Building Packages That Work
The art and science of pricing we are moving to the art of it. Okay, this is where it gets subjective. And I think most photographers really have the biggest challenge because it's so subjective you could change your mind, and it may or may not affect things right? So you can put a pack of structure together, think it's great and then want to tweak it, and it may not affect your cost of goods, but it might affect how your client seizure pricing, and they may not want to spend as much. So strategic pricing is what fills your profit bucket, and that is essentially true of strategic packaging. Now, there's a lot of folks of photographers out there who don't want to use packages, they want to sell ala carte only, and god bless them for doing that, because that is really hard to do and it's an incredible thing. Allison rogers does it in memphis, tennessee, and she has incredible averages, but she can she's set up to do that. She has an incredible selling system in place and she's good at sa...
les in the sales room. She is a saleswoman. And so, you know, she gets these really incredible averages by doing ala carte and by not selling digital files, so there are photographers out there who find success doing this you have tio part of being entrepreneurs we figure out what's going to work for you and in your market and associate with your personality and how you work best everybody is going to run a business differently so what I'm going to tell you today is more about what's the safest route for lack of a better word I don't want to say that word safe because everything is a risk obviously but I'm going to try to take you down the path that is the least resistance the path that will at least get you on the on the right road and get you being profitable if you feel like later you want to switch to just strictly allah card ordering you can do that and see if it works for you if you know right away that that's what you want teo that's fine you know don't take my my word is the be all end all I'm telling you what most photographers do and how it's the easiest way to be the most strategic in your pricing but that word strategic is what gets so money photographers in a ball on the floor okay you have to create packages from two different perspectives and this is the hard part from you your perspective and from your client's perspective so many photographers look att packages and how they will work from their own point of view and how they will work for to profit their business but don't bother switching the tables turning around and becoming a client going is there enough strategy there to make the client want to buy where I want them to buy okay, so this involves a lot of thinking and a lot of muddling over and going if I remove that from there and put it up there is that going to make someone want to purchase more how do I switch strategize that with pricing so that the package price seems like a better deal than alec art but that I still get them to purchase up higher to give to my average there's always little things have to question yourself with so you have to almost do these checks and balances between ella carte pricing and package and whatever too make sure that you're truly doing the strategy that will work the best for the profit you need okay for the average unique so I'm saying create packages that benefit you financially then make sure they benefit the client's needs clients needs should be very strategically approached some clients think they know what they want others don't have a clue sometimes you want them to think that they want something you know you want to educate them that this is the best way to purchase so in other words your packages should be structure so that the more they spend the more their needs are met so what does everybody want digital right? Everybody wants digital so first of all, digital should be in your packages, right? But where should they be in your packages? So if you have five packages where should they be? Middle and top sounds like the top or a football stadium exactly what does that mean that you put eight by tens and five by sevens in the lowest package? No, because the client would accept that as a substitute for the digital files, right? The problem with this is just when you think you've got it something makes you doubt yourself okay something someone another photographer your husband arrived your kids another industry something makes you go I nto you second guess yourself and want to back off and do what's safe and what you think is safe is what everyone else is doing which is so wrong it's actually worse okay, so what you should not do, of course is look at other photographers websites don't undervalue yourself even if you think you're not good enough to charge and don't compare yourself to other businesses we're going to system isat okay, clearly you have to base your packages on the average cell you need to survive right that's a given we crossed that line yesterday remember the line in the sand withdrew yesterday that says ok that's not profitable this is I have to stay over on this side of the line correct in order to make any money and survive we figured that out already by yesterday and the day before. Okay, so what you need to survive depends on how your break even analysis came out and in this this week's class we determined that to make fifty thousand dollars take home salary thing with maybe a hundred forty thousand you need eight clients a month at a fourteen, seventy two, fourteen hundred seventy two dollars per client maintaining a twenty five percent cost right so that means we have to sell a fifteen hundred dollar package to every single client who comes in our door or we need to make sure that we average that we can sell a thousand dollar package but that means we also have to sell a two thousand dollar package to meet that place to break even. Okay, so the lowest package should be fifteen hundred dollars, right? Because if you want to guarantee yourself to get fifteen hundred dollars that's where you should go correct you can why not? If you put your lowest package of fifteen hundred, you would guarantee your average of every single person who comes to your studio right pretty much that's the easy way out that's kind of the black and white version but that's not always necessarily the best thing my market for example in newborns thes people are not at the height of their earning income potential so my strategy has been to make the entry point appear lower and then woo them with the process the brand, the products, the experience, the quality of the work, the style, the art and so when they go through my gauntlet of business they realized okay the budgets out the window but that approachable target entry point attracts them in the first place and they go oh yeah maybe we should see about doing this we can afford this here's what happened when I first put it my just lay in the hospital right after dean was born I put in where I was I've got exclusive rights to put my brochures on the hospital walls and so I put my brochures and my pricing at the time said I started at nine ninety five not you know, nine hundred ninety five dollars thousand bucks I had spent over ten thousand dollars on this display and for four months I did not get one phone call from the hospital not one it was so scared I remember calling my sister like in tears on the phone like I just failed what did I do? I can't put this hospital's employee thing I know the work is good everybody tells me it's awesome everyone tells me they love it, but why isn't made the phone ring why his phone is ringing? I didn't I didn't know what to do so on a whim I decided to change how I looked I did not change my prices everything still costs the same that it cost but I packaged it differently to make it appear that the entry point was five hundred instead of a thousand once I did that the phone started ringing off the bleeping hook we doubled our client numbers so for me in my target demographic which is totally different than a family photographer or a senior photographer or wedding photographer okay, so I understand that in my target demographic that strategy of having an approachable entry point and then wooing them through to get the average where you need to get it was the strategy that worked this is business ok guys, there is not one formula that's going to specifically work for what you do and it's different based on what your knishes what kind of photography you're doing, what your prices are