Last in a series.
OK, so now you have almost completed your photography marketing plan. You have defined your business, your product, your place, and how to promote yourself. You are ready to go.
Except for one last question. How much should you charge?
Pricing is undoubtedly the most deceptively simple task that most photographers face. Setting prices too high will drive clients away, as we all know. On the other hand, setting prices too low leads to working too hard for too little.
Believe me, there are thousands of photographers who have gone out of business despite having shoots scheduled every day of the week. They just didn’t make enough money from them to get by.
Price for Profitability
Ultimately, you can be successful with either high prices or low prices, depending on what you’re selling. It’s not about price so much as maximizing profit (also known as income minus expenses). This can be done by selling more units at a lower price, or selling fewer units at a higher price.
As a photographer, if you are selling your services, you generally want to command as high a price as possible while still filling your schedule. That’s because you are a limited resource; there are only so many “units” of your time you can sell.
On the other hand, if you are a microstock photographer, the key to success is volume, so lower prices make more sense. If you are selling prints, you could go with either high prices or low prices, depending on your subject matter and your target clientele.
Researching the Competition
When setting your prices, a good place to start is with research. Study the pricing of the photographers in your area who offer similar services. This will give you an idea of the customary price, or what customers expect to pay.
Pricing yourself above the going rate may lead to fewer clients, but if you can prove your value or experience, or package your services in a compelling way, you can earn more money and establish yourself as offering premium services in your area.
Pricing yourself below the going rate is a strategy that many photographers use when starting out — but it can be a trap if you’re not careful. Too often, when you start low, you are never able to raise your prices to a reasonable level.
Why? Because once you establish yourself as a “cheap” photographer, that’s why people come to you. The referrals you get are from customers who do you the dubious favor of proclaiming: “Yes, I know a good photographer — and he’s really inexpensive.”
What the Market Will Bear
Another factor to think about in setting your prices is elasticity. This is the amount of stretch a client is willing to give in their purchase price.
For example, if the customary price of an 8″ x 10″ print in your area is $25, a client may be willing to pay you $27.50 — but if you raise your price to $30, they may consider another photographer. Elasticity plays a part in the annual (or more frequent) reconsideration of pricing, and as you compare your rates to those of other photographers.
Finally, don’t forget to think about your own costs when setting your prices. If you charge $900 for a day’s work, a good rule of thumb is to assume that $300 of that will go to the government, $300 to your costs, and you will pocket the last $300. Your costs include more than the cost of materials. They include studio expenses like rent and utilities; advertising costs; equipment and repair costs; memberships and insurance; assistants; gas and travel; and so on.
Some photographers price their services on a cost-plus basis. They estimate their costs for a typical wedding shoot, for example, and then add X percent for profit, and then charge that price. That’s fine for making sure your costs are covered, but it’s not the best way to optimize profits. You should set your prices based on the maximum your market will bear, rather than the minimum you would be satisfied with.
The End — and the Beginning!
This concludes my series on writing a photography marketing plan. We’ve covered a lot of ground, from mission statements to SWOT analyses, target markets to the four Ps. While far from exhaustive, I hope this overview has been beneficial to you.
Now, get out there and start marketing your photography business!