I finished the project that I undercharged it because even though it was a small project, it's still spent all that time laying it out, drafting it, testing my inks, like all of that stuff, right? And then I think going back to the idea of perceived value, it wasn't an index card to that client. It was a beautifully handwritten calligraphy, like, little plaque for a piece of artwork that meant a lot to somebody, right? So it was worth that price to them.

alane_1_05-30-2024_133102 33:08

Yeah, I feel like all of your points about having minimums are spot on. And I also love that you have a minimum for your hours for on site events, right? Cause that also just kind of goes back to that whole idea of like, get out of bed. Is it worth it? Because if somebody is only looking to have you on site for an hour, it's like, is it worth it to drive there, get your stuff together, set up, pack up, like just for an hour of your time? I mean, of course you'll probably be charging your travel and whatnot on top of it, but still, it's like, is that actually worth it at the end of the day? Cause then that also takes time away from you being able to be in the studio to work on a different project that Maybe it is investing more in you than, you know, that onsite job is paying. So all of these are really good things to take into consideration. Just like you said, I have gradually increased my investment minimum for weddings as well I've increased it from 500 up to 29 50 over the last three years, and I've definitely had people. Question it. You know, people will say like, Oh, well, can I just get this one sign from you or like, do I have to meet your investment minimum? Or is there wiggle room with your investment

shaochen_1_05-30-2024_113102 34:18

People forget what the word minimum means all of a sudden.

alane_1_05-30-2024_133102 34:21

Yes. And as long as they're not being rude then like, I really don't get upset when somebody is asking me about it because I can't blame my clients for not knowing what it means or why I have one in place, especially when like. I didn't, I used to not know what it meant and I haven't always had one in place. It's just important to remember that as you are working with clients, especially if you are in the wedding industry, that your client has most likely never been married before. So it's your job as the vendor to educate them. What I have found is that once I explain my minimum to them, either via email, or a phone call, or whatever the case might be, most people actually don't have a problem with it. And if it's out of their budget, they just move on. But if it's not out of their budget, they just needed that, like, extra Step of explanation to really be able to understand, like, what exactly is it that I'm charging, what are they getting for that investment, I have my little explanation of my investment minimum to clients, if this is helpful for anybody. So I basically say to them, like, I have an investment minimum in place in order to ensure that I'm able to give your wedding, the focus, attention, and creative energy that it deserves. And I find that I deliver the best. Quality of work and that my couples are most satisfied when I work with them on a full package rather than one or two details. And this is really what allows me to create, you know, a visually cohesive, truly unique to you. One of a kind experience for your wedding.

shaochen_1_05-30-2024_113102 35:48

I love that. Are we allowed to Borrow that from you

alane_1_05-30-2024_133102 35:52

Oh yeah.

shaochen_1_05-30-2024_113102 35:54

I love that. That's so good. I mean, of course, please put it in your own words, but I love, the explanation that you have and that you kind of have it saved so that if you do get asked, you're not again, going through the like, mental gymnastics of questioning yourself and figuring out how to explain it.

alane_1_05-30-2024_133102 36:10

Yep. Yeah. Just copy and paste.

shaochen_1_05-30-2024_113102 36:14

So you just talked about raising your minimums over time, which I've also done. Let's talk about how and when to raise your minimums. We have a couple of different scenarios. So one, raise your minimum with your prices. So as your experience increases, we talked about your hourly rate also increasing. So if you were charging 50 an hour and your minimum before was what we were saying, like Two hours is the baseline, which is 100. Now you're charging 75 an hour and your minimum should be 150 an hour. So again, going back to that math as a really great way to set the foundation. So just remember, as you raise your prices, you should raise your minimum. The second scenario is that you notice your average order size increasing. Let's say, for example, that right now your wedding minimum is 1, 000, but your average wedding client is spending 2, 000 with you. Since we can only take on a limited number of clients and, and the dates available for their weddings, You're potentially leaving money on the table when you're taking 1, 000 clients, if most of your clients are paying 2, 000, right? So I wouldn't necessarily raise your minimum straight to that 2K average because you're probably still getting ideal clients that are spending a little less than that, maybe 1, 500, 1, 800. But you probably want to consider closing that gap. You want to increase your minimum to get somewhere closer to the average that people are spending and the way that I would think about figuring out that exact number is take a look at the clients you're booking, which ones are your ideal clients and how much are they spending and then use that to inform your minimum.

