Pricing Strategy

 

Photography Brand Makeover

 

Lesson Info

Pricing Strategy

So let's talk about price let's first talk about how we know what to price because that's so hard right? Where do you even start? We talked earlier about I'm paying twelve dollars, so if I charge fourteen dollars, I'm making money and now we know that that's not true we've learned the cost of sales were having some conversations to realize that there are a lot of things that go into running a successful business, so let's talk about a couple different pricing models, different ways we can price we actually didn't put the one in there that's the wild guess we'll call it wild guess wag bag wild blind guests so you can fill in the blank whatever word you like, but that's what we do, we guess we're like pay twelve I should charge fifteen or seventeen, ninety five or thirteen so he's, we have no idea and we guess and we've all done it, I've done it, I know probably you guys have all done it and we don't want to ever do that again, okay? Because now we know better so we have a couple differe...

nt pricing ways that we can price and let me talk first about competitive base, so we know we don't want to do the wag we also don't want to do competitive based competitive bases where you say, oh, I'm gonna look at your prices and you're charging forty nine dollars simon a charge forty eight dollars or fifty dollars a forty nine dollars and try to do exactly what our competitors doing and we know that more than likely our competitors probably picked the wag strategy and they have no idea how their pricing so and not to mention you don't know what what their business model is so they may just be doing this as a hobby they may not be trying to make a living with it um they may, for that matter like sarah said they may just not have not have any idea themselves, you know, just totally have guests, so I know that you we all feel like, oh my gosh, I can't be so much higher than everyone else in the market, but the reality is you don't know why these people are in business to begin with and you don't know if you know what their costs are for that matter, so their costs may be completely different. And so that's, why it's really a bad idea to just face your your prices off of your competitors? Yeah, and most of the time they are just guessing and then you're relying on someone else who's guessing to build that business so we don't want to do competitive base pricing ok, so those are the two bad methods costs based pricing is where I want you guys to all start and we learned cost of sales already so costs based pricing is where we're basing our prices on her costs and we're talking cost of sales so if it costs us fifty dollars to create something and that's art two hours of our time and the prince and the may be a frame or whatever we wanted to figure out what we need to mark that have to have a twenty five approximately percent cost of sale okay so that would take it times for you can you go over again? What what was it? Three charge per hour what was the thirty dollars is what we just said as a rule of thumb I mean it's easy rule of thumb for you to go with now you know if you just left a corporate gig where you were making six figures and you feel your time is worth a lot more than thirty dollars an hour then that's fine or you're in a market where your time is worth a lot more than that then that's fine but that's just a nice easy little place to be that you know covers you and like sarah said more than covers you in case something were to happen to you and you needed to outsource it more than covers it's covered okay so that's cost base pricing and that's a great place to start and really, you can run an effective business if you control all those other costs. You know, we looked at that spreadsheet, so you've got your cost of sales appear it a twenty two to twenty seven percent. Then you've got to make sure your rent is an eighty percent and you're not playing ploy ease for high percentage there's all these other other things that have to be in line. But if you could base your class on cost of sales and manage everything else, you can run a profitable business. Now with a boutique business, I choose more of a demand base pricing model and what I mean by that is and we detail this in our book if you guys want to read it slowly highlighted right about, you know, right and get crystal clear on it. Demand based pricing is where you create prices and you go out there and you create the demand. Okay, so it's, really I have heard people call it you know what the market will bear, which I think is that weird thing you sound like I'm just gonna keep charging, mohr tell people go away and it's not like that, but here's, the reason that we use demand based pricing if I ordered that forty by forty canvas and there was any problem with it I will reorder it and I will eat that cost if I had I had a client once put a stack of frames on her van and drive away and they all fell off and crashed I fix them for redid them for her at my cost and so I have margin tio gift my clients I have the money to do all of these extra things for my client because that's right consistent with the expectation I have created in my business and so if I'm going to not have any extra margin for errors or things like that then I'm having that conversation with myself well that's not that big of an issue you know because I don't have the money to reprint it when it's my brand at stake okay so cost is the minimum demand is great if you can get there okay so you want to make sure you're at least cost based a couple more things let's kind of go through these air fun price menu ok you create value for your photography and a lot of ways talking to people on the phone telling them what makes you different having cool promotional piece is having a beautiful brand that's consistent well one of those ways is what you hand them when you're talking about price I showed you were awesome you had to predict the hotel did give us your example but you had it and off by eleven sheet of paper I've gone to school auctions where I've donated now have this big, huge display e found eight by