pricing

It’s not the pictures

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If one photographer quotes $150 for a business portrait and another photographer quotes $800, which of them will win the customer’s business? Despite the obvious price difference, it’s not obvious which photographer the customer will choose.

There are two types of customer: the price shopper and the value buyer. Although it’s common for some folks to alternate between the two, for example: be a price shopper when buying groceries and be a value buyer when shopping for clothes.

Some people will always choose the low-price option. These customers are price shoppers and they care only about cost. What they pay is more important than what they get.

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Nothing Is Better

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Some photographers don’t understand the value of nothing.

Customer: I want to buy this $1,400 refrigerator. After you deliver it to my house and install it, I’ll pay you $200. How does that sound?

Store clerk: Our cost on that refrigerator is $800. If I accept your $200 then we’ll be losing $600 plus the expense of delivery and installation, and we won’t make any profit.

Customer: But isn’t $200 better than nothing?

Store clerk: Of course not. Forget it.

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Don’t Get Comfortable

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If a photographer is comfortable with the prices they charge, then their pricing is too low.

A photographer should never set their prices based on what they would pay because the photographer is not the customer. Pricing should be determined by the value to the customer, not value to the photographer.

A customer’s willingness to pay hinges on their perception of value. Their perception is always different than the photographer’s.

The photographer sets the price and the customer sets the value.

If a customer decides that the value is equal or greater than the price, then they’ll invest in the photography services. For commercial and corporate photography, value is determined by the usage of the photography and the intended outcome of that usage.

Of course, to justify their prices, a photographer must always make sure their work creates value for the customer.

Once a professional photographer understands this concept, they’ll be comfortable with uncomfortable prices.

 

Photography Pricing Resources

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Here’s some resources for learning to price commercial photography. But I’m not vouching for any of these. A photographer would be foolish to base their business practices on numbers from someone else’s web site. Use these for informational purposes and to help understand the underlying principles.

— The News Photographers Association of Canada Cost of Doing Business Calculator (CODB) is a good place to start. You may be surprised at your CODB.

— The Canadian Association of Professional Image Creators has a PDF listing suggested minimum usage fees (i.e. licensing fees only). Main page > Useful Resources > Resources > Reproduction Fee Schedule. The site has other useful information.

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Should You Adjust Your Set?

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The photo assignment has been completed and the finished pictures and invoice have been sent to the customer. But the customer’s plans have changed and they now want to reduce the usage or even cancel it altogether.

Should you, the photographer, reduce the original license fee and send a new invoice?

Perhaps the customer originally requested a five-year license but their plans changed and now they want only a one-year license. Maybe the customer initially wanted a license for sales brochures and web use but now they’ve decided to go web only.
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One Lump or Two?

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In the previous post, it was mentioned that some professional photographers will list their creative fee and licensing fee separately while others will combine the two fees into one number. Which method is better?

Combining the two fees:

• Some customers find a single fee easier to understand.

• The client doesn’t know how much each fee contributes to the total. This allows the photographer more wiggle room if they have to negotiate the creative or licensing fees.

• The client doesn’t know how much each fee contributes to the total. The photographer can benefit when relicensing the picture since the client doesn’t know what the original license fee was.

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Photography Fees Explained

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A commercial photographer sets their price by combining a creative (or photography) fee with a licensing (or usage) fee. Some photographers list these fees separately, while others combine them into one total.

The creative or photography fee depends on the assignment’s complexity, the time required, the photographer’s talent and experience, and their business overhead.

The licensing or usage fee depends on how the client plans to use the finished images.
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