Gauging Compensation

Hey, this is Joe Costello from Onstage Entertainment Group and we had a request from Tara wanting to get an idea of how we deal with compensation and I assume she’s asking how do you know what the right compensation to ask for when walking into a venue or playing at festival or anything like that and so, what we’ve done, we had to learn it, obviously, over time and being one of the major booking agencies in town now, we get a little bit of a taste from all the different resorts we book, the different venues, the different event planners and caterers and DMCs, and it varies across the board.

We actually have special pricing for each of those circumstances and it’s a little tough to keep track of. Let’s call it the threshold, what someone would pay in basically three different categories. If you’re booking private events for just regular people that are holding cocktail parties at their homes, anniversary parties maybe at a small venue, it’s a one-on-one relationship, it’s going to be a little tough to push the limits of what that compensation could be for other places.

We gauge it by the size of the party. Is it done by the people themselves? Is it done by an event planner? There are so many factors that you have to take into consideration when you’re pricing yourself, so it’s really hard to just answer this in black and white and like, boom, we always charge this for this and this for this. We like to keep things where everything we book starts at a two-hour minimum, so if they only want you for an hour, sorry, it’s a two-hour minimum. You have to drive there, you have to set up, you have to break down.

With smaller events, one-on-one type situations with private clients, that’s probably going to be your lowest paying gig, unless you’re being taken advantage of at some of these other venues. Some coffee shops, some bars, some sports bars, whatever it might be, for some reason, some of these places just don’t like to pay and are getting away with murder.

I would say that from a private client to any local venue, the pricing probably should be in the same range and I don’t want to talk particularly about our pricing because it’s not what this video is about. I’m just trying to advise you on what I would do to kind of work on my own compensation with my own band. I know what bands that are like my band get paid. That’s what I use as my baseline for compensation, so the very first thing that I would give as advice is you need to look at other people, other duos or solo performers or trios or quartets or party bands or whatever it might be and you need to be honest with yourself and you need to compare your skill set, your talent with those other groups and make sure that you are playing the same venues that they are.

If all of those things line up, if you could figure out a way to find out what they’re getting paid, you should align your own compensation with that, so from doing private events for just one-on-one customers, small, intimate, in-home, small venue, not being handled by event planners and caterers and all sorts of things, that pricing should be sort of the same as it would be for playing in one of the local venues in town. Don’t let the local venues knock you down in price. They should pay you for working really hard at your craft.

Going up from there, when we book resorts and we have a contract with them where we’re booking nightly entertainment, the way we’ve been successful is that we get paid well. We pay our performers well, but we don’t take advantage of them because it’s continuous work, so if we can keep our pricing in a reasonable range and it’s profitable for them to have nightly entertainment five or seven nights a week, our giveback to them is we give them pricing that encourages them to have the entertainment continuously and as many nights a week as possible.

It’s a win for us. It’s a win for our performers because we keep them busy and if there’s revenue generated in these different outlets within a resort, a particular restaurant that they have, a lounge that they have, the pool, then they want to continue to keep entertainment going, then it’s a win for everybody.

Probably the highest pricing that we have is when these really large companies come into town and they want entertainment, the Googles, the IBMs, the AT&Ts. We’re sourcing entertainment for them. It’s a bigger production and they have the budget. This is the one time that maybe the performers really get a little extra bonus. They get paid well. It’s maybe not that harder than a normal gig but they’re finally getting something back.

Without mentioning specific numbers, I know that maybe that’s what you’re hoping for, Tara, I’m sorry, because it’s really hard. It’s not black and white and it varies from different venues to different people that book it, the one thing that we do stick to do though is that if you’re a performer and you’re working at one of our resorts, you get paid exactly the same as the person that played the night before you and the same as the person that plays the night after you. Nobody gets paid any different. There’s no favorites. Everyone that works at any place that we play, if the amount they get paid is X, you also get paid and that’s the way we like to keep things fair and clean, and that’s what I talk about when I speak about integrity and being fair to everyone involved.

I would look at people that are like you that perform in places that are like where you perform, that have the same talent as you, that draw the same crowd as you, whatever the case might be and a lot of time, they’re not afraid to say what they get paid, so I would just be honest and say, “Listen, I’m just trying to learn how to gauge my compensation. If you wouldn’t mind sharing what you’re getting paid here, that would be great.” If they don’t want to do it, that’s fine. I would think if you ask ten performers, seven of them are going to tell you what they get paid, I would think. I don’t know. I don’t ever mind saying it.

That’s my input on compensation. You have to gauge your marketplace, gauge what other people are getting paid. Compare yourself to them talent-wise, what they draw, reputation, also the mix of the venues that they’re playing. If they’re playing at a coffee house, it’s going to be lower. If they’re playing in a resort lounge, it’s going to be higher. Private events for single parties like a husband and wife having their anniversary or a birthday party in their backyard, that’s going to be different than your same exact band playing for a Google reception over at the Arizona Biltmore. Okay?

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