Day 10 Bonus: "Pricing Part 1"
Hello and welcome back in this segment where you're going to talk about pricing no, he will not think this is a fun subject and nobody does its like the hardest thing for every photographer that's wanting to take their business to the next level or start their business it's the hardest subject is the hardest thing and there isn't anybody that I work with I do lots of consultations and there is no one that I work with that does not struggle with pricing so you are not alone and I have been there too and they're even still times now where I feel like you know, maybe I've been really having to educate clients and bring them along with me and people are asking about digital and you know I'm wanting to hang wall portrait's and it is so much work and believe me, there are days when I just think I just needed change everything but if you have a plan and you can be consistent with that plan, it does take work and you have to have to educate your clients and you do have to build that value for ...
what you d'oh but it can be done and if you stick with it then it pays off in the end so I want to walk you through a couple of methods of pricing and I'm even going to show you my, uh, pricing and product menu actually, I'm going to show you a couple of them so you'll get to see a couple of different pricing methods and hopefully you'll settle on something I will say this there is no writer wrong whether it's ala carte packages or build your own collection it's whatever feels good to you and really whatever you're most comfortable presenting to your client, but I'm going to go through each one of those methods with you and talk about some of the pros and cons and some tips for whichever way that you were planning to do it and hopefully something will resonate and feel good to you so let's just jump in talk about the dirty keyword as we go through today I want you to really think about pricing for profit and to me that's a fun p word it's not the dirty p word of pricing profit is we all want to be profitable and so let's plan our pricing so that we can be profitable and the first and most basic form of a pricing method is a cost based pricing method and that's really the rock bottom of where you want to be priced so we're going to go through that costs based pricing. The first step of cost based pricing is to determine your cost and you're going to look at your hard cost your time cost and the desired profit that you want at the end so look, let's look at the hard costs of an eight by ten and again, this is going to be bare bones where you want tio start, we're going to raise our prices from there as we can, and we'll talk about that as well, but cost based pricing is the bare minimum, so let's, look at building an eight by ten and really what we've got in that well, we're putting together an eight by ten, we're going to print it from the lab, and I've got about a two dollars and seventeen cents cost from our lab for the print itself. To mount that print, we're goingto put in three dollars and seventy six cents toe add texture. It's thirty one cents lustre coding adds a dollar and six cents, and so those air those basic hard cost of the actual print, and as we work through this, I do want you to think about creating a custom print, something that is mounted and textured and lester coated and beautifully presented to your client, so it's going to be something different than they can go out and run and get at costco or walmart? So think about custom prince, and so you're going to think about all these costs that are going to go into that custom print so that you can price accordingly so we've got those costs involved her actually making the that he's the print and then I want you to look at your time and we've got a lot of time involved in this eight by ten but as a minimum because we're looking at bare minimums are minimums right now I want you to think about what it would take if for some reason you cannot retouch that image if you break your hand or you know get sick whatever might happen that would you've got to deliver the product to the client but you can't physically do the retouching what is it going to take to have your lab do the retouching or send it out for postproduction somewhere and about rock bottom minimum for finalising a print is going to be three dollars and seventy five cents so that's the amount we're going to put in there as time goes on I want you to raise that number because I want you to think about what your time is worth in retouching and get getting that image done but again that we're looking at bare minimums here's that's three dollars and seventy five cents and then we've gotta look at packaging that print if that is the only thing that you're delivering to your client you're still gonna have to package it presented it beautifully hopefully and so I've got about three dollars in packaging written down here yes you khun do it less expensively you can slide it in a plastic piece that came from the lab and handed over to your client, but hopefully you're going to start thinking about, you know, presenting things beautifully and really making a difference in the way your client perceives the value of of your print and so again, bare minimum if we're wrapping the print, we might have it in a print boulder, which is going to go in a box, which is going to go in a bag or even the print folder in a bag and it's gonna be have a sticker on it and a bow or a ribbon or a tag that has your business logo on it. So think about packaging and finishing that product, so when we look at that altogether, we've got a total of fourteen dollars and five cents, which, you know, when you see that you think, well, that's really, you know, I've put a lot of effort into that and fourteen dollars and five cents isn't that much, so if I double it, I'm profitable. I'm making a lot of money, but there is a lot more that we have to think about. When we think about pricing, we've got to think about all of our expenses that we have to just run our business, we have to think about a lot of other things and so what I want you to consider is getting to a goal at twenty