where your marketing what's your ideal client is and what town you live in so there's several factors that come into play here so don't think that that strategy is going to work for you because it worked for me my sister complete opposite she's in in los angeles, southern california orange county theo see hoity toity high in newport beach where all the girls are like toothpicks the size zero with big boobs and a rock around with their little louis vuitton backs ok, I'm totally generalizing but berlin is like, you are not generalizing. They are in a rush. They are into her and they expect you to do everything for them. Okay, totally different approach. Jenny can be go in in two thousand dollars. No problem, because her client is all about I went to generate photography. That's for my baby's going. They walk around with these thousand dollar strollers. It's incredible. Okay, totally different culture and mentality. The east coast, the south, the midwest, the northeast. Every culture in the united states, in the world, for that matter, great britain, sweden, italy. All these places have different battalion cultures about what they like and don't like. And that what? How they think about brands and status symbols, etcetera. So you need to look at your own town before you start strategizing this stuff. Of course, next week we're going to talk about how to research your market. The schools of thought on this kind of do I start my my average at the bottom bottom package or in the middle? There are two schools of thought, and there are some foxy photographers out there who start their pricing at the average sale. They need to make it's easy, it's doable, the brand's going to have to match it. Now for family photographers high school senior's name and that might not be a problem but in my market for newborns I had to think about stuff strategizing pfennig a little bit to make it work so my client's approached it right? Okay, so most people are going to buy in the middle right? That's cycle sales psychology one o one if you um okay let's do an analogy here. Okay? It's your fiftieth wedding anniversary it's a saturday night you guys all know what? Give me a great steak place here in seattle like incredible earth. Chris okay, ruth chris steakhouse for those you don't know is an incredible high end like hundred dollars a plate kind of dinner. Okay, so you go to risk ruth chris steakhouse and you look at the menu. What? And it's your fiftieth wedding anniversary on saturday night. What are you going to order, sal? And you're so belonged to you correct me up, sweetie. She's like steak I'm sorry, but I'm getting a two hundred dollar bottle of wine. I am getting the flay with the king crab legs and the sauce bearnaise and all the fixings. Okay, that dinner will cost us six or seven hundred dollars by the time we get out the door and I happen to love steak and seafood it's like my favorite ever, okay now what if it's my fiftieth wedding anniversary it's a tuesday night my husband wants to take me with chris steakhouse and you know I'm ok on steak whatever what am I going to get maybe the rib eye maybe the chicken okay you guys are so cute get exercise you see where I'm going with this pork tacos I don't think root growth has pork tacos you guys are all laughing about our dinner last night aren't you so okay so what if it's a wednesday and it's just any other day you happen to go to ruth's chris steakhouse but you don't really like stake it all on your broke you'll get this alan yeah exactly the last to leave oh my gosh you take one look at the minion go we can't afford this we're out of here now oh that's so cute she said would it be better if we left early so you could have it? You get a tip tonight so cute so you'd have a microphone it was cute when I wanted to repeat it. Yeah, so it ah lot of what you're going to spend depends on your situation as a consumer it depends on whether it's a special occasion it depends on whether you like steak or not and how much money you have so there are several factors that go into how much you're willing to spend that's, why the southern california orange county hoity toity newport beach mom who has three kids, beach blond hair and fake boobs does not really care about newborn photography she's not going to spend money on it even though she drives a porsche cayenne okay, so she may know she has to get it done because it's the thing to dio, but if she doesn't really care about it, she's not going to spend about a lot of money on it, right? That's? Why my story a few lessons ago about the mechanic and his wife, who had twins and they were a single income family about five thousand dollars worth of portrait's from me in maternity session and in the newborn session because to them it was their fiftieth wedding anniversary and they love steak, so it didn't matter what it costs. So this is the type of target clientele you're going after and of course, your package structure is going to be designed to get that person who loves steak to buy no matter what money they have because most times that we do photography not all the time, but most the time it is, eh? Very special occasion, newborn senior wedding family photography is a little more evergreen, but still and especially you all know christmas is the high season, right? I mean that's what everybody spends money and it's a special occasion it's a little not quite as intense as the newborn baby thing but a new more may be born in november's awesome like doubles your pleasure there right? So keep this in mind when you're trying to strategize your pricing and ask yourself how can I get the person who loves photography to purchase more even if they don't have a budget? So when you do this, you don't want anyone to buy your lowest package, right? Here's the goal five packages you don't want anyone to buy the bottom and you don't want anyone to buy the top. Those two packages on ly served two functions the low one is to entice them to come in the door and the top one is the whopper to make everything else look less expensive those are the two goals of those packages so when you make a package at the bottom yes you want to make your entry point appealing but you don't want it so low that they feel cheated when they come through the door, right? But you have to make sure that package does not have any value. It kills me when I see people putting oh you get a sixteen by twenty canvas five give prince and ten digital files in your first package you just gave away the whole enchilada on your lowest package that's plenty for the client to feel like they got what they wanted and didn't have to spend as much as you need them to spend if that's the case, that package should be fifteen hundred dollars, which is your average that you need to be at right, so keep that in mind packages ma provide that incentive for the client to want to move up okay, each package should have more value to it as the client spends more, but you also have to keep into account the price of the individual product that you're putting in the package. All right, we'll talk about it here in just a minute. Your lowest package have no value should be priced at the absolute minimum average cell you can live with. So for me, my lowest packages six hundred sixty dollars and with it two hundred twenty five dollars session fee you know that puts me in around a thousand dollars per client now do I go lower than that? Yes, slightly that might end. My actual rock bottom entry point is ninety five dollars for a gem session and three ninety five for twelve eight by ten files that you can print eight by ten I hate selling that it like makes me uncomfortable like but when I changed my pricing with the hospital story I just told you I was desperate so I need to figure out how to make that entry point very enticing thank goodness it's a huge bell curve, and once a year, twice a year, I saw that out of one hundred hundred fifty clients who come through my door. Okay, so those air numbers I can live with because then I also have the clients like the christian sins, who come in and spend six, seven thousand dollars on a session, they totally just canceled out those bad sales. So as long as you have both ends of a spectrum, you're fine. Now, there are some packing packaging structures that don't allow a client to spend more than your top whopper package, right? So you have to be careful when you strategize that when you're going to start thinking about bless you, how you're thinking to think about how you're making packages to decide if you