How can you increase the profitability of an art gallery? Simply put, you have to get ahead of the competition and attract the attention of your target audience. When it comes to modern strategies, don’t expect any specific “do this, do that” recommendations. Specific recommendations for action refer not to plan but to routine behavior that makes it impossible to win in today’s fierce marketplace competition.
In fact, the principles of an effective strategy to defeat the enemy, including competitors in the market, were developed thousands of years ago by ancient warlords and are still relevant today. Strategy means a unique approach to solving problems in a rapidly changing situation and the ability to adapt flexibly to any event.
So how can you use the principles of strategy in today’s gallery business? As stated above, the principles of strategy remain evergreen, and innovation comes from digitalization tools and the use of the capabilities of the World Wide Web.
Some starting points for a strategic approach
- To defeat the enemy, you need to know and understand everything that is happening on the battlefield. In the context of commercial activity, this means extensive market research.
- To win, you need to gather all available resources. The innovative approach here implies extensive implementation of digital automation tools to reduce routine operations. There are online services and application software that can automate tasks related to information collection and processing.
- Learn all the strengths and weaknesses of your opponent. In business today, this is called competitive analysis. Choose one or several competitors that are closest to your nature of the activity. Study in detail what they have undertaken to achieve success and what negative factors have affected their business promotion. Based on this knowledge, identify mistakes in the construction of your business and improve performance.
- Act at the right time when all favorable circumstances for the success of your business will be formed. Continuous monitoring of market trends is necessary. Monitor surges in demand for a particular direction in the art that your gallery specializes in. In any business, you can identify a certain kind of seasonality of growth and decline in demand. This allows you to understand when to run massive advertising and when to save money on marketing.
When investing in advertising, one of the most significant American entrepreneurs once revealed the secret of his success: invest 80% of available funds in product promotion and only 20% in developing a quality product. In the gallery business, this means that 80% of the expenditure budget should be spent on brand promotion, improving the reputation of the enterprise, promoting artists, and attracting clients. Only 20% of the funds should go towards searching for promising works of art.
The standard rate of an art dealer is 50% of the sale price of a painting or other work of art. Of these funds, 30% is spent on promotion and maintenance of the business. The introduction of innovative digital means of business automation will allow reducing overhead costs considerably, including at the expense of reducing the involvement of human factors. After all, most of the company’s budget is usually spent on employee salaries.