ten sheet paper saying my name is such and such I'll take pictures of your kids like no photo you even know what you're getting so commodity basically any pictures of your kids this person's going to do it and you're doing a good thing by donating and so what's the perceived value between the two night day, right? So these this is what I've been talking about you guys with the white house press printed card so this is the five by seven the top is the outside of its five herbs are five by five fold id card the top is the outside the bottom is the inside and super simple super easy look how easy that issue guys, look how easy that is for me to tell clients what I offer it's so easy products or hear some collections we have some painted wall art if you're interested now let's, talk about you and your kids look at the perceived value that has versus something I have to explain explain, explain do we sell stuff that's not on there all the time but again, this is these are the products I love that I love to sell, that I want to sell and therefore that's what I my client's purchased here's my senior price menu and this is a five by five trifled getting a little crazy with you but just to show you real quick, can you see the difference in the branding? Same logo, same face bright, whimsical kids earthy a little more of that the grunge with the kids are with the seniors but still the same flavor cracking up laughing, you know there's still the elements that are consistent we use polka dots on both dirty polka dots bright, playful, poke it out so there's certain threads that run through the different identity creation of the two looks and feels all of the prices and this is, I think, a little bit older, but all of the prices when you look at my prices, they're all the same the seniors, the kid family, the pets. Now I said, we know that seniors do take a more work, right? They take more retouching babies or easy, so that may affect how your price structure works. We're priced at a point where they're buying one large image and we can afford to invest however long it takes to make that image perfect. We're not doing, you know, twenty baby photos in twenty senior photos more more often for the same price, so this is the one that has the three section sessions three collections, a few products in boom easy squeezy now if you're getting into niche markets we have this conversation at lunch one of you guys asked me but how do you know if you're reaching different target markets how do you know where to put your budget and how do you know how do how do you differentiate all of these will? The easiest thing to do is to create your look for the three and have three different price menus everything could build from there same exact thing look there's the siri's of nine we had a pet a dog that came in this was precious I think was her name she was a katrina rescue and she wore scarves with her mama so we have hurry nine different scars on the orange wall and she loved the nine we have actually there's our bath yeah there's our best with her dog cassie and there she is down there holding her doggy up smooch in and a serious the same exact products I showed for the seniors there was a three there was a nine for the kids there was a three there was a nine same prices but I'm not handing that a client who comes in wanting pet photography I'm not handing her a price menu with babies on it saying but this would be your dog ok it looks like I specialize in dogs right for under fifty bucks so you could specialize in babies wedding seniors whatever for fifty bucks they're or less for each target market and get peace from white house they come in two days since another one of those things that I get a little there's no reason everyone can't do this you get a professional designer and you go to whitehouse and you get this five by five price card and they have different shapes I'm not saying everybody has to have this exact same thing, but when you challenge yourself to fit what you sell in this small space you'll realize that you're offering too much and your overwhelming your clients yeah would you even take that a step further and do maybe an accordion too? Like described the session like how to prepare for your session that's a great question and then have the private question okay, so she said you've got too much for me through when I run that through my filter it is too much and I'll tell you why I talked to the client on the phone I tell him all the things that make me different I pre qualify them they're the right client they're excited they come in for an in person consultation we sit just like this in my spoon feed that all to them I'm telling them this is what you're going to do this is how fun it is this is where we're gonna go this is what happens next I'm not going to make them work that hard and that's my filter that's there my filter now if I'm a sports photographer and I'm doing higher volume or dance school or even just a business that shooting all day I might need them to be a little more prepared and I might give them more of those things in writing but I find most of the time people are busy and they're not going to read anyway and then you given this big thing that's again it's like, well, what is all this and part of what I think makes us all special is explaining to our clients the clothing you can put we can all tell we could all write down what we want our clients to wear, but I want to talk to them about it and customize it to their family in that consultation they say they're cowboys and they live they wear boots every day so we're going toe I'm gonna brainstorm right there with them of how we can really capture that family and if I had just put a thing that says where brown shirt jeans everybody everything is so different so there's a the way I do it isn't necessarily right for everyone but that's how I take that I want to make it is easy as possible I spoon feed on high touch I give them everything I want them to know I don't want to make it harder scarier, overwhelming, simple and easy this is simple and easy your choices are you got six traces there let's talk about the images so you guys have to figure