want to put that ceiling on there or not, we're going to talk about the pros and cons of each method here in a minute middle package like is that is, where most consumers will buy and should be priced at the average sale you really, really want. If you want to take that strategy where the middle packages your average, there is absolutely no harm in taking the strategy where the middle or the lowest package is your average, but then you don't have the advantage of marketing that price point if you want it you don't need it if the brand matches and you're in a good area and a good market that hand that can handle it and your work is really well known you've been in business for a few years you'll probably get away with that. Okay? The top package of course should be your whopper the one no one ever buys. Okay, so we have questions before we move on to package strategies any questions you guys doing all right? I know it's kind of a lot to think about it makes your brain go inside about okay? There are a few tried and true methods for doing packages over the years. This is kind of what we've run into. So this is the old fashioned method set packages you get one sixteen by twenty to eleven by fourteen five, eight by tens this is obviously a hypothetical example okay and say you're sorry six hundred fifty dollars for it carrie that's awfully low but say you do that okay, the advantages are it's very easy to create straightforward the client understands it right? This has been done for years so people kind of know what this is all about it's very easy to understand consumers are familiar with it now the khan does everybody want substitution I don't need that many eight by tens can you five by sevens instead okay so they're not flexible in that regard to the client you find yourself moving stuff around all the time but like travis gugelmin back in the day he had like twenty packages for seniors and he did it like this I'm not sure if he still has a pricing out but he did it in the set packages set package way but then he had so many of them that there were so many options that you could get fined one that had what you wanted it okay, which was actually kind of brilliant at the time but it's a lot to look at so it worked but it was a lot to look at so look other con is that the consumer gets stuff they don't want and that has always been the problem with this separate packages that people have to fill the slots and they don't necessarily want that all right, maybe this is the big ticket item with gift prints so and it could be more than one big ticket items some people will put like a canvas wall siri's so three campuses on a wall with seven gift prince since flexible right you kind of go for the big ticket item you want and then you get to pick your gift prints either five by seven four by six eight by ten etcetera etcetera maybe you could add instead of their digital files so big ticket item and digital files you get five or whatever you need to pick up can't a decent methods, right? It works. It offers some flexibility more so than set packages. It's easy to see the price point steel have package a, b, c, d, e f g or one, two, three, four five right? The client can see where you start and see where you end. We'll have a good range of what to expect when they spend it's very easy for them to understand. The cons are that it has that price ceiling. Your client will never spend more than your whopper package. Unless you don't put everything in the water package, then you have the possibility of doing add ons, etcetera, substitution there still a problem? Because what would happen is and I had this method beforehand I had based on albums, so the cheapest album would be in the bottom package, which is with a small print credit. We're gonna talk about print credit the minute when the next package had, uh, the next higher album and a larger print credit. And then the next album, it's successively went up. The problem with that was his people wanted the pretty album, but they don't want a huge print care credit. They're spent they still want to spend fifty thousand dollars on album, but they don't need a nine hundred dollar print credit with that they just want to buy a few extra prints here and there so they're having to spend additional nine hundred dollars on prince that they don't want and I used to get kind of those objections of the sales were like, well, we don't really need that I'm still here going well that's the package you gotta buy it and then I'm finding myself having to substitute well they're spending fifteen hundred dollars they're getting my average so that's good do I finagle it so that they get the print credit that they want what's that gonna do fine business in my policies the more you start to finagle and make exceptions for people, the harder it is to run your business efficiently and with systems that you need to run away. So this print credit thing yes it's very effective because it offers even more flexibility than the gift prince because now I get my big ticket item but then I can apply this to anything else in the studio you could just call this even just a credit instead of a print credit so they could buy but take items holiday cards, album's image boxes they could buy anything with it right? And so this assumes that the sixteen by twenty is three hundred dollars correct so then it's just a matter of to spend this print credit you need to make sure each product in your studio is priced according to a valid cost of good or cost of sale does that make sense so and then what you might want to consider to is that you might reduce the price of this sixteen by twenty in the package so normally you price that at four hundred and in the package it's three hundred because you're buying it with the print credit with the studio credit does that make sense? So some people like to do that method so it offers some flexibility it's easy to see the price point's easy to understand but again it has that high priced feeling you're still going to end up with substitution sze unless you keep the credit the same in every package so you could make it so that there's a five hundred dollar credit on every single package one, two, three, four five five dollar credit five hundred kind of five dollar credit and the big ticket item just changes and the big ticket item is slept price like slightly less in collection than it is ala carte that's a good method, but again the consumer might get stuff they don't want because they don't want to spend the five hundred print credit because they don't need it okay and are they truly getting what they want are they truly do they want? You know, if you could only spend if you'd only put the print credit towards prince and you want digital files, then are you really getting what you want? Okay, so but it is a good method that works and I used it for years and it worked great, but we did have those issues of substitution tze and things like that all right, the one time discount this is a risky one a lot of people do do this, though they say everything is all a card, so based on the product prices we would've developed yesterday in the products pricing class, okay, the science of pricing and then if you order that day, you get a discount, okay? This is risky because you can't determine that they will buy your average sale, you can't set it so they will do that could spend as much or as little as I want, right it's flexible for the client very flexible because they only buy what they need and want, right? It's very easy to see the price point because it's just a one time discount, right? But it's very hard to control your average and that discount implies cheap if you're going to do a high end brand, you don't want to discount things or make it appear like a twenty percent off it was kind of it's kind of like it's not cheap per se but it's not as good is like a gift with purchase kind of thing it gives a different impression do you see? So you want to be careful when you say twenty percent off that day? It also implies that pressure to buy now which to me is a hard selling technique which I'm not really fond of but this works beautifully for some photographers some photographers like have a great time with this because the client will be tempted to buy more because they only get the discount that day makes sense but you do have to be a good a good salesperson okay method e this is create a collection it's actually getting more and more popular and I have done probably three or four different types of creative