Many (most?) photographers struggle with pricing their services. Price too high and customers will think the photographer is gouging them. Price too low and customers will think the photographer does inferior work. Either way, the photographer loses.
Some photographers think that if they lower their existing prices, their business will increase. Their plan is to charge less and make up for it with volume.
But this means the photographer is going to do the same work and provide the same level of service, all for less money. Then they’ll do it many times over again, always for less money, and somehow it’ll earn them more money. But these photographers fail to understand three things:
1) A photography business is not scalable. A photographer can’t do volume since there are only 24 hours in a day. You can’t squeeze five half-day jobs into one day.
2) A photographer offers two things: creativity and time. How can either be discounted? Can you be 50% creative? Why would you discount time when it exists only in a very limited, non-replenishable supply?
3) Decreasing price means the photographer earns less and their business suffers. Increasing price (within reason) means the photographer might have fewer customers but their business earns more.
A 1992 study (link to pdf) by Michael Marn and Robert Rosiello showed that the best way to increase profits is not to lower prices but to raise them.
Price is not usually the main factor in a purchasing decision. Customers will shop price only if they have no other way of differentiating one photographer from another. When customers shop price, it means the photographer has failed in their marketing.
For example:
• A photographer who sells business portraits as being just a picture won’t be able to charge as much as the photographer who markets business portraits as being a business tool or an indicator of business success.
• A photographer who shoots office interiors as being good “web content” won’t be able to charge as much as the photographer who redefines the category as being a form of lifestyle photography or even art.
Instead of lowering prices, the better option is always to improve marketing practices.
Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.
– Peter Drucker
