It's going down...

I understand the logic -- it worked for me until about 2002 or 2003. I had steadily raised my rates and never looked back. In fact, people were happy to pay them! But Michigan's economy is extreme, and it's not turning around anytime soon. Jobs are leaving faster than the rest of the country, as are workers. This makes us a bit of a funhouse mirror to the rest of the country. It COULD be how things will soon shake-out nationwide... or it could be slightly more or less. But one thing seems apparent: the market IS changing. We either adapt or perish.

Very Darwinian, I know. But facts are facts. The iPod didn't exist 20 years ago. We'd never heard of "outsourcing." We weren't pumping three million bucks a day into a war, sapping the vitality of a statistically robust economy. There were less people, less competition, but more weddings. More, better paying jobs meant that people were more willing to pop a few extra bucks for a premium DJ at their wedding, Christmas party, birthday or anniversary.

I'm not going to wallow in it and preach doom n' gloom. That's not what my posts are about. It's more an acknowledgement of the changes going on in our world that will impact us. It's a bit akin to the mid to late '70s and early '80s when DJs moved in and basically conquered the wedding market. Bands were already over a thousand bucks, and DJs could do the job for much less. I remember when people were surprised to see a DJ! (And a bit later, when they were surprised to see a DJ in a tuxedo! One hall manager commented, "It's nice to see you guys dressed up for a change!")

Technology drove the rise of the DJ. Amps and speakers became smaller and lighter, consoles first appeared and continued to shrink and shrink. Then the CD came along and changed everything. Bands that survived adapted; they headed to the bars, or they got larger and marketed to high-end clientele. Or they pulled a Greg Kihn, wrote a few hits and got rich. Yet there were a good many who weren't so industrious, lucky or creative and went quietly into the night.

Now technology is driving the market once again. The huge music libraries, exotic mixing software and ease of portability that once was the domain of the professional DJ is now within the reach of anyone with an internet connection. The hardware and software is better and cheaper, and there are websites offering couples advice on how to provide do-it-yourself entertainment! And preach on as we may, we can only lose by sticking our heads in the sand and trying to play "business as usual." The handwriting is on the wall. Adapt or die. Stand out in some way, expand what you offer, venture into related fields, build on your experience and make it pay. If they want to do it themselves, and will never THINK of paying a professional rate for a professional DJ, then why not rent them the sound system? Remember "If you can't beat 'em, join em?"

Oh, there will be DJs that don't change a thing and will prosper. But for every one of them, a thousand will drop out of sight. For every Rick Dees there are a thousand Peter Merrys, and for every Peter Merry there are ten thousand "sumpin' sumpin' productions." And it's mostly the last group that will suffer the most, especially when the Peter Merrys are forced to reduce their rates, as has happened up here in Hoffa Country.

So that's the bottom line: acknowledge the trend. Prepare for the worst. What's the downside? You'll have a better performance, a stronger company and maybe even a bigger market share if this trend isn't that bad in your neck o' the woods. And if it IS bad, well, you'll survive. Maybe even grow when others are faltering. Which would you rather be?

Dude Walker said:

Stu,

If all MDJs lower their rates...what has been achieved?

Where's the marketing edge of doing more events for less $$$...if an increasing population of MDJs is being conditioned to follow the same routine?

Where's the uniqueness?


More or less a commentary on the commonly used expression/defense "adapt or die".

In almost every application this is referenced to lowering rates. Why?

Perhaps "adapting to survive" actually means increasings one's rates to offset fewer potential annual events?

Click to expand...

You're preaching to the choir, my friend! I jumped on-board the "worth" train back in the '90s when I attended my first Mobile Beat show and saw Mark Ferrell's seminar. And it worked! I didn't just take him at his word, either. I went to my local Chamber of Commerce, who helped me cobble together a formal business plan. (One of the things they offer free to new members.) Without my saying a word, THEY suggested that I should be charging a minimum of $1200.00! Needless to say I was surprised for that particular number to pop up.

Later, we even got Mr. Ferrell to come to Michigan and give his presentation! It was one of my local DJ group's proudest moments. It really charged-up the DJ community. Yes, there were a couple of detractors, but by and large the DJ community -- the major players -- were all in. I managed to buy and pay off my commercial cube truck without breaking a sweat. Life was good.

But after 9/11, and a few rounds of layoffs and plant closures... things changed. Many DJs panicked.

There's also the fresh crop of young up-and-coming DJs. I've spoken to several ad nauseum. Most of 'em think ol' Stu is just fulla crap. One said, "Well, making three hundred is better than making nothing!" You'll never convince someone with that attitude that those aren't the only choices -- that it's not either / or. Trying to turn 'em around is a waste of breath.

