If you're a photographer, there's a good chance you've smashed your head against more than one wall, trying to figure out what to charge for your work. You've probably tried a lot of things, some of which worked - and some that didn't. At the same time, many of us have made a lot of mistakes when it comes to pricing. Here are seven mistakes I commonly see photographers make when it comes to pricing:
1) Worrying about what other photographers charge
Be honest. When you started out, and were trying to figure out what to charge, one of the very first things you did was to look around, at the other photographers in your area, and try to figure out what they charge. You're not alone.
Then again, I remember my mom once told me "just because everyone else is doing it..." The problem is that you have no idea what their pricing is based on. You don't know what their expenses are, their product markups, or profit margins. Even worse, what if they don't know those things (which, lets be honest, isn't totally out of the question). You don't really know anything about their business, so why would you want to base your pricing on it.
2) Failing to understand their real cost (COGS)
Figuring out the wholesale cost of something isn't really that hard. You know what the lab charges you for an 8x10 (I hope!). You probably have a pretty good idea what it "costs" you for each product you sell - except that's just the beginning. To really get a picture of what a product COSTS you, you have to look at the total COST OF GOODS SOLD (or COGS).
Your COGS includes the wholesale cost, shipping costs, packaging costs, plus design costs, production costs, the cost of selling the product, the time editing the images, and the time spent in production. It includes everything that goes into selling and producing that product - not just the wholesale cost of the print or album. To really begin to know how to price your products, it's critical to begin to understand COGS - and by far, the biggest area where photographers struggle in this area is...
3) Undervaluing their time
You are expensive. Seriously. You are an expense of your business. All of the time you spend on your business - especially selling and producing products - is an expense of your business. This is true, even if you aren't directly paying yourself. Often times, we think that if we do it, it's free.
There are a lot of reasons why that's not true, but here's the only one that matters: Anytime you spend on your business, is time you can't spend on anything else - and there's a price on your time. You can't get it back. You can only spend it once, so it has value. Failing to really appreciate the value of your time is the quickest way to go broke and out of business. Here's a post that goes in to more detail on how to price your time.
4) Missing the sweet spot
Pricing is one of your most important sales tools. You can use pricing to motivate people to do what you want them to do, and to buy what you want them to buy. Too often, photographers create pricing that doesn't make it obvious what the client should buy. If it's hard for the client to determine value, it's hard for them to make a purchasing decision.
For example, when creating packages, you can use pricing to help clients book. You can use pricing to drive clients to purchase larger prints, or better packages. You can also use it to motivate them to purchase the things you value - like albums.
When you approach your pricing as a sales strategy, you can create a pricing structure that creates the most value for the client - while maximizing profitable revenue for you.
5) Giving too much away
This mistake is about discounting your pricing, because you don't believe anyone will book you for what you're worth. Guess what, if you don't believe you're worth it, no one else ever will either.
There are definitely times when using discounts, or added value, can be a strong sales and closing strategy - but too often, we discount out of desperation. We think we have to lower prices because no one is booking, or no one is buying. Here's the thing - if you lower your prices to the point where you're no longer profitable, aren't you actually better off if no one books? At least then you're not working for free.
6) Creating confusing packages and options
Your pricing probably makes sense to you. After all, you probably spent some time thinking about it. You came up with prices and numbers, and cute little package names - and you know what it all means. On the other hand, your clients have no clue. If a client can't easily tell what your pricing means, or what your packages contain, they'll make the easy decision - and go somewhere else.
If you find that clients are frequently asking to swap out items from your packages, or if they're confused about the real difference between two packages, you might want to reconsider how you structure and present them. My general rule is, whenever possible - simplify. Make it super easy for a client to know exactly what you want them to do, or buy.
Don't use strange names that don't make sense. Don't create packages where multiple variables change at each level - people can't compare value when that happens. Instead, simplify.
7) Changing their prices too often
This might be the biggest mistake of all. Not only does it create confusion (often for you), it erodes brand trust, when potential clients sens that you're not really sure what you should be charging, or where the value is.
Certainly, if you're not charging enough to be profitable, you should consider a strategic way to raise your prices. But, instead of just randomly changing variables until something seems to "stick," take the time to put in the work to create a profitable pricing structure that works for your business. And then, "stick" with it.
Changing prices more than once a year, is likely to cause you more problems. The only exception is if you happen to have far more work than you can possibly take on - in which case, the laws of supply and demand dictate raising prices to create equilibrium.
For more help on really dialing your pricing, check out the FREE pricing guide download. Just click the link above. I highly recommend you check out Jared Bauman's Pricing consultations. He's pretty much THE expert on creating pricing that works for you.
hat do you think? What other common mistakes have you made, or have you seen other photographers make with pricing? Leave a comment below.