alane_1_05-30-2024_133102 37:57

I love this tip so much because I feel like this is actually what led me to setting a minimum in my business in the first place and then slowly increasing it. Because I remember before I even had a minimum, I was getting, starting to get clients who were booking a thousand, 1500 with me, but then I also had people who were doing Just one welcome sign for like 250. And I just remember feeling really guilty because I wasn't able to give the people who were investing more money with me, the like focus and the attention that I really wanted to be able to provide them at that rate. And it's because my time was being taken up by the people who are only doing one sign here and there. And it was just such a hard push and pull and like making me feel bad about the service that I was providing. And that's what really spurred me to be like, no, I need to have a minimum in place because I just don't feel comfortable having this wide of a gap on like the same wedding weekend.

shaochen_1_05-30-2024_113102 38:58

Yeah. And what we're getting at there is the trade offs too, right? Because like, instead of the 250 client, you could have maybe booked another 1, 000 client for that weekend or something. Going back to that idea of overhead, the amount of time we spend managing the 250 client versus the 1, 000 client is not that different. So it's hard for us to take on more clients. The third consideration for raising your minimum is to look at the demand you're getting for your work. If you're always fully booked or almost fully booked, or if you're winning most of the inquiries that you're getting, your pricing might not be matching the demand and it's a sign to raise your prices. If you raise your prices, yes, you will probably get a lower percentage of the clients who book with you, But you're going to end up with fewer clients to manage who are spending more money with you. This is like the point we were just talking about. And then ultimately that means that you don't have to context switch as much. You're not as like error prone if you're working so many orders and then you can really spend quality time with the clients that book with you, like Elaine was just saying.

alane_1_05-30-2024_133102 40:02

To put this into concrete numbers for people. I can share my examples. So in 2021, I think I started with no minimum and then I upped it to 500 I had 93 weddings, which was just insanity. And that's like the year where I'm talking, or it's like, I had some people who were investing four figures with me and I had some people who were kind of nickel and diming me over like a 250. Package, you know what I mean? So it was just a lot to be managing. It was, my focus was torn in way too many different directions with 93 weddings on my plate. So as I was increasing my minimum, I then got down last year in 2023 to only having to work 33 weddings. To bring in the exact same income. So I still made the same amount of money in my business. And I was able to work with two thirds less of the clients. And then that allowed me to start to think about what else do I want to do? Because that freed up time as well. Right? So, then I could be like, Oh yeah, you mentioned wanting to start a podcast. I think I actually have some time to do that now

shaochen_1_05-30-2024_113102 41:08

Yes.

alane_1_05-30-2024_133102 41:08

because I'm not juggling 93 clients. having a minimum in the first place and then gradually raising it and being in touch with what's going on in your business or in order to make those adjustments can really be transformative in your business journey.