out with your business how much time can you spend with them how much you want to spend with them and you don't want to spend time with them you know you really don't some people are that way like I just want to shoot and that's ok too it's okay to so figure out what? What works for you and your business model put it through your filter and figure out yeah, that value and added versus discounting I see kenna she's cheered going so what? What we're talking about here and I want you to jump in here because I know we both I feel strongly we wrote a lot of our chapter on pricing for this exact reason because it's again one of those things where there are times when discounting can be effective but what we're talking about is using price as a way to lure in clients it's different when you're bundling and clients are in and it's part of your sales strategy or you're discounting frames that you aren't selling anymore your basement cleaning like there are times when discounting can work, but what we're talking about is I want you guys all really understand what happens when you discount okay, when you look up you panic, you don't have clients and you have the knee jerk reaction of I'm going to go on facebook and put half off going to send out a postcard to everybody you're sacrificing the long term value of your brand for short term cash flow and that's why we're putting on this whole three day workshop because you you need to understand everything that goes on in a business and how you keep those clients coming in and how you get them to order big things and give you a lot of money so that you don't have to panic and get people in because what happens when you do that? First of all, you attract price sensitive buyers there are people in the world who just want a good deal chief jen jen jen right you want you want to get the better you are price and if someone's having half off, you'll drive out of your way to get there because you want that bargain and then next month when the competitor has a half off your driving this way to get right nothing wrong with no nothing wrong with that, okay, but if she's coming to your business and you're doing all this extra stuff she doesn't really care she's asking you, but I want this price and can I get two if I buy one of these or get a bonus can I get a cd? Can I have it cheap? That's what the wrong clients do, pacey, you're attracting wrong clients, you're teaching your good clients to wait for sale so all people that have paid the price for you they're like, well, shoot she's going to have a sale in january? I was going to come in dr runs wait till january and third year devaluing the long term value of your brand, so people see this portrait and they they know that you've always offered it twenty five hundred dollars, but you had a half price sale, so in their mind forever that's a twelve hundred dollars portrait, you can't go back and change it and look at brands who have done this. Tommy hilfiger used to be this status for another assam's everybody can get him. You know, a lot of brands have gone into that discounting trap, and I think what I want to be clear here because the chap maybe blowing up about this, what we're talking about is when you're selling the exact same thing for cheaper one day than what you're in and you're expecting to charge regular price again for that exact same thing tomorrow, okay? So you'll see some of the high end designers that are going in to target you're going into cole's and with students with special collections that's not what we're talking about that's a special collection that's something different. What we're talking about here is when you're trying to sell that exact same piece of art tomorrow for regular price, where is today you're selling it for half off? So I'm not going to say don't ever discount that's how I feel I've never discounted, but what I will tell you in all of our experience in working with photographers specifically, if they're having trouble making their business run at a certain price and they discount it does not help their business because the problems they had when they were priced this way, those problems are still there when they're priced this way and now they don't have the margins, they have the wrong clients in their freaking out, ok, that's just that I want to say we've seen it happen over and over it's not a magic pill it's not a magic answer you've got to figure out all the other things that you're doing wrong, and if you can make it here, you can make it here and you could make it here and you could make it here even in this economy let's talk a little bit about creativity, and I have about eighty of these that I that I typically teach, so when I try to pick out the favorites, we have some pricing more meaty longer several hour of webinars and things at the dr marketing dot com if anybody wants to go out and really focus on this I tried to pick out the things that I think are going to appeal to most of you guys and this is another one creation feed a lot of people wonder what what do I charge for a creation fee thirty five dollars, five hundred dollars and here's my opinion on this back when I first started creation fees session fee whatever you want to call it they would d'oh it's twenty five dollars and then each additional person is five dollars each location is five dollars and remember being like feeling almost punished for wanting to do some more creative things and different things when in reality if people go we know this if they change clothes they gotta buy each outfit they had more people they gotta buy mohr and that five dollars doesn't make us money or even if you it's twenty five or fifty we don't make our money on the creation fee the session fee and you already addressed that you've already figured most of you guys have figured this out if you look at all your revenue from the past year and you add up where you made money a very small percentage is in the session v the key to a session feet is first and foremost is to make sure the client shows up it's there, they've got have some skin in the game if they can just show up for their session without investing anything, you're