Sal Cincotta: Pricing
Let's rock and roll man this is the business blueprint so we are tearing it up today business, business business and tomorrow is going to be just his action packed with a bunch other stuff so let's keep going here pricing framework this is it man this is where the rubber hits the road if you are priced incorrectly you are you are telling the world or you have the potential to tell the world the wrong message about your brand price yourself too low and you run the risk of being the low cost provider getting stuck with all the minutia out there of everyone in the world who thinks they're a photographer price yourself too high and you price yourself completely out of the market, right? We're only the elite, most rich pete, right? Well, these people in the world can afford you well, we don't want to be there either place. So there's this right spectrum off clients if you will and we want to play somewhere in the middle to top end that's where we play with our studio. So think about this fo...
r a second at about four to five thousand dollars right is my mid level package. That client who thought they had a three thousand dollar budget right? If photography is important to him I can pull them up, they can afford me, they'll splurge at five thousand dollars that kind who has got plenty of money they can afford me no problem so I like to play in the mid to high end of the market, not the elite end of the market, right? So you know, people were out there telling you they charge fifteen, twenty, thirty thousand dollars for a wedding yeah, they probably do, but they might photograph for five weddings a year. I don't want a photograph for five weddings year I personally want to run an active studio I love photographing anywhere from thirty five to forty five fifty weddings that's my personal preference as time goes on, I'll raise my prices so that demand starts falling off right? But you've gotta find your sweet spot, but pricing and understanding that this is a framework is the key to making this all happen this can and should be customized everything I'm going to teach you don't tell me how it won't work for you. You don't tell me how it won't work in your business because this is the same framework I used back in two thousand eight the same framework from away is the same framework I used today in two thousand twelve and we'll continue to use in the future because it is in fact a framework and by the way it works with any business, it doesn't matter whether your niche or volume based business this will work it doesn't matter if you're photographing children pat's whatever I'm talking about here is applicability to any kind of business in fact, it doesn't even have to be photography this's business basics it will work no matter what you're selling the key though for this all to work you have to move to a package based system and that is something that I find a lot of photographers and mike struggle with because they don't believe in it and mostly okay because of all the misinformation that's put out there by us as educators, by the way and so as us as educators I feel like we have to be a little more responsible with the messaging because my systems based on consumer behavior and I'm gonna convince you of this in a second so there's three schools of thought out their package based bundling okay customized meaning allah card right? So where or we build a package for everybody, right? We customize it for everybody or basically ala carte but I want to add one to hear and really what it is is this concept of credits so you spend a thousand dollars with my studio, you get me for the day and you get five hundred dollars worth of print credit there's in three or four different schools of thought here let's go back to consumer behavior for a second let's forget we're talking photography let's talk let's have real talk right? So some real talk would sound when you go on buy stuff okay if you went someplace and you were buying something based on ala carte right build whatever you want you can have anything you want in this store so all our card how is your consumer behavior driven? You guys know where I'm going with this what do you focus on when you're building something on the card you're building a home would you put anything in it or how do you start making your decisions? Which girls going to get you coffee right now what you need and what the price is based on what you need and based on what the price is right so you're making would you agree pricing decisions when you're baking in allah card decision the calculators out you're adding stuff out up there and you're going through I want hardwood floors two thousand dollars who I want the chandelier five thousand who I want this couch ten thousand dollars away that's over budget pull this out pull this out so you start making decisions when pricing is based on a card. This is consumer behavior has nothing to do with photography so I can argue with any photographer in the world that they want to have this conversation because we're not talking photography we're talking consumer behavior you're making decisions allah card based on what you can afford that is horrible for us by the way I don't want my clients making decisions based on what they can afford that will never work out on my benefit let's flip two packages bundling we see bundling everywhere from mcdonald's go to mcdonald's to get a happy meal all right you go to mcdonald's to get the number one to number one valium you uh you go buy a new car okay by car and they bundle adams well, this comes with the dvd navigation system, the heated seats all this other stuff okay, when you're buying making purchase decisions that way how are you making decisions? You stop making decisions on what it's going to cost