Tuesday, November 30, 2010

What price is affordable art? (Poll Results)

In November the Making A Mark Opinion Poll asked the question What price is affordable art? in two different denominations - £ and $.  This post has the results - and there's a very interesting twist and some very profound messages for marketing and price points!

I had a strong suspicion that the response varied by country.  So I asked the question in relation to two different currencies - but made the answers absolutely identical in numerical terms (except for the currency).  As I expected, after one takes into account the currency difference the results are significantly different.

Now this one is a bit difficult so below you will see:
  • USA:  a chart for the dollar values
  • UK:  a chart for the sterling values 
Later on I'm going to add in the charts converted to the other currency so you can see the HUGE  difference in the responses.
    In the narrative I'm using the end of month currency exchange rate (using xe.com) to provide context for the values I'm quoting.  The exchange rate is as follows:
    • $1 (US) = £0.641737 (GBP)
    • £1 (GB) = $1.55865 (USD)
    Which means in very broad terms $1 = 64pence and £1 will get you $1.55

    Overall conclusions

    The numbers 500 and 1,000 are hugely influential in terms of people's perceptions of what are the big price hurdles.
    • Both produced a peak and very similar values in terms of percentage responses
    • after which there was very little activity until the next price hurdle was reached.
    The important point is that these are completely different prices due to the exchange rate!  Let me explain with some specific examples

    The Power of 500
    • In the USA, 24% of the sample would buy art at less than $500 (£320)
    • In the UK, 27% of the sample would but art at less than £500 ($775)
    • around about a third of the market would contemplate buying art costing more than 500 (whichever currency)
    The Power of 1,000
    • In the USA, 17% of the sample would buy art at less than $1,000 (£640)
    • In the UK, 20% of the sample would buy art at less than £1,000 ($1,550)
    • those contemplating buying artwork in excess of 1,000 (whichever currency) are only around 10% of the marketplace which reads this blog.
    Which means in terms of pricing art
    • you can get more people to buy your art at higher prices in the UK.  
    • Selling art to the USA:  Which should mean that artists based in the USA should be assessing whether they should be marketing original artwork at serious prices to the UK
    • there is much more resistance at lower price points in the USA when compared to what is experienced in the UK
    • Selling art to the USA:  Conversely, UK artists need to think very carefully how they price artwork when marketing to the USA
    For me, the conclusions bear out anecdotal stories I had heard (and hence why I constructed the poll in this way).  Plus it explains why the $100 daily painting ploy has worked well when marketing to the American market while it has had much less impact in the UK market.

    Now for the charts and the detailed results so you can see where these conclusions come from.

    USA: What price is affordable art (in US$)?
    • 70% of the 63 people who voted on the $ question thought that affordable art meant art costing less than $500 (£320) 
    • A significant minority think affordable art means it costs less than $100 (13%) or lower (8%).  $100 = £64.  $50 = £32,
    • This means only 30% of respondents contemplate buying art costing more than $500 (ie £320)
    • 17% would buy art costing more than $500 (ie £320) and less than $1,000 (£640)
    • 10% would contemplate buying art costing more than $1,000 (£640)

    UK: What price is affordable art (in GB £) ?
    • The overall profile of the chart is not dissimilar to the USA chart
    • 64% of the 41 people who voted on the £ sterling question thought that affordable art meant art costing less than £500 ($775) 
    • A significant minority think affordable art means it costs less than £100 (15%) or lower (5%).  £100 = $155 £50 = $77.50
    • This means only 36% of respondents contemplate buying art costing more than  £500 ($775)
    • 20% would buy art costing more than  £500 ($775)  and less than £1,000 ($1,550)
    • 9% would buy art costing more than  £1,000 ($1,550)

    Questions for you

    What I'm interested to know is as follows:
    1. Have you ever thought about price points and their importance before? 
    2. Have you ever considered price points might not be equivalent in different countries?
    3. Do you agree that 500 and 1,000 are very big and very important price points?
    4. Do these price thresholds influence how you price to avoid scaring people off? (eg  pricing at $495, £950)
    5. Did anybody notice what I'd done in terms of the options available?

