Easy Peasy Pricing Part 1
How do you hide an elephant in a cherry tree painted toenails red? How do you know works? Have you ever seen an elephant in a cherry tree? Okay, admittedly, I'm going to tell you all that was what we were laughing about, what the camera was coming on, I was going to start out with just a bad trivia fact and that was that last fourth of july, there were over two thousand tweets sent out of people demanding you stop posting bad pictures of firework shows, so I just make sure that even even twitter's blowing up over bad photography knock it off so let's, talk about what this segment is going to cover. We're going to go over pricey, we're gonna go over packages and ala carte, we're gonna talk about successful investment meetings and I'm going to talk to you about incentive pricing there's a lot of stuff going on in the segment, so keep up taken notes and let's start making more money so easy peasy, pricing problem, teaching, pricing so there's not one set way to do it and there's not one p...
erfect answer. So I can't sit up here and tell you I will give you all my price, and I'm certainly not secretive and we are a profitable business, but there might be certain circumstances that might be certain things in your business that would take tate you have to price things otherwise and I also think it's funny whenever I talk about pricing if you get up and you're like I charge sixty bucks for an eight by ten there someone in the audience it's like that guy's going out of business he only charges sixty bucks for an eight by ten oh my gosh how does he afford to get his clothes clean and then there's someone else in the same audience being like only god? How rich is he charges sixteen dollars for an age bite and oh my gosh, so pleases I share my pricing understand this is what we have worked out in our business this works for us we have healthy profit margins off of it everyone should price what works for you don't be naive about your pricing it might be too cheap in most cases that prop mobley is, but we're going to walk through this and make sure that we understand some things to help guide your pricing in the right direction. All right, so easy peasy pricing for profit right pricing can be one of the most intimidating things for your studio like people get freaked out when they have to set a price on things and the problem with that is that you instantly insecurities come through and you're insecure about your work and your may be new to the new to the profession or you're just starting out you're like, I can't charge that I'm just starting and what ends up happening is you way under price your stuff you went and that is ten times more prevalent but you can also overprice yourself. I remember one time I talked to a guy if he was telling me about his business that he was a part time photographer and he was just starting and he said and he was asking me about my pricing and I asked him how much you charge for a five by seven and he was two hundred and fifty dollars for five point seven and I asked if they were dipped in gold it but again not trying to be judgmental of other people's pricey and I just was like, wow, can you market sustain that? And he said, well, matthew, you aren't paying for the five by seven you're paying for my heart and I get that principal I really do, but you have to be really and understand that the market that you're in can affect your pricey can affect what is acceptable and what isn't so you're pricing for your business needs to take into account your market and you're pressing you to be simple it should make sense I shouldn't need to read a fifty eight page form to figure out how much it's gonna cost for me to have pictures might have done it yourself at your studio it's just he makes sense whether you do packages whether you do session fees but they don't do session fees and you do all a car simple okay and try to avoid the starving artist thing obviously not starving it is not a good look for me but avoid the starving artist thing it's not cool anymore so let's start being profitable artists so this is jerry bowman this is an actual chair bombing quote I was given him love for jerry flat before this is an actual jared bellman line he said this in his creative life vote a week and it was on pricing and it's actually available in the back catalog you should go check it out they he's in your south price communicates value and we're selling a sophisticated product to an unsophisticated buyer and that's not a dig at your clients that's not saying they're dumb that's not saying they're stupid that's not saying that they can't understand what's going on but they simply don't know what you know about photography they simply don't have the same values about photography that you do and so education is key in educating people toe to your price and why it's set that way and what you do all this cyclical you know in your price like like you said your price communicates value if you charge a ton there's there's a value that's being assessed to the experience and the product I should get from you your price dictates the value that people are going to get so I had this in my sixteen common things the same quote it's the forbes quote and I just love it marketing when you strip everything away is extremely simple you figure out what you want to sell and then you determine what it is that gets goodbye it's that simple let's figure it out we want to sell prince how do we do it? We want to sell digital files I am not photographer that's against the sale of digital files a lot of people that's kind of a taboo subject it seems like you either alienate some people are in and your embraced by others when you talk about that I think that selling digital files I got a thing I said about us five by sevens is two hundred fifty dollars five I said he's not a photographer anymore um his business failed because he had business practices that didn't work and so and certainly not a celebration and I'm not embracing that I'm not trying to make light of it I'm just saying that if you have an effective pricing if you price yourself out of a market, you won't you won't make it and we're here to make it and so when you talk about selling digital files it's basically like people that say sell prints say you weren't buying the print you're buying the art right, you're buying the art that's why I'm selling you a print that cost me two bucks that's why I'm selling it to you for a hundred bucks because you were paying for the paper you're paid for the art. Okay, great. What if I don't want your art on paper? Your argument is that your art you're just enjoying it on paper? It's not about the paper it's about the art, but effectively you're making it about the paper because you're saying the only way that you can enjoy my art is on this paper I don't care of you enjoy my photos