Pricing Your Work Q&A
Questions so how do you come up with the ala carte pricing? It is a little bit of this I mean it's just a field type thing I mean, I've been doing it so long there's no calculator any of those calculators that are out there on the market where they're like calculate your your product cost based on these variables garbage throw it away deleted off your computer it it's garbage you have to figure out what your clients are doing and if you keep seeing your clients over on that ala carte menu you're too low and so how much is too much I could care less if you were to say an eight by ten is two million dollars I mean you're going to piss some people off but ultimately we all understand we don't want them there we just want to drive them to the package so let's let's look at the question this way you're going to present your clients with three packages okay? You're top level package let's start package three package to or collection package one here we should offer a fifty percent discount. ...
So whatever you do framework remember this is a framework I don't care what price you charge your top level package should be about a fifty to fifty five percent discount off the ala carte price you with me your package to this could be a uh thirty five to forty five percent discount I'm not going to reward bad behavior, right? So as you continue to spend money in my studio, I'm going to continue to give you a discount. Bigger and bigger discount package one. There should only be a twenty percent two, twenty five percent discount. If you're gonna end up in my base package, how much do I want to reward you? I don't want to reward you that much. And so that's how we're setting this up, you're in my base pockets. You're gonna get a discount, it's just not gonna be that big. You go to my middle package, it's a better discount top package. Huge discount. This framework again is the same framework I used in two thousand seven ever since we started our bid. Yeah, uh, this this works really great. Um, what I've been doing and I just kind of knowing if you have any experience with us, have you ever tried to use, like the anchor effect where you build a super mega packed up top to set ah, price their mind that makes everything else look better. Like, have you ever had any experience with that? I have. And I hate that that philosophy. And let me tell you why so there's a philosophy out there that says hey create this like everything lottery package that's like you know a gazillion dollars no one's ever going to buy it by the way but you just created so that anything else seems less expensive my philosophy is completely different if you're going to put it down on a piece of paper you better try and do it and so within my studio if I'm putting down something our black label collection which is our two thousand dollar package I'm going into every meeting thinking they're going to buy that package I'm not going into that meeting thinking well that's just their fur fluff do you know what I mean? It's a mindset thing so you've got to be you know you're a competitive guy right? I mean we've talked about your background and I'm competitive when I step into that sales meeting right? We're in the war room and like it's me against their wallet they're coming in I mean think about it right? They're coming in going I don't want to spend money and I'm coming to that meeting going I want all your money and so I'm trying to find the easiest way to get there so if I'm gonna put a package or collection on a piece of paper dude, I'm going in to sell it and I want to sell that thing badly so it's just about can I make it compelling so I don't like that strategy um questions online yeah that way when you when you're telling them that is that every image they get is or one image is whatever one hundred dollars for one image for facebook no for facebook the way we do this is it's every image they order so if you order like in our packages that we covered if they order twenty different images prints all twenty go to facebook okay but if if they're asking you about the l a cart what are you saying? It's one hundred dollars per we'll know on the ala carte facebook if you're looking at the ala carte menu it'll say facebook ninety nine dollars ordered images on lee so they can't if you don't order an image you can't get it posted to facebook because it says clearly in our ala carte facebook ordered images only and the build your own packages you what do you think about this? I don't like him because you start get in the build your own packages you're not controlling what was the one thing mom said I don't know if you hurt her you're the expert I need you to tell me what I should do so what I did what I've done and when I've put these packages together okay and this is a pdf you can get online but this package it tells you uh it's got a sixteen by twenty four campus of fifteen by thirty panel I'm making household decisions for you we know that we want one picture that's going to be this size and then one picture that's going to be vertical ones going to be a canvas one's going to be a print we're making the decisions or guiding them of course they can add to the package but when you start letting them make their own decisions ala carte what's driving the behavior price you understand once they're making ala carte decisions they're just adding up numbers and they're not making decor decisions they're not making artistic decisions and I'm just trying to get them to a point where I can decorate and control what's happening in their home because I'm telling them here's what you need and you heard our mom tell us point