    10 comments:

    tarosan said...

    Can I ask - if it's not too much trouble - do you have data how big your survey group is for each country? and what the income brackets are? and how diverse these groups are?

    just wondering, if the info happens to be at hand..

    rbfineart said...

    Great post and a great poll. I would be interested to see what kind of results you'd get for the same questions depending on the region in the United States, say the northeast versus the south.

    I definitely think about price points when pricing my artwork, but I know from personal experience that as I adjust prices to reflect the market in a city like Chicago or Dallas or any fairly large metro area I run the risk of pricing myself out of the area I live in, a mid to small size metro area.

    I would think you'd run into some of the same in the UK when comparing price points in London versus a smaller town.

    pritislandscapes said...

    "Colour is fun, colour is just plain gorgeous, a gourmet meal for the eye, the window of the soul."

    carletta said...

    I enjoy your blog so much and have passed it on to artists and those that appreciate art.......Would the the majority of those participating in the poll be artists? I would guess the majority of your readers are.....I think they may have a different opinion of "affordable" art than the general public, and thus the poll may reflect what artists think of as affordable art. Many artists I know here in Maine, USA, have started creating pieces available at under $100.00, which seems to be what is selling in this economy.

    Katherine Tyrrell said...

    I think it's very probable that the majority of people who responded to the poll are artists

    The rest will be people who appreciate art in one form or other.

    I'm assuming artists have made a judgement based on
    (1) the prices they know art sells at more easily and
    (2) the price they personally find to be affordable for the art they buy.

    Artists are buy more art at affordable prices than many people appreciate so they are a very good set of people to ask what is affordable art!

    Katherine Tyrrell said...

    @tarosan

    I have aggregate data - at a very high level - for the type of people who read this blog but not for the people who responded to the poll - which is hosted in the side column of this blog and is constructed using the blogger opinion poll widget.

    Coupled with knowledge I have of the people who write to me, I'd say that in general there are two big groups which read this blog. These are:
    (1) younger people wanting to learn about art - and who typically have a lower income levels or more demands on their budgets
    (2) middle aged and older people, often women, who (for the most part) seem to have a more comfortable income level. They are a mix of artists and people who want to improve their art and those just interested in specific topics covered by this blog.

    Katherine Tyrrell said...

    @rbfineart It's very definitely the case that the way art is priced in London is different from the way it is ooften priced in more provinicial or rurle areas.

    Although one also has to factor in the average wealth in an area - there are some very pricy galleries in rural villages and small towns!

    I think the benefit for some artists who don't live in London is that the price of their artwork can often look very competitive when exhibited in art society exhibitions in London - and gets snapped up as a result! :)

    Theresa Bayer said...

    I tend to look around & see what other artists are charging to get a general idea, and go from there. The under $100 and under $500 price points seem to be popular in Austin, Texas. Many of the people who have bought from me are artists.

    Vinayak said...

    Thank you very much for such an informative blog. The poll is indeed designed very thoughtfully and I am sure is of great help to artists, especially newcomers to this field who need advice on pricing their art. In addition to the points you have brought out here I was wondering if oddly priced work sells more. What i mean to ask is would a painting priced at say $465 sell more easily than that priced at $500, not because it is cheaper, but because it suggests that the artist has a very clear pricing policy and that he/she wont try to pass substandard work for unreasonable prices or be tempted to overprice his/her work just because someone is willing to pay!
    Thanks again and best wishes,

    Katherine Tyrrell said...

    By and large it's a big mistake to price at a "hurdle" price.

    The way to think about it is to look at a price and ask yourself honestly what price makes it seem more atractive a purcase.

    Increasing the first digit by 1 (eg from 4 to 5) is generally not the way to go.



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