Tuesday Tutorial: Increasing Your Prices
Happy Tuesday and HAPPY NEW YEAR all! Today’s tutorial is about the ever dreaded price increase for your business. Let me start off by saying this is not about how much or where your pricing should be, but some pointers and guidelines to move in the right direction.
1.) First determine if you actually really need to raise your pricing. We would all love to make more money, but this shouldn’t be your sole reason to do so. If any of the below statements apply to you, it is probably time to increase.
- You are working way too much.
- Every inquiry books.
- Clients book way in advance.
- The quality of your worked has drastically improved.
- You have a new/improved studio space.
- Other photographer’s think you are priced too low.
2.) Determine your current numbers. Are you making a profit? Are you losing money? What areas can be improved or streamlined to maximize your profit?
3.) Now determine the numbers for where you want to be. You cannot successfully reach your goals without having a plan to get from point A (where you are now) to point B (where you want to be). Figure out how much you would like to make (different from need) and calculate how many sessions that would be based on your current pricing. Don’t forget to include all of your costs of doing business including everything from studio rent, office supplies, association fess, equipment, etc. From this starting point, decide on how many sessions really make sense for a work life balance and calculate accordingly. You will start to see exactly what you need to charge to be happy.
Once you have decided on a solid number, it is time to act. There are basically two ways of implementing the new pricing…all at once or slow and steady.
Let’s look at the pros and cons of both types:
ALL AT ONCE METHOD:
Pros: get ideal client, weed out deal seekers, fast
Cons: possible booking lull, starting over with a whole new client base, very risky if clients do not see the value
SLOW AND STEADY METHOD:
Pros: keep your current clients, gain a gradual shift of new cliental, a chance to re-evaluate the market at intervals
Cons: the money may be slow to come, may cause client confusion, you may become complacent and not raise your rates on a regular basis.
Another big concern with increasing your prices is how to handle returning clients. Being upfront is the best way to avoid any mis-communication or sticker shock. Change a negative into a positive by telling them you have become more selective with your cliental. Show them all of the ways you have added value to your services and exactly how it can benefit them. None of our clients really care how much one of our new lenses cost, but they love to hear how we have added a pre-session consult so that we can give them the shoot of their dreams.
I hope this helps in a small way…pricing is such a monster to tackle, but if you start with these simple steps you will be on your way to success.
Best wishes to all my fellow photogs and may 2014 be the best yet.