five percent cost of sale and that's a good goal to start with and of course, I want youto lower that as time goes on, well, that's a great goal to reach for when you're starting is that twenty five percent cost of sale, and so to reach that we're going to take that fourteen dollars and five cents and multiply at times four and that's going to give us that twenty five percent cost of sale and put us at fifty six dollars and twenty cents as the bare minimum that we can charge for that eight by ten so that's not including all that time that really is involved with shooting and editing and retouching and the sale and then packaging. So you've got a lot of time put into each and every one of the images that you deliver to your clients, so eventually I want you to think about that and maybe add that time value in there, you know, if you want to make twenty dollars an hour, let's say, with all those things included, you've got a half a now er in which again, that's that's keeping it pretty conservative, but if you've got a half hour and then you want to add that ten dollars, of time value for that half hour, so we're gonna add that in and multiply it times four because your time that's involved is part of that cost of sail again, we're looking at hard cost we're looking at time costs and adding those together and then multiplying that times four to get the cost that you want to charge when you're considering time value, there is a lot to consider so let's kind of walk through the workflow a general work flow with the client of of producing whether you're doing digital files, prince, whatever you're doing, we've got a lot of time involved. I'm gonna take you through my work flow because I do want you to start thinking about something beautiful as a finished product for your clients, doing something special for their home that they're going to enjoy every day, whether it's, wall portrait or albums or an image box, but something that's, a final product and not just handing over those digital files so let's walk through my work flow and as we do, I would love for you to really think about your workflow and really the time that you have invested in each and every client. So we're going to start just with, you know what it takes actually even get that client in, and I've got really, really conservative numbers here that we're gonna look at that preparation, what does it take to get a client? So we're looking at marketing? We're looking at you know being on facebook and putting things out on our facebook studio paige maybe you do twitter and send out tweets and you know something that you can do is just to even do it twitter search on who's having a baby in your area look for those hashtags and key words and then tweet back out to them you know and you could just say you know hey at mary jones congratulations on the new little one from x y z studio with a hashtag and you know that's going to get her attention and then look you up to say, hey, why did this person congratulate me and then they get to your web site and they see your great images and it's you know, wow, I should call this person so you know all that is time involved in your marketing and in getting that client in the first place and I just put a really conservative time here of fifteen minutes and you know think about the time that you've got invested and let's put a time value on that after that preparation hopefully we've got that first phone call and when that first phone call happens I've got fifteen to twenty minutes in that first phone call and we're going through that entire first phone call together so I won't go through that now but you understand why I've got fifteen to twenty minutes in that first phone call we may be getting emails first but I've got that in that preparation and I want that email to lead to a first phone call I want to be able to communicate verbally with my client so I can begin that education process and remember that when you your client emails you and you email them back, the only thing that you can read on email is your own personality you can not read the personality of the sender and so you know think about that when you're sending an email to the client and make sure that everything that you send is very positive it can't be thought of in any way is being negative and you know he always want that yes for the client you want to keep things very positive but you want to turn it into a phone call and so think about the time invested on that first phone call and that's that's step number two there next after the phone call I'm going to track all the information that that I took on that first phone call and I'm going to start a workflow envelope for that client I'm going to add their information to an envelope and get that started in the process that's gonna wait in our first been in the studio that is that it'll stay there until they actually had their session done and then it moves to the next bin and so we're starting that workflow envelope right then and then I want to write a card to my client. I'm going to send out a little thank you for calling, and we're looking forward to your session. I'm going to put an appointment card in there, and depending on the situation, I might put in one of our wall clean rulers so that they can put those on their walls and take those snapshots of their walls if they if they're if they're session, is soon, then I'm probably not going to send the wall clean ruler I'm just going to tell him to take a piece of paper to the wall and take those snapshots for me, but some of those things are going to go into that first mailing. I am going to write them it a little note that tells them how excited I am to get teo, meet them and photograph their kids so that whole step and process is going to take another fifteen minutes and again, I'm being super conservative with time here, so so so that you can look at the bare bones of the time investor that you have in each and every client the next step between the phone call tracking all that information and actually doing the consultation call with the client because I'm going to get those snapshots from her. I've got correspondents