Just what do I think I'm worth?
One of the things I learned quickly upon starting Paper Swan Photography was that figuring out what to charge--and what to provide--is one of the most difficult parts of the job. When I first started, like so many others, I simply took whatever I could get--or worked for free--and was (truly) grateful for the opportunity.
Now I am in another place altogether. I'm not a world-famous 'rock star' photographer, but I'm not a baby anymore either. In this middle ground, where so many of us reside, there is, it turns out, absolutely no standardization in pricing. None. Zero. Zilch.
So I study the art and science of pricing...I eagerly absorb the advice of the rock star scions--those established, respected, well-known photogs who have discovered the secrets to success and offer up their advice and example. I come away from their inspiring seminars and pricing guides thinking, "Hey, there really is a big value to what I do...I can make money doing this!"
Then I look at the other side, and encounter discussion boards full of low-cost shooters and brides irate from what they regard as price gouging in wedding photography...closing my tabs I think, "Is that really all it's worth?"
Clearly, pricing cannot be set on the advice of others. Surely, techniques, psychology and considerations can be learned from the rock stars, but their pricing and clientele are well outside my reach at this stage. Pleasing the bargain-hunting couples, though I completely understand their reasons, is similarly impractical.
I'm in the middle...not aiming for riches, but unwilling to work at a loss. My fellow photographers occupying this place run a wide gamut of pricing, packages, styles, and experience; finding a median is, for all intents and purposes, impossible.
So I take a breath, pour some wine, and open Excel.
Where did I put that secret formula?
For a few minutes, I stare at my blank spreadsheet. Ummm...okay.
The first run at creating something useful is to log and total my personal expenses. Try to account for everything--knowing full well I'm going to miss stuff--add a multiplier for taxes and, voila, there's my minimum annual profit. Divide by a target number of weddings per year, and there's my minimum average profit. Fabulous.
That doesn't get me to prices, though.
Next I try to hit a target hourly rate. This is where I see just how many hours a wedding takes me--from initial consultations, to retouching, to album design, to file management...and oh yeah, shooting. Wow...really?
I take all those hours, multiply by my target rate, and get another minimum profit per wedding. This one is somewhat higher. Hmmmm.
Still not at package prices.
So now I have some high-level ideas as to what I need to make on a shoot. Let's revisit those packages...some of the thoughts in my head:
- What is actually important to my target couples?
- Where do I really want to spend my time?
- What can I include that gives my couples a lot of value, but also makes me some money?
- How can I make it easy to choose?
- How can I create packages that result in the right mix, getting me to my targets?
Thinking on these questions, I create four packages...simple enough to reduce the work required to make a decision, but comprehensive enough to deliver lots of value and reduce hassles. Some key decisions:
- Include the digital negatives. Conventional wisdom says photographers should keep the negatives (aka, high resolution files) sacred and sell prints; historically, print sales have subsidized shooting prices, and photographers dread their work ending up printed poorly. I've struggled with this from the start. Reality check: I don't really want to spend my time selling prints. I want to take pictures. Also, digital is a way of life now...the Facebook share has for many couples replaced the gift print.
- Remove all 'or's. My old packages (still posted as of this writing) include a couple either/or options. My sense is that couples are already making a million decisions...it probably isn't helpful to add another one. Reality check: Too many choices are paralyzing. Let's make this easier.
- Kill print credits. I've always included print credits or packages in my offerings. I really, really, really want my couples to get nice prints of some of their pictures; that so many photos today reside only on hard drives and Facebook saddens me. Data is so ephemeral. Reality check: Even with credits, it can take a long time for couples to choose prints. A really, really long time.
- Keep hours unlimited. This is a big one for me. I initially tried setting hours allocations (8 hours, 10 hours, etc.), but in practice stayed for the whole thing anyway. Reality check: May as well make it official. Besides, who wants to negotiate extra costs with someone on their wedding day??
- Always include an engagement session. They're fun, they let me get to know the couple, the couple gets used to having my camera follow them around, and a couple prints are a nice touch at the reception. Reality check: Don't be silly, just include them!!
Okay, packages created. There's four of them. No idea what they'll be called, but I know there's four, and I (think I) know what's in them. Progress!
So now, a la carte listing, assigning retail value, hours, and materials costs. What's the point of this? It establishes the line item retail value...what I have to charge to account for the higher risk associated with cherry-picked products and services and make sure the margins are okay if that's all someone orders. It also establishes that the goodies in packages aren't just bonuses...they have value and costs of their own (for both of us).
Now I add up the line-item retail for my packages. Zoinks! Yeah. Nope, definitely cannot charge that!!!
From there, it's tinkering. How far can I discount my packages and still make the targets I came up with earlier? And, yes, how can I make more profitable packages appealing and worthwhile to my clients?
Now we have prices!! Victory!!!
Epilogue
Sadly, I realize a couple days later that I have accounted for my variable costs, but not my fixed operating overhead. Back to the spreadsheet...
Why did I tell you all this?
- I like projecting my inner monologue through my keyboard.
- I know there are many others in the same boat, and they should know they aren't alone.
- It's always interesting (to me at least) to see what's in other people's heads as they are making tough decisions. I hope to show you more of it.
- I confess, I worry that people will see my prices as excessive. By being transparent about my thought process, my hope is that even if someone feels they are too high, they will understand that it's not some sort of moneygrab. There's a really, really good reason they are set where they are.
Final thought...I really, really wish I could incorporate more perspective on client value into this model. I hate vendor-centric pricing; for the moment, however, that's what I have to work with.
Enough about me, what about you?
How do you set your prices (whatever business you may be in)? And do you find this kind of blog post interesting/entertaining/useful?
Talk to me!! :)
