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02/17/2013 06:45:41 AM · #1 |
I'm struggling to make a decision on whether or not to change my pricing structure. I know, I know, it's shocking to hear someone like me admit uncertainty but you'll get over it. For the record I'm anti-shoot-n-burn so for the sake of canon and nikon getting together and making babies (cankon? ninon?) let's keep this to the traditional model of session fee + prints. Thanks for your cooperation.
I'd like to hear from anyone who has actual experience pricing their portrait photography in one of these three ways. If you don't have actual experience feel free to comment anyway and I'll just ignore you.
Let's say I need $500 out of a session to compensate me appropriately.
A: $500 session fee, $300 credit towards product
B: $200 session fee, $300 minimum order required, no credit
C: $200 session fee, ala carte pricing, no minimum, no credit, just fingers crossed they will buy at least $300 in product
Pros and cons:
A: pro; credit towards purchase already paid by the time they get to ordering session. Will this encourage them to spend more? I dunno. Maybe.
con; larger initial investment to secure a session so perhaps that will scare some people off. I'm already priced high so I'm not super worried about this, but it's a consideration.
B: pros: lower initial cost makes booking more inviting; minimum order makes sure I'm compensated appropriately
con; Not sure if people will like the idea of a minimum order, i.e. does it seem at all "shady" to be calling it a minimum? Do other businesses do it? (not really) I think most photographers get around this by having a starting package that is their "minimum" without calling it that. I don't want to offer packages - I'll explain why later.
Sandy Puc's credit system is a possible way around this but again, I feel like it might appear shady to clients. I'm trying to go for simple and straightforward. Clients might think "why is she using credits, not prices, is she trying to trick me?" That's the way *I* would look at it anyway, but I'm a skeptical jerk photographer.
C: pro: session fee compensates for time, prices compensate for prints. Simple and effective. Clients like it, I like, win-win, right?
con: in order to guarantee proper compensation for my time I would have to triple my session fee which may price me out of my market. It's the "first unit of sale" dilemma. I need $500 to cover my time and expenses for a session. My session fee is $200. If I only sell one 8x10 I have to charge $300 for it. If I sell two they're $150 each. If I sell 5 I can charge $60 each. With this method I have no way to control what they purchase other than my suave powers of persuasion. This is how I've always done it. Crossed my fingers, hoped, prayed, done a rain dance and sacrificed a goat before each viewing session. I've become better at sales but I've finally stopped being afraid of numbers and am keeping books and I'd like a little more stability when it comes to planning and budgeting and projections or whatever it is business owners are supposed to do with all their "free time" not running their business.
As promised, here are my issues with packages. I am a custom studio, not one size fits all. I've always prided myself on not selling things people didn't want and used my ala carte pricing as a point of differentiation. I know some consider being able to upsell to a package a huge benefit but on the other side of the same stone I'm afraid of "downselling" to the package; i.e. limiting a sale because a client has hit the package "ceiling" and feels like they have to stop. I guess this is where the credit systems come into play but they seem phony. I don't want to seem phony. Maybe they aren't phony, and I just think they are cause I'm a skeptical jerk photographer and not my client. It's all so psychological my brain hurts.
So what say you, business masters of DPC? Any input or have I covered everything so thoroughly I just need to stop screwing around and pick a method? |
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02/17/2013 07:57:00 AM · #2 |
| Well currently I sit at option c. But I don't have a lot of overhead costs. In fact I have considered dropping the sitting fee to zero and just selling prints but to many people will no show for a freebee. |
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02/17/2013 09:24:33 AM · #3 |
| I like the idea of a lower session fee like in example B and C. I also think if you really wanna get your $300 minimum you should start your packages at approximately that price. Could be slightly lower or higher but I would group the packages close in price and close in product detail, so there wont feel like a ceiling and if they would like to purchase more there are reasonable options. Saying that you probably have some much higher package deals that would be a significant jump in price order to upgrade. Maybe grouping the packages would be your best bet. Take the $300 to $500(just examples of your possible pricing) package range and make that option A. Take the $750 to $1000 (just examples of your possible pricing)and make it option B.So on and so forth. I think through client interview you should get an appropriate feel for what they are willing to spend on some scale. I would also not just show clients options A if they told you that's all they wanted to spend, I would at least slide in there the beginning package of option B and see if you can get and upgrade out of showing them the differences. Good luck. BTW do the clients mind when you show up with just your IPHONE 5 to take their photos ? lol |
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02/17/2013 11:11:54 AM · #4 |
As a customer I would have a bad taste on B... I just don't deal with places that have a min order BEFORE I see the results (and yeah I know it's the same as A... but it does not feel like it to me).