And it's not completely their fault. In a state like mine, 30-50,000 job losses per year for half a decade cannot HELP but have a major impact. To most folks it's just a sidebar article in the paper. For me, it's large, bleeding chunks ripped out of the living heart of my consumer base. There is still life in Michigan, and still parties happening every week. But they're not paying what they used to no matter how unique and distinguished one makes one's self. Really, it's the same thing all of us do when money is tight: we walk into the car dealership and admire the Corvette -- would LOVE to have one -- but we BUY the Saturn. Our financial realities dictate it. When checking in with past Christmas party clients a couple years back to see why they didn't re-book me, sometimes after a long history, I repeatedly heard, "We'd love to have you, Stu, but we just don't have the budgets we used to anymore." (And those were the companies that didn't outright cancel their parties!)

I still believe in the "work smarter, not harder" philosophy. It's just that today, that means more than just accepting fewer jobs for higher pay. The higher pay isn't there -- at least not enough to support as many players in our industry as there are. (Even after the massive culling of the herd!) Being smart now means offering more value; expanding options we offer clients; working in related fields such as recording studios and nightclubs. Or writing, which Dude and I have managed to do. People still have needs, and the goal of business is to serve them. At the moment, the need in my market is for either cheaper entertainment or even an entertainment substitute. I'm currently writing an article about a buddy who offers a jukebox system to his clients. Another rents sound systems for the iPod people. Yet another does invitations, bubbles, custom labeled chocolate bars and champagne bottles, balloons, tooling and light decor and centerpieces.

To each his or her own. Innovation will rule the day as I see it. We WILL emerge from this slump one day. The trick is to survive and even thrive while we get there.

The b/g don't have money. Weddings are down. The "middle class" is vertually extinct. The number of dj's are up. Competition between dj's is fierce. Telling quality (for the client) is almost impossible.

Will weddings ever "pick up"? Mere speculation. But I doubt it. Never again will we regularly see a 250 person reception average. They are regularly going to be smaller, and cheaper, or very, very high end.

What to do is anyone's guess. Pass or Fail.

I do have a plan of attack. That is what each of you must do. OR you will die.

Djing is no longer just going to be a fun job or hobby you can make good money with.

Its going to be hard work, long hours and good pay, or easy, fun, and very little pay.

Flyingdjdan said:

Djing is no longer just going to be a fun job or hobby you can make good money with.

Its going to be hard work, long hours and good pay, or easy, fun, and very little pay.

Click to expand...

I saw the same thing happen in the home video industry, which was my field of employment from the mid 80's to early 90's.

When owning a video store stopped a cash cow that produced money for the owner just because he opened his doors, and became a tough, competitive business featuring top-knotch marketing pros, many mom and pop operations just folded rather than put forth the effort to compete.

The DJ industry has matured to this level now. Increased competition for a smaller number of available income opportunities is now a fact of DJ life, just as it was for the home video store owner of 15 years ago.

Those who can play by the rules (in the case of the DJ business - insurance, business license; in the case of the video store owner - legal copies of movies people want to see) and do the best job of sellilng themselves to the public will succeed.

There will be those who try to skirt the rules (in both cases, securing inventory through illegal methods - file sharing for the DJ; buying one copy of a movie and making mass duplicates for the video store owner) and their existence serves to cheapen the market for those playing by the rules. They must be stopped before they stop cheapening the market and succeed in killing it.

Seen many video stores in your town lately? Remember how they were on every corner in the 80's/90's?

Analogy complete.

Dude Walker said:

If they are pricing themselves lower...they are admitting they are worth less.

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But what happens if you price yourself out of the market you want to serve?

That's exactly what I did. I was doing lots of events in "low-end" venues like Moose Lodges, Elks Lodges, American Legion Halls, Fire Halls, and so on. And I was happy to do them.

Last year I raised my rates and the number of events started falling off and it took a big downward spiral. The kicker was one groom that almost literally tossed me out of his house when I quoted the price.

Anyway, I was also looking at a large overhead so I started looking at what I could do to cut it. I chopped out the advertising that wasn't working and did some other things. Low and behold, the overhead cut was approximately the amount I had raised the rates. So, I lowered them back to where they were. Ba da bing, I'm back in the market I want to serve.

This ticked several DJs in my local association off, but, ya know, sometimes you just gotta think about yourself. Besides, they won't work in the venues I serve because they are "low-end".

Will I do a "high-end" venue for the same price? Sure, if I have the date open. Most of the time I don't have the open date.

Am I happy with the ove? Yup. Am I worth less because I lowered the rates? Business is business, so, nope.

Goodnight,

Ok, you got undercut, and successfully figured a way to stay profitable but cutting unnecessary expenses.