gonna have a lot of no shows, you're gonna have a lot of people just not even calling and just not showing up because they're some came up and we have people who have sick kids they call us, we rescheduled no big deal, it's also to pre qualify the client's a little bit. This is where I think people get hooked up. They think, well, I'm busy and I'm charging one hundred fifty dollars, so I should charge six hundred dollars, but there's there's like a fine line there when you I mean, I could probably charge one thousand dollars a session, but I'd scare off a lot of my great clients that don't, you know, maybe at a thousand dollars or like, oh, I don't know and maybe come in and spend five thousand dollars, but if I would have said a thousand up front, it might have it scared them off so we don't make our money there. So I feel like if it's an amount that they wouldn't want to lose me thirty dollars, no one would care, they skip out on that session, but I think what you heard a little bit make it but they miss it it needs to be a little a little bit more but I think once you get over several hundred three for five hundred dollars I think you're going to be missing out on some really good opportunities I haven't changed my session fiend years and years and years because it it's not where I make my money but it makes sure that my clients show up you also I see people on their price menus getting people to do things that they don't want them to do. So look at your price menu and say is this is this getting my clients to do what I want them to dio for example in my success where software program I look at those numbers and I did an analysis one year and I looked at what am I making average on an indoor session versus an outdoor session and how is charging more for an outdoor session fee and my outdoor session was like three times what my indoor wass so why would I do that? I'm I'm an idiot you know they are yeah ok your average your your stereotype for sale okay my average sale for outdoor was three times what it was indoor but I was charging maurine a session fee and even if you charge twenty dollars more you are completely discouraging that client from picking that session and on further looking at it that's because those particular outdoor sessions were huge groups and we know huge groups are profitable. So I went tio the same session fee for indoor outdoor and I do ninety percent in because that's, what I like to do so they asked me, what do you like to d'oh? And I say, you know, here we can control the weather. We can control every single thing about this session if it's cold, rainy or kids crying it's not going to go a cz well, so I get them to do what I want to do, but I'm not penalizing them with price. Now, some of you may find that your, you know, your big groups, usually big groups are super profitable. So why charge extra for more people if you have a process that thrills them and that encourages everyone in the family to buy and you have an incentive for them to get all of their orders in you could make a lot of money, so don't penalize them. Okay, so go through your price menus and say, am I getting them to do what I want? One more thing, and then maybe we can take some questions before we wrap. Had a darling photographer a couple years ago had me look at her price menu, and, um she was offering fiber base prince and this was after digital's pry five years ago and I said no why do you have five fiber based prints on their shoes? Why have a client who really loves it and I said do you want to sell this and she's like oh god no I hate it you know like but when you have it on your price menu it looks like you want to sell it so I said tell this one client look, I don't offer that anymore but for you I will do it your pricing is going to be different you give the job what the prices are you haven't printout or whatever but you say I'm doing this special for you because you've been with me since day one and I'm rewarding you with this but when you put it on your price menu she's got people ordering fiber based hand printed black and white prints that she's shooting digital files now and she was like oh like the smile was off of her face she was so happy and sometimes things that seem so obvious when you look outside looking in we don't realize we're doing them so we're trying to sell things you know person I don't hate doing those air or custom design books sometimes they're so hard and they're complicated but you're still offering them don't offer them if you don't want to do it don't offer it so the whole thing with pricing is being priced for profit getting people to do what you want them to do because again they want the destination they don't know what this session fee should be or the process should be your leading them to that destination the way you want them to get there on your plane with your seeds and all of the amenities you want to throw in okay, so pricing questions from you guys and we can take from the outside anything I know there's probably zillions of them because there are zillions there are yeah, but the chat rooms air just like screw lee was such a big thing because let's face it if we're not priced right we could be graded everything else and there's nothing we can do to make money if we're not price for profit so there's a lot of folks out there who are just starting ok with people from all levels of course, but staffer to from bloomington, illinois says how yes illinois finally once again how do you how do you price in the beginning without giving discounts are specials to encourage people to give her a chance so how did you good? What is we didn't talk about value added, we talked about discounting do you want to talk about that? You're so one of the things that you can dio is you can say because you are investing at this level I'm going tio give you this? In addition, so one of one of the great ways that we can do this with high school seniors is by throwing in something that we know that they really really want. So for example, what you may do if you're trying to attract high school seniors is you can say, I'm going, teo, you know, we'll do the session, my session fee