Pricing your Patreon work so you don’t go insane.
Alright. So you’ve started designing a Patreon. You’ve laid out the things that you want to offer to the people who are going to be your patrons, and you’ve laid out a production plan to ensure that you get out everything you’re trying to make on time and allow you enough time to be unplugged from your work and be a human being.
Now the question is:
How much should I charge?
First, you may be tempted to fall into the trap of pricing “competitively”. Don’t do that, or at least, don’t make that a major component of your pricing structure.
You need to start with real numbers, specifically an annual income goal. We’re calculating that right now.
Here’s a basic formula that might help. It’s constructed based on the assumption that you’re gunning for full time on your Patreon.
Minimum necessary income (rent/taxes/bills/food)
Extra Money (any money that you wish to make, save, or be able to spend beyond MNI)
We’ll call this first number your “Life Money”.
Cost of business (any services or hard production costs your art business apart from Patreon)
Cost of production for Patreon (any money you have to spend to actually make your Patreon happen, as well as any Patreon fees))
We’ll call this number “Operating Costs”
Add your life money and operating costs together. This is your Annual Income Goal.
The total money you need to make each year is the foundation of your whole price structure.
For all four of these categorical costs, make sure you’re writing everything down that you need to or want to spend. You need to be operating off of honest data.
Once you have your income goal, you can break that down into how much money you need to make each month or week, depending on how you’ve set up your Patreon charge cycle.
For example, say your income goal is $80K. That’s about $6,700 a month or $1,538 a week. Now you have some hard numbers to do your own planning by.
Now how are you going to make $6,700 a month or $1,538 a week just off of Patreon?
If your minimum donation is $1, this is what you have to do:
Convince 6,700 people to give you just one dollar every month.
Or 3,350 to give you $2 a month.
Or 1,340 people to give you $5 a month.
Or 610 people to give you $11 a month.
There’s 7.5 billion people on this earth. If you can make something worthwhile over the long term and get enough peoples’ attention, you only need .00008% of the world to give you just one dollar.
That’s all you have to do. Convince 6,700 people, one by one, to give you a dollar or more every month. All you have to do is create content worth more than what people are asking for.
Am I saying that’s easy? No. I’m not. It’s going to take sustained time and effort either on the front of building a solid audience, or on the front of being okay with taking your time pulling people into your Patreon one by one. And honestly, I would implore you to have a higher minimum so you won’t need as many customers.
Am I saying that you should only be content with 80K? Not by any means. That’s just the number I had on hand to do the math with, but it’s certainly not a bad number, accounting for business costs and self-employment taxes in the US. Some people need or want more, and that’s not necessarily bad. You just have to know that the more money you want, the better you have to be and the more work you have to put in.
Your Patreon pricing has to begin with the end in mind. If you know what you want to make or need to make, you can break that down, step by step, until you have weekly or monthly income goals that you can plug into Patreon prices.
Now you have an annual income goal that you can break down into monthly or weekly income goals!
Now we have to get to work on actually pricing your rewards.
Your rewards need to be valuable to your patrons.
When I say that, we have to really separately consider the components of “cost” and “price”, and consider also the principle of “value”.
“Cost” is what it takes to produce a “something”, whatever it is that something is that’s being sold.
“Value” is a subjective quality determined by the people who purchase a “something”. The “something” is worth more to them than the money.
“Price” is what you are asking for the “something”. Price must be higher than the cost in order to be fair to you, but less than the value, to convince people to buy.
You have to take the data of “cost”, “price”, and “value”, and run it against two more data sets. The quality of your work (which is kind of connects to “cost” and ‘value”) and your audience.
Your audience is really the key here, and I should have mentioned this in the article about things you can sell on Patreon.
A general audience can only really be sold to at a “general” price. We can call this the tip jar crowd. These are people who enjoy your work, but are ultimately only really marginally invested in what you are doing. You can’t really ask a lot of them, because they aren’t really invested deeply in your work, and that’s perfectly fine.
Your concern should always be with your audience. The people with whom your work and message really resonate are the people with whom you have a certain right to ask for more money than your general audience tier.
You have to understand how your rewards are designed to serve the needs of your audience.
Who is your target customer? This is the question you ask to help you form an idea of what specifically you should be selling, and then you can get an idea of what you ought to be selling it for. The question of how many people you can expect to buy your rewards also comes into play, but I would advise you not to worry overmuch about that. Think about the value of your rewards from the people who want to buy from you right now.