you your mindset completely switches to how much you're saving everybody grieves me on when you go buy a value meal even though you save ten cents which is almost comical by the way we never order it all separately we order the value meal because we're so we know it's cheaper by buying the bundle so here's my philosophy if clients are based buying stuff ala carte and I allow anybody to do everything first of all clients don't even know what they what they want or need by the way that's our job we're the experts we should be guiding them we want to be the trusted advisor but if I let them make decisions based on all car pricing they're making decision based on what they can afford if I make it by bundling and discounting things, they're making decisions on how much money they're saving you understand the fundamental difference, okay? If you don't understand that difference, you're going to struggle with my pricing model that is key. This is human behavior credits this concept of credits, print credits and I don't care what line of business you're in, whether it's baby's families, portraiture, print credit, it doesn't work from a jordy of people because if I have a thousand dollars print credit into your studio five hundred dollars per credit into your studio and I know this because we've tried it and failed, the client comes in with a preconceived notion that this is all they have to spend. I have a five hundred all prank credit, we don't need anything else, we don't anything beyond that, and so now my time and energy we spent trying to convince them they need more I become a sales person again. I don't want to be a sales person, I want to be a trusted adviser and so we have built our business everything this framework I'm telling you about based on the concept that human behavior is driven by saving money, that is the value I'm making a value based decision or helping my clients make a value based decision girls with me all right so with that being said let's, talk about ala carte pricing this is fundamental to everything. If this is broke, every thing's broke money is like water. It will follow the path of least resistance, meaning your clients don't walk in your studio wanting to spend ten thousand dollars there wanting spend five thousand dollars in there they want to spend as little as possible again back to consumer behavior we are if you make it easy for them to walk out of there and spend a hundred bucks not shame on you so I don't want to make it easy for me. I want to punish bad behavior on bad behavior if you're on my other card price list, that is in fact bad behavior that's not what I want you I don't want you coming in and buying one eight by ten one sixteen by twenty I want you to buy a bundle, okay? So I'm going to make the bundle the most compelling item on the table translation I'm going to set my ala carte pricing artificially high because I don't want you there so only you know the answer to this only you know the answer to this out there where are your clients ending up wherever they're ending up it's because you have made it easy for them through your pricing strategy, everything you offer has to be on this list and price artificially high again, I don't want you coming in and buying justin eight by ten. Just one canvas. So we'll talk about where that should be. But I want to punish bad behavior. I don't want you there. I want you in a bundle. Keep it simple. Don't overwhelm your clients with complex pricing. Okay, bye. Complex rising. I'm talking about like, you know, forcing them to do calculations, calculations. Forcing them to do that is really bad. I tried as much as possible to have everything. Outline form. Don't force them to go to multiple sheets of paper toe look at pricing trying keep it is condensed is possible. That is the key. Keep it simple negatives. Holy cow. We're about to have an amazing conversation about digital negatives. Digital negatives. Let's have this conversation. Yes, let's. Get it out there. Let's define digital negatives. Digital negatives are just that digital negatives I started in the days of film photograph my first wedding it's, seventeen years old. We don't have digital cameras. We used film went to a dark room how to develop that you did not sit in the dark room dodging and burning skin, correcting color, correcting all these images, and then hand them over to the client. You handed over a true negative that is what a negative is as it came out off your camera so figure it out we've got to be artists. We've got to be good photographers. I'm not suggesting we hand clients images that are three stops under exposed right that are blue because we had the wrong white balance on our cameras. We got to figure that stuff out. But here's, what I'm not going to do, I'm not going to create all these artistic images. Spend hours in photo shop, right? Dodging and burning, replacing removing garbage from the image of moving pimples from the client's face and then handing that over on a cd that is madness that haas to stop today. I'm also not gonna hand them raw files, not gonna hand them right. Twenty five minute j peg files. Why? What are you doing with those images? So my definition of a digital negative is eighteen hundred by twelve hundred pixels. That is big enough for you to print an eight by twelve two hundred forty d p I j peg file that's it that's my definition of a digital negative on edited. I am not going to invest all that time and energy the hours that it takes to do some of this stuff and hand this to you want to see the so that you could go print it online at sam's clubs or anyplace else? I want you coming to me for artwork in your home because you can't get this at those places and my client's, those discerning clients, the clients who love photography I don't