is, is, you know, one hundred dollars let's say, but along with that comes and animate a movie and, you know, with a five hundred dollars minimum purchase or a thousand dollars minimum purchase or whatever it may be. So instead of saying half off the session today, you're going to add something of value to that that doesn't cost you as much money, okay, so it needs to be something that it might be on your price menu for fifty dollars or one hundred dollars or five thousand dollars, but it doesn't cost you that, right? Because we learned already that your costs are about twenty five percent of that and in the case of a digital product, maybe even less so that's her added value. Ok, so rather than saying half off my sessions this week because I knew and I'm trying to get some people in the door instead say here's, what, I'm gonna d'oh this week with session t you know, what's included, I'm also going to, you know, throw in an eleven by fourteen or I'm going to throw in, you know, your first ten holiday cards where you get to be a model for my studio, we work with a clothing store in town and the girls get tow have there photo in that fun painted frame all over this clothing store, you've been there and you saw how cool that was, so that's really, we're giving them fame, so if you look a tte one hundred dollars product that you're discounting to fifty percent off, you're getting fifty dollars for it, but if that same hundred dollars product you can buy something for two dollars that gets them to pay the hundred dollars, you get ninety eight dollars huge difference huge difference so it's a value added incentive, so you're not attracting some that wants a discount, you're rewarding someone who really loves what you d'oh like with the anna moto video that might be something you don't even sell. The on ly way to get that video is to invest at a certain level with my studio, and so you communicate this clearly upfront, you reward them, and then they tell their friends, and they come in and say, I know I have to spend a thousand dollars but I really want to do that because I want this video and then they're sending their friends and all of a sudden you have clients all right, one more quick okay before we wrap up the day is from fashion tv in singapore sarah, if we are overworked with too much bookings, is it time to price higher? How true is this? Are there other instances where we need to price higher? Yes it's economics well, a little bit and it depends on what you want so if you want to have a very busy high volume studio, then what you need to do is if you're overwhelmed now it's time to look at your numbers and see if it's time to hire someone but if you don't want to be this busy if you want to reclaim your life and spend time with your family again or travel or whatever it is that that that you're so passionate about in your personal time then yes, I mean that's when you look at it because like sara was saying it's economics supply and demand so, you know, we worked with a pizza chain back at in our ad agency days and was very much driven by the price of cheese so you know, the price of cheese is constantly fluctuating and so they knew that you know, when the price of cheese went up there they were going to have to raise their prices, and then they were going to, you know, their margins. We're going to go up necessarily, but the demand was going to go down, they weren't going to be is busy at that point, and also pricing decisions like every other decision in a business doesn't happen in a vacuum. So if you are that person in your super busy and you want to raise your prices and you want to maybe increase that the quality of clientele and increase your average sale, you got to make sure you're doing everything else correctly because you're going to be attracting clients who have a certain expectation. If they're paying more, they want to be treated wonderfully. They expect everything to be consistent in beautiful and a strong brand and strong customer service in an amazing reception when they get there and beautiful packaging, and they expect expectations rise. So you've got to pay attention, even mohr as you raise your price all of these little details, especially tomorrow, we're talking promotional, planning and selling huge elements, two thrilling clients and being able to charge more. But I was there I was that busy busy person and I thought I don't want to do this I want to get the prices up I want to have the clients that want to do the cool things so I can spend more time with fewer people yes they're paying more but they're getting some so awesome so it's all in what you want to do I couldn't imagine shooting all day all day all day some people love that same push my gosh she I don't know where we could bottle her and self right I mean she's you know she had she probably way had a conversation when she's like I can't imagine she's talking to vicki topper and me and she said I can't imagine doing only two sessions in a day what do you guys d'oh right? We have a lot I mean it's just different people are different so that's why I love this format that there's more than one way to do it you have to put it through your filter and say, what do I really want? But I know lose for most people it's not working at dinner hour it's not putting your kids to bed and going back to work or eating at the dinner table with retouching on your laptop while you're eating and not talking to your family I know I do that sometimes my kids and I'm like ok mama mama mom and that's. What I don't want for people. I want them to be able to put it away and enjoy their life.

Class Description

Learn branding from Sarah Petty and Erin Verbeck! Attract the right clients to your business by creating your own unique brand, new distinguishing products, a more profitable price menu, the right marketing and a new sales process!

If your marketing isn't working and you're not attracting enough of the right clients, Sarah and Erin will go step-by-step, showing you how to address each part of your business's brand to make sure it reflects you and brings in clients you'll love.

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