pricing

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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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.

 

Budgeting for Success

Many photographers fail to understand that a client’s budget determines their work. In an ideal world, it would be the other way around. But sadly, the ideal world and the real world don’t often intersect.

Don’t confuse “work” with “effort” or “creativity”. The latter two should be independent of the client’s budget. Whether the budget is $1,000 or $10,000, the photographer has to put forth the same effort and creativity.
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Pricing editorial photography

When it comes to pricing their work, photographers need all the help they can get. fotoQuote and Blinkbid are two common software tools used.

An overlooked tool for editorial photographers is Editorial Photography Estimator. The free version is still available but not the commercial version which included data for advertising photography. A new edition of the commercial version was supposed to have been released in 2011.

It’s very important to remember that Editorial Photography Estimator (EPE) is from 2001 and its numbers are out-of-date. However, the underlying concepts are still valid. Editorial fees, for both assignment and stock, are based upon the circulation of the publication and that publication’s ad rate for a full-page colour ad.
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Higher prices make customers happy

The key to helping your customers better enjoy your photographs is to raise your prices.

A 2007 USA study, with the catchy title of “Marketing actions can modulate neural representations of experienced pleasantness”, showed that marketing actions, such as changing the price of a product, can affect consumer enjoyment of that product.

The study used functional MRI to observe the brain activity of test subjects while they sampled differently-priced wines.

The subjects were told that five different wines were priced at $5, $10, $35, $45 and $90. But unknown to them, there were really only three different wines: the $5 and $45 wines were the same; the $10 and $90 wines were the same.
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