collection my entire career it's where you tell your client to conduct several steps to create their own package so they're basically creating a collection and you would give them the steps of one for example, choose your art, choose your album, choose your prints the minimum is there's no like set price here, so the client like doesn't see oh this cost this amount what happens is is you add it up and then what's in the shopping cart is the price of the collection so the products are priced according to your cost of sales and then they're added into the cart into the into the shopping cart essentially to create the collection price and people are like, well, why don't you just make it ala carte ordering? Well, how that works is if you buy and create a collection the prices according to a twenty your costs of sale is, you know, basically products or price higher if they're ala carte then if you buying collection she would almost have to priceless one for your collection price list and one of people just wanted by allah card and this alan carr is pumped up compared to collection collection is based on the numbers you ran yesterday and and for them this is just inflated ala carte is just inflated from there so it offers tons of flexibility. You can put those steps anyway you want you could do two steps you get to three you could do five you could give prince of digital files showing our products albums you can combine it I mean it's just like you can configure as the owner of the business those steps anyway you want and the minimum collection is what I call a soft minimum meaning it's the minimum product the cheapest product in all three of these categories added up is what will be your minimum package now the constant this is that it can be difficult to understand ah lot sometimes clients in the beginning when I started doing this I had like three or four steps and it was really convoluted and people are like I had explained to him like three or four times for them to get it so that could be really challenging for your clients to get and then when you're on the phone with him trying to get them to book you can't just say oh I have a package that starts with five hundred and one that said three thousand lost several in between there's no price range for the client to go yeah we can afford to come to you or whatever it is very easy to adjust and change okay so all you have to do you don't actually change your entire package structure you just have to add or take away products right because the products are going to get what's get put into the credit collection and if you want to add products you just add it to your lineup if you want to take it away just take away you don't to restructure your entire package structures that make sense now the prose to this is that there is no price ceiling somebody khun spend ten thousand dollars on this or you're soft minimum the problem with this is there's no sailing you can't give your client's atop range of what you are but you can't give them an average and that's what I do so I tell plants collection starts at six sixty most of our clients invest anywhere from eight hundred two, eleven hundred on their portrait session they go home it's an art piece that we would be printing for them and all their digital files on disk so that basically telling them that the average sale you're going to get it all according to your mind but when you come in and go through the process you are quickly swept up into the branding and marketing engine and you don't want to spend that much anymore you want to blow the budget okay? Do they all know? Of course not, but I want my client's toe average at eleven, twelve hundred assailant so that's why I keep that average right there? I want them to be able to go home with what they need there's no clear price point for the consumer and it's overwhelming sometimes and it is very easy to over complicate this as a business owner less is more excuse me less is more less is more or less is more simple, simple simple I start off with four steps I'm now down to two this is how our creator collection works choose an art piece could be one or a hundred it's up to you she's your digital files you get them all do you want a small or do you want to march most of time I would say sixty percent of the time my clients walk away with one item from step one and I am perfectly okay with that it's less work for me last time orders placed right after they leave the order appointment they leave with the digital files, so basically my work is like ninety percent done when they leave the order an appointment, they've got their usb I uploaded to the online lap so they can order prints on their own from a reputable source and I have to produce their printed product. They're our peace and bam! We're done! It comes in and that's why we can deliver these products within seven days of ordering. So for us, the soft minimum on this is six hundred sixty dollars it's sixteen twenty print for two, sixty five and small digital files for three, ninety five okay, this is changing january one it's going up by about ten of eighteen percent, so small digital files will be up to around four, fifty four, ninety five and the cost of princess changing because everything is going to be wall ready because that sixteen by twenty right now is just amount of print is not framed, so everything that we're cell is going to be wall ready, so I'm going to start offering in eleven by fourteen that's framed for two, ninety five might be three. Twenty five after get three let's call three twenty five and then the files will be four. Fifty. So that means my soft minimum is going up to seven seventy five plus a session fee minimum of ninety five. And I'm gonna almost guarantee myself a nine hundred dollar sale with every client comes to my door. I'm okay with that that's the minimum. So the average is going to be higher than that because we sweep them in. And a lot of that its product design and development which we talked about in the six piece of selling last week. Because we have beautiful products and those temptations and that eye candy and good merchandising. The minimum is really hard to buy my studio, even when you do get all the files. So I hope you guys are seeing how this all these points on the circle of your business, our inner relating to another and how they affect each other. Okay, again, that forty thousand foot view. So here's, how our brochure looks right now. And this is the brochure that's at the hospital. This is what happens when you open the inside of it. So it's not the outside there's the inside, so it says it gives our why right here. Let the beginning never end already to the birth of a child marks a defining moment your life from this day forward, everything changes. You have a new reason for living. You have a new reason to love. And just weeks from now, your little one will no longer fit so tiny in your arms. They are only this little for so long with a newborn portrait session of jewel images we will help you let that beginning never end and then they see the pricing. Our credit collection includes your choice of one or more signature art products and digital files. All the cart options are also available, so this is the starting point. So it says choose signature art, credit collection and choose digital files. So step one step two this is starting prices for everything so that's just a sixteen sixteen by twenty mounted photographic print boring press. We also offer canvas water, color prints, standouts. Other stuff is coming. Press printed book a little teeny tiny four by five book from pro d p I that's very small, not people look at that is to seventy five and upgrade automatically to the larger books strategy. Do you see that it's a cheap, little flimsy book for two, seventy five for four, sixty five. One hundred bucks more basically one hundred fifty bucks more you get a much more gorgeous thick board page book so not only did the prices go up, but the value perceived value of the product goes up as you spend more money do you see that um then they choose their digital files all or in smaller all in large and now we've added that you get to take your images home the day of this appointment and with the large files you get the image box with the proofs inside and a free set of birth announcements and an iphone or android app of your images. So just by adding the freebies to purchasing the large files which only cost me about thirty bucks, the difference here is three hundred dollars that thirty bucks is