Pricing Strategy #3 - Design and Management Fee

shaochen_2_05-30-2024_122618 41:23

So our last pricing strategy is a design fee, setup fee, management fee, whatever you want to call it. And this one goes back to the overhead time idea. And I think the best way to illustrate it is when you have an order that you have multiple items. Although I would still include a setup fee, even if you only have one item in the, in the order as well. But let's say that I have a wedding order and I have a design and management fee. That's what I call it for my wedding clients. And in the proposal, I'm creating a bar sign for them, a welcome sign, some place cards, and I'm going to itemize the price for each of those items. And the pricing per item goes back to the formula that we talked about before at the beginning of the episode, like hourly rate times time. Plus the materials costs, but what's missing from that formula are things like how many design revisions they're going to get, and the feedback from the client the project management and the communication aspect, sourcing or researching materials for something custom, because that can take a lot of time. Like I go down rabbit holes for researching supplies. Um, Time for QA. Making sure you double check and triple check your work, packaging those place cards by table so that the planner doesn't have to go through 200 place cards to find one name, right? The overall design and management fee captures all of those overhead tasks and admin hours spent on the overall client project that you should get paid for. And I think this also ties back into that value based pricing. It's like all of the customer service experience. of the project, and that's going to be the the overall experience that you're delivering behind the scenes. That doesn't always get captured when you're pricing the individual products. And that's why this kind of flat design management fee comes into play. Now, in terms of how to come up with that theme, in the beginning, you're going to have to kind of guesstimate how many hours you're going to spend on those overhead tasks. And it's going to vary with the size and complexity of your project. I kind of use what I like to call like a math shortcut where once I price out all of the items in my invoice, I basically apply like a percentage as the design and management fee. I call this a shortcut because it's basically approximating how much time I think I'll spend on those things based on those size of the order, the complexity of the product. But I think in the beginning, when you're trying to figure this out, you should definitely start Actually like time yourself on some of these things and see how long your orders are taking. So you can come up with a more accurate design and management fee. Yeah.

alane_2_05-30-2024_142618 44:10

work, we were going to put this in the last episode, the tech programs, but it's in the guide. So if you haven't gone gotten the guide yet, go back to episode 10, download our tech programs guide, but there's this app. And I think it's also on your desktop and you can have a Chrome extension called toggle, and you can like mark off what it is that you're working on or who, what client you want to apply the time table to. And so then like, if you're working on a seating chart, you can just hit like start and then when you finish it, you can hit stop and it'll be like, okay. An hour.

shaochen_2_05-30-2024_122618 44:40

And then I think what you should do with that data is at the end of the project. Once you have your hour total that you spent on it, go look at how much they spent with you. And look at your actual hourly rate was above your hourly rate that you set for yourself, or was it below and start to make some adjustments based on that. And those adjustments can be a higher design management fee required because there was more overhead or admin time, or it could be racing prices with certain products that took you a really long time. So we're always like learning and iterating in our business and that's why we need this kind of data. So it's important to track. Um, Elaine, I remember a couple of years ago when we were having one of our. I shared that I was including a design and management fee for my wedding proposals, and I know that you were doing it for your stationary clients, but you hadn't done it for your day of clients. So can you share a little bit about how that changed your business once you put that into place? Yeah,

alane_2_05-30-2024_142618 45:40

why aren't you doing that for your signage clients too? Like you're doing the same thing. You're designing and managing their signage. And I was like, Oh my God, I am doing that. Aren't I? So, yeah. So then I started to add in that fee and. That is really what allowed me to start getting paid for like all of that. Like you said, all that extra time that I'm spending on each client's project, doing, doing things that I like to kind of consider a lot of my non billable hours. Like those aren't going into line items on their proposal, but there are things that I'm doing for them as a part of their project that my time should be covered for. Right. This is really what's helped me increase my average wedding value in tandem with having those investment minimums in place. While I can raise my prices of individual. Items each year, what I'm charging right now for say a welcome sign or a bar sign, I feel really good about that, and I know that a lot of my clients decide to work with me because of the service that I'm providing them, not necessarily the individual pieces. And I know that I deliver a really great customer experience from, my quick communication to easy to use client templates, to keeping my clients on track with their deadlines, all of those things. In addition to creating their custom designs, I'm also literally managing each of their projects and all of the calligraphy details of their wedding to make sure that nothing is missed. And it's a really stress free experience for them at this really important time in their lives. And so the way that I'm able to make sure that that value that I'm delivering is being covered is through this fee. When I had 93 weddings, I was like, this needs stop. My fee has ranged from 150 to. 1250 on a single proposal. And that with the investment minimums really helped my average wedding value go from a thousand dollars per wedding to 4, 000 per wedding. So again, just like the investment minimums, I have had a handful of clients question this line item over the years, but just like with that investment minimum, because I can explain it to them share with them exactly what it covers. Show them the value that they're getting, the clients who are able to invest and see that value end up moving forward. And then I just continue to prove my value as we work together.