What happens when, not if, the competition does the same? And you can no longer affordably cut a corner?

Dude:

And my argument is that I had priced myself beyond what my market could afford.

Price wise, I am about middle of the road in the area. Even there, I still get some folks in the market I serve telling me I am too expensive.

One bride told me about the $250 DJ and I told her that if price was her bottom line, then she should go for it. She did. I got a call back from her two weeks from her wedding asking if I was still available because her $250 DJ bailed on her. I was booked.

I solved the gas price problem by cutting back the distance I will go withouit a travel charge.

As to subscriptions, I don't count them in the overhead they are a personal expense releated to the business. The business expenses are the phone, advertising, and liability insurance. Everything else is personal.

I know that overhead will increase over time and I will raise rates to meet it.

The other part of it is, this is a part-time operation for me. I do not need to DJ to survive and I really could care less about the full-timers these days. They either keep up or go out of business.

GoodKnightDJ Wrote:

Dude:

And my argument is that I had priced myself beyond what my market could afford.

Price wise, I am about middle of the road in the area. Even there, I still get some folks in the market I serve telling me I am too expensive.

One bride told me about the $250 DJ and I told her that if price was her bottom line, then she should go for it. She did. I got a call back from her two weeks from her wedding asking if I was still available because her $250 DJ bailed on her. I was booked.

I solved the gas price problem by cutting back the distance I will go withouit a travel charge.

As to subscriptions, I don't count them in the overhead they are a personal expense releated to the business. The business expenses are the phone, advertising, and liability insurance. Everything else is personal.

I know that overhead will increase over time and I will raise rates to meet it.

The other part of it is, this is a part-time operation for me. I do not need to DJ to survive and I really could care less about the full-timers these days. They either keep up or go out of business.

Click to expand...

Before I go off the deep end here... Will you please clairify the following???


How can you outprice the market in your area when in the next breath you say you are middle of the road??

Please explain a little more about what you mean in reguards to business and personal expenses and not included? Included how???

Flyingdjdan said:

Before I go off the deep end here...

Click to expand...

You'd be DivingDan then.

Flyingdjdan said:

How can you outprice the market in your area when in the next breath you say you are middle of the road??

Click to expand...

Please note that my market is targeted towards specific venue types. Many DJs in the area simply do not work them (even the low-ballers) because they believe that the people that book them are "low class".

When I raised my prices $200 macross the board last year I got extreme push back from prospective clients. They weren't booking me based on price alone. That told me that I was priced outside the range that this market copuld afford. I did further research to confirm that.

Flyingdjdan said:

Please explain a little more about what you mean in reguards to business and personal expenses and not included? Included how???

Click to expand...

Each DJ that works with me must have his/her own music, equipment, transportation, and so on. Those expenses are personal to that DJ.

The services the business provides for them (overhead) are my time following up on leads, use of the phone for the lead follow up, liability insurance, and advertising. I have figured out what this all adds uip to on a per event basis and that is the figure I hold back when I book them.

To me, subscriptions, transportation, and such should not be part of the overhead equation unless you are a single op. Even though I am not technically a multi-op because of the way I work it, would it be fair for them to pay for my music, transportation, etc.?

Dude Walker said:

Approx 17,000+ each year...


Stu,

Lots of things to respond to in your previous post. Rather than addressing them all...I'll focus on the one that is most important.

The following is the essence & at the heart of the problem.

This caustic attitude...one that is defended almost as if it's a right to work badge is present in every market.

It is at the genesis of nearly all MDJ related problems.

It appears that you, I and others are battling it every day. And we will do so, perhaps, until we choose to retire.

I attribute it to a lack of business related knowledge. Being able to understand music flow and engaging a crowd only proves a person has the ability to DJ...not run a viable business.

2008 & 2009 are gonna be rough ones for many! However, you are correct...this slump should pass.

I wish to ask you a curious...and somewhat loaded question...

If you were "the" decision making lending officer (knowing what you know right now about the MDJ industry, the current & future event potential)...would you recommend that the MDJ startup loan be accepted?

If so...why?

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Good questions all. I'm in 100% agreement that many talented DJs don't know squat about running a business as well. (Bands don't either -- that's why they have managers.) I know I didn't when I started out, and it was only by shear luck and a wide-open market that I survived for more than half of my career with absolutely no business plan. If I tried that today, I'd have been done in two years, tops. My Chamber really helped me out. I also found a great book called "Freelance Forever" that is like a pep rally for entrepreneurs -- really charged me up!

Still, I'm not exactly the business whiz of the world, so putting me in the position of playing banker is a stretch, buuuut...