time with the client back and forth she's sending me over those snapshots I'm giving her my cell phone number so she's just texting them over, I'm texting her back, I'm talking about the designs that we've created for her I'm taking those images into preview those snapshots and creating wall concepts for her and preview and I usually spend about twenty thirty minutes and preview designing those wall concepts depending on how many walls they've sent to me, but I want to have all that prepared before I talked to the client on the phone, so designing those con concepts and preview we've got about thirty minutes there, and then I would say corresponding back and forth of the client whether it's text message emails getting those snapshots and kind of sending a few little wu who's back and forth you know these rooms look great, I can't wait teo chat with you. I can't wait to show your designs I probably got about fifteen minutes they're so that's another fifteen minutes next we're going to do that consultation call and remember that I don't do those consultation calls until I have those snapshots, so the consultation call is the next step and we usually spend at least fifteen minutes on that consultation call that's what I'm presenting the clients with those wall designs as wall concepts that we've prepared for them and we walk through they're probably going to ask me pricing at that time, so that could even lead into twenty, thirty minutes on, you know, talking about the pricing for each of the concepts that I've designed for them and narrowing things down. Are you getting excited or even making some changes, which, you know, hopefully we don't have to make a lot of changes, but that does happen, so we've got allowed time and for that as well, once the consultation is done, we're going to start getting ready for the session, so we've got about fifteen minutes in just preparing for the session, and you might have a whole different timeframe involved, so write down whatever your timeframe is, but if you're if you're on location, you're probably packing things in the car and getting things ready to go if you've got a home studio, you know, when I had a home studio, I had teo pull everything out. I had everything you know, put away in my front closet, I had an easel, and I had three portrait's in my front closet, I had a portrait of a newborn, a portrait of a high school senior and a portrait of a family and whatever I happen to be photographing, when that client came, I would pull out the easel. And that one portrait would go on it in my entryway I also was getting out backgrounds and you know, a fan if I needed it or whatever, you know, toys and and rugs and blankets, whatever so think about that time that you have in preparation now with my retail location I wantto come up and make sure everything was cleaned up before you know, after the last session that we did if I already know what clothing the client is going to wear, so I'm going to be pulling out the background that I want to use getting the lighting set up so I've got at least fifteen minutes in that whole process. The next step is the session itself, and this is usually the on ly thing that photographers take into account, you know, I spent an hour I spent two hours with this client and I made this much money, and we think we're, you know, doing such a great job, but in reality, you know, we've got all these other steps that it takes to really work with the client and that's the purpose of this exercise is to really think through the entire higher process so you can see what you have involved in what you have invested in your client, so it makes a little bit more sense when you do start planning your pricing that you're not just pricing for that hour of that session or that two hours of that session. But here for the sessions that we do in the studio, I schedule everything for one hour except for high school seniors, which are two hours and newborns, which we usually schedule about two hours for but everything else we schedule for one hour and, you know, really, especially when you're photographing little kids, if you go over an hour, they're so over you, I usually will tell moms if somebody asked me, you know, how long should we plan for the session? You know, one of the first things I'm gonna say to her is, you know, well, it's going to depend on how many outfit changes we're going to do and how many out change half the changes we're going to do is going to be dependent on how many rooms we're going to be designing for. So we're walking through that process, but I also want to let them know that, you know, usually in ten to fifteen minutes, honestly, I have what I need, and that doesn't mean it's going to be the first ten or fifteen minutes of the session, because that might be playing ball or telling a story or reading a book, it might just be getting the child comfortable. But within you know, sometimes it's five minutes of shooting it's like okay, we've got what we need and now it's just kind of play time extra time but you know, letting the client know that in advance really takes the pressure off of you know, telling them it's this much money for this amount of time because then they expect to have that whole amount of time and if you know within fifteen minutes you've got what you need then you were wasting forty five more minutes by you know, just shooting and creating a lot more work for yourself and you know, there comes a time when you kind of have to get over well I needed you know, keep shooting to make sure I've got plenty of options and what they want you know, plan for that session in advance so you know what you're shooting for and once you have that be done so you know, I would encourage you to really try to minimize those session times and then you know, one of the things that always in our sessions, you know, within five, ten, fifteen minutes, whenever I do know and I've got really what I need, I'll literally say that to the mom and I'll say, you know, we've got what we need now and now we're just gonna play and that kind of takes all the pressure off of everybody so even if the child has a meltdown