Business Balance

Before a company tries to save a few dollars on its corporate photography by buying cheap stock pictures or by hiring the lowest-priced commercial photographer, that business should remember this:

There is hardly anything in the world that someone cannot make a little worse and sell a little more cheaply. The people who consider price alone are that person’s lawful prey.

It is unwise to pay too much but it is worse to pay too little. When you pay too much, you lose a little money, that is all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do.

The common law of business balance prohibits paying a little and getting a lot. It cannot be done. If you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.

– often attributed to 19th-century social critic John Ruskin, an advocate for economic reform and social change.

 

Usage and licensing fees

The fee for commercial photography is based on two things: production value (creative fee) and usage (licensing fee). Remember that production expenses are in addition to this.

One point of the previous post was to show how production value affects the creative fee. High-end camera gear, lots of lighting equipment and lots of time spent creating a picture will result in a very good photo and also a more expensive photo.

The second factor determining the overall fee is photo usage. This usage is a combination of four things: how many pictures will be used, how the photos will be used (media), where the images will be used (location) and when the pictures will be used (time).
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Sticker Shock

Hotel Client: What?! You want $1,500 just for some pictures of our chef?!

Photographer: What do you think the job is worth?

Client: Maybe $250.

Photographer: Okay, for $250, I’ll come by your hotel sometime in the next couple of weeks whenever I have some spare time. When I’m there, hand me your cell phone and I’ll take a few pictures with it. You pay me $250 and the job is done. How does that sound?

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Business advice for photographers

The American Society of Media Photographers (ASMP) has a few dozen videos to help professional photographers improve their business practices. Topics include negotiating, marketing, pricing, paperwork, licensing and copyright.

These videos were produced for American photographers and so there are a few legal and business issues that either don’t apply or are different here in Canada. However many of the concepts and principles are equally applicable to Canadian photographers.

 

Commercial photography for web sites

When licensing pictures, corporate photographers and commercial photographers must remember that there’s no such thing as “web use.” The Web is a medium, not a use. Photos used online can be editorial, advertising or anything in-between.

Many business clients use photographs not only on their web site but also on social media sites such as Facebook and Twitter. A photographer has to decide whether such use is no longer editorial or public relations but rather a form of advertising. The common definition that only a “paid placement” is advertising may no longer apply.

For a corporate client, its own web site is usually considered marketing collateral and not advertising. All advertising is marketing but not all marketing is advertising.

But for a business client such as a retailer, is its web site a form of advertising? What about that company’s Facebook or Twitter account?

Perhaps every use on the Web should be priced higher than similar use in print. This is not just for the larger and longer-lasting “circulation” of a web site but also for the increased shift towards advertising use.

 

Expected Value

Do you have a spare $800,000?

If yes, then HTT Technologies has a nice automobile just for you.

HTT (High-Tech Toys), in Quebec, has designed its 750-hp Pléthore LC750 supercar for a very exclusive audience. HTT has been quoted as saying that its target customer is the billionaire auto enthusiast. (By the way, the 390-km/hr Pléthore LC750 is cheap when compared to the 415-km/hr Bugatti Veyron Super Sport which is $2.5M).

If the price tag isn’t exclusive enough, the company says it will build only 99 cars. Exclusive design, exclusive price, exclusive production.

Sure, HTT could’ve designed a nice, average car. But that wouldn’t get all the free publicity that an $800,000 supercar gets. Plus, HTT has said that selling an average car would require a huge sales volume to earn back its investment.

Apparently, at $800,000 each, the company needs to sell only a handful of cars to break even on its initial investment. The company has said that it hopes to sell about six or seven cars per year.
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Marketing Professional Photography

When marketing its products or services, a business is usually told to focus on selling the benefits of those products or services. Sell the sizzle, not the steak. But this isn’t entirely accurate.

Human nature is such that people are motivated by the need for risk aversion. People will act more to avoid a loss than to gain a benefit. We fear loss more than we desire a benefit. This is known as the Prospect Theory.

From the New York Times:

…most of us find losses roughly twice as painful as we find gains pleasurable.

A professional photographer seeking new clients should frame their marketing more around loss avoidance and minimizing risk rather than just pointing out potential benefits. New clients are usually concerned with avoiding risk since they’ve never worked with that photographer before, (i.e. “Can we trust this photographer do the job properly?”).

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