Marginally cheaper by the dozen

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You can tell that it’s getting close to the end of the year as companies rush to get work done or hurry to spend any remaining budget. In the past two weeks, I received nine inquiries for business portraits and each job had to be delivered and invoiced before December 31. The requests ranged from two to thirty business headshots.

One potential customer asked why I don’t offer a bigger volume discount for multiple business portraits. They wondered why the cost to shoot 30 business headshots didn’t drop to under $50 each.

Here’s why:
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Typecasting

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There’s a quote attributed to French author Antoine de Saint-Exupery that, roughly translated, says:

When you want to build a ship, don’t start by gathering wood, cutting boards and distributing the work, but awaken in men a desire for the vast and endless sea.

A similar philosophy could apply to photographers who seek quality customers. Instead of passively accepting any customer at any price level, it may be better to first teach customers to understand and appreciate the benefits of quality photography. Educated customers will expect more and pay more.

There are four types of customers:
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For Internet Slaves

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If you’re an “Internet slave”, read this New York Times article by writer and cartoonist Tim Kreider about working for free.

Practicalities aside, money is also how our culture defines value, and being told that what you do is of no ($0.00) value to the society you live in is, frankly, demoralizing. Even sort of insulting. And of course when you live in a culture that treats your work as frivolous you can’t help but internalize some of that devaluation and think of yourself as something less than a bona fide grown-up.

For most professional photographers, this should not be news. But photographers new to the business should pay attention.

 

More or less

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Two corporate photographers were talking shop. The first photographer said that he recently charged $6,500 to produce 14 studio portraits for a company’s annual report. The second photographer replied, “They should’ve called me. I would’ve done it for $2,000.”

And there’s the problem.

The second photographer said he would’ve been happy to do the same work for less money. If this photographer was smart, he should’ve asked, “What did you do to earn that fee?”

Of course, the ideal situation is to figure out how to do the same work and be paid more. What would a photographer have to add in order to earn more?

Some photographers forget that it’s not supposed to be a race to the bottom. Photographers compete mostly with themselves. It’s not about charging less than another photographer but rather it’s about figuring out how to deliver more to the customer.

When the choice is between (a) doing the same work and getting paid more, or (b) doing the same work and getting paid less, it’s surprising how many photographers will choose less.

 

Stop Time

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When considering a potential purchase, a customer will, where possible, compare the price of the product or service to other similar products or services. But when a customer has no reference points to help determine the worth of a purchase, they will usually fall back on two old standbys: price per weight and price per hour.

For example, a customer will often assume that a 5-lb. box of Product A should be cheaper than a 10-lb. box of Product B and that a two-hour service should cost less than a four-hour service.

Many companies don’t have a lot of experience hiring a corporate photographer. This means they may have difficulty determining an acceptable price for professional photography. Is a particular photo commission worth $500 or $5,000?

To gauge a photographer’s price, a customer will often resort to hourly wages. For example, if a photographer charges $1,000 to shoot some business portraits over the course of two hours, the customer might think, “That’s $500/hour! That’s much too expensive!”

The cost of photography should not depend on time spent but rather on value gained. Pricing photography by the hour is like pricing books by the number of pages or pricing paintings by the square inches of canvas.

When assessing a photographer’s price, instead of reducing it to dollars per hour, ask how important that photography is to your company’s marketing plans. If the marketing value can’t be expressed in dollars per hour then neither should the photography.

 

Mileage for Canadian photographers

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Most folks still use the word “mileage” even though we’ve been metric for a long time. The correct word seems to be “kilometrage.”

When calculating what to charge for kilometrage, the operating expense portion is easy to figure out. Add up all your operating expenses for a year, (e.g. gas, repairs, maintenance, etc.), and then divide by the total number of kilometres driven that year. If you had $10,000 in operating expenses and drove 20,000 km, then it cost 50¢/km to drive the vehicle that year.

But what about the ownership expense portion (i.e. cost of vehicle, insurance, licences)? If your car cost $35,000, how do you factor that expense into your kilometric rate? Vehicle depreciation depends on what car you own and how long you keep it.

Possible ways to help determine a suitable kilometric rate:

• The federal government publishes a list of kilometric rates for government employees. These generic, one-size-fits-all numbers are the bottom end of what you should charge.

• The government also publishes “acceptable” auto allowance rates for company employees. These more realistic numbers are higher than for government employees. You can charge even higher if your situation requires it.

• The CAA has a somewhat limited driving cost calculator. If you can’t find your vehicle when using “By Brand” then try the generalized “By Category.”

Remember that your mileage rate, (it’s easier to say than kilometrage :-), covers only your vehicle expenses. It does not cover your time. If driving to/from a job takes hours, you should be compensated for that, too. Your time is worth a lot more than, say, 75¢ per kilometre. Your travel fee should include compensation for both vehicle expense and your time.

Also remember that you can claim only the business portion of your vehicle expenses on your tax return. You need to record the kilometres you drive for business purposes each year. For example, if you drove a total of 18,000 km in a given year and that included 9,000 km for business purposes, then you can claim 50% of your vehicle expenses.

 

Buying Time

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Possibly the best free thing is free time. Everyone wants free time. But since time comes only in a very limited supply, free time can be, ironically, very expensive to acquire.

For example, some people have to work a full-time job for almost an entire year to earn two weeks of free time. Similarly photographers have to do many jobs to earn enough money so they can afford some free time.

Since free time seems to be almost a luxury, why would any photographer work for free? Working for free, literally or effectively, not only eliminates the benefit of working, it also prevents the photographer from being able to afford free time.

 

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