at some point I have already said to mom we've got everything that we need so put that into your vocabulary if that makes sense to you that something that I learned a long time ago that you know if if I leave it open ended it will be open ended you know moms will push everything to the limit if you've told her this is a hour and a half session she wants it to be an hour and a half plus one more minute and so so I've got an hour there and that's going to be different for you depending on what types of sessions that you're photographing and you know just the way you work so put your time value their minds I've got about an hour and next we've got after the session I want to make sure I've scheduled time for just saying goodbye, giving the kids a treat or a toy, you know, letting them feel comfortable moving in and out of the studio or whether I'm on location I might just wanna hang out for a little bit after I photographed just to keep that relationship going and not have it be you know, okay, your time is up, so I'm scheduling time infer that with that goodbye I'm also going to be cleaning up if I'm whether your home studio or at retail location wherever you are if you are all on location maybe you're bringing everything back home and you've got to put everything back in its place so a scheduled time for that I've also scheduled time for downloading my card and while I'm downloading my camera card I'm gonna write a thank you note to that plant if it's a child that's between the ages of maybe three and ten twelve I also write a note right to the child and you know you can put that right in the same envelope but if you put it in an envelope together address it to the child and not to mom because that's something that's really special and you know you'll be amazed at how many clients will tell you my child has never gotten anything in the mail addressed to them which is crazy if you're my age you know that used to be something that was like my job growing up was going out to the mailbox and there was always something from you know, a cousin or a pen pal we actually had those back in my day had pen pals you know and um grandma there was always a letter in the mailbox a couple times a week and so you know these days it's of course a lost art and you know, so write those notes to the kids and that's something that your clients will remember that's something that's really special that ties you to them, but you're going to write it want to write a note to mama's well, until or some of the fun things that you saw during the session, let her know that you're super excited about creating that concept for the room that you talked about, and just keeping that conversation going. So I've got all that planned and scheduled, and we've got about thirty minutes and all of that, so I want to make sure that I planned for that, and then we've got the editing. Oh, the editing, I've got an hour there, and, of course, we know that is a minimal, minimal time frame, so really think about that, and, you know, I want to encourage you, you know, three through the next few sessions that you do time yourself, really think about each step of the process and how long it's taking you so that you can plan accordingly, and, you know, if you're putting each step of the process on your calendar, you won't get to that point of being up at two o'clock in the morning and wondering why, you know, you've got everything on your calendar, and so that, but that won't happen for you, and yes, there are exceptions or things that we have to get done, and there are deadlines, and there are you know, special things like designing albums that you know, he may not have planned for, but as a whole, if you get everything on your calendar, you can keep your time managed and not just for your business but your family as well. So think about that editing editing time, and I've got an hour there think about what your time value is there and, uh and make a place for that next after the editing, we're going to prepare for the sales appointment, and this is a really important and hopefully throughout the siri's you're really encouraged to meet with your client in person for their sale no matter what your final product is, I promise, promise promise you you will make more money if you are meeting with your client in person, and that is one thing that if that is all you take from this is that sales component meeting with your client in person to make those suggestions and helped them through their order, you're going to make more money, and so we want a plan for that we're going to prepare for the sale, we're going to put a slide show together, we're going to choose music for the slide show, we're going toe complete those designs as well, concepts that we've created and get everything ready for them, and I've got about thirty minutes planned for that annexes the sales appointment after you've prepared for the sale that we've got a schedule that sales appointment and I would encourage you to schedule your order appointment when you schedule the session. So when you schedule your session, the next step might be, you know, about a week after your session, I'm going to bring you back to the studio or I'm going to come back to your home and show you while your images and help you through your order let's, go ahead and get that schedule now, so we make sure that it gets on the calendar and we've got a place for that, and so you can schedule it with your client at that time. And why not? You've got her on the phone. You're making up ointments, you're taking her money, hopefully for her session fee. And you know what? I don't get it all done and let her know the next step of the process and so schedule that order appointment for the order appointments. We want to keep those at an hour as well, and you're going to be able to do that the more you plan and prepare for the order appointment with your client now that's one thing that I hear a lot from photographers, that their order appointments are going way too long, way longer than an hour. And they can't get people to make their decisions and get in and out and you know, the more you plan and prepare