Creativity. There are few sellable goods or services that have such a wide range of pricing as creative work.
Why is it that one painting can cost millions of dollars, while another can't even be sold?
Why is that one designer can charge 10x what another designer charges for the exact same service?
My goal with this post is to share with you two examples of creative pricing in action, and then explain to you why they are priced the way they are.
The tale of two painters
First, I want to give you a scenario.
Imagine that you buy two identical sets of art supplies. A canvas, paintbrush and paint.
You give the first set of art supplies to an art student. He spends weeks working on the project and creates a beautiful painting as the end result.
Yet, even with the beauty of the painting he fails to find a buyer who will pay much of anything for the painting.
You give the second set of art supplies to contemporary artist Jeff Coons. Jeff throws together a painting in 5 minutes and the painting sells for hundreds of thousands if not millions of dollars.
Why is it that the college students painting is worth less? Even though he invested a large amount of time and work into the artwork, his work is inherently worth less than what Jeff Coons did in five minutes. Why is this?
The tale of two designers
For the second example, imagine two graphic designers. Both of these designers have a similar style and quality of work.
One designer, spends his days designing.
The second designer splits his time between designing and building up a following for his work online. He blogs, uses social media, writes and creates a tribe.
The first designer charges $1,500 for a simple graphic design project.
The second designer charges $15,000 for the exact same project.
Why is it that one designer can charge so much more than the other designer for the same work and the same product?
What drives the price of creativity?
We are trained to believe that quality is the driver of the price of creative work. We are told that if something is better, it will sell for a higher dollar.
But when it come's to creativity that isn't the case.
The true driver of the price of creativity is demand.
Quality is a predecessor for demand, but quality alone does not create demand.
Demand comes from marketing, promotion, and prestige.
Demand comes from building a perception of you and your work.
Demand can't be bought, it can only be developed over time.
When you look at the fine artist Jeff Coons, there is a demand for his work. Regardless of what he creates, the art world wants it.
The art student has no buyers and has no demand. Despite quality, he will struggle to find a buyer until he creates that demand.
The designer with the online following has a large demand of people wanting to hire him. This demand allows him to charge significantly higher rates and people can justify paying for it because of the designers prestigious status.
The second designer has no following, and is forced to take what projects come along.
The bottom line
Quality does not drive the price of creative work .
Demand drives the price of creative work.