Tuesday, March 29, 2016

Incentivize vs. Penalize

Do you have a hard time collecting payment or getting client selections done on deadline?  If there are no incentives for moving quickly, things may almost always wait until the last minute or just after the last minute with an ask for forgiveness or a distaste for a late fee.  By incentivizing clients to act early and on-deadline, you help empower them to make the most of their time by rewarding early and on time decisions.

Take two different sets of language you might see in a creative agreement:
"Orders placed before the early bird deadline of 2/2/16 will receive 10% off the total order."
"Orders placed after the final deadline of 2/8/16 will incur a 10% late fee."

What excites you more?  What makes you look forward to completing your order early and on time?  What language creates stress for you if you don't complete it on time?  How do you want your clients to feel about working with you?

Here's another example:
"Prepaid packages save 10% when paid in full during booking."
"Payment options available for 3% more."

Another photographer recently said to me, "why would I want to give anyone a discount for paying their bill early or on time?"  My answer is that you should already have this "discount" built into your pricing profit margin for negotiation purposes anyway, and when you recognize that clients who wrap up their orders early are actually creating LESS work for you, you realize that you're actually saving even more money by way of administrative time.  When clients pay early it means you can wrap up their project earlier, it means their work isn't on your to do list overlapping other work you have to do, and it's one less bill to chase down and create a payment system for.

Please keep in mind that I'm not suggesting you shouldn't have late fees or extra fees for added administrative work - merely that by providing incentives for the client side of your process, you can wrap your projects up more quickly and ultimately provide both you and the client with a more rewarding experience.

Anne Ruthmann is a professional photographer in New York City. With over 10 years of success as a full-time photographer in weddings, portraits, editorial, and now architecture and interiors, she spends any extra time she has helping others find smart solutions to business problems.  Stay in touch on Instagram, Twitter or Facebook.

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