with their client before the sales appointment, the easier it is for them to get there to make happy decisions and to be very happy when they leave and to leave under an hour is super important because it's just like the session fee with the kids getting tired and over you and the order appointment mom and dad you taken pass an hour and they're just you know, frazzled and tired and just too much to think about and so if your plan and prepared before you get there, they'll be able to make those decisions and make them quickly and be really happy with those decisions before they leave after the sales appointment I want to schedule time just like I did after the session for just being comfortable and keeping that relationship going with the client I want to be able to say good bye I want to be able to just chat with them and, you know, let them go easily out the door so that I'm not shoving them out waiting for an x appointment are, you know, trying to get somewhere so I want to book that time onto my calendar as well, so for about thirty minutes after the sales appointment, I want time on my calendar for doing those goodbyes for logging in all of their info that I all the notes that I took during the order appointment any special request or you know anything I want work log that in while it's fresh on my mind I also I'm going to sit down again and right out I think you note so that's the third time now that we've written a thank you note once after the first phone call again after the session and now after the order appointment now when it comes time that you have other people doing your order appointments for you, you want you want them to sit down and write out those cards because it's going to be fresh on their minds they're going to write out a thank you note that says it was so great working with you tonight um you made great decisions and that's something that we always want to compliment them on and make sure that we're reinforcing the decisions that they made. So you made great decisions and I can't wait to see your final portrait's and you were gonna love these every single day in your home and so you know, just getting them excited and keeping that process going they're going to get that a few days later so just about the time when, you know they may be thinking, you know how I really just spent a lot of money and I hope I made a good choice they're going to get that card in the mail and it's going to say you made great decisions and we can't wait to see the final product. We're as excited as you are, so I'm going to sit down and write that card, and that whole process is about thirty minutes, so we want to make sure that scheduled into the calendar next, we're going to plan time for prepping for placing the order to the lab and then actually placing the order to the lab. So we're going to get that ready in my studio there's someone else who is prepping the order, and then I go through that final process of placing the order to the lab that kind of feel like that's my last and final touch on the images, and I want to make sure that they're, you know, my perfect for going out to a c I to the lab, so put that on your calendar that's something that needs to be scheduled if you're designing an album or designing anything really it's going to be a longer amount of time and that needs to get scheduled, put it on your calendar so that, you know, when you are finishing up with that client, and if you know that you also know when it's coming back from the lab most of the labs these days have a date a three day turnaround it's pretty quick no matter what you're ordering, so if you know that you know when things are coming back in so you can also schedule time for opening up those packages for, you know, framing if you need to frame or getting it out to be framed and for packaging and all the things that we need to do to finalize things, I'm also at that time going to go back through the order envelope, make sure that we check everything in that we have everything that we need make any changes that we need to make and, you know, check that off the list so I've got about thirty minutes in that amount of time and again that's very conservative if we're framing, but for just for the rest of it it takes twenty to thirty minutes in that time and we want to make sure we've got that scheduled on the calendar so you can see when we put all of this together and this is with my very streamlined workflow for my studio, we've been doing these things this way for a very long time and even a streamlined as we have it, we have at least seven hours invested in each and every client that is a lot of time, especially if you're going from just thinking about your session time to really thinking about your entire work flow. So I really want to encourage you to go through this exercise and think about every step of the process that you're taking and get in all on paper, and it helps make a lot more sense, you know, the reason that I didn't go through this when we're talking about work flow and I decided to go through it and talking about pricing is because I think that once you see it all on paper, once you see it on black and white, it really helps when you're planning your pricing because you can really see the time that you are invested and the value of that time when you're planning your pricing. All of this time, everything that we just wrote down does not include everything that you have to do is a business owner. There are so many things and responsibilities that we have when we're running a small business and, you know, we've got this crazy list here of all these, you know, millions of things that we have to dio, but I want you, teo, you know, even consider that even consider dear bookkeeping, and you're cleaning the floors and you know your education this time that you're spending right now, investing in your business think about all those things that you do. To set yourself up as a business owner and has a profitable business and think about that time that you have invested into your client, so thinking about that cost base pricing and getting to that twenty five percent cost of sale multiplying