The audience you have and are developing form the points of data that create your “target customer”. Who are the people invested in your work? Do they want to learn more from you? Do they want to enable you to make more of what you’re making? Do they want something exclusive from you that won’t be available outside of their direct patron relationship to you?
I know I just said not to worry about the size of your audience, but I know it’s something you’ll think about subconsciously and it’s a number that’s actually important for your business, so here’s a little data. (A conversion rate is what percentage of visitors or users of a specific service decide to buy a certain product or service.)
The human element will always throw a wrench into this particular set of data, as this is largely meant for people who are advertising to a general audience, but these numbers are generally good for thinking about how many people following you on the internet are likely to become paying customers.
Now, again, don’t get hung up on how big your audience is, at least, not just by itself. focus on how many people you need to be bought into your brand, and at what tiers. The size of your audience right now is just your starting point.
When you construct a Patreon, you need rewards that are worth more to a patron than the money that they have in their pocket.
If you are going to have more than one reward, it’s important to have a good pricing scale in mind. Whatever you’re doing, it’s absolutely critical to make sure you’re offering things that are directly relevant to your audience’s needs.
Consider what they’re asking for, or what you know they are looking for based on your homework that you’ve done on your followers.
Once you figure out what you want to sell, you need to put your products into tiers.
For sake of this article, we’ll talk about the following rewards using a rough scale that I extrapolated from Ryan Delk’s pricing scale:
1x Early/Exclusive Access
2.2x Private Community + Education Resources/Direct Education
5x Exclusive Merchandise
11x Your Time
Every one of these subjects deals with expansions of the question of “what did it take me to make this, and what will the customer get for the price?” That’s really the whole question of developing a good Patreon and it can only really happen when you do the homework to uncover the answers. You can look at what other people are doing, but the end of it all is developing prices that are right for you and your relationship with your own audience.
Don’t forget also that individual rewards are just components of a bigger puzzle that you can combine or rearrange according to your needs, goals, and what is right for you to offer to your patrons. You can even cook up your own rewards, these are just examples that I would use for my own situation.
Bear in mind also that you are not required to start your pricing at $1. In this case, design your pricing around what it is that you need, but make sure your customer is getting something that is worth at least 3x the price for them.
1x Early/Exclusive Access
This is relatively easy in that all you have to do is prepare a larger buffer of content that’s not available to the general public. Can you provide good behind the scenes material, extra videos or comic pages, or high-quality versions of your work? Do that. If your price is right, even consider producing a small print that your patrons can select and receive in the mail.
When pricing this tier, take into account just how much exclusive material is becoming available to them. The large of an archive you can offer, the more valuable this tier becomes. You can either increase the price (but not for loyal customers) or use the increasing size of the content archive to make the offer more attractive to your patrons. 30 exclusive videos or illustrations, for example, is far more tantalizing than just 5.
2.2x Private Community + Education Resources/Group Classes
You’ll notice that I have two rewards attached to each other. There’s a reason for that.
Speaking personally, private community by itself isn’t something I would pay for unless I knew that there was a common goal that the members are all working toward. Private community is basically a way of paying for a creator’s time to try to get something out of them, and what you’re offering to people should really be something worthwhile.
This is a way to field important questions your patrons may have, and enabling you to directly address those questions in a place where that information can help multiple people without having to tell each person the same thing individually.
Also, when you make educational content available to this patrons at this tier, you also give them somewhere to chat about the resources, and help each other grow and develop. You can build on this by having group classes where you help coach and direct the education of the people consuming your learning resources.
Because you’re taking time to interact with people, produce educational content specific to their needs, and even directly mentor them, you are effectively a professional educator. You have to really think about what your students are gaining from your material and whether they are achieving tangible results. Clarity and direction is worth something to people, but you have to be delivering on your promises regularly.
5x Exclusive merchandise
This tier begins to place a cost requirement on you in order to produce physical goods in addition to your normal work fo producing art work. You have to begin to account for what it costs to design, manufacture, and ship your merchandise to your audience, and find a way to make a profit after that, unless you are simply doing this as a favor to your patrons. This tier can get expensive, but it really should be. Having said that, you need to be certain that your patrons at this level are really gaining something from their investment in you and what you are offering.
An alternative to this could be offering your patrons free merchandise, and then offering that same merchandise for sale away from your Patreon in order to gain additional revenue, but still have something to give to the people who are investing in you at a high level.
You really have to be careful about adding this one in, however, because you need to be ready for the work of developing and distributing physical goods. It’s not an impossible logistical challenge, but it can and will take you off guard if you’re not prepared.