want the cd of images they wanted because martha stewart told them they needed it. Right? Martha's like you need your checklist. Bridal checklist. I need digital negatives from the wedding checks out gives them to us that's all it is, I want to print the artwork for their home, and we communicate that with our clients. Girls with ming let's go in the ala carte print prices and I know the internet's gonna be blowing up about like my definition of digital megan's, so I will get there. Four questions print prices this is ala carte these air my print prices okay, so you don't have to price in there, but you need to understand where we're pricing them, and if you're online, you're probably following along in that form. The pdf form you'll see this on the side of the ala carte prices give prince I charge one price one flat feet fifty dollars eight by ten eight by twelve four by six five by seven one price fifty dollars framework gonna keep stressing this you don't have to charge fifty bucks. But what I don't want to see is your charging five dollars for a four by six eight dollars sir five by seven and on and on one flat price why clients naturally can object right how come I gotta pay the same amount of money for an eight by ten is I do a four by six how come I don't get to four by six is on a sheet of an eight by ten what's your answer you've got to be able to handle these objections with your client so my answer quite frankly when a client asked me that that I say to them guys just being completely transparent with you we all know that what you're paying for here is not the piece of paper you can go to sam's club wal mart and get this for forty nine cents if you wanted to what you're paying before is my time and talent as an artist and the cost of what went into not only creating this image for you editing this image packaging this image and delivering it to you is a final product that's my answer to the client right when they say to me how coming eight by ten is the same as a four by six I'm not like uh what do I say what I say what I say no nervous energy I'm just matter of fact here's why it is what it is if you don't like it not my client right? I've got to be okay not having those clients eleven, sixteen two, ninety five sixteen, twenty four three, ninety five fifteen, thirty four, forty five, twenty, thirty four, ninety five here's what I want you to pick up on we're back to being framework notice how much is the price jump between each size hundred bucks right each full size we jump the fifteen thirties in between size so guess what it's a fifty dollar price money thiss pricing is simple for my clients to figure out oh, I want to go one size larger hundred bucks does that make sense? I keep it simple for my clients again back to frame work four years ago same same framework but in eight by ten was twenty five dollars on eleven. Sixteen was probably one ninety five two, ninety five three, ninety five right up through that price ring so the framework has been consistent. I promise you this framework works so you've just gotta adapted into your business it's got to be painful to be here and it is. Look, if you want to come to my studio and just by sixteen by twenty for print you're gonna pay for hundred bucks word now mind you that's way below our sales averages, but if you're going to do it, I'm gonna make money at it, right? I'm gonna punish bad behavior one and a half inch campus and these are all the ala carte prices we're talking about so one and a half inch campus is six, ninety five jump to the next full size twenty, thirty seven, ninety five, thirty, forty eight, ninety five and then the in between sizes or fifty bucks in between each easy enough prices you girls with are you noticing? How much does it cost to go from a sixteen twenty four print to a sixteen, twenty four cameras? Three hundred dollars how much does it cost to go from a right twenty thirty prints with twenty thirty campus no, three hundred three hundred bucks, right? So now my clients you guys figured it out right now, my clients know that to go from any print size to any canvas size is it one hundred twenty two dollars and seventy two cents, right? Some convoluted mathematical formula that we've come up with? I don't use pricing calculators or any of that madness. Some items have more margin than on then on others, but what I'm looking to do is make it simple for my clients to understand that to go from a print to a campus is this much money so that if their looking out of sixteen by twenty four size they understand to jump to that same size as a canvas is x amount of dollars everybody with me acrylic krilic is an additional two hundred dollars acrylics more money critics more expensive and most importantly, acrylic is seen as a luxury item by my clients, so I'm naturally going price that a little bit more money and so now they can see to go from a canvas to acrylic is a two hundred dollar price bone there he is noticing the sizes though how consistent they are just because the lab's offer size doesn't mean you need to carry it I'm not trying to be everything to everyone my clients don't know what sizes they need I'm guiding them and letting them know what size we need and so sixteen twenty four full frame not sixteen twenty we don't offer sixteen twenty anymore that's not how they're coming off my camera, right? I'm losing four inches in the krump that's not what I want I want it to look like the way I took it uh twenty twenty square clients are starting to dig the square so we offer a couple of squares. The panel is this size this is a very popular size for us this fifteen by thirty and so my clients, this is also a unique size. My clients love this by the way and this is an acrylic, so this is a fifteen thirty acrylic so this is something