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The Photographer's Pricing System: The Grand Reveal

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In this excerpt from The Photographer's Pricing System: Get paid what you're worth for portraits and weddings, Alicia Caine explains that by establishing your price points first and then tweaking the content of your collections, you gain greater flexibility to test what will sell best and what your clients will be the most drawn to, as well as on how to present it.
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Build tweakable collections

Compared to the number crunching and research, collection building is one of the easiest aspects of the whole pricing process, but it is not a one-and-done task. Finding the perfect combination of products will require some tweaking even after you start presenting the collections to your clients. Because you established price points first, you’ll be changing only the contents, not the cost. Your returning clients won’t freak out when you make these changes; few memorize exact product groupings, but most remember prices, specifically your session fee, minimum order requirement, and gift print cost.

By establishing your price points first and then tweaking the content of your collections, you gain greater flexibility to test what will sell best and what your clients will be the most drawn to, as well as on how to present it. You don’t want to be stuck in that box where you encounter problems with your collections and then either live with them or start all over from scratch to fix them.

Test what works

I’ll be honest: I can’t tell you the perfect mixture of products to put in your collections. What works and what doesn’t ultimately relies on the wants and needs of your unique marketplace, how you present and sell, and your style of imagery. For instance, do your images sell better as collections of smaller prints or do they sell better as larger images? I don’t know all the answers, and you may not even know them—but that’s okay!

Research and observation hold the key. Test various product groupings, and pay close attention to what people are buying. If things aren’t working, do another client survey. You can always rely on client surveys to help you refine what you are doing in your business. Only your clients know what they want, no one else. When in doubt, research, and make performing surveys a regular practice in your business. Whenever you’re having a hard time understanding your clients or the marketplace, ask questions directly of those people to find the answers. Assumptions are a dangerous thing to build a business on.

Add digital files strategically

Everyone wants digital files, as I’m sure your client surveys are telling you, and digital-only collections (without any prints) are becoming very popular. Digital files also are incredibly beneficial for factoring value into a collection without raising its cost of goods. If you want to add more value to a collection while reducing the overall cost of goods, add digital files.

My method of using digital files strategically is to sell them as elements within the print collections, as well as to offer an all-inclusive digital file option (which comes with a set of proofs) on the à la carte menu, setting it apart from the actual collections. That way if someone truly only wants all the digital files and nothing else, he can just buy that. By including them in print collections, I ensure clients can still get their hands on their favorites shots as digital files, even if they don’t get them all.

Pricing an all-inclusive collection of digital files is easy, because you already determined your price for a single file in Chapter 3. Simply multiply that price by 10, and there’s your price for all-inclusive collection of digital files plus a tangible, deliverable set of proofs. Although some photographers offer 5×7 proofs, I usually provide my proofs as 4×6 prints because that size slips into albums easily.

The price of this digital-and-proof collection will always be slightly more than your minimum order requirement. Clients can choose to buy the minimum in digital files or spend a little bit more and get the whole session. The best part is that no matter which choice your client goes with, you will always make a profit and your cost of goods will always be under that 15 percent.

By now, you’ve done your math (for instance, 3 × $40 per gift print = $120 per digital file; $120 × 10 = $1200 as the all-inclusive price), and you may be wondering if your digital file price point is too high. Remember the psychologically behind sales: The more someone spends for something, the more they value it—digital files included. The more clients pay, the more urgency that they will feel to actually print and do something with the files because they’ve invested a substantial amount. So essentially, by charging these higher rates for digital files, you are building in more opportunity for overall satisfaction because clients are more likely to use them. Sell them on the cheap, and clients won’t feel the value as much, may never print or use the files, and will be less satisfied overall because their money didn’t produce a result for the investment. Clients will turn that lack of satisfaction against you and probably won’t return; they just can’t justify doing it again because they didn’t follow through on their end.

After I started selling my digital files for $250, my clients began asking me tons of questions about the best places to order the highest-quality prints. They wanted to make sure they were making the best choice for their investments and to take action as soon as possible. I saw a totally different attitude, and it really helped me justify the price of selling the digitals.

Create stacking collections

Don’t make the common mistake of building one collection of all prints, another that’s all digital, and a third that mixes a ton of things. This approach leaves clients overwhelmed with no basis for comparing the value of their choices. The result is usually that clients retreat to buying only the minimum from your à la carte menu.