blank yes thank you for walking me through this process I need help making these decisions especially with two hundred, two hundred fifty images maybe you have a set percentage where if package one package soon pakis tree if you're at you know, eighty percent package three that you have to say well, we're too low do you try and break a package one two and three up as two percentage that should actually be the sales amount for thos e twenty thirty fifty do you get to one hundred? You mean how many ten clients come in? How many oren package one exactly yes so we are average is two thousand dollars well, my top packages two thousand dollars, I can tell you right now, we don't have one hundred clients buying into our top level package. What we've got is let's just say package are packaged through ah, package one more white board space. All right, so package one, I would say maybe two out of one hundred clients end up here package to that's my middle package, maybe ten out of those hundred end up here are package three out of one hundred clients, you're going to see eighty eight in package three and above, right that's how we have a two thousand dollar average because they're not stopping at that two thousand dollar level, they're going to that two thousand dollar level, and then they're adding their upgrading, their album, they're getting a more significant album, they're adding pages to their album, they're getting an additional campus. I've had them come in where they'll get canvass for dad's office. So where we're doing some of these artistic edits, not only will they buy canvas of their home, the buy canvas for dad's for dad's office, so this is what's happening. We're finding that a majority of our clients earning up here in higher after they're at black label or any one of these, what kind of percentages do they get off of additional prints? Yeah, so for example, if you're in our black label collection, all additional wall portrait are twenty five percent off, so we're in scenting them to continue spending. What I don't want them to do is get to that two thousand dollar package and stop spending if I let them get to that package and stop spending. I've really I've not done my job as a sales person. I want to make it easy for them to spend. So what I'm saying is is, hey, as you get to this package, all additional gift prince, which are normally fifty dollars, all additional gift prints are ten dollars, I'm still making money, right? Cause that eight by tens only cost me two bucks. Yeah, I'm making eight additional dollars, but I've already done all the work I've already made my margie and write my cost of good was about fifteen, twenty percent. So anything else coming in? Just icing on the cake? More than not, though, not only would they buy all these additional gift prints, they're opting for additional panels. So notice when we were showing her all these images, there were a multitude of panels. There was a square shot, those air my signature at it. Those are the ones where they'll sit here but like I can't decide, I don't know which one to select and that's that's the goal right? And because we're making it so easy for saying, hey mom, don't worry about it if you want if you have wall space in your home you know get an additional canvas it's twenty five percent off the other car price so we're making it easy for them tio continue to spend so that's key how we doing online questions have so many questions sound we only have eighteen minutes what do you want us to do? Let's say let's take a few questions from online and then the one other thing I want to do is talk about I pride of time. We could take five questions online and then I want to show you what products I think you should carry and I've got cause I know I got a lot of questions about this acrylic I showed and I want to showcase that for sure. So give me a few questions and will you be talking about the delivery process because a lot of people are asking about that the delivery process like as far as you know, you get, you get the images edited and then the prince are sent to you so that you package them yourself and then you mail them out just the whole you know I'll cover that a little bit let me make a little parking note okay, so hit me okay? Okay s so a just a clarification on what you've just talking about you mentioned that the family could by prince the discounted rate from the web gallery do you also offer additional products such as another canvas at the discount rate or for that do they pay ala carte no, we do offer additional gets discount so no matter what package there and there's some level of discounts over example ahh canvas if you're in my base package there's no additional discount I'm not going to reward bad behavior get into the middle package it's twenty five percent off any campus get into the top package it might be a thirty or forty percent discount on additional items so we're definitely rewarding them for spending more in our studio so I don't want to stop the spending okay and that's what a family is buying that from a web gallery as well yeah family's baby seniors framework is the framework castle it applies to no matter what line of business you're in this works cool okay? Rick hernandez would like to know if you ever consider your competitors pricing never I could care less what my competitors are doing I never ask what they're doing I don't look that was the worst mistake I ever made when I started my business in two thousand seven, when we were on the brink of disaster, it was because I was more concerned with what my competitors were doing and less concerned with basic business