a ten percent cost of good, right? And so that has all of a sudden increase my probability and my average sale overall by just spending thirty bucks makes sense so that's how we're incentivizing the client to purchase more or at least go with a large files. I've added that the files anyway I'd do the same for small files as I do for large, so the more I can get them to buy the large files, the better off I am financially now there are ala carte options the other option is to do twelve digital files for three, ninety five or all of them for three, ninety five see that no value. So basically for two hundred sixty five dollars more not only did you get in our piece that's printed but you get all forty images instead of twelve what deal are you going to take as a consumer? So a lot of hours looking my price and you got your really cheap I see and I know why they say that, but if you think about it and you look at the structure and you look how I'm patting things in okay, so this order right here cost me thirty dollars. Well, cost him good thirty bucks that's a ten percent cost a good no five percent because the order is six hundred sixty dollars, right? Well, packaging for this let's see so it's probably around forty. Well, padded and say fifty fifty bucks my cost of good on the files and on the wall portrait for a six hundred and sixty dollars sale. So I'm profiting six hundred ten dollars off that sale plus the session fee of two twenty five so that gets me up to eight hundred and fifty dollars and I barely gave them anything. Does that make sense? The other thing you need to understand I didn't show you on the flip side of this brochure it says the two session types family session and gem session the gem session. We're going to show you between fifteen and twenty images. So there's a lot fewer images and on a platinum session is thirty to forty. So by spending one hundred thirty dollars more in your session fee, not only were you going to shoot and show you three times the number of images, but then when you get to create a collection, you get all those files here. So it's much more advantageous to do a platinum session that it is a gem's because you're gonna end up with more images. Do you see that? So I always sell platinum sessions and create a collection ninety nine point nine percent of the time, and most people do not do a minimum sale. Why marketing, branding there's no value in it. I placed the value in the large files, so that immediately gets my creative collection starting at seven hundred dollars. And then we have to add in the piece and I tout the benefits of prince versus albums. So I'm constantly trying to sell albums because I love them personally and I think there are better value. I get the room images of their walls so we start playing around with things we could do on their wall. I plant the seed of the sale in the pre consultation. So we come into this appointment with a nice big plan of what we're going to dio and they see the pricing realised where the best deal is and always spend over a thousand dollars because of that you see it so strategy I want you to think about how to make it work for you but then also convinced the client that spending more is the better option every good business or industry in the world does this the menu at ruth's chris steakhouse does this okay, so when you think about your own packages do you have that incentive built in the logic deductive reasoning to the client that says, oh my gosh if I just spend this little bit much more we get like three times as much do you have that in your pricing? Maybe a little bit can you make it better how can you make it better what the clients want to climb for digital files right? So use the digital files to manipulate your pricing if you want to sell them if you don't want to sell them then use things like eight by tens that the client thinks is a safe purchase and that they want for family and friends they all want the gift prints right? So use those as a manipulating factor to make him buy more makes sense questions I see you're all just kind of going uh linda yes when you're saying that your cost of goods for the bottom entry package created collection is only thirty or forty dollars where's your cost of goods for the wall portrait I I'm sorry if I must communicate to you I didn't mean to I said that because I was thinking about the price of the sixteen by twenty which is thirty dollars okay in the price of me putting like the costs into the files is probably about forty thirty or forty dollars so all in all I was calling six the two items a sixty dollar cost of good which probably was a little bit low but regardless it's about a fifteen percent cost of good but yes I am factoring in that so I'm sorry if I miscommunicated thatyou do you get it now? Okay okay yes so if they get the ala carte digitals are they not taking them home that day? No, no. Sometimes sometimes I just don't wanna deal with fix them so p o that they went on a car that I was given time forget about the door you know his frustrating hating people by allah cart but for the most part what I'll tell them is okay well, we need to go through in sort through those images and do final retouching on them so you can come back and get them in two weeks or week or whatever uh it's strategic I say it that if they buy created collection they get to take them home that day and it's just another added incentive that makes them want to do credit collection because remember when they see these images for the first time it's the height of the emotion they've never seen them before they saw me shoot them but they haven't actually ever seen the images as a digital product you know, as a digital image so when they see them for the first time that that emotion comes at its height and as peak and so they're like yeah, I want to I want thes I need to go home that instant gratification that human nature just loves to love and that's why anton, I want you to stop showing images beforehand because you need to maximize seeing them at that appointment so you use that emotion to your sale advantage to make sense any other questions? Yeah, so if you have somebody who's going to come in and do your gym session, which is the twelve to fifteen images is that right is fifteen to twenty that will show you ok, you sever that you because I was going to say if they already know they're only going to get let's say fifteen and then they're looking at your all a car and they're like yeah probably just give up three images so I'm in with the ninety five dollars, session fia and then innocence four hundred for the files and they're thinking mentally, well, I'm just going to give up just a few images to how do you know I love that you're thinking like a client. So good job, but number two, you're absolutely right. And my strategy there is we never show fifteen to twenty it's always twenty to thirty and that's the strategy we say we're going to show fifteen to twenty, but we but we shoot for thirty ana gems that we shoot it full session. We just don't include the parents, okay? So when they come in, we go oh, yeah way have a few more images than we normally show. We could have a hard time leaving things on the bedroom floor too. So there's a little more than normal and that's when they go wrap, this is going to be hard. Okay, so it's the art of sales so you you don't upgrade their session fee for sure enough, the extra images you just talked them in at that point to the crazy election. So you've lost a little money at the session fee part, but I'm going to make it up there. Yeah, yes, and the amount of time that we lose eye my gem sessions, they keep the same average that the platinum sessions d'oh the session fee really in my book is money seen money gone? You know, it's money, money spent money gone and to me it's just to hold them it's just a hold their spot it's really to get a commitment from them granted it pads your pads, you're profitability, but I have because we show more than what we say we're going to show the gem sessions have been just as high of average as the platinum sessions, okay, so that is a little that was learned the hard way, and after I had a few sessions where they like what came down to me, all my albums have twenty images in him, so gem sessions blue and buy an album of images or they figured out we couldn't refuse, so you're absolutely right. What happened was they went, oh, we don't need him all what does narrow it down? And then I shot myself in the foot, but if I say that you'll get twenty to