THE INSPIRATION PLACE PODCAST
Let me ask you, my friend, which part of the brain do you want your customers to be using when buying art? Do you know the answer? Yeah, it’s the feeling part of the brain.
It’s The Inspiration Place Podcast, with artist Miriam Schulman. Welcome to The Inspiration Place Podcast, an art world insider podcast, for artists by an artist, where each week we go behind the scenes to uncover the perspiration and inspiration behind the art. And now, your host, Miriam Schulman.
Well, hello. This is Miriam Schulman, your curator of inspiration and host of The Inspiration Place Podcast. You’re listening to episode number 186, and I am so grateful that you’re here.
Today, we’re talking all about pricing your art, but before we get into today’s episode, I just wanted to ask you to do me a little favor. Because my mission is to help as many artists as I possibly can, and the best way I help artists is with this free podcast, would you take the time to share this episode with a friend? No matter how many artists you know whether that’s a lot of artists or just a few, I bet you know at least one person who hasn’t heard about the show. I’d be so grateful, and I bet your friend will be as well. Now, if you’re not sure who listens or not, you can always take a screenshot of this on your phone and share that in your Instagram stories. That’s exactly what Atlanta-based artist Kristin Cooney did, and I really appreciate it. Thank you so much, Kristin. If you’re feeling extra generous, please leave me a review. I usually see the ones that are posted on Apple Podcasts. That’s another way that helps people find the show. Jennifer Nelson of @JenniferNelsonArt did that recently, and I sure did appreciate it, Jennifer.
Okay, now on with the show. Today we’re going to talk about whether or not you should round your prices. Now, rounded pricing is called prestige pricing. This is going to apply to not just artwork, but also art classes or services. The other way to price is with the 99 or 97 at the end. What we’re talking about today is actually one of the 12 lessons that will be inside my book, Artpreneur, however, since the book will not come out until, oh my God, 2023, that’s right, not until next year, I didn’t want to make you wait a whole year. We are going to dive into one of these lessons in today’s episode.
Now, inside my Artist Incubator program, they get actually all 12 of the lessons. You can join the Incubator in one of two tracks, the two tracks are the mastermind track and the self-study track. The mastermind track is where you get the most coaching with me. That track is by application only. I keep the size limited to make sure that I can serve the artist in the group. It’s definitely not for beginners, you do need to have a track record of sales and you already need a website in order to qualify.
As of this recording, there are two spots available in the mastermind, but when those fill, the next opening won’t be until May. If you’re interested in joining the mastermind, to see if you qualify, go to schulmanart.com/biz, that’s as in the letter B as in boy, I as in ice cream, Z as in zebra. We’ll also have this linked inside the show note. That’s schulmanart.com/biz, or B-I-Z.
By the way, I also offer a second track of the Artist Incubator, and that opens up periodically. There is a little less handholding in there, but you get it for a much lower investment. It includes all the same curriculum. You also get all the wonderful mindset coaching from our resident mind coach, and you still get coaching by me once a month. You can read all about that track also and add yourself to the wait list, again, on the Biz page, that’s schulmanart.com/biz.
All righty. The lesson we’re focusing on today is number nine, Symbols and Decimal Points Matter. As I record this, I realized by the time the editors get their hands on this book, that lesson may be a different number, so don’t sue me. In fact, as of this recording, I am actually expecting the first round of edits back from the publisher. I handed the book in way back in December and I’m recording this on March 17. I don’t know if anyone’s even read the book over at Harper Collins yet or not, I presume Linda over there has been working on it and she said she’s giving me the edits back today. I’m a little bit both nervous and excited, scare-cited. Anyway, let’s dive into today’s lesson.
Have you ever noticed that when you go to a fancy restaurant, they always round the prices? In fact, sometimes they don’t even use the dollar symbol on the menu, or if you’re in a different country, the pound symbol or the shekel symbol. Now, researchers from the Cornell Hotel School found that people given a menu without dollar signs spent significantly more than those who received a menu with them. This is because when you don’t have the dollar sign on it, it reduces the transactional experience of the number. You stop thinking of the number as money.
Here’s how I use that logic in my own business. When I am messaging or emailing, or whatever it is, back and forth with a customer and I’m asked to quote numbers online, I will leave the dollar symbol off, and also, if it makes sense, the commas. For example, if a painting is $2,000, $2,000, I will quote the price to my customer as 2000, no comma, or 2000 USD, or 2K. This is not about deceiving anybody, it’s not about tricking or deceiving. It’s just about reducing the idea that this is just going to be a transactional experience. You’re focusing more on the experience, or the relationship of the experience, or the emotions of the experience.