To answer your question, I'd seriously have to ask a few of my own. For instance, I'd like to SEE that business plan. I'd like to see how the applicant proposed to use the money. If their plan was to just buy some gear and CDs and start a traditional DJ business, then without collateral I'd say no. (And in fact that's all I heard even when times were good! I basically built my business on a shoestring, cash n' carry.) If there was a solid plan behind it, though, then I might change my mind.

GoodKnightDJ said:

You'd be DivingDan then.

Now that was funny!


Please note that my market is targeted towards specific venue types. Many DJs in the area simply do not work them (even the low-ballers) because they believe that the people that book them are "low class".

Ok, that explains much. You truly didn't outprice your market, you outpriced a chosen type of clientel.

I would think that is rather limiting to a business owners profitibility, but a choice obviously made with some (hopeful) reasoning and logic. One of limiting factors I wouldn't make, but... your happy I guess.

When I raised my prices $200 macross the board last year I got extreme push back from prospective clients. They weren't booking me based on price alone. That told me that I was priced outside the range that this market copuld afford. I did further research to confirm that.

Again, in this situation, when the time comes when you don't have options to "cut any more fat" and no profit is left, what next?

Each DJ that works with me must have his/her own music, equipment, transportation, and so on. Those expenses are personal to that DJ.

The services the business provides for them (overhead) are my time following up on leads, use of the phone for the lead follow up, liability insurance, and advertising. I have figured out what this all adds uip to on a per event basis and that is the figure I hold back when I book them.

To me, subscriptions, transportation, and such should not be part of the overhead equation unless you are a single op. Even though I am not technically a multi-op because of the way I work it, would it be fair for them to pay for my music, transportation, etc.?

It seems almost you have two seperate entities working here.
1 being a booking "agent" of sorts.
1 being a dj yourself.

Creativly interesting, yet, taxingly perplexing.

Click to expand...

Now, back to a question you asked earlier, of Dude, but I would like to reply.

But what happens if you price yourself out of the market you want to serve?

Click to expand...

That is a plain choice you made. In this case, your client base has a budget of non sustainability to you, and your business.

In this case, the answer I give, is expand your market base, expand the types of venues you perform at, or slowly bleed to death.

I know first hand how 1 business bleeding WILL take your entire family into bankruptcy. It can happen way before you know it. A hell of a lot faster than you think.

Jeff Romard said:

The one thing most of us forget is Mobile DJs rose to be the choice because they were a reasonably priced alternitive to bands. When we start pricing ourselves at the band level and offer the services of an Ipod people will seek one of those two choices

From what I see we have to get better at what we do. You can sell lines of S*** all day but Bricks and Mortar still build buildings

Click to expand...

Price is not the only reason. That is true, but only a small part of the equasion.

How about...
The ability to perform more types of music.
The ability to have consistant music quality.
The ability to have a continual flow of music.
Much less space required.
So much more.

There was overall much more value to having a dj over a band.

As someone who has been both a DJ and in a band, I'd have to say that money IS the #1 reason why people made the switch over to DJs. My band had four members back in the '70s, and we all wanted at least $250.00 per gig. Usually we managed a tad more, putting us at over $1,000.00. Today, that's chump change for a decent band. One of my family members had a full orchestra! They were somewhere in excess of four grand.

When it comes to types of music or repitoire, many hire a band BECAUSE they want THEIR particular style! Think about it: if you hate, say, country music and your band can't play any, you don't have to worry about your guests requesting any OR the DJ forgetting.

As DJs, we've got to avoid the trap of buying our own BS. We use the minor differences between ourselves and bands (and even other DJs) for marketing, which is fine. And having been in both camps, I generally prefer DJs myself. Hell, I got my first DJ job because a friend's band BROKE UP, leaving him stranded for his party the next night. That said, it really doesn't matter if my music is pouring out of a CD player or a band, I still did the same exact stuff. I had to announce the couple into the room, introduce the Bridal Party during the Bridal Dance, preside over the bouquet & garter antics... all while TRYING to play my drums! (Our lead singer wasn't up on wedding stuff, but we did have a nice back-n-forth that people liked.) When it comes to bands AND DJs, I'd say that what really makes them different are the personalities involved. Mine was the same with a band as with my Cortex.

You know the old saying about not letting the radio DJ play clubs, or the club DJ play weddings and the wedding DJ doing either? Well it's the same for bands; many bar bands aren't right for weddings, many wedding bands aren't right for bars, and some bands are trying to be the next Aerosmith, so they might not be the best for either. Of course, like some of us who have successfully done radio, clubs and weddings (not to mention skating rinks!), there are exceptions to every rule. If your wedding band's focus is actually ON weddings, there really is little difference. Well, except that we kick their butts on price.