on your ipad. I don't care if you want to put him on facebook great more power to you if I go out and I crush a session em how you want to enjoy it is by getting a bunch of five by sevens and not putting anything on your walls. I'm okay with that too. I want you to enjoy the work, the way that you want to enjoy the work. Conversely, I need to make money, so if you're going to sell digital files, you have to do it to make money don't give it away the idea of doing a one hundred dollars session and you get everything on a disc it's a broken business model, it will not work, it is not sustainable uh this is a picture from my good friend alicia this is her pricing when she started her business and we can all take a moment and giggle because she's not here yet uh no eight by tens eight dollars five by seven six bucks for by sixes four dollars a set of wallets four bucks and if you spend forty five dollars in prince you can get your disk for ten bucks when we talked about let's just talk about any photographers that the big name photographers that you guys have all heard the people that are selling thousands and thousands of dollars at sessions do you know what one thing they have in common is? They're charging more than eight box for an eight by ten yeah a fox it at this price list you're never going to be a three thousand dollar photographer you're never goingto average three thousand bucks it's not gonna happen so think about the numbers you want to hit think about what your market will sustain and start making the moves to price herself toe where you can deliver that product profitably. Let's talk about packages versus all a cart sales okay? Selling packages or collections means that you're taking a bundle of stuff you're taking a wall portrait you're taking a collage you're taking for eight by tens and eight five by sevens and a hundred wallets and you're putting it together you would typically have an ad on price in the ad on price for all of the products is going to be much higher than the bundle. You are discounting the bundle to make it appealing to clients. You're saying, well, if you were by this from the ad on sheet it's going to cost you three thousand dollars but if you buy it as a collection it's fifteen hundred you're going to save half the money it's gonna cost you half assed much right? This is this is the most common way that people sell in our industry and there's a lot of things going on that are good about it. Okay, if you sell a collection, you can almost dictate a minimum order price through your collection. But let's, talk about setting up collections. Let's say that you need to sell five hundred bucks, so have a good session. You need to have five hundred bucks in sales toe have a good session. Why in the world is your smallest package three hundred? Like why? Why are we pricing our stuff to sell lower than we want to sell it for? If you need, if it's three hundred is, you're happy to do it. Price have a package that starts three hundred, but if you need five hundred, your packages need to start there. And I know this is like a, uh, moment you guys maybe are sitting at home saying like, you know, obviously I was about to say something about sure lock on there, but I caught myself uh, no, but I'm surprised at how many people struggle with this basic concept and they this lack of self confidence, this I can't charge that plays into effect and it's hurting your business and it's and you sell those packages and it's like a little dig because you're ticked off that you didn't get what you needed to get off of this session and that wears on you, you and I don't want to sound weird and spiritually but it's it's hard on your soul starts to make you not want to do it and that's a stupid thing to start getting in a position where you don't like this job because you have bad pricing so let's set it up to be happy when you sell packages like I said, you can kind of set your minimum order the other thing that's good about it is let's say you have a product that you just intensely love coasters I can put your pictures on coasters oh my gosh, that is the greatest thing ever when russ comes over to my house he's gonna be able to pull out his matthew the body coaster put his drink on and coasters are so exciting and I love it. I've never wanted anything more than to drink a drink off face e goes there, I got it, but let's say like I'm so I'm passionate about my love for coasters, so I'm gonna put coasters in all of my packages. Every package comes with twelve coasters, but the platinum package comes with twenty four it's amazing value, right? If I sell it in a package each product in that package, you're not able to get a fair assessment on if it's a product that your clients want. If I put coasters and all of my packages, all of my clients are getting coasters. No one wants a stupid coaster, so you're you're setting up packages, and if you don't have a good pulse on what your clients want to buy, it can lead to a situation where they're buying things they don't want, they don't need, and that can lead to a bad experience. I told you guys that we had we've had parents that come in that will say like we went to another studio and we love the work and it was a good experience, but they had this package and it made me buy this this sixteen by twenty, and I have I don't have sixteen by twenties in my other kids I only have eight by tens and I got stuck with this sixteen by twenty no it's your decision as a business if you want to customize these packages and it's okay for you to say yes or no I would say if you say yes, be prepared to customize every single package that comes to your door, which means that you're going to need to know all the numbers on costs and production time and labor to do adequate inappropriate substitution sze and if you need to charge for a package modification, you need to do that, but the package is don't give you the ability to know exactly what people want and it can lock people in with products they don't need which can make them not happy so yeah let's go on to the next one nothing that's bad about selling packages we just went over how you can lock people in with stuff they don't want your top packages generally going to be your kitchen sink package it could be everything we got and the kitchen sink give it all the that's generally where your sales top out, you're not generally going to sell mohr than your top package, so if you have all a carte pricing and people are coming in, they there's no package there's no limit to what you can buy you come by eight thousand five by sevens if you want, I'd love you if you bought eight thousand five sevens but there's no limit but generally with packages your top packages going to limit your sale okay? One of the good things that I didn't cover about packages is that if you are not a full time photographer, if