Building Blocks: Pricing with Skip Cohen
Most photographers are right-brain artists. The right side of your brain is known as being responsible for creativity, while the left side is analytical. An accountant would typically be a strong left-brainer, while a jazz musician a right-brainer. Artists are more creative and less interested in operational issues, while accountants are more focused on the numbers.
You’re an artist, and you need to respect both sides of what it takes to run a business. You need to be creative, but you also need to pay attention to the details.
You didn’t set out to be a photographic philanthropist. Nor did you plan on macaroni and cheese every night for dinner. That takes me right to the topic of this month’s article: pricing.
The success of your photography business comes down to revenue, but it’s not just about how much you make at the end of the year. It’s about how much you kept. It all starts with your pricing.
Sal Cincotta has often said that nothing screws up a business like incorrect pricing.
He takes it one step further, talking about punishing à la carte prices rather than bundling to raise your revenue and margins.
What’s your real cost to do business?
Let’s start with a list of everything you should consider in your costs.
Gear Education Internet
Computer Insurance Car
Printers Rent Gas and maintenance
Supplies Phone service Legal counsel
Furniture Social media Accountant
Software Time Dues/memberships
Packaging Utilities Advertising
Website Subscriptions Charge from your vendors
Additional labor Travel Entertainment
As thorough as this list is, I can guarantee there are a few things I missed.
What drives me crazy is hearing photographers talk about how much money they’re making because a 5×7 costs them only a dollar or so from their lab, and they charge clients $5 or even $10. That kind of pricing doesn’t begin to reflect what it really cost for you to be a professional photographer.
At this point, I need to make one obvious clarification: Everything I’m writing about assumes nothing but the very best skill set as a true professional. I’m assuming your work is outstanding, with images that match your clients’ mindset and exceed their expectations.
So, you’ve spent some time and calculated all of your costs to be in business. There’s a lot of discussion about the appropriate margin. Check out Bryan Caporicci’s articles at SproutingPhotographer.com. There are 12 posts, each covering a different area of pricing. (Click on Articles, then scroll down to Pricing.)
Keep it simple, with no more than three or four price points. There should be low, medium and high tiers, plus an exclusive tier if you’re going for four. Remember, your client base, if you’ve done a good job establishing value, will always aspire to move up in what they spend with you.
Think about buying a new car. The salesperson never shows you the bottom of the line first. Instead, they show you the top of the line, and you need to decide what features you can live with and without.
I also like names attached to the packages, especially for wedding photographers. For example, you might want to have Silver, Gold and Platinum. The important thing is strong differentiation between the coverages—the more the client spends, the more she gets.
Publishing Your Prices
Don’t. While there are some who say my directive is old-fashioned, I still believe people aren’t just buying images—they’re hiring you. I’m fine with giving people a range of your costs, but encourage them to contact you directly since every client is different.
Added Value Versus Discounts
Sooner or later, you’re going to be putting together promotional offers. Do your best to create added value rather than just offer discounts.
Here’s my pet peeve. I know we live in a but-it’s-on-sale society, but there are ways to add value for a special promotion that don’t require you to turn your business into a pricing war with your competitors.
- Watch the YouTube video from several years ago in which Sal talks about different packages. Package pricing allows you to put together different components for a limited-time promotion. (Just type “Sal Cincotta Pricing” into the YouTube search box.)
- Talk to your lab. There’s so much going on with new products today, and you might want to add a canvas or metal print to the mix. Ask your lab a simple question: “What’s new?” Also, while canvas isn’t new, it’s still unique to so many of your customers.
- Michele Celentano has made herself a “full service” photographer. She helps the client decide on the size of the portrait and the frame, and then she shows up when it’s ready, complete with hammer, level and picture hooks. Nothing is preventing you from also becoming full service.
- Wedding photographers can create added value with extended hours of coverage or an expanded engagement session.
- Contact your album supplier for new products, additional grandmother albums, etc.
- Are you offering hybrid solutions? I’m a huge fan of Photodex and slide shows. It’s so easy to mix still images with short video clips. This can be an add-on product for clients purchasing a certain package. It’s not specific to bridal clients. With a family portrait session, you could offer a slide show as a holiday card for the family to send out.
- Holiday cards, invitations and virtually anything you can do with an image becomes a fun promotional addition to your mix of products. And don’t forget framed prints; you have to show them on your site and in your studio to plant the seed.
- Offering a client a blog page with images along with a unique URL is so doable. You can also offer them all their images on an iPad, which is still considered unique.
- Look for ways to cross-promote with other vendors. Get together with the limo company, florist or caterer, and find ways to promote each other’s products. A Mother’s Day promotion could include a family portrait plus a gift certificate to a florist or Mother’s Day brunch at a restaurant.
Educating Your Client
You’ve got to do a better job getting the client to understand what an album is, especially in the wedding category. An album isn’t just a book of photographs. (I’ve been saying this for years.) An album is the first heirloom of a new family. It captures memories that would otherwise be forgotten years later, and answers the question from an inquisitive granddaughter who asks, “Grandma, what did you look like when you and Papa got married?”
Raising Your Prices
At some point, it’s going to be appropriate to raise your prices, but let’s put a little logic into the equation. Many of you just pick a number and then raise everything you sell.
If you were going on a road trip, you’d never just pull out of your driveway and head in the direction of wherever it was you were going. You’d plan your route first. Pricing is no different.
- Look at what you sell and determine your best-sellers and your average price.
- Look at your costs, including all your expenses.
- What’s costing you the most? Are there ways to reduce that cost?
- How much do you want to make on each product/service you offer?
Denis Reggie was the first photographer I ever heard make this statement: “Don’t price your products based on what you can afford. It was years before I could afford myself.”
Peaks and Valleys
To even out the seasonal peaks and valleys in revenue, you need to take the time to analyze your business. As a portrait photographer, for example, Bruce Berg is one of three studios in the Pacific Northwest involved in the Lane County Children’s Photo Contest during the first quarter each year.
Three competing studios have created an incredible event during what is typically the slowest time of year for most photographers. And they’ve been pulling in the entire community for over 30 years. Google “Lane County Children’s Photo Contest” to read all about it.
You don’t have to accept that things are tough during the slow season. Look for ways to make your business more diverse so you can even out the peaks and valleys.
Pricing isn’t rocket science, but it is labor intensive. I know it’s trite to say it, but no pain, no gain. Analyze your business and work to educate every client on what makes you different from the other photographers in town. Offer quality services with quality products, and exceed client expectations.
The key is to make yourself habit-forming.