Since getting back into shooting weddings after a year of "upheaval." I've been trying to go through my pricing with a fine tooth comb. *on a side note, my pricing schedule was based on 2 guys sitting around a table, trying to come up with pricing where we made money, but were still competitive in our area with the "middle range" photography pricing.
Here's what I discovered in short order.
My Whopper price (the one that is way above the prices that I expect to get) was actually a really good deal. As far as the price breakdown we made the least amount of profit in the end. I just offered a ton of stuff, because I figured "nobody is going to do the whopper which is priced at the HIGH end of the high end photographers in the area.
My "I hope to get some of these booked, but if I book too many, I need to raise prices...price" (second from the top tier) Was a really great deal for me, but if anyone looked at the price, and what they got, they could quickly find out that it wasn't a very good deal. My margins of profit on that was almost double what it is for the "big kahoona package" (not the name of the actual package, I just use fancy names for the "levels")
The next tier down is my "most popular package" It actually is my most popular package, they get 2 photographers (plus an assistant) an event booth where guests pay for 5x7 prints on the spot, and the bride and groom get 10% "commission" to spend on more photo prints, or book upgrades, or??? (no cash back, just credit, so that 10% commission costs me basically pennies) The problem is, this package really doesn't offer that much less than the "I hope to get some of these booked...." package above to warrant that it is CONSIDERABLY less expensive.
Lastly, my budget package is basically just $200 less than the "Most popular" but they get nothing, everything is ala-carte, and if they add just one photo album they are already paying more than the "most popular package" which has a really nice lay flat album for the couple, and a "cheapie" parent album. I do tell the couple that it is a lower quality book, but offer them an upgrade to the lay flat for a minimal fee. I don't want to sell any of those, but it gets my foot in the door when people ask what my prices are, I say they are starting at $----, but we quickly move up from there.
I don't offer a package of "just a disk of images any more" For one thing, most new laptops and many desktops don't have a DVD drive built in any more anyway, plus I educate them that disks don't last forever, blah blah... Most people that get a disk, rarely can decide what to print, blah blah.... We are the professionals and "help them" choose what photos would be the best for an album, but they have their say...blah blah.
I don't want to argue the points of giving disks away, it's just not in MY business plan. I know that I fell into the "all the other photographers in the area are doing it" trap, but then I decided that I (personally) don't want to be the same as "all the other photographers"
OK, here's what I took away, and what I'm doing now.
I've come up with a formula for how to come up with my prices, and I'm even sharing the formula with the clients.
Stick with me, and I will explain some of it, that works even more in my favor.
My package are all for "all day coverage" (basically, as long as they need someone, we'll be there.) Normally, it starts about 2 hours before the ceremony, but I have had to go at 7:00am to the beauty shop for getting some shots of the bride getting her hair done. It's what they want, and it's what I offer, so...)
here's the formula Based on a 12 hour day (rarely if ever, but it's what I tell them) Also note, I don't share the parts where I explain the benefits...like (rarely takes that long, or "benefit me")
Photographers get paid. They get $____ per hour x 12 *(hours) x How many photographers.
Editing takes time, the editor gets $____ per hour x 36 (I average about 3 hours of editing per hour of shooting (based on 12 hours, even though it rarely runs that long.... benefit me.)
Albums $__________ based on a "standard" 10x10 album 40 pages, includes the extra layout time. If they balk at the price, I explain that it isn't a "Walmart" album, and it takes several hours to lay out the album, see editing time above.
Prints for the walls and other "side items" are all "lab prints, on Kodak Endura paper that are guaranteed not to fade for 100 years on the wall, or 200 years in a box or whatever.
I give them the price, and just let them know that "these are the prices"
Now, that doesn't end the formula.
I have to add 35% to the total to cover "uncle Sam" Yes, I have to pay an average of 35% on taxes, so that has to be added to the package. (the benefit to me is that I'm paying taxes on the net profit, but I'm adding 35% to the gross package) I've yet to have anyone question me on that part. I do pay sales taxes, but I just figure those into the costs. In our state no tax on the service part, but there are taxes on the value of any tangible items. (photos, books, disks if you include them, etc.) No tax on any digital downloads (which I don't do for weddings, but I do for corporate headshots where they pay for the sitting, and the rights to use the photo)
Lastly, I let them know that I also have to make money to stay in business, so yes, there is a markup. (even though I'm one of the photographers getting $x per hour... I'm also the editor making $x per hour, and I'm also getting mark up on the products)
Now that I've explained the ins and outs, here's more how it comes across.
If you want 2 photographers for full coverage it will be $___ x 12hours x 2 (or 3, or one?)
There is a flat fee of $ for editing time of $____x36 We do NOT give out unedited photos EVER, so this is a constant.
Album cost $______ If they get multiples of the same album the price is $_____ (lower because the editing is done)
Finally, add 35% to cover what I have to pay in taxes. (see the note on how this works to my benefit above)
If they balk at the price, we can always make it an 8x8 album, or fewer pages, but we don't offer the lower priced albums without someone asking for less of a cost. If they ask for other discounts, it's an easy "sure, we can reduce coverage to 1 photographer" Of course, one photographer means that there won't be as much coverage.
Anyway, instead of going the 3 to 4 different levels or packages with fancy names, I just have a conversation with the couple, and ask a lot of questions, then get out the pad and show them what it would cost.
For the "bargain hunters" I explain the "rebate" for using the event booth (which also requires at least 2 photographers, one for the wedding, one for the booth)
With some guidance from me on minimums, I'm actually letting them help set the price for the event photos, because it will effect their commission as well. I can guide them to the exact price I want them to, but it makes them feel like they are deciding.
And.... lastly, I offer them the option to "register" with me. I give them a stack of cards to give to people who ask where they are "registered" and the guests can pay money towards the photography instead of buying another crock pot. I give the guest who sends me money, a receipt, and a certificate to put in the card that says they donated towards the photography.
If they are still "bargain seeking" after this little exercise, I thank them for their time. I don't negotiate, I've shown them the numbers, and this is what it will cost.
I tried it out the first time this weekend with a couple. The bride actually said, "can I tell you something? I absolutely love you... you are the first person who took the time to listen to what I want, and took the time to show me exactly what it costs and why."
The only issue now is that I need to use my own formula to come up with my "prices starting at" price, which would just be one photographer, one book. (smaller 8x8)
Anyway, what I'm trying to do is the opposite of "package pricing" and trying to tailor each wedding to the wants and needs of the couple.
It made my prices higher than they were before, but I'm covered this way, and if the first attempt at working like this is any example of how it will be received, I think it may be a good thing.
Finally, as with any of my posts. This is based on my experiences over 30 years, I'm always changing, and it is what works for me in my area of the country. I'm not competing, or even trying to compete with the $200 Craigslist photographer. Mine is not my main source of income, so my systems will probably not work for someone who depends on wedding photography to keep their bills paid.
So, anyone have any other ideas, or things I may be missing? Anyone have any comments on how stupid my new system is? I'd love to have a good, open conversation about how other people come up with, implement, and discuss pricing with clients.
My other way worked, but I think the second to the highest package, with it's unrealistic profit margin vs. the other packages, kind of worked against me. I'm just always trying to find the best way. (for me)