you are maybe you have another job and you're trying to get into this industry what's nice about packages is you can kind of have you can predetermine how much work your package is, how much time it's going to take for you to produce your packages, whereas with all a cart there's no way because you don't know they might get an album, we might get a custom grad cards, they might get a walk you don't know, so it might be harder for you as a part timer or someone just starting to effectively manage work for because that could be big swings in time. I give all the orders five by sevens that's great because we mark our five by sevens and we make a ton of money amplified by sevens side no tipping our pricing tip one oh one I did this easiest way tto make more money and be happy about it like and make it easy as we've gift prince everything at my studio five by seven and smaller it's the same price I don't know, and a lot of people do eight by tens and smaller, but don't have a different price for four by five, four by sixes and five by sevens at that price, it doesn't matter just say, we're going to give you any of these sizes for one price it simplifies your pricing makes it easier for people to understand, and it allows people like I just we said, all right, we're done with that. We're just going to charge our five by seven price, right timing more off of my four by five of my four by six is you know what happened, though I don't sell for both eyes before by sixes anymore, and my customers feel better because they're like, oh, well, for the same amount of money I could get this picture and it's way bigger so it's a good experience and it simplifies the process. Cool. Um, selling all the car means that all of your products are available at a set price. That's it you make a list, you put a price on it and there's good things about selling it. You khun cell well to the fact that you sell only what they need. You can pitch that tier clients I am not going to lock you into a package I'm not going to make you come in and pick out all of these five by sevens and eight by tens because you want a good deal on a sixteen by twenty campus print you'll get whatever you want maybe they have maybe the kid has thirty seven aunts maybe doesn't have any that's gonna affect how many small prints they're going to need and so when you lock people in with packages it's impossible to make one package that's going to be perfect for everyone doesn't exist people's families are different people's own desires are different their needs are different they're wants a different in the budgets are different so by doing all a cart you allowed them to steer the direction of what's gonna happen that's a good thing about it it doesn't limit your sales okay they could spend whatever theywant what's bad about it is that with packages we bundle at a discount okay so you're were your attraction to the collection is that we're gonna bundle these products and sell them for less well we don't have that with all the car so you have to have a strong incentive pricing model you have to give people something for free for spending a lot of money so with collections we discount with allah cart we add two for free six of one half dozen of the other that you end up at the same place you can but it's just the perception and how it works. What's bad about all the car pricing because I will never sell a coaster. I won't sell one, so you have to. You have to be aware that your products need to stand on their own two feet. Every single one needs to be a value or you won't. And there's kind of a little exception to that. I do put some things on my pricing and I praise him really, really high and I never ever sell them, but I have them there because we use them as incentive items. So I want to be like, oh, my gosh that's worth three hundred dollars we would never pay money for a slide show, but we got one for free that's great! It don't ever buys it but there are some things you can leave on there that are just there to make the incentive pricing work better. So, um, in the other thing, that's bad about all the cart sales is with packages we talked about. You could set your smallest package like five hundred bucks, right? So I know I'm gonna make five hundred bucks off every session because everyone's goodbye package because not buying a package is such a bad deal, you gotta buy it god I want so you spent five hundred bucks right? I don't have that through all the carte pricing unless I set up my clients with a minimum order and that's key to doing this effectively I need to know like I don't I can't tell you guys how much I'm gonna profit off of each client because what they spend their money on will affect my margins but I need to know that I'm making it leased this much and sales offer your session I need to have that year in tea or else I could really kind of put myself in a position that's not good where I'm not making money where I'm breaking even and that's unacceptable I'm a business I make money it's not a bad word profits not dirty we all should have it okay so why are we why are we all a car it's unique it's unique in our market I don't know now I'm like telling everyone in minnesota oo the worlds and I'm probably not gonna be able to say I'm the only guy who's, no packages and all a car but it's unique it's different stands out harder to make me a commodity I'm different than everyone else and I push it okay and with the amount of time we want to spend with our investment sessions the amount of time that we have to work with clients on the back end this system works and like I mentioned earlier today, if you have the time and the resource is to spend two hours doing an ordering session with all of your clients when it's convenient for them to bring all of the members into the family great, you'll make a tough you could make great money doing it that way, and I'm not thrown stones, but it doesn't work for us. We're too busy. We don't have the time to spend that many hours with all of our clients walking them through this. So are all the current system means that they go home with this order catalog. And we talked about this the other day in the order catalogue is printed on it's, typically printed on like a regular office printer. Okay, that's what it is, but this walks you through all of our pricing. It walks you through most of our products and it gives you the ability to fill out what you want to buy. So they come in and they pick up their proof book which they do not own that's on loan to them. I have their minimum order in my bank account. They take this proof book home and the order catalog home to fill out what they want to order they're going to come back to me. With ninety percent of my sale done, I'm not going to have to do most of the work with them. I'm not going to have to guide them through the process.