A and C both work for me, so for ME it would not matter. The down side of A is that your kinda telling them how much to spend - it's subtle but IMO it's there because of the credit size.... I know your not but it has that feel to it. I suspect you would do better sales with C.
Edit: How about using C and adding say a 5% discount after $750 and 10% over $1500?? Just throwing out an idea....
Message edited by author 2013-02-17 11:14:25. |
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02/17/2013 11:16:02 AM · #5 |
| I don't know, for $500 I'd go buy my own iPhone5 and take the photos myself... |
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02/17/2013 12:17:24 PM · #6 |
Originally posted by MattO:
I don't know, for $500 I'd go buy my own iPhone5 and take the photos myself... |
this is a good point. i would love to get top dollar for my work but its hard to get people to spend that much and considering the competition is already undercutting, i need to keep pace.
luckily photography isn't my top bread earner i don't know how folks for who it is, are surviving... |
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02/17/2013 07:05:15 PM · #7 |
here is my suggested solution to your pricing question
E: $500 package 1 includes booking, contact sheets, in store viewing and one year club membership (that gives a 10% discount on print orders over $100) and $300 credit toward the cost of printing.
F: $300 package 2 includes booking, contact sheets, in store viewing and one year club membership
G: $200 sitting fee/deposit without club membership
If you offered these options your going to allow everyone to participate and I beleave you will see most of your clients go for option E. the percieved value of the club membership is set at $100 as per the difference between option E and F. The included print credit and membership in E sets it as much better value that option G.
Oh yeah no one will order F it's only there to set the stage for E to be favoured over G.
As a sideeffect you also create an Exclusive club which gives you a database of paying clients who are open to the idea of repeat business.
disclaimer: I am A+ for design and advertising in my degree but the above is still theoretical as I am not yet a working photographer.
Message edited by author 2013-02-17 19:07:33. |
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02/17/2013 07:56:29 PM · #8 |
Originally posted by MattO:
I don't know, for $500 I'd go buy my own iPhone5 and take the photos myself... |
Thank goodness my clients haven't figured out they could do this yet! |
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02/18/2013 05:13:54 AM · #9 |
Originally posted by robs:
Edit: How about using C and adding say a 5% discount after $750 and 10% over $1500?? Just throwing out an idea.... |
Brilliant. It's packages without packages. Leaves room to go up but doesn't put a ceiling in place. You're hired. |
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02/18/2013 05:17:45 AM · #10 |
Originally posted by StefanJSimons:
here is my suggested solution to your pricing question
E: $500 package 1 includes booking, contact sheets, in store viewing and one year club membership (that gives a 10% discount on print orders over $100) and $300 credit toward the cost of printing.
F: $300 package 2 includes booking, contact sheets, in store viewing and one year club membership
G: $200 sitting fee/deposit without club membership
If you offered these options your going to allow everyone to participate and I beleave you will see most of your clients go for option E. the percieved value of the club membership is set at $100 as per the difference between option E and F. The included print credit and membership in E sets it as much better value that option G.
Oh yeah no one will order F it's only there to set the stage for E to be favoured over G.
As a sideeffect you also create an Exclusive club which gives you a database of paying clients who are open to the idea of repeat business.
disclaimer: I am A+ for design and advertising in my degree but the above is still theoretical as I am not yet a working photographer. |
This is sorta the same as robs isn't it. Same goat, different name. Wonder how the client perception would differ tho. Would they feel pushed into one option over the other due to the obvious deal? |
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02/18/2013 07:19:59 AM · #11 |
It is similar to Rob's yes, except the middle option isn't supposed to be taken seriously as a true option, it's a device to assist the buyer in finding the value in the prefered option.
The idea is to guide people using a silly option which isn't attractive but makes to the option you prefer more attractive than if it wasn't given.
Theory behind this based on material from TEDTALKS largely from the very wise Dan Areily's talk.
Message edited by author 2013-02-18 07:22:25. |
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02/18/2013 09:41:36 AM · #12 |
How many customers spend 1500 or more? Give them a big discount
and encourage them to come back on a schedule. |
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