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Wednesday, July 20, 2005

Asking pros for advice about pricing

Pro photographers always get questions from others about how to price a particular image, events, assignment, or other opportunities. The natural belief is, they've been there, so they know something that less-experienced photographers don't know. But, asking pros for advice like this is fraught with all sorts of problems, the least of which is that whatever "price" is thrown out there is likely to be wrong. Photographs aren't like widgets that have a static price list that people either purchase or not. There are far more variables involved. The main problem with asking a pro for guidance is when one is looking for quick answers to a short-term problem. The best way to address the subject is to look at it in terms of longer-term career-development goals, which will then give insight into how to handle short-term and immediate questions, like how to price a particular opportunity.

To wit, I recently got the following email, and it prompted me to articulate a longer, more thorough opinion on the subject:

On Jul 20, 10:22am, photosbymarcus@mac.com wrote:
I apprenticed with a local high dollar wedding photographer for 5 years and then became a lead photographer in his business for another 4 years. After it became evident that there was no further room for growth I decided to go on my own. [...] I recently photographed an event on spec.... I submitted the photos and the client immediately said they want to buy them outright. She sent me list this morning listing 6 photos with this comment "These are the potential photos depending on cost etc." So here I sit trying to figure out whether to give them away at $250 each and regret it if they agree right away, or risk charging some figure like 3-6k since they are buying all the rights. I know you've been here before and appreciate any additional input?

You've hit the same problem everyone does, and to think that pros are any better at this than anyone else is a mistake. It's ALWAYS hard to price these things for the reasons you described, and the longer you're in the business, the more you realize there is no pattern or rhyme or reason to it. There's the classic tradeoff of proposing a number they accept at the risk of it being too low, versus asking for too much, and losing not just the sale, but follow-on work.

My book points out several examples where I've tried to price things consistently, only to find that some clients bite, and others don't, leaving me with a smaller slice of the potential buying market. (This is when I used to believe the old mantra, "don't undersell your pictures or you'll lose respect from your clients and hurt the industry." That's hogwash.)

The real strategy is two-fold: understanding your own longer-term objectives, and those of your client.

As alluded to earlier, it's simplistic to think your objectives are plainly described as "get as much as you can for each picture." Instead, you want to do two things: find ways to get recurring revenue from each picture, and find recurring clients that continue to buy. Of course, you want to optimize how much you get from each picture, but to do so without looking at those other objectives is short-sighted. And, as Shakespeare would say, "therein lies the rub."

To be sure, there are often two different business models: one in which you try to get as much recurring revenue from a large number of clients, and another in which you have a number of recurring clients who pay more per picture. Either side of the scale should net out to a profitable business model. It's harder, but possible, to have a business has both: recurring clients that pay for images, and recurring revenue from those same images. For this article, I'm more focused on building relationships with clients that develop recurring business.

One might surmise that to get recurring clients, you want to price low enough to entice them to return. While there's some logic to that, you also don't need to leave too much money on the table. This for two reasons. First and foremost: what makes a long-term relationship is often not the financial relationship, it's the personal one. Establishing a professional relationship usually starts with good communication and a mutual understanding of a project. In your case, you shot an event, and the client wants to buy more pictures. Here's your opportunity to talk about the event itself (from a business point of view), and to find out how many more they may have, what other types of events there may be, what other kinds of imagery they might be able to use from those ongoing events, and where they use the images (besides just brochures). You may have an opportunity to chime in with suggestions that feed the brain storming session. If your ideas are good, and you're hitting it off with the client, you'll have more opportunities to position yourself (if not outright asking) for follow-on work. And all this can happen before a single dollar is quoted for image use.

If you get to a point where a dialog like the above is taking place, then when talk of money comes up, you can work into the discussions the longer-term plan that involves multiple events, per-show shooting fees, etc. (Remember, time is your most valuable resource, so the more they take of it by hiring you, the more they would reasonable expect to pay you in the aggregate, not on a per-image basis.) What are those fees? Don't know--by the time you get to this point in discussion, it's so far different from that of any other client, that one can't compare it for priceing guidance.

It may also be that those talks not progress at all. You may not have good ideas or ask the right questions that spawn a good discourse. (Sometimes, it's just chemistry; one can't expect to hit on all cylinders with every client.) If this is the case, back off and just let your pictures sell themselves the best they can, and negotiate what you can from there. This may also be your only option if the client likes you, but still doesn't think there's opportunity for ongoing work either.

Then there's that kind of client who uses negotiating tactics like this: "Let's see how these go first, and we will talk about future work later." Or, the most common thing, "we promise you'll get future work if we can get these pictures for a good price." To this, the one solid piece of advice I can give is this: never, ever believe "promises of future work." That's not how you build a relationship. It's a classic role-playing game of master-servant, where they are positioning themselves with a higher status so they can coax you into what they want. It's not professionally wise on their part. But, fortunately for you, it's also a tactic used by novices, and easily remedied by simply turning the tables: "I'll be happy to give you that discount you want when that future work comes, but for now, these are the prices for these pictures." Note that this is not a panacea: it won't immediately cause the client to say, "ya got me" and back down. It is just as likely that they don't go for it as it is that they do. The thing to note, however, is that if they started this role-playing in the first place, it's possible that it's the type of client you don't want to work with in the first place, and however it plays out is just one of the many ways you'll get to the same conclusion.

I realize that all this discussion doesn't address your main question: what do you charge for the pictures? I don't know. No one knows. Even the client doesn't yet know... or rather, they are primed for being presented with a proposal of some sort, and while they may think it's just a "price," they are often more receptive to longer discussions about their businesses than they thought. And that's your opportunity to establish a rapport. When the chips come down, don't believe there are any rules for or against pricing high or low. You have only your gut to sense at any given time whether one price or another is effective, for the long-term AND the short term. The better you are at that, the more successful you'll be. (And not everyone who tries this will be successful.)

A final note: you know weddings well, so you can pretty much eyeball a client based on the number of guests, geographic location, social demographics, the venue, the caterer, and other details to see what kind of budget they have for photography. (And, of course, the reputation of the photographer!) Someone not familiar with weddings would be just as confused as you are about this concert you just shot. But wedding photography is a very mature, niche market, where the clients follow certain kinds of predictable patterns (or, enough so that you can price things relatively accurately). This is quite unlike open-ended stock photography, where your clients are all over the map from many industries. And, many industries don't follow the same tightly defined pattern. That is, just because you have a real-estate company as a client who wants to pay for pictures of a concert on their property, doesn't mean they'll follow the same model that another real estate company would pay under identical circumstances. So, asking "pros" for advice here is going to yield arbitrary and random numbers that have as much success of being right as a clock that doesn't run has at displaying the right time. (About twice a day, if you look every minute.)


Blogger Nisa said...

I appreciate your info on the business of photography very much. I have just stepped into this field and have a long way to go:)
Here's an unimportant suggestion for your blog: Sammy's yawn will look much clearer with a resized image like this http://x-plane.org/home/raniasphotos/sammy-yawn-small.jpg


1:36 AM  
Blogger argv said...

I should probably just use a proper image instead. :-|

8:17 PM  

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