principles. And so it was at that moment in time when I trusted my my education and my instinct. That was when everything changed for us. Do not worry about what your competitors are doing, because we're not competing on price were competing on an experience and worry about the experience. That's, what you need to worry about do you have an opinion on, uh, the credit system from a lot of people have learned about that, and patricia night is asking, how do you feel about the credit versus dollars? So we started a tte one point in time with the credit system. It was more towards weddings, but we started with a credit system so client would come in and they would, you know, by their wedding package and included in that wedding package might be a five hundred dollars print credit. Okay? And our philosophy was because we were following what other photographers were doing is they would come in afterwards and weed up selome we pre designed stuff, we do all this crazy stuff to get to spend money, no matter what other photographer doing it will never trump human behavior. When you tell somebody you have a five hundred dollar credit, you guys all know this you've got credits gift cards too that bath and beyond or wherever that wherever you shop you've got gift cards human behavior when you walk into that room or store knowing that you have a five hundred dollars credit do you go in thinking you're going to spend a thousand dollars you go in thinking you're going to spend five hundred dollars so by offering that credit system you are making your life impossible because what's happening is back to the psychology of the sale the clients walking in and they're under the impression that I've got a five hundred dollar credit that's all we're spending now I have a huge uphill battle ahead of me to convince them to spend more money so we do not institute the credit process at all for that reason did you have a question I do um timeframe sorry I almost lost it uh time frame for the additional discount for families is it wants the web gallery goes down that discounts gone and now you're back to the ala carte pricing that is correct so there's got to be a called action there very well picked up on they a cz longs that web galleries up which is usually a two week or thirty day window depending on what package there in those discounts are in play once that gallery comes down back to full price and we tell him that and that's again you've gotta have some leverage or else you're going to be chasing him down for they'll call you three years later thinking they're going to buy eat by tens for ten dollars it's gotta happen in that two week window good questions there's so many to choose from photo smurf would like to know if you and taylor have set a monthly salary for yourself that rolls into the pricing um no so that's an interesting question so taylor and I the way we have our business structured is we make very low salary so we keep the salary is low as possible so that the business has much operating income is pop possible right? You want your business cash you don't want to deplete your business of cash because then you can't invest in new equipment gear whatever so taylor and I take is low is our accountants will allow us to take as far as a salary uh then at the end of the year it's a dividend payout and that's beneficial to all of you photographers out there so why does this matter when you get your paycheck there's ah host of taxes that are pulled out of it especially if your w two you're getting medic medicaid taxes all the medicare all these things were being pull out state, local federal government all these taxes come out however dividends don't get taxed the same way, so if you own a business, you should not necessarily be a sole proprietor. Consider incorporating we are an s corp for business actually there's a great plug for a shutter mag because there's a huge article in shutter magazine talking about it's a free article our attorney wrote it the benefits of incorporating so just go read that article however it's going to tell you created s corp that allows you to pay yourself is a w two and then it gives you all the benefits off pick paying dividends out at the end of the year so that you're not tax the same way. So that's how we set it up. Very cool. Thanks for sharing them. All right. You want to take more questions if you don't keep going. Okay. Let's. See, um d d y two thousand eight from st louis, missouri would like to know if you offer any sales based upon the time of year holidays, et cetera. No, I'm not a big sale person because I feel like once your client start thinking everything's always going on sale, they wait, they sit there and they go, I know a sales coming, I'm gonna hold off on making that purchase. So we don't have a christmas holiday sale where everything's going to be forty percent off we don't have a because your client will start waiting man they'll be like oh no I know there's going to be sale again human behavior think about those stores that you go to michaels is when I always talk about michael's framing store right they always have a seventy five percent off sale every day is like well every other days is seventy five percent off sale so what do you do if I need something from there? I just wait until they're holding a seventy five percent off sale that's the wrong consumer behavior that's not what we're looking to do so I am not a huge believer in creating sales for my items again let's look to the high end brands gucci louis vuitton there's never sail in louisville thanh no sales products never go on sale so that's my uh it's my philosophy john uh which month do