we're starting do now so you can see right it doesn't need to be framed so what we do is we show our clients in our studio hey guys, you don't even have to go out and get these framed and they come into our studio and they see this sitting on an easel okay? And now we're teaching them how to display this in their in their homes and they love this right? This is modern. This is a very modern way of showing this off so they're seeing it when they come into our uh our studios and I'm gonna stop here in a second metal we have metal price the same is acrylic because first of all my cost is the same and the proceeds value is the same miscellaneous items remember, everything we offer has to have an associate id price with it no matter what it is, nothing is free there has to be an associative value with it so save the day and thank you cards we sell it our cost is going to be anywhere from a buck twenty five two dollars, seventy five no matter where you get this stuff from web posting okay, yes, I charge my clients to post the images online one hundred ninety nine dollars they should not believe this is free because it's not free time and energy go into posting this stuff online facebook posting an engagement session bridal session any random session around the shoot two ninety nine that's the session fee. That includes just the session, not the session there. Negatives. I come over washing car. Cook dinner for you and the kids. It's, just your session fee. Digital negatives. Yes, we charge for that. Fourteen, ninety nine that's the ala carte price. I don't want you coming into my studio and just buying digital negatives. My coverage per hour for fifty per hour. So think about this for a second. This is done intentionally. I get the same phone calls you do. Hey, I'm getting married on june fifteenth. I need six hours of coverage and digital negatives. Guys, get those calls I get him to. Absolutely. You can book us for six hours of coverage six times, four hundred fifty dollars an hour. Right? So use you start doing the math on that. You want to start paying twenty seven hundred bucks for me to show up and no negatives. Then add another fifteen hundred on top of that, right? We're near four thousand dollars. You want to pay for thousand dollars for me to shoots, chart your wedding for six hours and hand you a cd of images. I will be the world's richest shoot and burner I'll do it, but guess what clients don't want that they want more than that. And so when they start adding itself ala carte it's more expensive than just going with a package, so can you see how we're punishing bad behavior client for life, something else we offer and start queuing up questions for me, ladies? Because I am going to pause here I find it hard to believe nobody's got questions about pricing understatement climb for life six hundred ninety nine dollars what is that? What we do is we offer our clients a free photo session once a year for the rest of my life, right once I die the party's over but we give him a free photo session once a year they love this as an option. Now we sell it all card but the truth is nobody buys it allah card it's always bundled in a package and that's a huge both or why? Because we've all agreed that the clients are booking us because of our personality because of our experience well, if they had such a great time with us such a great experience with us, why wouldn't they want to come back to us now? I'm making it easy for them to come back with us. I'm giving them a free photo session that's where the value is and I'm not making money on the session everybody understand that it's, like think about printers will have printers right the the printer cos hewlett packard's right xerox they basically are giving you the printer I cost you know where they make their money the ink okay razors razor cos they're giving you the razor at free all right, it's they make their money on the blades so I'm practicing the same concept that we see in corporate america I'm giving you the session for free that's not where I'm making my money I'm making my money on the print sales dvd slideshow that's like what we opened up the day with just an emotive slideshow ala carte we sell that for three ninety nine nobody comes into my studio and pays these prices this's what everybody has to understand out there because some of you might be freaking out like my clients would never pay that good I don't want them to pay my clients don't pay it either I'm punishing bad behavior that's the key I don't want them playing over here in the ala carte price list if they do if your clients are you're doing something wrong even slide show second photographer dvd proofing engagement guestbook framed campus right so that at a frame around your canvas or your acrylic is an extra two fifty everything we offer has to have an associate id ala carte price questions ladies let's start with you how we doing yes so I understand the framework you've explained that pretty clear on framework framework and that we technically maybe not offered these prices per se but is that what you kind of want us to do is just build at least the framework on knowing what individual prices are for each item that's right but maybe not necessarily these prices because you had mentioned you started out with the twenty five dollars of the get gift prince but then now they're fifty so would you encourage us to maybe kind of do that same idea you something that's more comfortable but still doing the whole punish bad behavior situation the only way I'm not looking for you to come in and say because this does no good right? I'm giving you my pdf my pricing sheet but it does no good the truth is for you to just go this is what south charges this is where I'm going to try if you don't understand this