This same store today sells beauty supplies.
(This post is mostly for new photographers doing corporate or commercial photography rather than retail photography.)
Unlike a department store which sells hundreds or even thousands of products, a photographer basically sells one product – themselves – and that comes in a very limited supply. A retail store’s business model is based on volume. A store has an unlimited supply of products to sell to dozens or hundreds of customers each and every day. A store gets a steady stream of money from lots of small purchases.
When a store has a sale and discounts its prices, it’s just reducing it’s profit markup. Revenue lost because of a discounted price is offset by increased sales volume.
But a photographer can’t have a sale. Or, they can have a sale but it won’t be successful. It won’t be successful in getting you more work at your regular prices. New photographers always fail at this: you can’t discount your way to success because a photographer can’t do volume.
A photographer is not a department store selling hundreds of items to hundreds of customers each day. A photographer can work with only a few customers per week, if that. Trying to increase your volume of work by having a sale will never decrease the marginal cost of providing that work. Simply put, having a sale means you’ll be working more and earning less. This is the exact opposite of what you’re trying to do.
The marginal cost for a retail store to service a customer is almost zero. The cost of running a store is the same whether one person or a hundred people walk through the front door. So a store needs as many customers as possible and a discount sale is a way to lure customers in. But for a photographer, the cost to service a customer is high, especially the time cost. Photography is a labour intensive, bespoke service.
But there are ways for a photographer to make a sale without discounting their price.
Downselling
You send an estimate to a potential customer and they say the price is too high. What do you do?
You can offer to lower your price but, and this is key, you must also correspondingly lower the quantity of your work. If a customer needs a lower price then lower the amount of photography, lower the production quality, and/or lower the amount of usage.
A downsell means the customer gets a lower price but they also get fewer features, fewer products or fewer services. You are not selling the same products and services at a lower price. There is no discount. Instead you are selling less products and less services at a lower price.
Downselling can help prevent losing a customer.
Examples:
• For a three-day event, you quote $6,000 ($2,000/day) but the customer says their budget is $3,000. Your downsell is that you’d be happy to photograph one-and-a-half days of the event for $3,000 but not the entire three days.
• You quote $4,800 to do 40 business headshots for a company. The company says its budget is $2,000. Your downsell is to say that for $2,000, you can photograph 15 people. You might also suggest that you can photograph 20 people each month for two months at $2,500 per session.
• You quote $7,200 to do 16 product photos with three views each. The company says they were hoping for under $3,000. Your downsell is to say that for $3,000, you can photograph six products with three views each or all 16 products with one view each. You could also offer to photograph eight products, with three views each, per month for two months at $3,600 per session.
Before you send a quote, figure out what downsells might be possible with that customer. Be prepared ahead of time in case the customer asks for a lower price.
If a downsell isn’t possible then you can’t afford to work with a customer who wants a lower price. You are not obligated to work with everyone who contacts you. You can and should reject customers with whom you can’t afford to work.
Offering More
If there’s no downsell possible then maybe do the opposite. Offer more.
Let’s say a company wants one photo of its factory exterior for its web site. The quantity of photography is minimal and the use is relatively limited. What can you do if the customer offers half your price? You can’t shoot pictures with 50% less exposure or 50% less focus and you can’t deliver half a photo.
You could try to reduce usage. For example, the factory photo can be used on their site for only two years instead of, let’s say, five years. But the problem with usage is that it can be difficult to police a customer’s usage. So instead of lowering usage, you might try raising the usage.
For a company that offers half your rate, you could try offering more usage. At the lower price, the usage is only two years. But for your normal fee, the usage will be increased to 10 years.
The strategy is to keep your normal price and somehow sweeten the deal without giving away too much. But like downselling, offering a bit more is not always possible.
Upselling
The strategy of upselling is to persuade a customer to spend more so they can get more. Upselling is so common you probably don’t even notice it.
Every fast-food restaurant asks if you want to “upsize” your meal. After your meal at a sit-down restaurant, your waiter/waitress always asks, “Would you like dessert?” Online stores show you other products recommended for you, popular products other people have bought, or accessories related to your current purchase. Of course, car dealers are (in)famous for upsells as they always try to sell you additional vehicle options and accessories.
For photographers, upselling isn’t always possible but do keep it in mind. Before you send an estimate, decide if there any possible upsells and include them in your initial estimate.
Examples:
• $500 for a business headshot with two delivered images.
Upsell: $700 for a business headshot with five images.
• $500 for a business headshot.
Upsell: additional $100 for full retouching, background replacement, multiple image sizes, multiple crops, etc.
• $500 for a business headshot of one person.
Upsell: If any other people in the office want a new headshot, it will be $225 per additional person.
• $2,400 for photography of a business event.
Upsell: Business headshots during the event at $100 per person. This will usually require a second photographer so calculate accordingly.
• $6,000 for photography of office or factory interiors.
Upsell: Business headshots, editorial portraits, product photos, etc.
It’s often, but not always, better to get as much money upfront rather than limiting usage and hoping to get more money later from future use. Larger companies that frequently work with professional photographers usually understand usage limits. But smaller companies don’t understand and often won’t respect usage limitations. So try to upsell usage by offering a longer licence in your initial quote.
Examples:
• Business headshots $400 each and that includes three years use.
Upsell: $550 for ten years use.
• $3,000 for photography of office interiors with three years use.
Upsell: $4,500 for unlimited use.
• $3,000 for product photography for use on the company’s web site.
Upsell: $5,800 for unlimited use.
Many business photos have a limited lifespan so try to upsell for that lifespan.
Still Want To Have A Sale?
You could have a sale but it will always fail. A sale will not get you more work at your normal prices. Having a sale tells customers that your normal prices are too high and they should wait for your next sale.
If you need to generate money, and we all need to generate money :-), then don’t discount your prices. You can’t discount your way to success. Rather than lowering your prices, increase your photography. This tells your customers that your normal price is the right price.
Your first thought should never be about discounting your work. Instead you should be thinking about increasing your value. The numbers might look the same as having a sale but the optics to the customer are different.
Example:
• Normal price: $500 for a business headshot.
Sale: Bring a friend and get two business headshots for $600.
This might look the same as having a sale on business headshots but it’s not exactly the same. If you had a $300 headshot sale then you’d be making $300 per session. But with the bring-a-friend, you’ll be making $600 per session.
Note how many stores have two-for-one sales rather than a 50%-off sale. The former is about increasing sales volume and revenue. The path to success is increasing revenue not discounting prices.
In the end, the best way to generate sales is to get yourself better known. Marketing your business should always be your top priority. Before you buy a new piece of gear, buy a marketing book or take a class about small business marketing. Finding new customers is the only way to increase sales.
Having to discount your prices means your marketing isn’t working and you’re not reaching customers right for your business. It’s always better to raise your marketing rather than lowering your prices.
