value

Batter Up

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During yesterday’s Toronto Blue Jays at New York Yankees game, (the Blue Jays won 8-5), the TV announcers were talking about the value of veteran pitchers.

One announcer explained that, although younger pitchers can often throw the ball faster than the older guys, veteran pitchers have more control and they understand the game better. This means that veteran pitchers can throw exactly the right pitch at the right time and win games. That’s why, the announcer continued, veteran pitchers cost more.

A similar explanation can be used to explain why experienced photographers cost more.

 

Size doesn’t matter

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A few days ago, a potential customer asked why a business portrait would cost $500 when the photo is just going to be used small on their web site.

In the 1990s and earlier, many companies had no issue paying hundreds of dollars, or more, for a business portrait. Back then, the cost to publish a brochure, annual report or other form of print marketing was relatively high. The cost for business portrait photography was only a small fraction of the total publishing cost.

Today, every company has a web site where the cost to publish is essentially free. This zero cost has made some folks think that corporate photography should also be very cheap. Their thinking is, “why should we pay hundreds or thousands of dollars for pictures that cost us nothing to publish?”
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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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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.

 

Choosing a business portrait photographer

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If you buy a cheap pair of shoes and they turn out to be uncomfortable, you stop wearing them. The money you paid for these shoes was wasted.

If you buy a more expensive pair of shoes and you enjoy wearing them, you’ll wear these shoes often. Over the life of the shoes, the additional money you paid, compared to the lower priced shoes, will be inconsequential becasue the value received is high.

Business portrait photography is a common offering from corporate photographers. Here in Toronto, business portraits can range from $50 to $1000. Even $2000 for a single portrait is not unheard of.

Why is there such a wide price range?
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Topic of conversation

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Why do people shop at dollar stores? Is it for the customer service, the wonderful store ambience or the quality of the products? It’s only because of the prices.

Why do people buy coffee at Starbucks? Is it for the customer service, the wonderful store ambience or the quality of the products? It’s certainly not because of the prices.

Consumers choose to shop at a particular store for a variety of reasons and price is not often the primary motivator. Instead, customers search for the best value for their money. Value is always in the eye of the buyer, not the seller.
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Expected Value

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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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