Ignite
Week 2: Demonstrating Value
Homework Review
Creative Offering
Mission Statement
“What?”
“Why?”
How do you feel
about mixing
art and money?
The Artist’s Career
Hobbyist
Striver
Portfolio
Careerist
Fame and
Fortune
Elaine Grogan Luttrull,
Arts & Numbers
Mission
High
Requires funds
Winning!
$
Negative
Distraction/
Wastes Resources/Time
Low
Positive
Generates Income
Myths (?)
• Business skills are counter-intuitive for artists
• Directly selling your art erodes humility, goodness, or purity
• Artists are not passionate or motivated by business
• Artists are intimidated by business
• Artists have prejudice toward “business” people.
• Business has nothing to do with art
• Business takes time away from creating
• Talent, not business skills, will lead to success
• Expensive scams are targeted at artists
Andy Warhol
Being good in business is the
most fascinating kind of art.
During the hippie era people put
down the idea of business—
they’d say, ‘Money is bad,’
and ‘Working is bad,’ but
making money is art and
working is art and good
business is the best art.
Wage and Employment Data (May 2014)
Occupation
Employment
Hourly Mean
Actors
59,210
$37.28
N/A
Art Directors
33,140
$47.05
$97,850
Artists and Related Workers
7,700
$29.52
$61,410
Choreographers
Annual Mean
6,030
$24.71
$51,390
Craft Artists
4,760
$17.45
$36,300
Dancers
11,240
$18.53
N/A
Designers, All Other
6,890
$26.61
$55,360
Editors
97,350
$30.84
$64,140
Entertainers and Performers, Sports and Related Workers
15,780
$21.10
N/A
Film and Video Editors
24,460
$36.10
$75,090
Fine Artists, Including Painters, Sculptors, and Illustrators
12,100
$24.58
$51,120
Graphic Designers
197,540
$24.36
$50,670
Multi-Media Artists and Animators
29,000
$33.37
$69,410
Music Directors and Composers
21,880
$26.55
$55,230
Musicians and Singers
38,900
$32.49
N/A
Photographers
52,250
$18.44
$38,350
Producers and Directors
97,300
$43.41
$90,300
Set and Exhibit Designers
10,460
$25.55
$53,150
Writers and Authors
43,500
$32.63
$67,870
Wage and Employment Data (Georgia)
Occupation
Employment
Hourly Mean
Actors
820
$14.32
N/A
Art Directors
560
$44.94
Annual Mean
$93,470
Artists and Related Workers
320
$41.04
$85,360
Choreographers
N/A
$16.69
$34,720
Craft Artists
80
$15.77
$32,800
Dancers
N/A
N/A
N/A
Designers, All Other
130
$29.51
$61,370
1,820
$26.54
$55,210
Entertainers and Performers, Sports and Related Workers
120
$21.26
N/A
Film and Video Editors
400
$25.43
$52,890
Fine Artists, Including Painters, Sculptors, and Illustrators
300
$19.41
$40,360
Editors
Graphic Designers
6,270
$24.70
$51,380
Multi-Media Artists and Animators
1,450
$26.91
$55,970
Music Directors and Composers
21,880
$26.55
$55,230
Musicians and Singers
38,900
$32.49
N/A
Photographers
52,250
$18.44
$38,350
Producers and Directors
97,300
$43.41
$90,300
Set and Exhibit Designers
10,460
$25.55
$53,150
Writers and Authors
43,500
$32.63
$67,870
Get More Data from BLS
Bureau of Labor Statistics –
Occupational Employment
Statistics
http://www.bls.gov/oes
Creative Industries Employment in GA
Creative Industries Compensation in GA
Fair Valuation
One common mistake for
emerging artists with a
good creative offering in
a arts hungry market is
to under price. A low
price is rationalized as
necessary to enter the
field.
Caroll Michels
career coach,
artist-advocate
–
SO… HOW DO YOU DEMONSTRATE
VALUE?
Example: How Visual Artists
Demonstrate Value
• Join recognized artist organizations – get listed on their rosters
• Have a dealer or gallery publish a catalogue at least 12 pages long
• Get listed in exhibit catalogues and bulletins from:
–
–
–
–
–
–
•
•
•
•
Museums
Art associations
Corporate art exhibits
Juried shows
Non-juried shows
Local, regional and statewide shows
Get your work reviewed
Any physical proof that you are an artist from neutral 3rd parties
Document every significant piece of art (Who, What, Where, etc.)
Track sales
Pricing Visual Art
• Pricing has been considered an “art” - but that’s not necessarily true!
• Price competitively – benchmark competitors
– Based on art quality
– Based on the production costs and efforts
– Based on the position in the hierarchy of fame, fortune, and
accomplishment
•
•
•
•
•
•
Make sure you are displayed with artists in your price range
Don’t price so low you are not taken seriously
Don’t price so high you are not taken seriously
Consult with gallerists, art appraisers, collectors, etc.
Be consistent – create a steady appreciation
Find multiple justifications for the price and be confident
Pricing Visual Art – More!