11x Your time
If you are offering something as a reward that is essentially the patron buying your time, you should be asking a high price. You will never get your time back. The patron who directly buys your time (like in the form of custom work or direct mentorship or education) generally is aware of this, and you as the professional should be offering something that in some way directly improves the life of the patron purchasing your time.
This can be a scary reward to offer, but you should be ready to rise to the challenges of running a successful Patreon, as well as to take the hits for any mistakes you might make. Really, all of these rewards are scary because no one else is on the hook to make production goals but you, You have to make sure that you aren’t placing yourself in an impossible spot, and are able to meet the goals that you are accountable to your patrons for.
Your rewards pricing must ground well into your income goals.
For your own sanity, you need to make sure you are developing prices that are fair to your time. The right value for your audience, yes, but fair to your limited time.
A common trap for Patreon creators is to set themselves up with machines that they cannot unplug from and are stressing about regularly. Don’t put yourself in that spot. I would advise you to protect yourself with a day job of any sort and to build your Patreon on the side so that you don’t have to worry about any undue financial hardship. Don’t be afraid to limit how many people can participate in different rewards until you are ready to scale up safely.
We’re trying to build you a future as a professional creative, not crush your dream under deadlines and public pressure.
Now, you know you need to make $6700/month like we discussed above. Which reward is going to be the one that most of your customers are likely to buy? Which one has the best value proposition for them?
For an effective example, let’s say that your premium community+education tier will be your flagship offering. People are just itching to learn stuff from you.
Somehow, some way, you need to be able to produce educational resources as well as spend time with your students regularly. Let’s say you do 10 classes a week (two a day) and do 2 hours a day of specifically education production. You’re looking at four hours of committed work a day for your “teaching job”.
You know you are capable of teaching six students per class for a total of 60. So, 60 students who come back for repeat classes over the course of the month.
Take your monthly income goal of $6700 and divide it by 60 students. You now have a number. Your 2.2x tier should cost $110 monthly, or $28 weekly. (we’re rounding so the customer can have a clean number.)
Now your price scale can look like this per week:
$13 Early/Exclusive Access
$28 Private Community + Education Resources/Direct Education
$65 Exclusive Merchandise
$143 Your Time
Or like this per month:
$52 Early/Exclusive Access
$110 Private Community + Education Resources/Direct Education
$260 Exclusive Merchandise
$572 Your Time
If these numbers look funny, there’s three possible reasons for it. The first one is because they’re written for a situation that you may not be familiar with. Whether something is “real” or not plays a huge part.
They might also look funny because you’re not confident in what you can do. You can solve the confidence problem by just getting good at your own work before you go trying to ask people to pay you for it. In fact, people should be coming to you, not you to them. Confidence allws you to put forth numbers and not back down from them.
They might also look funny because you’re familiar with a competition-driven pricing model where people try to race to the bottom for prices and hook in as many people as possible that way. You solve the competition problem by not worrying about competition. You worry about serving your clients and customers the best that you can, and they will bring in other people who will also want in on what you are offering.
You might also be saying that these numbers look kind of high for this hypothetical.
High prices are not wrong if you have the value to back them up.
If you really did need to make 80k a year, and you really did know that for your main program you can only serve 60 people, it’s just the number that you need to make for that particular reward. Your job isn’t to worry about bringing your prices down. Your job is to stand behind them and make them worth paying. Give your patron something worth the asking price.
Now, this is planet earth and interesting things can happen apart from our expectations and best efforts. There’s a comic artist out there who charges a mere $1 for exclusive access, and that’s his only tier. 13,000 people are paying him a dollar every month right now. There’s also a lot of failures out there that don’t have a record of their place in the world on Patreon.
It’s hard work to create using a subscription model like Patreon to be successful, but a key component in this particular business is to be serving the needs of your own customers and doing so well. You have to be steady and willing to build slowly.
Remember that the more you can define a goal and break down the steps to get there, the more likely it is you can reach that goal, as long as you are actively working to make the goal happen one step at a time.
Select valid rewards.
Figure out what you need to make in a year.
Break that number down into weekly or monthly goals.
Break those goals down into your reward prices.
Put up as much value as you need to validate your reward prices.
And work until you have all of the paying customers you need.
Don’t be afraid to give it a shot. This is real life and you only get one of these. (Just don’t dive all the way into Patreon with an empty bank account and no financial security. That might put a damper on things.)