Instead, make your collections easy to understand so that clients can easily see their value and decide spending more than the minimum is worthwhile. Clients appreciate clear, comparable choices, such as basic, premium, and deluxe options.

One way to ensure this is to create collections with contents that stack like building blocks on top of each other. Collection 1, the lowest-cost option, serves as your base. Collection 2 then contains everything in Collection 1, plus a little more, and finally Collection 3, the highest option, contains everything in Collection 2, plus even more. The three choices build on each other; they don’t compete with each other.

To demonstrate the stackable approach and the behind-the-scenes decisions that go into building collections, the next few sections will walk you through several examples. For simplicity, I’ve arranged the collections into three groups: collections without specialty items, those with specialty items, and digital collections.

Example collections without specialty items

Shown in the sidebar “Collections Without Specialty Items,” the first group of example collections is designed for photographers who aren’t offering specialty items yet. It assumes an MOR of $750, gift print price of $40, and digital file price of $120 per file. The collection price points correspond to the percentage increases (25 percent, 50 percent, and 75 percent) recommended for new businesses in Chapter 3, “Reverse Engineering Your Pricing.” (You’ll notice I rounded to the nearest $50 for easier calculations.) For this pricing group, you won’t yet be selling canvases or albums, so prints and digital files are your friend.

You’ll notice all three collections list a quantity of gift prints first. Gift prints are an excellent base for your collections because their cost of goods is low and they are always popular. Clients love them because off-the-shelf frames are easy to find and no custom framing is needed. When you have a simple collection structure, adding or removing a couple gift prints makes tweaking easy, as well.

All three collections also offer clients the freedom of choice. Clients can choose their preference of gift print and wall print sizes. Choice is a great way to get your clients to feel even more excited about the process, while simplifying your sales sessions. If your client wants a wall gallery, for instance, you can point him to a collection and then help him design his own gallery by choosing the wall print sizes that would work best for him. Listing the largest option (20×30 for wall prints and 10×13 for gift prints) encourages clients to go big. Clients focus on which size they want rather than which size is the cheapest. I used 20×30 as the largest wall print option, but you can tweak that size, depending on whether you want to sell bigger or smaller—and client feedback, of course.

Digital files increase the value of each collection, while decreasing the overall cost of goods of each. Remember, your all-inclusive digital file package is worth ten digital files. Working backward from Collection 3, which contains the all-inclusive set, Collections 2 and 1 should each contain proportionally fewer. For the example, I included six digital files in Collection 1 and four in Collection 2.

When tweaking print sizes and numbers of items, be sure to keep your cost of goods below 15 percent of the collection’s price point to ensure it’s profitable. If your cost of goods rises above 15 percent, you can simply lower the number of wall prints you have in a collection and increase the number of digital files to give additional value. Collections are super easy to tweak as you go; simply pay attention to how your sales are doing and if you are staying within your budgeted percentages.

The cost of goods is for your benefit, but the comparable à la carte value is for the client’s. When you present your collections, always show your clients not only the collections’ prices but also the comparable à la carte value for their contents, such as Collection 1, $950 (à la carte value $1440). When totaling up the value of a collection, simply add up the individual à la carte prices. For the wall prints, use the price of the largest size clients can choose. For instance, for Collection 1, I added $320 (eight gift prints at $40 each), $640 (four 20×30 wall prints at $160 each), and $480 (four digital files at $120 each) to reach the $1440 value.

As the final piece of each collection, include an incentive to buy additional products. To cap off Collection 1, for example, I offer 10 percent off additional à la carte items. Collection 2 offers an additional 20 percent off, and Collection 2 increases the offer to 50 percent off. These are suggestions; feel free to offer whatever incentive feels best to you! Just be careful that you aren’t overly generous (such as discounting more than 50 percent) or stingy (giving only 10 percent to Collection 3).

Remember, these discounts are a bonus for you to get additional sales, so think creatively. Consider selling an additional portrait session to your client by reminding him he can use the discount toward the purchase of his next session fee! Or, you could give your client a certificate allowing him to use the additional discount for an entire year for re-ordering prints. Most clients won’t take you up on the offer, but it makes you look good by offering an additional generosity feature. Not to mention that it’s a great way to pick up an additional sale or book another session: E-mail your client with a session reminder card two to three months before that one-year certificate expires, saying something like “Just wanted to let you know that your 20 percent discount is about to expire, and I didn’t want it to slip away before you had the chance to order more prints or put it toward your next session fee.” This a great way to keep marketing to clients without appearing pushy because you are giving them additional courtesy service and taking care of them. Making life easier for the client, that’s luxury customer service!