Now, recently I noticed that Pottery Barn does this too. I’ve been a little bit obsessed with decorating YouTube videos. There’s a popular YouTuber, I follow quite a few and I’m not going to tell you which one this is. They all pretty much do the same thing by the way, they do a lot of shopping videos, they take you into stores. This one took us into a West Elm and Pottery Barn and they show you what they like in the stores. This particular YouTuber was us something in Pottery barn, and she turned over the price tag to show it to us. This was actually priced as a 299, but there was no dollar sign on it. It was Pottery Barn, 299, and there was a decimal point, but no dollar sign. I was like, “Huh, very interesting.” I’m going to have to go to my local mall and check out the Pottery Barn and see if they are doing that across the board on all their things. I’m going to also check to see if they use commas if things are more than a thousand dollars.
Now, when I’m using online art classes, I actually do not round the numbers. I use what’s known as charm pricing. This is the practice of reducing the price to just under the threshold of commonly recognized pricing tiers. For example, I offer my Watercolor Portrait Academy class at $497, because art students are more price sensitive and this way they perceive the price as in the 400s. I also avoid using numbers that end in a nine, so I make it 497, not 499. Numbers that end in a nine are going to signal value rather than quality. Ending the number with a seven or a five is going to feel friendlier. There’s a lot of psychology that backs this up.
On the other hand, when I sell my paintings, I don’t use charm pricing. I use a round a number. For example, I’ll price a painting at either $480 or $500, I don’t do the 499 or the 497. Now, the rounded number is known as prestige pricing. I want to share with you some research that backs this up. There’s a 2015 research study by Kuangjie Zhang and Monica Wadhwa, and they prove that rounded numbers are processed by the feeling part of the brain, whereas non-rounded numbers, or those using the charm pricing, like the 497, are processed by the law logical part of the brain. Their research showed that consumers were more inclined to buy a bottle of champagne when it was priced at $40, rather than $39.72 or $40.28. Let me ask you, my friend, with part of the brain do you want your customers to be using when buying art? Do you know the answer? Yeah, it’s the feeling part of the brain.
Now, when I used to sell my art on eBay, they actually advised sellers to price past the decimal point, in other words, 499.99. They said that would increase sales, and that’s cause eBay attracts bargain hunters. You’ll notice that places like Walmart also price their offerings to the penny. The reason they do this is because they’re telling their customer that pennies matter, and as a result, they attract penny pinchers. When you’re selling art, which is a luxury, you want to do the opposite. You want to repel penny pinchers and communicate quality.
That is why I want to share something that portrait photographer Jeffrey Shaw shared with me on my podcast. He was an early guest on the show, it’s actually from podcast number three. Here’s what he had to say.
I think a fun comparison I love to make is that restaurants. You walk into a Greek diner and there’s going to be a cash register and a bowl of mints, right?
You walk into a nice five star restaurant with linen table cloths, there’s a hostess stand, there isn’t a cash register. Same thing is true, if you go walk into Walmart, you walk into most of your typical department stores, there is a lineup of cash registers. Yet, if you go to a high end store, Berdorfs, Neiman Marcus, you’re hard pressed to find a register, it’s going to be discretely tucked away. Bergdorf Goodman does an amazing job at completely the making it impossible to find a cash register. The difference is that whether you are speaking the language of relational or transactional to your customers.
If you’re a very transactional business, and this is the irony of it, is that in the middle to lower end market, there’s actually more focus on the money, and in a higher end it’s all about the experience and the value, so you don’t draw a lot of attention to the transaction of money. If you walk into a Walmart, it’s obvious that this is going to be a money transaction because it’s a very cost-conscious atmosphere, right?
You go to Walmart to be conscious of how much money you can save. You go into a place like Bergdorf Goodman, Neiman Marcus, it’s what quality can I get, what experience can I have shopping here, and they really minimize the impact of the transactional experience, right down to the visual that you can’t find a register.
Now, if you want to listen to the full episode with Jeffrey Shaw, you can go to episode number three, just scroll all the way down in your podcast app, or go to schulmanart.com/three, and we’re going to link that in today’s show notes.
