Wednesday, March 14, 2007

The Psychology of Pricing

It seems like the question of how to price photography packages and services comes up over and over for many people - even people who have been established for quite a while, so it seems like something we should really have a conversation on. Here are some of my thoughts - I'd love to hear yours!!

1. Understand the buyer you want to attract (aka target market).

    I can't tell you who your target market is because it's different for everyone (at least it should be), but I can give you some questions to help you think about how to price for your ideal buyer. Print these questions out and write down the answers. Yes, it's hard work and it's time consuming, but these are things you should think about in your business.
  • How will your ideal buyer find you?
  • Will anyone else have an influence over their decisions?
  • Are they bargain shoppers who will analyze each item and price?
  • Are they all-inclusive package people who want to pay for everything up front?
  • Are they likely to negotiate?
  • How much research will they do, and how will their research into other photographers affect their expectations of you?
  • What level of service do they expect (do they just expect you to show up, take pictures, and hand over a disk... or do they expect you to help them plan their wedding and make decisions)?
  • What does THEIR referral network look like and does that have an impact on the pricing they expect?
  • How important (honestly) are your services to them? (it's very easy to fool ourselves on this one... make sure you do a reality check)
  • What do their other purchases say about their values and how they make decisions?

2. What does your pricing say about you?

  • A la carte pricing tells the buyer: Do-it-yourself, include what you need, you can add on later (or not), my profit is built into my shooting fee and the rest is bonus
  • Package Pricing says: I'll help you decide, all-inclusive, pay up front, profits are built into the package as a whole.
  • Lowest Price Says: This is the minimum I'll work for.
  • Highest Price Says: If you wanted to get everything I think you should have, this is what it would cost. (This SHOULD be a dream number that most people don't actually pay. If your clients are booking your highest package- you need to raise the price on it.)
  • Middle Price Says: Just right- not too much, not too little. If you have several middle packages, you will spend more time helping the client decide which on to choose.
  • One Package Price: this is what I need to make it worth my time and this is what I think you need to walk away with, there's room for negotiation. (Be sure that you are comfortable with the negotiation process if this is your structure. Some people like it, some don't, and you need to make your pricing fit with your personal style of doing business.)
  • Retainer Fee: will your ideal buyer be able to have the amount in their bank so that they can cut you a check at your meeting, or will they have to save for a while in order to simply secure your services? How much of a commitment/risk are you asking them to take on securing your services so far in advance?
  • Payments: Can you take ANY form of payment to make it easy for the client to hire you? Do you allow flexible payments over time if the client is stretching their budget for you? Do you accept all of the money before the wedding day? Do you take part of the payment after the wedding day? Do you require any payment on the wedding day? What do those answers say about your level of service or the risk you expect your clients to take in trusting you?
  • Market Comparison: Where are your prices in comparison with your competitors? Do your prices reflect the quality of work and service that you provide when compared to your competitors?

3. The REAL costs and the REAL profits.

  • What are your COGS (cost of goods sold)? You NEED to know exactly what it costs for each product you offer before you can decide what the price needs to be. Generally, your costs should be no more than 33% of the price. Cost does not neccesaily include the time it takes to create the product.
  • What are the service costs associated with providing each product (goods)? (if it is something you currently do on your own, what would it cost to outsource it if you were ever too swamped or injured to do it yourself?)
  • Did you include tax, shipping, and packaging into your figures? Do you expect the client to pay those in addition?
  • What are your costs outside of your goods? How much do you spend on education, professional organizations, advertising, marketing materials, accounting, legal fees, phone, internet, travel, promotions for clients, photo contests, studio space, equipment upgrades, emergency backup services, etc. Add up the annual costs for these items and divide them by the number of jobs you want to take in order to find out how much of each job goes to your overhead.
  • How much money do you REALLY expect to make in reprints (after you've subtracted your COGS, shipping, packaging, and the cost of your time)? Could you sell a DVD of the images for that amount or more? Would the profit margin be higher? What would that say about you & your services?
  • How much is your time worth? How much is time with your family or friends worth? Are there tasks in your business that you're taking care of which could be done by someone you could pay less in order to free up more of your own time to work on things that only you can work on?
  • Are you REALLY the only one who can complete the project or task? Can you train someone else to do it if you had the time? If so, than you're really not the only one who can do it- and you have to consider how valuable your time really is if taking care of that task prevents you from doing other, more important things that only you can do- like making decisions about your business or building relationships with clients or vendors - or being a mom, dad, or friend to the people who love you.
  • Write down the list of tasks in your business that make you happy (or in your life for that matter) . Then write down the list of tasks that bore you or frustrate you. Then think about how much it's worth for you not to take care of those boring or frustrating tasks and where you might find someone who is happy to do the tasks you don't like, who may even do them better because they are happy doing them.
  • How much do you need to make in order to live the lifestyle you want? How much do you want to work in order to live the lifestyle you want? In other words, how does your overall cost of living get divided among the amount of work you want to take each year? How much net profit do you need from your gross income to take care of everything outside of your business?

I'm sure I've left out a lot of questions and things to think about - but hopefully this will be a good starting place. I'd love to hear your thoughts as well so that we can have a deep discussion about the issues at hand. Posted on OSP 3/14/07

Update: 11/8/08 Check out this great blog on the psychology behind why customers buy:

Tuesday, March 13, 2007

Painting With Light

Check out this awesome SPM video on Painting with Light, by John Michael Cooper (AltF).

