One of the topics that we get asked most about (and I mean most by a long shot) relates to how folks should price themselves in their photography business. It’s hard to give solid advice in a one-size-fits-all sort of way because everybody is so different and every photographer operates a different business – different goals, different struggles, different dreams. So instead of spending time today talking about percentages, costs, and markups, I thought it would be helpful to instead talk about the “whys” behind pricing, and then leave you with some links to some of the “hows” as far as numbers go. Sound good?
Note: this is going to be a bit of a long post – but that’s because there’s a lot to talk about. So grab your coffee or tea, sit back, and settle in.
To start, I think that there’s a good reason that so many photographers are constantly asking us about pricing. With the economy behaving like it is, there’s an authentic felt need for photographers to “get everything together” in order to book clients, make ends meet, and become profitable. I think the first thing people look at are the numbers (which I think is a mistake – more on that in a bit). For the past few years there’s been a HUGE drive for photographers to separate themselves by being UNIQUE – websites, blogs, business cards, marketing collateral (which are all really important things, by the way) – and I think we’ve strayed so far towards the idea of being unique that pricing has become largely focused only on dollars & cents and not on what it should be – providing value in exchange for dollars.
So what that means is the real discussion on pricing isn’t about the numbers – it’s about creating value that EXCEEDS the numbers. So here I’m going to talk about creating value (1) in your images, (2) in the service you provide your clients, and (3) in the experience you create for your clients. As we discuss these three components the internal dialogue you should be having should be centered around thinking about what you are doing to create value in these areas.
Sure, maybe you could just build a gigantic marketing machine and make your photography not have anything to do with images, but that’s not good for you, your clients, and the industry as a whole, so the first place that value needs to be created in your business is in your images. Your photography has to be quality work, and beyond being high quality, you have to be able to do it over and over and over again.
Erin blogged about a talk given by David Giffin at last year’s TED conference and in the talk he said something really meaningful that still stands out to me, and is particularly appropriate to mention here. He said “…every one of us has at least one or two great photographs in them. But to be a photojournalist, you have to have more than just one or two great photographs in you. You’ve got to be able to make them all the time. But even more importantly, you need to know how to tell a story.“
So you need to be able to consistently create fantastic images from your shoots, day in and day out, under constantly changing and challenging conditions. If you only produce one or two good shots from a wedding day or a portrait session, well, I wouldn’t quit your day job yet! You create value for your clients by the experience and technical skills you bring to the table as a photographer, so make sure your skills match up with what you’re charging. Your clients are depending on you to tell the story of their wedding day, families, etc – and they need to be able to look back at the images you produced and say, “that was worth every penny I paid, and more.” That’s the goal with your images.
The second area that you can create value for your clients in is in the customer service you provide. This is a relatively simple area in which to create value, and this idea really centers upon setting expectations for your clients and then exceeding them. This means that you tell your clients that their images will be ready in 4 weeks, but then delivering a final product in 3 weeks instead. Or having clear, consistent communication throughout the whole process so your client knows exactly whats going on, when.
Every interaction with the service portion of your business should be painless and should add to the customer experience (which we’ll talk about next) and not detract from it. Answer your phone, call clients back quickly, answer e-mails in a prompt fashion, and deliver everything on time, if not early. That’s how you create value in the service you provide.
The Experience You Create
The third area is probably the most fun area, at least I think so. Most of your clients, when all is said and done, are really paying you for the experience that you’re creating; not only the in-process experience but also the finished product experience. Think about Apple products, for example – when you buy a brand new iPad you’re not just buying the device, you’re buying an experience – that is the experience of going to the store, talking with the employee, going through the transaction, walking proudly out of the store, opening the box, and turning on the device. It’s all part of the experience, and each part of the experience works to make the other parts (and the final product) better and more enjoyable (and of higher value).
So with the experience you create, what are you doing to break the experience down to meaningful things? Maybe gifts are your thing, or maybe it’s impromptu dinner parties, or maybe it’s handwritten notes delivered to your clients on their wedding day. Every interaction with your client is a chance to either make the experience better, to make it worse. If you’re out to create value, then you need to make the experience better, every step of the way. So how do you do this? My friend Dane suggests that to be successful in this area we need to “be the invitation to others, that we would want for ourselves.” In other words, how would you feel special/valued/important/unique? What do people do for you that floors you and makes you stoked? Do that for your clients.
You get it – we need to create value in everything we do, and the value we create needs to exceed the price/fee we charge. Now let’s talk about the different ways for you to actually present your pricing/value information to your clients. I think that if there’s one area that photographers over complicate more than anything, it’s pricing. And having something that’s overcomplicated doesn’t make anybody happy – simple is ALWAYS better (this is a discussion for another time, but trust me on this one). The other day on the Pictage forums my friend Kevin Swan posted some great thoughts on the idea of simplicity, and it’s perfect timing for this post (pay attention to the bolded portions):
When Apple announced the iPad, critics were quick to point out what it doesn’t have and what it doesn’t do. It doesn’t multitask, it has no camera, it has no ports, it doesn’t support Flash, “it’s just a big iPod Touch!” they cried.
And yet, they sold nearly 1 million of them in the first week–and the 3G version hasn’t even dropped yet.
It’s even stranger if you consider that tablet PCs have been around for a decade, but no one cared. In 2000, Bill Gates held one up at CES and told the world, “this is the future of computing.”
You may be interested to know that Apple doesn’t do focus groups; they simply build what they find beautiful and pleasing–blending technology and art. Jobs is famous for pushing to simplify devices that are already very simple. Most of the recent innovations, from the iMac to the iPod, to the iPhone and the iPad, are all the designs of one guy, Jonathan Ive.