shaochen_2_05-30-2024_122618 48:03

I think the key to having clients understand the design and management fee is that when you have it itemized out on the invoice, it should include like a detailed description of what it covers. So I'll give you an example of what mine says, and you guys can feel free to borrow it if you want. Because no two weddings are the same. I provide personalized service to ensure that you receive the attention and creative energy your wedding deserves. Included in this fee is planning, research, design, project management, material sourcing and testing, expert support via email, design time, and one round of feedback on designated custom design drafts. And the design fee is subject to increase if the order items and or complexity change.

alane_2_05-30-2024_142618 48:47

Yeah. So mine is also dependent on the proposal size. So if the weddings on the simpler side and only has a handful of items I don't charge the same design fee as somebody who has a more complex wedding. Maybe I'm also dealing with a lot of different vendors, like maybe somebody is getting fabric signs and print orders from print vendors, things like that. So I take a look at what is being included in their proposal and how much additional time I think it's going to take me to manage or do the design drafts, etc. I have, a baseline design and project management fee that I set for the year. And nothing will go below that, but I may increase it from there. So that also tends to take into account, like, what is the demand? How booked am I already or not? Like things like that. But when I started it, I just did a one 50 flat rate. going back to. Our first strategy that we talked about, about doing work for free. This is where I was also kind of using like a low introductory offer because I just wanted to test putting a design and project management fee on the proposal. See how clients were going to react to it, practice, gaining the confidence and also being able to stand behind it. Right.

shaochen_2_05-30-2024_122618 49:59

yeah,

alane_2_05-30-2024_142618 49:59

when I first started charging that I didn't really know how to How to explain it very well. But over the years, I have no problem backing up what my fee is now.

shaochen_2_05-30-2024_122618 50:07

I think you just illustrated really well how all three of these concepts we're talking about all play together and tie into each other. Like we really want you to understand these concepts and explore them in your own business because there's like many ways you can apply these concepts. And when you come into an area of pricing that feels gray, you can come back to these principles that we're talking about today to help you make some decisions.

alane_2_05-30-2024_142618 50:32

So

Let Your Values Be Your Guide

alane_2_05-30-2024_142618 50:33

kind of like what shall change us out of like how. Our hope with this episode is that you have these three different strategies that you can work through and use in tandem in different pricing situations or whatever the case may be. It's really important to, again, going back to pricing is personal, to follow your values when it comes to navigating these different situations, different pricing strategies, et cetera. The biggest thing to remember is that like, you can have your policies for. Doing various things in your business. You can have your boundaries. You can have your, you know, set standards But at the end of the day it is your business And so if you want to change something up if you want to do something a little bit different That's all you like that's your choice if you want to do a whole wedding for free For your friend, do it like that's totally up to you. As long as you are staying in integrity with whatever your values are. So again, like we hope that this is all just serving as a good baseline for like how we think about these things, but we're not necessarily. expecting you to do them exactly the way that we do or agree with everything that we say we just want to arm you with like the confidence to approach these various situations.

shaochen_2_05-30-2024_122618 51:46

I'll give an example. I had a client who had agreed that they would pick up a display for me because they didn't want to pay for delivery. Which I offer as a paid service and the display had some onsite assembly required, but I really like tried my best to make it as foolproof as possible. I even recorded an instructional video for them, but then a few days before the wedding, when they were supposed to pick up when all the pieces were coming together, I decided that I still had some concerns about the client transporting it partially assembled the way we discussed and that ultimately I would be less anxious and it would be a better outcome if I just went on site and did all the assembly for them myself. Luckily, this wasn't a wedding that was super far away. It was like within an hour and rather than charging the several hundred dollar Delivery and setup fee that I normally have. I offer to do a complimentary. And the reason was because one of my top values is like client experience, exceptional client service. And in this case, they agreed to their end, which was to pick up. I was the one who kind of changed the scenario from what we agreed to. And so I just felt like this was the most aligned with the kind of client experiences that I wanted to offer. But then unfortunately, when I offered this, they also tried to stretch my goodwill. by asking for me to pick up their rentals after the wedding. Um, And so I went back to my values and my boundaries, and I politely declined that, and I explained why.

