Price and Value

by:

Joe Patti

Seth Godin recently made a post that provides a good summary of how value influences the way consumers view price.

“It’s too expensive,” almost never means, “there isn’t enough money if I think it’s worth it.”

Social entrepreneurs are often chagrined to discover that low-income communities around the world that said their innovation was, “too expensive” figured out how to find the money to buy a cell phone instead. Even at the bottom of the pyramid, many people find a way to pay for the things they value.

[…]

Often, it actually means, “it’s not worth it.” This is a totally different analysis, of course. Lots of things aren’t worth it, at least to you, right now. I think it’s safe to assume that when you hear a potential customer say, “it’s too expensive,” what you’re really hearing is something quite specific.

There is a sentiment commonly expressed around arts organizations, especially ones that are trying to attract college age attendees, that college students who say a ticket is too expensive will generally spend twice as much on beer on the same Saturday night. While a performance and a beer are transitory experiences, everyone knows beer is more transitory of the two. (The old saying, you don’t buy it, you rent it.) But, of course, it is the social environment that accompanies the beer that people value.

More from Godin:

Culturally, we create boundaries for what something is worth. A pomegranate juice on the streets of Istanbul costs a dollar, and it’s delicious. The same juice in New York would be seen as a bargain for five times as much money. Clearly, we’re not discussing the ability to pay nor are we considering the absolute value of a glass of juice. No, it’s about our expectation of what people like us pay for something like that.

Start with a tribe or community that in fact does value what you do. And then do an ever better job of explaining and storytelling, increasing the perceived value instead of lowering the price. (Even better, actually increase the value delivered). When you don’t need everyone to buy what you sell, “it’s too expensive” from some is actually a useful reminder that you’ve priced this appropriately for the rest of your audience.

Over time, as influencers within a tribe embrace the higher value (and higher price) then the culture starts to change. When people like us start to pay more for something like that, it becomes natural (and even urgent) for us to pay for it too.

That bit I bolded caught my eye. In theory the arts already deal with a tribe or community that does value what it does. That tribe tends to be affluent and influential, but we all know the common refrain is that these people are dying off. Whatever influence they have, it isn’t continuing to motivate too many others.

I am not sure the answer is just better storytelling and waiting for influencers to help shift the culture. I think there has to be a corresponding shift in product features to something consumers value as well.

This isn’t just about the arts. In the cell phone example Godin uses, the phone’s value in the developing world goes beyond just being able to talk to other people. It allows people to gather information about crop prices and choose which market to travel to and acts as a medium for currency exchange.

Without these benefits, I don’t imagine as many people in the developing world would own phones as do today. They are buying Nokia phones with long battery life rather than iPhones because electricity sources are so scarce.

In terms of the arts, I have no doubt that it is entirely possible to avoid compromising on price. I likewise believe that there are many groups out there offering what people want, but who suffer from lack of good storytelling.

Yet just as phone companies know they will sell more Nokia phones in Kenya than Apple and Samsung phones, even though those two companies are duking it out for domination in the rest of the world, very few arts organizations are going to be exempt from aligning their “product features” to suit local conditions.

What’s It Take To Do Your Job?

by:

Joe Patti

From the “We Should Steal This Idea…” file, The Guardian has been running a series that is essentially the newspaper version of a career day, called “How Do I Become…”

I was originally attracted to the series when I saw the “How do I become…a set designer.” article. The series covers a lot of arts related careers, including ones you might not immediately think of like perfumer, embalmer and bellmaker.

With all the discussion these days about the cost of going to college, and whether attending is appropriate for everyone, a series like this that draws attention to a whole range of career options people might not immediately consider can prove a good resource.

The thing I really admire about the Guardian series is their ability to provide good summaries about the skills a person needs to acquire for each profession in the subtitles. I have done a number of career days for schools and it can be difficult to boil your job down to a few interesting words like:

“Preparing food, washing up, sweeping floors – start low but aim high and you might find yourself styling food for the big names.”

“Eyeballs and chipolatas should be fun-filled not fearful, in a profession where learning on the job is the only way to cut it.” (butcher)

“Filming is neither fun or glamorous, says cameraman Joel Shippey, which is why you need commitment, the right attitude and a love of people.”

“It’s taken more than a decade for David Stewart to learn how to ‘nose’ whisky, and that patience is a big part of being a malt master and blender”

It’s difficult to break in to and not for the faint-hearted, but the joy and excitement of dealing in gems provides ample compensation.

Obviously, one of my prime interests in a series like this would be to promote arts careers and bring people to a better understanding about what is involved with the jobs.

For as much as this may be a good idea, I am not exactly sure about what the right delivery channel would be. Given that newspapers are on the wane and aren’t read by a lot of young people approaching career decisions, a series like this would ideally be delivered online and through schools.

I am just tossing this out there to see if it sticks on anything or inspires anyone.

How Dare You Refuse That Money?

by:

Joe Patti

Really interesting story out of Australia via Non Profit Quarterly. The Arts Minister has asked the Australia Council to develop a policy penalizing arts organizations who refuse private funding based on idealistic or political motivations.

Refusing funding from tobacco companies is mentioned in a couple instances, but this was brought on by artists in the Sydney Biennale objecting to its association with a company involved in a controversial detention center used to house asylum seekers.

Senator Brandis responded to that by saying, “What I have in fact asked the Australia Council to do is to develop a policy so that it would be a condition of the receipt of Australia Council funding that the arts organisation concerned not unreasonably refuse or unreasonably terminate private sponsorship.” When pressed on who would be responsible for deciding what is to be considered “unreasonable,” Brandis replied, “I don’t frankly have a fixed or dogmatic view about whether it should be the Australia Council or whether it should be the Minister or whether it should be some third party arbiter.”