For those of you racking your brains about how to manage your pricing, what bells and whistles to include, and what your competitors are doing, maybe it’s time to take a play from Apple’s book.
I believe the reason Apple sells is that they have created a business that isn’t about technology or features, but is about relationship and lifestyle. How many people truly love their blackberry? People respond to Apple’s products because they’ve been designed with and for personalities. Yes, that means Apple may turn off many feature-obsessed techies; but they’re not trying to please everyone. If you’re trying to be appealing to everyone in your photography business, you will be attractive to no one.
Could Apple have built a camera or flash or USB or DVD or whatever into the iPad? Absolutely. The fact that they didn’t is something to think on. Apple appeals to artists, to creatives, to people who love beauty in design. They have built their unparalleled marketing and branding around artists–movie makers, painters, musicians, writers, Photographers. They have purposefully excluded entire segments of the population (the techies). Their position for years was, “the computer for the rest of us.”
Who are you appealing to? Who are you excluding? If you can’t answer BOTH questions, you may need to think a bit more about your business.
What this post communicates to me is two things: (1) the importance of not creating unnecessary confusion and waste by centering my pricing on bells and whistles and (2) the idea that I’m not designing my business for everyone, but rather a very specific subset of the population. I think if you can take these two points and use them as the lens through which you view your pricing, things will become clearer.
Before we wrap up and I leave you with some links for further reading, I wanted to go over the three basic ways you could set up your pricing for your business. One isn’t better than another, but the important thing is to think about how you could use each of these to create the most value for your clients (in terms of simplicity, ease of understanding, etc).
A la Carte
What it is: The A la Carte model is designed to let the client choose exactly what they would like, on their terms. Each offering within the model is independent of the others – that is, if the client chooses one option over another, you’re happy no matter what. Value it brings:Clients who know exactly what they want can get exactly what they want, with minimal effort.
Three Package Model
What it is: The most common model used by photographers – three packages (or five packages) with a definite “middle” package. You use the lower and higher packages to guide the buyer to purchase the middle package, which often builds in the highest profit percentage, and gives the client the most value for their dollar (a win-win). Value it brings: Clients who like others to put things together for them, take the guesswork and expertise out of the package building get to simply choose the package that best fits their wants/desires.
Session Fee / Upsell
What it is: Different from the A la Carte model in that you’re relying on some kind of upsell in order to make your living – if the client doesn’t buy more than the initial offering, you are losing out. There are two ways of implementing this method: a low session fee with a focused upsell OR a high session fee and a less focused upsell. With either variation you are relying on some sort of upsell later.. Value it brings: Low Session Fee / High Upsell Value: Low initial investment at a time when the client may not be able to afford as much, then the photographer is given the chance to prove the value of his/her product and then gives the client the opportunity to purchase more later.
If you’re still with me, give yourself a big pat on the back! Before we close, there’s one more thing that I’d like to talk about, and I think that it’ll make a nice bookend for this whole discussion. I know we’ve been very abstract in our talk thus far, and not really focused in on hard numbers (and by this point you should probably realize that this is because pricing isn’t about the numbers), BUT I think some sort of guidance is in order.
The Dollars and Sense
Once you’ve thought about your value, and how you give your clients the most value possible, you’ve got to figure out how to actually price yourself, in a dollars and sense sort of way. I think the knee jerk thing to do is to just pull a number out of thin air, decide that it sounds good, and just start charging that price (which is what a lot of folks do, I think) and I want to strongly urge you to not go down that road. It’s not that I don’t think you should just come up with a workable number – you’re free to choose any starting point you wish – but I want to encourage you to FIRST do some homework, so you can have a basis on where that number comes from. This way, when clients push back and want some sort of “deal” you can actually know empirically where your numbers come from, and why they’re important.
The basis for all of this should center around actually knowing your costs in a very specific manner. Not only the cost of the products you’re selling (albums, prints, canvases, etc.) but actually your real, hard costs for the intangibles you’re selling (time & service) as well as the center of your business – your images. SO much plays into these things, and the biggest mistake I see a lot of folks making is simply not knowing what it actually costs them to operate their business, and further what it costs them to pick up their camera, walk out the door, and shoot. Because even in this digital era, shooting isn’t free (remember, your shutter will break after 100,000 frames…and how much does that cost to fix? Can you do the math to figure out what each frame costs you?)
Sit down with a pen & paper and actually write down all your costs (rent, insurance, capital purchases, editing, album design, printing, association fees, etc). Once you figure all this out, you’ll be able to divid this number by the number of events you shoot in a year and come up with an hourly cost of doing business. This should serve as a basis upon which you build everything else. One of the biggest reasons small businesses fail is because they fail to become profitable, and having a solid foundation upon which you’re building your business is a great start to building a profitable business.
Increase your value, don’t decrease your pricing
Hopefully this post was helpful to you, and more than anything I hope it at least got you thinking about how to INCREASE your value as opposed toDECREASING your pricing due to the economic conditions we’re facing. The people that will weather the storm are the folks who are providing ever-increasing value to their clients.
If you’ve got a question you’d like to ask and see answered, ask here! We love questions!
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Written by Jeff Youngren
Jeff and Erin Youngren are international wedding and lifestyle photographers running one of the fastest growing boutique studios in the competitive Southern California market. Although based in San Diego, their deeply emotional style and passionate partnership has taken them from the streets of San Francisco to the canals of Venice to the family suburbs of Chicago to photograph extraordinary weddings and incredible couples. As leaders in the photographic community, they are passionate about helping other photographers build viable, authentic businesses, while building a photography community built on integrity and honest leadership.