•
•
•
•
•
•
•
•
Start on the low end
Sell originals for more than reproductions
Larger works sell for more than smaller works
More expensive materials (bronze, precious gems) command
higher prices
The faster you work and the more prolific you are, the lower
your prices
If you can’t produce enough work to keep up with the
demand, then raise your prices
Don’t lower prices – offer discounts
List your prices as retail prices
Your Pricing Formula
∞
𝑓 𝑥 = 𝑎0 +
𝑎𝑛 cos
𝑛=1
𝑛𝜋𝑥
𝑛𝜋𝑥
+ 𝑏𝑛 sin
𝐿
𝐿
(just kidding)
Your Pricing Formula
Hourly Wage × Number of Hours
+
Cost of Materials
=
Price
Break
Video: Market Psychology
Your Assignment:
Write down everything
that increased the value
of the paintings
Market Psychology
Why do we negotiate?
Creating Interdependence
• Integrating your interests
• Remain autonomous, but become reliant on and
responsible to one another
• Cooperate + Competitor = Co-opetition
– Work together where neither party has competitive advantage
– Can share common costs
Reasons to Negotiate
• Anytime you cannot achieve your objectives without the
cooperation of others you are negotiating
• Negotiation is an interpersonal decision making process
necessary when we cannot achieve our objectives singlehandedly
• Effective negotiation is not just about money. It is about
relationships and trust.
First Task: Create Value
•
•
•
•
•
•
•
Keep multiple issues in the conversation
Talk in terms of packages
Make bi-lateral concessions
Make multiple offers of equal value
Throw in things you don’t care about
Ask diagnostic questions
Capitalize on differences by structuring contingent agreements
Creating Value
1
0
7
1
2
Create
Value
3
5
5
1
8
2
4
4
6
3
9
= Issues on the Table
Second Task: Divide Value
• All negotiations divide value if an agreement was reached
Dividing Value
7
1
2
3
1
0
1
5
Create
Value
8
5
4
2
6
4
3
9
The Challenge
throughout both tasks:
Building Trust
Negotiation Sandtraps
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•
•
•
•
Leaving money on the table
Settling for too little by making too large concessions
Walking away from the table
Settling for terms that are worse than the alternative
Trying to negotiate when it is not beneficial to do so
Avoid the Sandtraps
Negotiate only when both
parties believe they
benefit more by
negotiating than by not
negotiating.
Why people are ineffective negotiators
•
•
•
•
•
Faulty Feedback
Satisficing (Is what suffices really satisfactory?)
Self-reinforcing incompetence
Hubris
Fear of change
Negotiation Myths
•
•
•
•
•
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Negotiations are fixed-sum deals
Negotiators need to be hard or soft
Good negotiators are born
Experience is a great teacher
Good negotiators take risks
Good negotiators rely on intuition
Recognize the types of issues
• Trade-off issues: Make a concession to further the
negotiation
• Zero-sum issues: Recognize and compromise
• Compatible issues: Recognize and fully benefit on mutual
interest(s)
Win-Win Deal
•
•
•
•
•
•
•
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Trades that create value, not compromise
Not an even split
Not based on good future relationship
Optimizes value
Both make concessions
All parties think they made a good deal
All creative opportunities are exploited
No resources were left on the table
BATNA
Best Alternative To a
Negotiated Agreement
What you get if you
don’t negotiate
BATNA
• The BATNA of the other party tells you how high or low they’re
willing to go.
• Know what you can offer that will be accepted.
• Anchor the conversation near the BATNA, so they will be happy
to at least reach an agreement that is better than their resistance
point as determined by their BATNA.
• Understanding your BATNA allows you to feel either sufficiently
confident or cautious.
More BATNA Stuff
• If you have a good BATNA you can feel confident about
pushing for a good deal.
• If you know that your BATNA is not good you can be
careful to make appropriate (not premature) concessions
to insure reaching a better then BATNA agreement.
• The more dependent you are the less you have an
advantage.
Resistance Point
The minimum terms you would accept, given your
BATNA. You cannot go beyond this point.
Important: Try to estimate the other party’s
resistance point.
This is also known as the walk away position.
Bargaining Zone
The overlap that exists
between your resistance point
and the other party’s
resistance point.
Aspiration Point
The absolute best case
scenario for you, event if
it’s unrealistic.
Target Point
The best result you can hope
to achieve.
Use the other party’s value
system when trying to figure
out their target point.
Putting it all together in one AMAZING
Illustration
Negotiator #1’s
BATNA
&
Resistance Point
Negotiator
#1’s
Target Point
The Bargaining Zone
Negotiator #1’s
Aspiration Point
Negotiator #2s
Aspiration Point
Negotiator
#2’s
Target Point
Overlapping Bargaining Zone
=
Positive Bargaining Zone
Negotiator #2’s
BATNA
&
Resistance
Point
47
Homework!
Finding Wage Data from BLS
Bureau of Labor Statistics –
Occupational Employment
Statistics
http://www.bls.gov/oes