Now, here’s something else I want you to know. I was working on these lessons in my book, about the same time that I was preparing to list my house for sale. Remember I said I turned my manuscript into the publisher at the end of December, and in December was when my husband and I were talking with a real estate agent about what price to list the house. Huge argument, but she really wanted to price our ending with a 99 or a 97 and I was not going to go along with it. Actually, I was going to go along with it in the beginning, but I felt really uncomfortable and before actually did get listed, I mean, I’d wake up in the middle of the night, like Miss Clavell, with that, “Something is not right.” I woke up in the middle of the night, I said to my husband, “There’s no way we can price this at 99 or 97. This goes against everything that I’ve been teaching to my clients and that I practice myself.”
When it comes to million-dollar homes, I’m sure you can guess that mispricing a home can cost you thousands or even hundreds of thousands of dollars. I want to share with you first my agent’s logic and then I’m going to share with you my logic. Now, the truth is, my agent’s logic would be preferable if it was a buyer’s market, but right now, especially in New York, right outside New York City is definitely a seller’s market. In fact, I’ve heard most of the country is a seller’s market. Even if you have a lot of money, it’s very difficult to compete for real estate. Because of the uncertain times, people are holding on their houses, they don’t want to sell, so the inventory is very low and the houses that do come on the market sell very quickly.
Now, my agent felt strongly that if we didn’t price the home below a threshold that we were going to miss out on buyers who were looking for a homes less than that threshold. My logic is that we wanted to miss out on those buyers who did not have the capital to buy above the asking price. Also, since at the same time we were preparing our home for sale we were apartment hunting in New York City, and when I was doing my searches, not only did I have an upper limit, an upper threshold, meaning when I typed into Zillow, I didn’t want to see homes that were $2 million, so I said, “Please don’t show me homes above a threshold,” actually, my threshold was much lower than two million, and I also didn’t want to see homes that were priced lower than a threshold because I didn’t want to be bothered with Zillow updates about apartments below a certain price. That might be really weird, like it had a bathtub in a kitchen or something like that.
I want to share with you, one of the apartments we did look at, it was really nice except for this very weird bathroom situation. Just off the kitchen, it had a toilet with no sink, and then in another bathroom, and I’m going to put bathroom here in air quotes, it had a sink and a shower, but no toilet. Then a third bathroom had a toilet, a sink and a bathtub, but it had two doors, and yes, this is a million-dollar apartment. I did not want to be bothered with the bottom of the barrel for New York State real estate apartments, and I knew that buyers like myself had the same logic and probably had similar filters for their alerts for homes in my town and that they also had a bottom threshold. In addition, I understood that pricing the house ending in a 99 or 97 would send a signal that we were open to offers below the asking price. Using a rounded number sent the message that we were looking for asking and above.
What happened? We listed the apartment on the coldest weekend of the year in January, between Wednesday and that Sunday, over that four-day weekend or five-day period, we had over 90 showings. It was a brutally cold January, perhaps the coldest of the year. Then our house went to what’s known in the real estate market as best and final offers. What that means is my agent sent an email out to all the agents who had taken their clients to see the home, that they had to submit their best and highest offer by noon on Monday. In the end, we received 10 offers, and all of them were over the asking price. The winning bid was 200,000 over the asking price. By the way, the next lowest was only a little bit lower than that.
Now, this is a seller’s market, but I can compare what happened with my house to another home just a few blocks away. They put their house on the market in early December, before the weather got bitterly cold, and they had some features in their house that actually made it worth a little bit more than ours. They had a flat piece of land and our house is on a steep hill. They did price it ending in I think it was a 99, so a thousand dollars less than ours, and they did not get more lookers on the house. I said we had over 90 showings, they had 84 showings, still a lot, but not as many as we did. They did get more bids, they got 14 bids, but some were below the asking price. Their winning bid was $50,000 less than ours. Pricing their house just a thousand dollars less than ours may have cost them $50,000.
All right, my friends, I hope you got a lot of value out of today’s show. Remember, my mission is to help as many artists as possible. If you got value from today’s show, please pay it forward and share it with a friend.
Next week we have on the one and only Christa Forrest, she shares her journey of leaving behind a lucrative job in finance for the freedom of creating a career with her art. Trust me, you do not want to miss it. Make sure if you’re on iTunes you hit the plus sign, or a different app you press the Follow button on your podcast app. If you’re feeling extra generous, please leave me a review, especially if you can leave it on Apple Podcasts, it helps others find the show.
All right, my friends, thank you so much for being with me here today. I’ll you the same time, same place, next week. Stay inspired.
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