all your costs, and we just went through that time value list all the time that you have invested in your client, and so eventually thinking about that incorporated into your your list of expenses that you have that cost that you have involved with your client multiplying that times for to get to your cost of each and every print and products that you're creating, and then I want you to think about how each one of those dollars breaks down. So if we've got twenty five to thirty five percent into our cost of sail, that cost of sale is going to include anything it takes to build that product. So it's going to be everything from your retouching, your print, finishing the production for the final product contract work near frames your packaging, you've gotta include your sales commissions in that if you're paying somebody to do your sails for you, any credit card fees and hopefully you're taking credit cards because people will spend more when they can hand over their card instead of having to pay cheque or cash, and then if you're if you are hosting images online you need to consider that hosting fia's well so anything that it takes to deliver that final product is going to be included in your cost of sales and then you're gonna have thirty to forty percent that's going to go to your general expenses your general expenses are anything that it takes to run your business whether you photograph a session or not whether you produce a product or not so that thirty forty percent is going to go teo employees and I want you to consider yourself as your first employee so be thinking about that as you're planning your pricing and then it's going to go to your overhead you're building expense and if you have a home studio or even if you're on location you need to be paying yourself and paying your business for renting the space that you use in your home even if it's just an office space think about that and you can take that as a deduction on your taxes and so, you know, really consider that as you're planning your pricing what that overhead is going to be it's also going to help you if you do ever decide that you want to retail location that you've already planned for that in your pricing so those are really good guidelines tio keep in mind as you're planning your pricing and even that base price of that eight by ten and we'll talk more about howto charge for that eight by ten and you know, when we you've got that fifty six dollars, base minimum there, and you're gonna want to raise that up over time, you know, how do you do that? Some of you may be really thinking, are you kidding me? I charge ten dollars for an eight by ten. I mean, I've seen prices, you know, all over the gamut of pricing I was just working with some photographer is just a couple weeks ago and was with a whole group of people, and I saw pricing from five dollars for an eight by ten, you know, to twenty dollars for an eight by ten and and you cannot be profitable that way. I heard photographers telling me and telling each other in this group, you know? Well, my lab charges this, so I am profitable, I'm making money well, no, when you break it down and think about the time that you have invested in your client and really where parts of that dollar goes, you are not being profitable. If you're not price for profit after your set with that bass minimum that cost based pricing you khun start raising your pricing as your demand increases, you know, we're working with carly, and carly has very inexpensive pricing. And she's very busy she's got a full time job and on the weekends she is booked solid and so I want her to start thinking about raising her prices based on demand and that's where you will be to a lot of times photographers are they get very, very busy and it's it's hard teo you know I've got this full time job and I'm so busy on the weekends and I can't see straight and this isn't fun anymore what's time to raise your prices and put a value on what you're doing and only photograph the people who believe in that value and see that value yes we have to educate our clients and yes we have to build that value but if you price it accordingly it makes a lot more sense at the end of the day and you know one of the things that I hear a lot from photographers especially women and photography is you know my my husband was super so for supportive about this in the beginning and I loved that I had this thing that I was so excited about and now he hates it he hates what I do and I will tell you right now that if you get things plan and get things scheduled and your profitable with your business he's not going to hate it anymore and you know I will promise you that so let's get things in order and it's price for profit plan for profit and you can get excited again about what you're doing and so can your husband and the rest of your family. Another method of pricing is competitive based pricing that's when you're looking around you to see what other people are charging, this is not something that I recommend it's not something that I recommend that you say well, you know this person is charging this much so all charge the same are all charged less or I'll charge more, you know they're they're situation, their expenses, their family life, whatever their needs are completely different from yours, so don't be looking at the competition to base your pricing on what I do recommend is to look at what the competition's doing so that you can do something completely different and I was told a long time ago that when it's different, they can't compare and that was such good advice because if we do things differently, if we present things differently, they're not going to be able to compare and and we'll talk more about that and separating yourself from the competition and doing things differently. But that is the way that I would suggest looking at the competition is, you know, let me see what everybody else is doing so that I could do something completely differently don't look at your competition and try toe compare yourself or base yourself oh, and your pricing on what they're doing. Because that doesn't make any sense in the long run.