We can only hope that the option adopted is not the current Minister. Brandis has since said that while it was reasonable for arts companies or festivals to reject corporate funding if they had concerns about a sponsor’s financial credentials, it was unreasonable for them to refuse sponsorship on political grounds.

While the funding model in the United States is different than that of Australia and the amount of support U.S. arts orgs receive from government sources is comparatively small compared to private and corporate support, I can easily see a similar rhetoric being used politically in the U.S.

“X Theater has been on the public dole (equal to 2% of its budget) for years and they are perennially saying they are in financial straits. But just last year they refused a donation from Y Company (seeking to charity wash its reputation after that last scandal), even after they offered to double their usual donation. Where do they get the nerve to ask the people of this great state for more of their hard earned money after refusing Y Company’s generosity?”

To a certain extent, refusing money from tobacco companies might be easy because there has been a decades long nation wide campaign about the problems brought on by smoking. With other companies, issues like environmental damage and sweatshop like conditions with low pay may be mitigated by widespread employment and improvement in the general standard of living, causing more ambiguous views about refusing support on ethical grounds.

I think it would be difficult to pass a law or rule to this effect in the U.S. because it is easy to see how that there will be no end of trouble. (How can such a poor school afford to refuse Playstation’s sponsorship in return for painting their gym and cafeteria with the logo?!)

Just merely employing the rhetoric to equate arts organizations refusing private funding with the unemployed refusing a crappy job can be damaging enough.

Aid and Expectations

by:

Joe Patti

There was a TED Radio segment that aired back in October that hit so many of the conversation points in the arts today: recognizing failure, serving communities and funder priorities.

The topic was aid work in Africa. Italian aid worker Ernesto Sirolli reveals that pretty much every aid effort in Africa has failed. Some failures are attributable to arrogance of thinking you know what the solution is, but are equally attributable to the fact that no one will admit their failures, leaving others to replicate them.

SIROLLI: Every single project that we set up in Africa failed, and I was distraught. I thought, age 21, that we Italians were good people and we were doing good work in Africa. Instead, everything we touched we killed.

RAZ: How did every single project fail?

SIROLLI: And they still do. See, the first reaction was, let’s not tell anybody we made a mistake. Let’s not tell anybody about this project. I really thought that it was one bad project that will never be repeated, which, I think, is what the Americans in the Peace Corps are thinking right now. That they are in a bad project, but it’s unique. So what they do, they don’t tell anybody what they’ve done because there must be lots and lots of lot good projects out there.

But if they had the chance to go and find out what their colleagues are doing around Africa, they will discover that, in fact, the norm is failure.

What caught my eye was the assumption by each group that their failure was unique based on the assumption everyone else was succeeding. Not surprising since everyone was reporting successes.

Sirolli says that everyone sent back reports to the home office talking about how great things were going when everything was actually going to hell. While the rosy reports were submitted to one office, another letter was sent to him begging him to come help the distressed aid workers.

I think the arts world faces a similar problem, it is just that our budgets are a bit smaller. The failures get a lot more publicity though, if you take a look at all the orchestra negotiations that have broken down and the failure of companies like City Opera in NYC.

Actually, that is not really accurate. We only know the very end results in each of these cases. We don’t know enough about the failures that lead to these situations to learn from them. There isn’t much to be learned from “Don’t Run Out of Money.” A little more transparency and frank discussion may be helpful.

When Sirolli talks about the Enterprise Facilitation system he invented, I felt like his approach was both a lesson to arts organizations and funders.

SIROLLI: … And I invented the system called Enterprise Facilitation where you never initiate anything, you never motivate anybody, but you become a servant of the local passion. The servant of local people who have a dream to become a better person. So what you do, you shut up, you never arrive in a community with any ideas and you sit with the local people. We don’t work from offices. We meet at the cafe. We meet at the pub. We have zero infrastructure. And what we do, we become friends, and we find out what that person wants to do…

…The passion that that man has for his own personal growth is the most important thing. And then we help them to go and find the knowledge because nobody in the world can succeed alone. The person with the idea may not have the knowledge, but the knowledge is available. So years and years ago, I had this idea – why don’t we, for once, instead of arriving in a community to tell people what to do, why don’t, for once, listen to them? But not in community meetings. What we do, we work one-on-one, and to work one-on-one you have to create a social infrastructure that doesn’t exist.

Art organizations can probably take a cue from him about learning about the community by hanging out in cafes and talking to people rather than holding community meetings. Both funders of arts organizations and the arts organizations themselves might find value in simply helping people to connect their passions with the knowledge they need to realize their passion.

Any entity with resources to offer will probably find it difficult to just step back and not try to motivate people or impose their ideas on the people they hope to help. I am sure Sirolli and his people had that problem when they started. It is extremely difficult to surrender your ego and expectations, especially when you are bringing money to the table.

But the thing is, that is exactly what the best actors are able to do. They set aside their expectations about the way a scene should go and open themselves to the infinite possibilities that might occur. That way if a line is flubbed or delivered differently than it has been in the past, they can respond appropriately to the situation.

Bad actors chug on heedless of unexpected change or are caught short by it. In either case, they call attention to the problem.

This isn’t the best analogy because Sirolli’s people don’t react in order to serve their motivations the way actors do. Still, his people need to strive toward the same goal of suspending judgment in the same manner as actors do.