thirty images, then they'll look att that twelve and go, oh that's not a lot compared to what she's going to show us so I tell them I'm going to show them fifteen to twenty I actually show them twenty to thirty and then tearing it down to twelve is an impossible task, the art of pricing okay question when do you incentivize you're sales do you tell them at thesent shen when you send them out the door with their ordering packet that there are incentives for purchasing or do they find out about those incentives at the ordering appointment? We just started doing them in the box and the birth announcements and all that we just started doing that about two or three months ago and in the beginning I did it just at the ordering appointment because I was like scrambling to try to order proofs and my system wasn't quite in place and so I wasn't sure I was gonna have the proofs in time so I was kind of I did at gordon appointment now I'm doing it at and it's in our new brochure so now I'm doing it at the session when we make the ordering appointment on the calendar and I'm saying them don't forget if you invest in large files there's a few perks that come with that I hope you saw them out there on the coffee table before you left so they know it's coming especially in the birth announcements are the giveaway everybody wants those darn birth announcements because they're going to go toe minted or tiny france and doing themselves anyway same with christmas cards I mean this is family christmas cards in high school senior announcements and all that stuff it's the same for paying for my industry as it is for any other genre okay, people want that card and it's such a great marketing opportunity for you because you can stand your logo on the back of it, so when and they're going to do it anyway, especially I mean, obviously with babies it's right away, everybody does it with babies, but for families and seniors, chances, families in particular chance I was just going to the christmas card, right? But, you know, you could you could do it like, okay, you get the christmas card or you get a set of cards and they say, oh, can we wait till christmas to order them? Of course, granted, you've got to do the work for that at christmas, you need to make sure, but at that time I bet you any money they're gonna want to buy more announcements or more christmas cards for christmas when the time comes, you just ended up paying for it, and if you make the card now, I mean, I have right now I have baby playing clients who have bought the large files and want to use this session that they just in the summer as their christmas card, and they're asking me to hold off, but what we're doing is we're designing their christmas card now and delivering it now, even though it's not quite close to christmas yet. So why can't they do a christmas card instead of a baby announcement or our high school's? It doesn't matter okay, so the car that's been great everybody sent it out our logo on it so it's almost like a marketing expense and I paid twenty one bucks for the for the cards for the clients they're spending an additional three hundred dollars to get that plus the proof's in the box the box is dirt cheap it's just a little etc box I might pay like fifteen dollars for him they're no big deal okay, so I've got another total I've got another fifty bucks in the entire thing um and they're spending three hundred more dollars okay, so that's closer to a twenty percent cog but if they don't do it the boxes reusable I haven't ordered the birth announcement yet I've only blown twelve bucks on the purse so I don't lose that much that it's only a twelve dollar risk that they won't get the large files so I'd rather push that envelope to see if I can get my average sale hire um then worry about spending twelve dollars on some proofs okay don't all making sense so these prices up here my my products are all based on the product formally we did yesterday so those are priced profitably same with the digital files okay, so then all I gotta worry about is how the client is combining them when I create create a collection just making sense, but notice this is all I offer for all the cart. There are no other options you cannot buy prince, you cannot buy canvas, you cannot buy anything ala carte other than these two digital packages. So if you even want us to create anything fora for you, you have to pay us to do it and do create a collection. Does that make sense, everybody all these photographers wanted don't you offer anything else here? What don't you want to give him the choice even at a higher price? No, they have to see that there's no value in ala carte that all the value is towards create a collection and that's, what I want you to do in your package is even if you don't choose critic election model, I want you to be able t convince your client and go two packages so you can get that average said he'll need. If you put too many fancy or appealing options in allah card, they're going to buy ala carte, so you have to make all the cart as unappealing as possible, but notice it's the entry point this is the entry point for getting into my studio, which is digital files, which is what they want. So I'm almost fooling them I'm almost saying, oh yeah, you can get in cheap, but then when they come in and see, they're like, well, that's not what I want, but because the gem session is fifteen to twenty five, they're like, oh, she's lying it shows we should be up that's more than half we should be fine, we'll get more than half of our pictures on disk, but then they quickly re read through that and they're wooed by all the kindness and love and authenticity and brand products and level of on they're like, oh my gosh, we just got to do this, so this is the art of running a profitable pricing and sales system do you see? So I have now had this pricing for three and a half years, and this is the pricing that changed the hospital display before it was all a cart started at nine ninety five and create a collection was lower credit collection was like seth six, ninety five or seven hundred or whatever, but none of these products changed in price these air all still the same as they were years ago. Ok, it was just very configured a little differently, so now people think that they can get in for a ninety five dollars session fee and three, ninety five and our brochures we have brochures and sage m session ninety five dollars with your select files on disk for three ninety five I don't say how many you're selected digital files on disk for three ninety five that's the promo that's the postcard and so they're like oh my gosh we condone see this this is doable but then there woud I'm not like being mean I'm not like being sales e I'm just this is how it is and then everything is so kind of nice and lovely and that branded well and experienced yada yada yada they just quickly realized that oh well we'll just spend a little more it's worth it and it's our fiftieth wedding anniversary do you see what I'm saying so I'm using the buying triggers the pricing structure the product line the brand and the customer service to convince the client that they need to spend more than they thought they should have any good business we'll do this to you think about when you go to the spa he just went in for a pedicure and lo and behold you're like oh god day spa thing sounds so good oh sure we can fit you him it's four hundred dollars instead of forty you know that kind of thing is every business does it okay it's just a matter of being strategic but all the points on the circle have to be so now you understand why branding is so important don't you now you understand my customer service is so important, don't you? Now you understand why having a attractive product line that's, creative and unique and not just a canvas on a wall is so important. It's got to be creative it's got to be enticing it's gotta be merchandised. Well, all these points on the circle make up your business and you need to make sure they are all being juggled in the air. Which means that if you are not sitting out here forty thousand feet in your business, you're not able to predict when one is going to fall. Right? Okay, the nice thing about what I do it credit collection is it's extremely easy to produce? Wanted three products in the files. I get the files that day, those air gone I go upstairs, I run higher is production and pro select make their sixteen by twenty or their album or whatever order at the lab thirty minutes later and everything is done. Most