Charging The Perfect Price

If you’ve been in business for less than two years I can guarantee that you are  not charging the perfect price for your photography, and most photographers who’ve been in business for more than two years are probably not charging the perfect price either.

You may have been different, but many photographers set their prices by using one of the following 2 models:

Model A
1. Find out what your competitors are charging.
2. Decide where you want your customers to view you, are you low-priced, middle-of-the-road or high end?
3. You set your prices according to the results you find.

Model B:
1. Find out your competitors prices
2. Work out what the average is.
3. You set your price just slightly below the average.

This is what is known as price positioning, and to a certain extent it does serve a purpose. But what it also means is you base your own prices on where you see yourself positioned in relation to what your competitors are doing.

This is a huge fundamental mistake! Why? Because around 85% of people don’t buy on price alone. Yes there are a small number of people who are always looking for the cheapest price, but most people will pay a little extra if they think it is better value.

So if people are not buying on price, what are their buying decisions based on? These figures may surprise you, but a recent study revealed the following:

Fifth in order of importance was price
Fourth was customer service
Third was value for money
Second was quality of products
And top, even more important than value for money and quality, was trust. People want to feel that they can trust the people that they do business with.

Getting back to the issue at hand, the only way you can find the perfect price for your photography is to test. For portrait photographers this is dead easy. Make up a new price list putting up prices by 10%. Over the next 20 to 30 sessions see which price list makes you the most money. Use your original price list for half of your clients and use the new price list for the other half.

Forget your average order value, that figure is irrelevant for this test, for this test you need to know which price list is going to make you the most profit. At the higher price list (subject to your profit margin) your order value can be down about 16% and you’ll still make more money.

Once you have enough sales to make a comparison you can then use Which ever price list makes the most profit as your regular price list. If it is the higher price list (which it usually is) you might want to run the test again.

If you are reading this and thinking “I can’t just put my prices up by 10% for no reason”, well yes you can. And if you are thinking your sales will drop, you are most likely wrong. I was recently chatting with a client who owns a busy portrait studio. In the past he had not charged session fees for his “Baby’s First Year Plan”. Getting a bit fed up of working for nothing he decided to start charging a session fee of £9.95.

The good news was two fold. There was no drop off in bookings and his no-show and cancelation rate dropped, so he decided to put the price up to £19.95.

Again, no drop off in bookings so after a couple of months he raised the price to £29.95. Again, no drop off in the take up rate. He recently increased the price to £39.95 and has still not experienced any drop off in bookings. What he was doing for free he now earns over £30k per year for, and that is just session fees, not print sales.