This is a guest blog by Sean Low, President of The Business of Being Creative which “provides practical business advice to those in the business of being creative.” You have got to follow Sean on Twitter.
Of all the issues confronting creative businesses, photographers included, pricing tops the list. Always. What to charge? How to charge? Can you charge? When to charge? If only there were a right answer. Unfortunately, there is not. However, there is definitely a wrong answer.
If you are not transparent and do not have a pricing model that supports your philosophy, you will go broke in a hurry. Why? You will never be able to create the trust with your client necessary for you to do your best (or even adequate) work. If you are trying to “bury” expenses and/or profit in a single number or “package”, your clients will sense it and will (rightfully) question your integrity. They will be waiting for the other shoe to drop, even if there is no shoe. So the better question to ask yourself is: have I communicated the value of my art and does the way I do things support that value.
You can earn a fair return if you a transparent with your pricing and your business model.
Fundamentally, photographers are in two businesses: 1) selling the act of creating the image; and 2) selling the products derived from the image (i.e., prints, albums, etc.). In a perfect world, a photographer would be able to make money on both businesses. However, in the digital age and with competition the way that it is, it is increasingly difficult to earn a fair return on your investment of time and energy in either business.
The pricing pressure on the act of creating the image has never been greater. You need only take a look at Groupon offerings by photographers to witness the price of creating an image approach zero. On the other hand, services like the Album Boutique make it very difficult to extract value from selling products associated with an image. Moreover, many clients are placing photographers in the very difficult position of having to give up control of their art and just turn over a CD of hi-res images. Just say no.
To move forward, you have to bring integrity to your process. You can earn a fair return if you a transparent with your pricing and your business model. You should be able to say to your client that this is what you need to create your images. If it means having a second or third shooter, then you should lay this out too. Despite what you might think, clients do know you are in business and have to pay things like rent, utilities, payroll, etc., so if you do tell them that you charge say fifty percent on your and your staff’s time they will probably accept it. Likewise, if you require a certain quality of album be purchased (it is the legacy of you and your art after all), they will likely accept that too. Again, you are entitled to earn a fair return on your investment of time and energy – enough to sustain your business. The key is to be transparent to what that is with your clients. Transparency builds trust and is really the only currency you trade in.
Ignore those that would compete with you solely on price. Focus on what you offer and why you do things the way you do. Be uncompromising when it comes to the integrity of your art and completely transparent in what it takes for you to create it. Your ultimate value has nothing to do with the price you charge and everything to do with how you communicate. Those clients who need (read: not just want) your vision will pay for it. It is up to you to move them from want to need.
It's your turn to sound-off. What are your challenges when presenting pricing to your clients? How do you approach pricing – is it transparent or do you make it difficult for your clients to get a good read on you and your business? What issues do you encounter when discussing pricing with your clients?
Guest
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I completely agree that your prices cannot be too low. When I was starting out, mine were and I feel that some of my clients hired me for the wrong reason (low prices) even though I was the wrong photographer for them (I’m more PJ based and they wanted more traditional shooters, for instance). I raised my rates and got better clients. This year, almost all of my clients have purchased albums. I experimented with not including the DVD. That didn’t go over too well. I found my booking percentage has been higher since I raised my rates (covering what I was charging for the DVD) and started including it. However, it is hard to say if that’s just a coincidence…
I completely agree that competing on price is a very, very bad idea!
Totally agree! Spot on! My prices were initially too low also and I’ve raised them twice even this year and am attracting better clients seem to accept the cost for my creative services. They’re appreciative of the fact that instead of handing them a CD and sending them off somewhere to figure out how to wade through it and get prints I sit down and educate them on products, print sizes, cropping etc. We even have software that will show what their framed print will look like in one of the rooms of their house. They are blown away with all the attention we give them.
I am just starting out and am trying to come up with my pricing, without being too low and so that I can make some profit. There are so many pricing structures out there and I think you did an excellent job of giving tips that didn’t lead to a specific way of pricing. Often times photographers try to claim their pricing structure is correct but it is like most things in business it needs to fit in with many other variables.
I am taking this one for future reference, thanks for the insightful information.
Fantastic! Love this “transparency creates trust” concept!