photographers have so many things in their packages that they're like trying to figure out what they have to order and it's like things get dropped through the cracks and fall through and it's okay to keep that, but you need to come up with a system for ordering all that stuff that's efficient, so you're not forgetting something in someone's order makes sense and I'm a simple girl and once I have the money I hate doing the work which is really bad it's so bad because I'm like once I have the money I get lazy and don't want to do the work right? So this makes it easy so I just walk out go upstairs, order their product really quick it's happened it's done I marked on the order form when I ordered it what date? Throw it in the file so lauren khun package it it'll come in less than a week later and then belinda calls and says come pick up your order and bam we're done it's literally that easy so I don't have to do a ton of work after I've already got the money which I know is my weakness in my personality some people are much more responsible and much more like, you know, thinking of someone else before themselves, you know? Yeah it's bad it's really selfish I totally readily and I'm glad that you guys are laughing cause that means I'm not the only one of the boat but um yeah it's like you got the money so you kind of stall in place in the order because you know, it's gonna take a lot of work, I'm sorry what'd you say totally you get paid, you see squirrels exactly but it's true because you're like, oh just order later and later and then all of a sudden two weeks is gonna buy your crappy car back I place the smith order I have done that yet well, if there's only one or two products to order, I just run upstairs quickly process like get it done out of here bam right where it were finished and then I don't have to worry about anymore, okay? So in that way, because I was having to put deadlines on myself when I had other pricing because I'm like if I don't I would have to put in the calendar if I don't order it by that's all gonna be here different vendors stuff takes different times and you're getting all this stuff from different places and trying to get it all in one package is a lot of work, right? A lot of mental work so that's why I end up simplifying down to less is more or less is more less is more and that's. The other lesson I hope you learn in this entire five weeks is that less is more keep it simple stupid is and that kiss the kiss acronym keep it simple stupid not like you are stupid but keep it simple stupid okay the beautiful thing about this process to is that when they get the files that day it means the sale is final why? Because they are taking a digital product out of the studio which is downloadable and the beautiful part also is that the low cost of good on the files five percent cost of good on digital files allows me to pad my profit and create a collection so even though the price of the products as you saw earlier today's lesson was around twenty percent with the files being around five that puts my cost of good on a collection at ten to fifteen percent on every collection no, I have some products like my asuka albums where I charge fifteen hundred for the album and the price of the album is three to four hundred about three nine, four hundred dollars so that's a pretty hefty cost of good it's about twenty five percent and it really sucks when they buy the small files with that one because I don't pad my profit as much okay but it does even out but the goal is to try to stay for me to stay at that ten to fifteen percent cost of good as much as I possibly can okay the digital files it's that entry point it really is being able to show that entry point for my market now for families and seniors and weddings it's probably going to be a little bit different you know? I don't know sorry shoot wedding so you're gonna have to really think about what they're buying trigger is a bride and brand yourself according to what they want you're gonna have to really study and research your ideal client if you do weddings how many of you do winning? Okay one. So are your bride spying on price? Yeah some it's not always yeah it's not always so if doing this kind of thing strike up no matter what the art of the teas enticing with a reasonable cost but still high end because I'm sorry but to most new mothers five hundred dollars on portrait is a lot a lot especially in oregon in newport beach it might be a little different the osi but in most small town yusa not tiny rural community but small town usa for the average family who makes forty thousand dollars combined income mid twenties just starting out their life having a baby five hundred dollars for portrait is a lot of money. Okay, so but that entry point is still approachable to them we're it's a thousand dollars was exorbitant it was way too much had they looked at the pricing they would have realized that compared to this pricing it's the same it's all about how you spend it. Okay, so all the digital files having that approachable price point is what worked for me so in your industry you're gonna have to ask yourself in your genre will that work for my brides approachable with them when they come in they realized the brand because we're service what you're going to offer, how you're going to help them if upgrading is going to be worth it right there's two types of consumers in the world and dawn is very familiar with this because she posted one of the videos on it the neo in the traditional we'll talk about this more next week but traditional is based buys based on status, features and price so if it gives them status they'll buy it it has a lot of features they'll buy if it's cheap okay the neo buys based on quality design, authenticity and innovation and experience so if they but here's the clincher so they will spend more on products they deem worth it okay so that's pretty much our consumer right? We want those people but here's the thing if they look at your product customer service brand product line everything you do style visual of your work if they look at that as a commodity they will act just like a traditional on demand the lowest price. So if you attract initially on price you want to track too low so I know the internet's going to scream at me for this so I got to be careful what I say here um for my market if I attract initially on price but then woo with its worth it the neo consumer goes crazy because it allows them to experience my brand first off firsthand and deem if it's worth it before they commit to spending the money now as a photographer becomes more and more known in the market and has a status symbol associated with working with them then it's different there's a studio important called campbell salgado they have been there for twenty thirty years and they do black and white c p a portrait and everybody who's anybody goes to them work is good it's not like stellar stellar you know award winning stuff that ugo they're very good they're professionals don't get me wrong I don't want I don't want to degrade that at all but my point is that they've been there so long and they have such a solid brand and they've created such an amazing experience and they've raised the prices over the years and doing so the perceived value on them and the status symbol associated with working with them attracts both neos and traditional sze so all the wealthy people have their kids portrait's taken at a camel's colorado does that make sense so when you're first starting out like I was taking it from you know attractive approachable price not cheap approachable and then wooing through the process allowed me to weed out and go then the neos go oh this is really awesome we need to spend more money now do I get traditional sze to some what? I try to weed him out. Okay, but as the brand is getting more and more, they're going to want to come to me because it hopefully it'll be a status symbol to come to our studio because the brand and slowly getting out because there yet but it's slowly getting there. And when you own a nation, your market, you're gonna be able to do that. Do you see how this thing like this? Okay, I know you guys are all getting a little bit tired. This is a lot to take in. But when it comes to digital files and that approachable point clear, I'm not saying don't be probable. I'm not saying shooting bird, please don't think I'm saying that. I am not saying that the thing you need to know is I rarely rarely sell ala carte files and that eight, ninety five for