Here are the basics of the technique:

  • A completely dark room
  • Low ISO - 100 ISO
  • Tight aperture - f13+
  • Long exposure - 15-30 seconds
  • A "snooted light" created by wrapping a dense and dark material around a lightsource to avoid light leak out the sides (like Sticky Black Craft Foam Sheets)
  • A handheld light such as a video light or flashlight
  • Tripod or table - whatever you need to make sure the camera doesn't move
  • A subject that can stay still (doesn't work so well with pets)

Once you've mastered the basics, play with the light in different ways:

  • Use different colored lights, or create a gel for your flash light by using wax paper and colored permanent markers
  • Turn the light off, move the subject in a different location and turn the light back on, all within the same exposure for a double exposure effect
  • Try using the light at different angles to create different effects and highlight different parts of the image
  • Vary the intensity of the light in different places by being closer or farther from the subject with the lightsource
  • Create spotlighting or selective lighting by turning the light off when moving from one part of the scene to another
  • Create shadows and silhouettes on walls with objects off-camera
  • Draw pictures with your light source
  • Have fun with things like sparklers, glow sticks, and other light emitting goodies

Check out the cool things that Polite In Public has done with light painting!

View more inspiration on the Light Paint and Light Painting Flickr Groups!

Share your experiments on your blog and post your link in the comments section below to improve your Search Engine Optimization and to share your mad skillz with others!

Thursday, March 1, 2007

Professional Photographer Album Resources

Professional albums can be one of the most overwhelming things to figure out because there are so many options out there. My biggest advice to someone wishing to carry albums is to keep it simple. Find an album that works best with your style and stick with it (provided they have good turn around times, customer service, and quality). Most clients aren't concerned with which album maker you use, because they trust you are providing them with a quality product. If you're going to offer several different albums, make sure you know why you're offering those options, and what they say about you and your business. It may be a good idea to offer an inexpensive coffee table album if you're dealing with clients who are on a budget, and it may be a good idea to offer something that's highly customizeable if you're dealing with clients who will pay to have something unique. Know your clients, know your style, and choose your album(s) based on that knowledge. With that said, here are some album resources for you! I'll update this list over time as I learn of new resources. Feel free to leave comments about your favorites as well!

There are several different types of binding which will have an effect on how your images appear in the album, as well as how your clients will handle the album. (Please note: the terms used below are not standard book binding terms.)
  • Pinched Glue Binding: double sided printing on single pages are stacked together and glued down one edge creating a "pinched" binding. Parts of the image will disappear into the center of a two-page spread and the book will not lay flat when it is opened. This type of binding is most common with paperback or softcover books as the pages need to be glued to the cover to reinforce the strength of the binding. People tend to hold this book in one hand, and then flip throgh the pages with the other - similar to how they would view a magazine. (This can also be referred to as a "perfect" binding.) It has become more common to see in hardcover books recently, but due to the binding, it may come apart more easily in a hardcover book.
  • Stiched Book Binding: most often used with hardcover library books is a stiched binding which clumps multiple pages (double sided and printed as 2-page spreads) together and then stiches them with thread to a binding tape. These books may lay flat when open if the cover binding is structured for that use. Depending on the size and weight of this book, it is either handheld or laid flat with pages turned one by one- faster or slower depending on the perceived delicacy of the pages.
  • Folded Page "W" binding: pages are printed on a single side as a two-page spread, are folded, and then bound together by gluing each page to the next. Reinforcement is given to the spine by gluing the spine to a binding tape which gives the pages flexibility to lay flat when opened. These books are often a little too heavy and stiff to simply hold and flip through, so they are often laid out flat and viewed as full spreads.
COFFEE TABLE ALBUMS These albums have images printed directly onto a double sided, flexible, thin page. Most common printing for a coffee table album is CMYK or InkJet. Binding is either stitch book binding or pinched glue binding. Advantages: very affordable, lightweight, thin page thickness allows for many pages. Disadvantages: less durable over time, colors may vary in printing, clients have easy access to similar albums which may affect their perception of the overall value of this product.
Here's a video from The Wedding Travelers on the difference between a Coffee Table Abum (Asuka) and a Flush Mount Coffee Table Album (VisionArt)... FLUSH MOUNT COFFEE TABLE ALBUMS This is somewhat of a hybrid product in that its pages are thinner than a flush mount library album, but are thicker than a coffee table album. The printing is often done on either true photographic paper or on a dense fine art paper. Each page is printed one sided and is then scored and the pages are glued together to give each page more strength. Advantages: accurate photographic color, medium page thickness allows for more pages. Disadvantages: images may deteriorate over time in the scored creases.
FLUSH MOUNT LIBRARY ALBUMS This album most often consists of photographic pages which are permanently mounted to a dense cardstock or plastic page, resulting in very thick pages. Photographs can be split in the center of a spread to avoid creasing distortion. Advantages: very durable pages, books are more likely to lay flat when open due to binding. Disadvantages: number of pages are often limited due to the thickness, albums can be very heavy (this could also be perceived as an advantage when considering perceived value of product.)
Here's a video from Lori Compass on YouTube, showing an example of a Flush Mount Library Bound Album with a collage design... MATTED ALBUMS Even though we group all matted albums together, there are actually different types of matted albums for you to consider. There's a slip-in matted album which allows you to order your mats and album in advance and you simply fill in the holes with your images, and then there's a mounted matted album which requires you to send the prints to the album maker who then mounts the prints into the mats for you, or creates custom mats for your images.
CUSTOM ALBUMS These album makers don't exactly fit into one of the boxes above. They provide custom products for clients who value originality and customization and are willing to pay extra for that luxury.
SELF-MOUNT Self-mount albums can either look like matted albums or flush mount albums, but the basic principal is that you actually mount the images yourself. This is a product which you can purchase in advance and then create a custom album almost on the spot for a client.
Here's an example of a self-mount album, with slip lock pages.. ALBUM DEALERS
DIY ALBUM CONSTRUCTION w/ John Michael Cooper The example shown is how to create a flushmount coffee table album.