alane_2_05-30-2024_142618 53:15

That's a really good example of how like you have your policies, you have your boundaries, but you're also, Willing to make exceptions if something isn't quite feeling right. Or like, doesn't feel like it's in alignment with the level of service or whatever that you want to offer. I had something similar happen recently too, I was working with a florist and I was supposed to do this, this client seating chart on the florist mirrors, but they broke. And so she texted me like, do you have mirrors that this client can use? And I did. And Usually I'm charging a rental fee on mirrors, and the florist was like, I'll comp the rental fee, blah, blah, blah. Cause we didn't want to go back to the client. But after the wedding was all said and done, I got my mirrors back safe and sound. The next day I texted the florist and I was like, you know what? Don't worry about it. Like, thank you for picking up. Thank you for delivering. You know, we'll just waive that rental fee because I already got them back. And I didn't, I just didn't feel great charging the florist for that fee. I didn't want to go back to the client because it wasn't her. It wasn't anybody's fault these mirrors broke and knowing that I got mine back safe and sound and I didn't have to worry about it. I was like, you know what, we're just going to waive the rental fee and we're not going to worry about it. So again, that's where it's just like, you can do what you want to do at the end of the day.

shaochen_2_05-30-2024_122618 54:33

Yeah, and like, ultimately, Living by your values in your business that can pay off in the future because that person is going remember the favor that you did for them or that you were easy to work with and you were understanding, kind human being like that goes a long way, right?

alane_2_05-30-2024_142618 54:48

Exactly. Exactly. So that brings us to the end of our pricing strategies. So just to quickly recap, the three of them that we chatted about were doing work for free. Having investment minimums in place and design set up project management fees. So we hope that those help you, like I said, just kind of. Give you some confidence as you're navigating different pricing strategies or setting a pricing strategy in place for your business. Take what resonates with you, leave what doesn't, but we have also been toying with an idea. Related to pricing that we are excited about, but we also want to get your opinion on. We are wondering, would it be helpful For us to put together some sort of like a market research survey on pricing, because again, pricing is very personal, but I think that there is also a lot of talk that goes on of like. When you lower your prices, you're devaluing our industry standards and devaluing our craft but if we don't even know, like, if nobody has kind of a baseline anyways, then how do we know? Like, I don't know. I just think about the people who are just starting out, like, I was at one point, it was like, yeah, sure, 2 for an envelope, because I don't know what I'm supposed to be charging for an envelope.

shaochen_2_05-30-2024_122618 56:05

Yeah, I mean, I think there is an element of market research, market prices exist. Like when I think about when you were saying, I don't feel good charging more above this bar sign that I already charged. What's playing into your thoughts there is like, right. There's a market value on it, right? For how much somebody will pay for a bar sign. And so I think it's important to be able to do market research, and that's really hard if all we have access to are the prices on Etsy, which are many times underpriced. And especially for services like live calligraphy, where it's much more based on local markets. We wanna have more transparency by geography. And so that's really our goal is to create more transparency because pricing isn't shared very often. It's awkward to go ask somebody who you may or may not know about how much they charge, even though you're just trying to get a benchmark.

alane_2_05-30-2024_142618 57:01

So this idea is just a little seed right now, but we just want to see how much interest there actually is out there. So if you want to send us a text in the show notes, there's that link to text us. And just let us know, like, yeah, you know, market pricing, market research is something that you're interested in or not. Or you can drop us a DM on Instagram at calligraphy biz corner.

shaochen_2_05-30-2024_122618 57:25

And then finally, if you want more of our help with pricing and feeling confident about the proposals that you're setting out, remember to check out our pricing toolkit that's linked in the show notes, if you are in my pro wedding calligrapher course, just a reminder, you already have access to the two templates in there, the price book and the income planning worksheet through your course. Yeah.