twenty. I never sell its feudal absolutely pointless. Because for the same price you can get all the files and our peace. So no one ever buys the large files. This one here, no one ever buys this, okay? Because there's no point because for nine hundred sixty dollars, you can get all forty of them, plus the sixteen, twenty art piece. Do you ever have anybody than ask? Well, then why's this on here and how do you respond to it? If somebody's really mentally breaking down your prices just look atyou? Bluntly go, why do you even have this? I want to make sure we have options for everybody, and there are folks who just really I don't want to pick all forty images. Perhaps they like others better, some better than others, and some folks prefer to do the printing on their own or they have a service that prints for them. And so we don't necessarily need to be printing a product for them, so create a collection isn't right, so we want to make sure that we give options that everybody can have a choice for is probably what I would say something along those lines no one's ever asked. So that kind of I just pulled that right out of you know my head, huh? But that's pretty much what would happen. And I am blunt. I say to my climb and you guys know me by now I'm pretty blunt when it comes down to it. I was I will say, well, you know, we want you to purchase collection, we want to print something for you. That's the way this pricing a structured and why there's not a lot a lot of options ala carte because we know that you wanna have the digital images for your archives, but we also want to make sure that you print and the value of printing is enormous because your digital files or transient they won't last and tow us that's, not where the value lies, the value lies in the ability to put pretty artwork in your home that you and your children could enjoy for generations. We'll last longer than you, so that's the whole purpose of doing this, and so we do have some ala carte options, but ultimately we want to print something for you and that's. Why it's priced the way its price to entice you to go that direction. That's the truth blunt to the point, I say that a lot actually, I say that probably a couple times a month somebody asks and or kind of goes, well, this doesn't make sense why suk I'm like, well, yeah, it's done on purpose, you can see it, can't you when they see it right away, but they also understand running a business and they get that I'm trying to entice them, but I'm not sitting here pushing and going, you know, do it, I'm using the system to entice the client all right, so the effect of strategic praxis is well, of course that gets a happy client who spent it really does, especially when the package is structured it well enough that they get what they want, right? Your clientele will feel like they're getting a good value because the difference between allah card and collection shows that right especially once they've gone through your gauntlet, your sales for sale system your profit throughout their maximum you're going to meet your happy place every sale okay? And all you're gonna have to worry about is whether or not you have the client numbers that you want right that's really all you're going to be concerned about at this point, so at that point marketing becomes your biggest strategy and maintaining your customer service cycles so you'll get referrals, right? Isn't that the case? Okay, so now you seo do it okay, you need to create three five packages or design a critical create your own collection that works for you price your products of the problem product formula and then when I want you to do is set it all aside for at least one week shove it in a drawer and do not look at it for at least a week better to do too I know you think I'm crazy, you know? What is she thinking I could have a step down no but after one to two weeks, I want you to take it out of his room. Will you forget about it a little bit? That's the point and then come back. And I want you to look at it as if you're shopping. If you as if you were a client, you will see the flaws glare at you, ok? It really works. So create a package structure that you think works for your cost of goods. Your average sale, all that good stuff gives incentive for the client to move up, make it work, shove it and your two weeks bring it back out. Go. Okay, I'm a client. Where am I gonna buy what I want? What's. My deepest, darkest desire. Digital files or give prince or that the hot product in your studio? It's basically, what I'm telling for me its central files that's why keep saying digital the hot product. And where is the hot product? Where where is it? In your packet structure. Yeah, well, I want you to structure it so that it's supposed to be in the right spot and structure it so that it makes you want to buy in that spot, so you need to make sure and create that package so that that happy places where they buy what? You think yourself well, can I just put it all in the middle package? No. You want to try to get the client to get your client to spend more right? So the way that is to incentivize even further so give just enough in the middle one that that's the starting point for them because it has the hot product that they want in it and then the next product up oh, you just been this what's more look how much more you get so am I says, and then of course you make the whopper said no one else that way no one will buy and if you sell the whopper chance sorry need another higher whopper. Okay, so tomorrow we're going to talk about your first outsource accounting. Okay. Accounting book keeping um we're gonna have interview with my accountant cody martin, who just helped me convert over to an escort my attorney help me convert but he's he's my accountant who's kind of keeping the money management side of it, but um so that's an interesting interview. I think you guys will really like it a lot. So and he's uh he's an entertaining guys and entertaining is accounting can be right, so those were online go ahead and join our facebook group to continue this discussion and of course we will be online to periscope this afternoon at four thirty. Julia l kelleher is the symbol for my handle, and here is your ah homework day nineteen and you guys are like, oh my gosh, this is so much homework. I can't take it. I don't expect you to do all the homework, but if you can it's going to help you and give you a huge jump start. Okay, so evaluate your package or pricing model. If you don't have one, create one, does it encourage up selling and doesn't make your desired average sale consistently if you're not selling your packages instead, people are going to ala carte your packages are not attractive enough, okay, you need to make alec are less attractive and packages more attractive with what you put in it and how you price it. So ask how you can change your package structure to increase revenue, okay organized, develop and create a package structure that suits your brand very important your business model and your desired average sale. If you're a high volume, low priced studio, you might want to go with the ala carte twenty percent off thing, then your area of innovation all of a sudden is not based on quality it's, either based on convenience or price. Which makes you different which is a good thing so I know a lot of people are saying to me they're like oh my gosh you're just doing this around newborns around your model or whatever no it work for any different model but you have to match the brand has to match the price you have to look at your area of innovation you have to decide on a business model in a structure all the points in the in the circle have toe work together do you see that this works for wedding it works for families there is nothing different about the way I do I just have a different ideal client than you d'oh that's all it is my client may just be different than yours and I'm targeting and marketing my client not yours does that make sense so think long and hard about who that woman is because it usually is a woman and live and own and breathed her life and be in her shoes and find out how she purchases things okay if she lives in a horny twenty neighbourhood then you need to figure out what her buying triggers are isn't status you say I'm saying so target marketing understanding your market your client research is so critical to the rest of this process and magic I probably should have put it first researching your market before you dive into the stuff that's how important this