deploy a graduation card announcement strategy yeah the graduation card announcement strategy is big for high school seniors what we do is come ah la la la la I'm trying to think it's right before they go back to school we start getting them to think about graduation announcements and then we'll hit him again right after the holidays so there's two times you have an opportunity to hit him up to start thinking about graduation announcements but with that being said when they come in to see their pictures for the first time that's when you would ideally have sample graduation announcements all over the table and get them excited about graduation announcement so but realistically they're not going to make that purchase until just before graduation so they have to know they exist though or else you'll never sell them all right so here's what I'm going to go we've got ten minutes and I know you've got tons of questions I want to cover two things maybe one thing what products should you carry and so the products that we like to carry that we consider ah distinctive advantage for our studio canvas is the number one selling item so I want you guys to start looking at canvas companies okay? Metal prince acrylic these air three items that you can carry beyond prince okay, of course prince are ah given those are the things you should carry but canvas, I want you to look at a couple of campus options sixteen by twenty four twenty by thirty I'm not worried about necessarily size, but you've got options that fifteen by thirty size that long skinny one I'm telling you about is gorgeous in a canvas two and a half inches thick so a two and a half inch that campus will sit this far off the wall it is absolutely gorgeous for the client it screams high end you've gotta offer high end products if you want to charge a high end price you can't sell inferior products okay and then charge money for it what are you going to do when this is all over when you're done watching and you go okay sal I'm buying into it I'm going to change my business are you gonna offer the same low end products then what is the difference between you and your competitors just you're charging more you've got to offer that level that caliber of product that no one else is carrying so canvas we use one of two companies bay photo marco fine arts medal bay photo they have great metal prince acrylic marco fine arts and marco my sponsors are very good to me marco this acrylic and I'm gonna tell you a little bit about it these guys in the studio saw it okay what makes this acrylic so unique first and foremost comes ready to hang okay so this thing is here ready to hang with a wire hanger look how thick this thing is right so look how thick that is the reason this is from marco fine arts what makes us so unique is that rather than printing on an emotion style print where they're printing on the actual acrylic they print on an actual photographic print and then matt it in between two pieces of acrylic this thing is probably the best acrylic I've seen on the market bar none and so I put a little pressure on marco and what they're doing is they created a discount code you need a sample in your studio you're not gonna be able to sell it if you don't show it it's that simple notice we were trying to paint this amazing picture for joing kendra but when we put this in their hands okay mom wanted some a little more traditional she said it but for my client's back in st louis and I don't know if you can see this particular at it it is gorgeous on here you guys are you guys digging the way this looks everybody's nodding their head. Yeah, this is gorgeous. Normal price on this one hundred twenty five dollars that's your cost, in my opinion, this should be sold at the same price you're selling your canvases for. So within my studio we sell this at a canvas at six ninety five ala carte, right? I don't want anybody coming into my studio paying six ninety five for it that would defeat the entire purpose. So that's ala carte my cost on this marco okay, it's a forty eight hour sale. I hate being a pitchman for it, but I negotiated this deal for all of us. The code is shutter mac, they are offering you this a free sample for fifty nine dollars I think that's a ridiculous price so now you have a sixteen by twenty four krilic in your studio they might let you use it more than once so tried I mean if you if you want to get a couple of them but it's sixteen by twenty four krilic for fifty nine dollars unheard of okay so they're basically doing it at their cost ah for you guys because they knew we were going to be showcasing this thing here so I hope you guys appreciate that but if you're digging this you've gotta have that sample in your studio again it's marco fine arts I think the links on the web site the code is shutter mag and it's a forty eight hour sale so do take advantage of it if you're even considering adding acrylics it's on the block okay perfect yeah it's three fifty four everybody I hope you have had an amazing three days with this I'm gonna hand it over to the lady's in a second but I hope you've had an amazing three days I can't stress enough this I've let it all hang out online everybody here knows it I think there wasn't a dry eye in the house when mom was in here for the sales presentation but this is truly a senior business in a box this is everything you need to get your business going and take it to the next level so thank you for tuning in uh, this has been an amazing experience for me, ladies, thank you so much for having us here. It's. Just been, ah, humbling, humbling experience. And you guys, thank you so much for being part of this.