framework and you're gonna have to watch this over and over again because questions they're going to arise if you don't understand this you're going to fail because all you're doing is copying what I'm doing and you don't understand the spirit behind what I'm doing and so this number day one two thousand eight this number what was fifteen dollars and then I realised holy crap you can't make money selling a maid by ten for fifteen dollars it seems like you would cause you go oh well that's like eight hundred percent marco no it's not you've got costs associated a lot of calls so this number for you any photographer out there by the way if you're a professional photographer this eight by ten the lowest it should be twenty five dollars if you're charging anything below twenty five dollars I guarantee you you're losing money we can have that conversation all day long you will lose that conversation you're losing money minimum twenty five dollars now with that being said I don't want you to come in here and be like, okay, I'm going to twenty five dollars and then everything else is gonna be like like south you find your range but if you understand the framework you understand that this will move so when I photograph a wedding in new york city or I'm bidding on a wedding in new york city my prices start at thirteen thousand dollars start if I started a thirteen thousand dollars in st louis I wouldn't I wouldn't book any weddings but if I went to new york city and started at five thousand dollars the perception is I'm a suck is a photographer he can't possibly be any good is only five thousand dollars you see what I'm saying but the framework is identical so the same framework the same albums the same product I'm using in new york is the same product framework amusing in st louis this is just a living document that makes sense how else we don't so how do you handle that different pricing someone's having ifit's a destination wedding or you're going shooting in st louis or new york? How do you send them the different pricing if it's a st louis wedding getting married in new york, they pay st louis price is right, but if it's just a new york client pulling me out into new york, it won't work right? I have to have new york pricing, I have to have chicago prising its just consumer behavior, it won't work will be fundamentally it'll be rejected and I'll tell you a true story. We had a client book us in chicago, but she was from st louis, but she met us out of chicago bridal show, so she got our chicago pricing, which was considerably more expensive then our st louis pricing and she asked about that and we did the right thing. We adjusted that pricing for as you should write so it's it has to be done, but in general, you're going to have that one off scenario where a client right there's some cross contamination there, you've gotta honor your local pricing, but I just have multiple price sheets that I keep track of two the internet so many questions wow, yeah, okay, a lot of people would like to know about this a question from david eric how do you handle someone that buys a package and wants to remove an item at the ala carte price? I've seen that a lot, yeah, I'm in a minute, okay, let me answer the question, but we're going to cover that in packages next. So how do I know what you're going to do in your packages is you're gonna have however much your package price is let's say the packages nineteen, ninety nine or two thousand dollars, right next to it should be the value of that package, meaning right cause you're discounting it being in the package. So for us, a two thousand dollar package might be a thirty nine, ninety nine value, forty percent discount. So now that client comes in and they say, well, I see the engagement session is to fifty I want to pull that engagement session out how much? Well, susie, as you can see the packages already discounted by forty percent and unfortunately I can't discount a discount and consumers will accept that answer why? Because there's, not a store in the world you can go to and get discounts on top of discounts, you can't go in with ten coupons and redeem them to get something for free it doesn't work that way same thing there, so you have to have how much that is worth in the value, not to mention we have at the bottom. Collections cannot be altered, but I will show you that mawr in my packages. That is a good question. All right, so maybe it will hold the rest of the package. Question. Anything that's here towards packed. What? I want to make sure that people get the ala carte framework. Okay, I do have a question from adam part. That is interesting. Who says? And I think this was with regard to the digital negatives. What do you say when your clients tell you that you that they've already paid for your time and talent in the original contract? Let's put some context around that paid for my time in town to me, that was more around the price of what? A fifty dollars, fifty dollars. Okay, maybe that's what? Yeah, I think that might be what? He's referring to what they what they're talking about their if my client were to push back on me like that let's role play if my client were pushed back like, well, that's, we paid our session fee for right. I would push back and say you're right, we've paid for the session fee that was for my time with you. But that covered just my time. Travel with you on that photo session. What it doesn't cover is the editing of this image, the retouching of the image of the packaging of it, the image and the delivery of the image. And I'm going to tell you this point blank. If you have clients that are arguing with you like that, not your client run, because you will never make these clients happy. And those air those air, not my client, cy, won't deal with them.