I recently got to spend time with my 7 year old. I both validated that she does indeed have my genes and that she will likely outshine me quite soon. She was doing arts and crafts and decided to create bracelets. Quite quickly she was being offered cash money for these bracelets so she became determined to create more. She started making general bracelets with colors that she liked. She set up a stall at school and people bought them for around $5. Then her grandfather gave her $20 for a bracelet she made him and she realized something.. the price someone will pay for a bracelet isn’t just based on what it cost her to make.
The price is based on the value the buyer places on what they’re buying. The smartest sellers try to understand the value that a buyer is looking for. Then deal with price.
Suffice to say, when she told me she had made me a bracelet just for me, I was not surprised by the $100 price tag. I would have sold anything I own to buy that bracelet from her.
Therein lies the lesson: The power of discretionary pricing.
Instead of offering people your rate cards (in MENA this is challenging because it’s all they ask for), seek to understand why they want to buy from you. In some cases, you bring more or less value than your rate card states.
I was introduced to the world of rate cards when I spent a few months advising at a now defunct start-up. A place where chat mods got C-level roles, leadership hired staff as spies to eavesdrop on their colleagues, investor cash was spent on Bentleys and the accountant got paid in cash and did the books on paper. Suffice to say, this wasn’t the place to pick up best practices.
A rate card is a content creators inventory. It matches the things creators sell with price points. They are often designed to look like restaurant menus that show a deliverable and the pricing to the right.
When a third party agency or brand in the Middle East wants to work with a creator, they most often first ask for a rate card. Just like when you’re out at a fish market, you want to know how much the fish costs before you decide to haggle and make your purchase. In this instance, the fish are the creators.
Leading with price is the norm for most agencies when they seek to work with a creator in the region. Why? Because a brand gives them a budget and tells them to achieve views or impressions. Their job is to hit those metrics at the lowest price possible in order to retain as much of the client’s budget at the agency. It’s a simple transaction. They don’t often seek to pair the creators who would have the most impact on the brand if it means less money in their pockets so long as the KPIs are hit.
The takeaway? Seek to build higher quality relationships with the governments, agencies, brands and buyers to truly understand why they are buying. Be more like a 7 year old selling bracelets. Try not to be the fish.