Example collections with specialty items

The examples in the “Collections with Specialty Items” sidebar add canvas prints and albums to the collections and use price points based on 25 percent, 75 percent, and 125 percent increases over the example MOR of $1500. For comparison, the gift print price for this example is $55, digital files sell for $165 apiece, and specialty items are marked up at 5.5 times the gift print price. These collections are designed for a more established business that consistently brings in clients through its marketing efforts and is becoming less sporadic. Notice that Collection 3, the biggest collection, offers basically double the contents of the smallest, Collection 1. This is when upselling is really magical.

Again, I built the collections with a gift print base, but this time I just put the same number of gift prints in each collection and chose to build by progressively adding specialty items. For example, Collection 1 contains a canvas because that’s what ideally I want to sell to all my clients, Collection 2 stacks on a second canvas, and Collection 3 increases the offer to three.

Not everyone is a canvas fan, however, so I offer the equivalent value in wall prints as a choice each time. It’s a fantastic way to make your collections flexible without you having to deal with the headache of clients asking for unanticipated swaps and changes. They can basically customize the collections; meanwhile, your cost of goods and collection price remains the same. Offering a choice of equivalent value keeps ordering sessions simple and reduces the frustration for you and your client.

All three collections in this group also contain digital files, but notice Collection 1 offers the option of receiving an additional canvas or three wall prints in place of the digitals. Additional trade-offs like this are great to put in the collection price list, because clients love seeing they have a choice. And they are not overwhelming because there isn’t a lot of options you are offering them.

Collection 2 contains everything Collection 1 offered, plus an additional canvas (or three wall prints) and a session album to build the value. For purposes of calculating the equivalent à la carte value, note that the session album assumes a $300 cost of goods and a 5.5 times markup, bringing its à la carte cost to $1650. The incentive for additional sales also increased to 20 percent from Collection 1’s 10 percent.

Collection 3 adds a third canvas, as well as the all-inclusive digital files with the set of printed proofs. Collection 3 is basically your dream client session. They buy (and get) everything: gift prints to give away, a wall gallery, all the digital files, and a session album. For the client that wants it all, it’s the perfect collection to have. And while your dream client is in a spending mood, you also offer 50 percent off additional à la carte products or a later session fee.

Example digital-focused collections

The sidebar “Digital Collections” offers three more sample collections that use 25 percent, 50 percent, and 75 percent increases over an MOR of $1500. This time, however, the collections emphasize digital files. For comparison, the digital file price is $135 apiece, albums are $2000, and 20×30 canvases sell for $700. If you want to make your main focus digital file and album sales and don’t like complicated ordering sessions, this group of collections provides a simple solution. Pet photographers often like this option because their clients generally don’t want tons and tons of prints.

Every collection in this group includes an increasing number of digital files, as well as a session album. Collections 2 and 3 also offer a choice of canvases or wall prints.

If you’re considering this route, be aware that these collections aren’t going to be upselling much. Once you sell your digital files and the client has an album, which essentially contains the entire session, the client loses incentive to buy small prints because he thinks he will simply print the digital files himself. These collections will have lower gift print sales, and you might get the bulk of your sales in that smallest collection. But the benefit to offering these is that they are a ton easier to sell during the order session when walking a client through the choices. There just aren’t many options that require client decisions, so your ordering sessions will be simplistic. If you are completely intimidated with in-person ordering sessions, these could be a great choice for you.

Fill your own collections

So there you go. You now know three unique ways of building your collections. Play around with the ideas, and do what feels best for you. As long as you aren’t underselling yourself, you really can’t screw up what is in the collections. Calculate your cost of goods and remember your budget: Keep the cost of goods at 15 percent or less of the collection’s price. That’s what matters most.

Don’t be afraid to tweak them as you go. The beauty of locking in the price points first is that you have the comfort of stability. You’re still not wavering on what you need your sales to be, you’re just refining your offer within a collection. Filling your collections is where you get to be creative.

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