|Nikon D3S, AF-S NIKKOR 28-300mm f/3.5-5.6G ED VR, 4–Alienbees B1600, ISO 200, ƒ/11, 1/160|
For the past 20+ years the photography community has been pushing for photographers to know their rights. Copyright is at the top of that list. Right next to it was you knowing the cost of doing business.
I even perpetuated many of these tips that photographers needed to know to be sure they were running a healthy business.
Before 2002 quality images were hard to come by versus today where almost daily the amount of well exposed, in focus images are being created faster than we can calculate. The reason I picked the year 2002 is that is when a 6-megapixel camera went from $25,000 to under $2,000. This made if very affordable for the masses.
Today there are so many images available that for the most part photography is now a commodity.
As photographers were pushing for more from customers and trying to explain why they must get more money the customer needed them less and less.
Let me start the business lesson where we never did in the past for photographers. We need to start running our business based on the customer/audience.
|Nikon D100, Sigma 70-200mm f/2.8 EX DG APO OS HSM,, ISO 200, ƒ/22, 1/160|
What is the customer's problem?
The best possible customer for you is the one going through a major crisis. You can be the super hero and help save their business. You can see plainly their problem and you have a solution that will not only fix the problem but also help them be more successful.
The reality is that this is your only kind of a customer. If they have no problem needing to be fixed with your services they do not need you. Businesses don’t spend money on things that will not help them reach their objective. At least we know they cannot afford to do that very often without going out of business.
Next you need to figure out how much it costs you to provide that solution to the client.
You see if you don’t know the problems you are solving for a business you cannot figure out what you need to be doing in the first place.
|[Nikon D5, Sigma TC-2001 2x, Sigma 120-300mm ƒ/2.8 DG OS HSM | S, ISO 36000, ƒ/5.6, 1/4000]|
Do the math
Now this math you are going to do has two parts. You have what we call ongoing expenses, which you must spread over all your jobs. This is not just what money you need to pay your home budget needs, but also your business budget. This includes your gear, your costs to find out about customers and costs to communicate to them about your solutions. Remember you have to do all this because they may not hire you and you still have to pay for it somehow.
This cost of doing business is then spread out over all your jobs through a year. Maybe that figure is about $600 per the average job you must build into the price.
Next you must do your math again and add up all the expenses to do the specific job to solve this client’s problem.
You add these together and this is what you must make to stay in business.
How you arrived at this price or what this figure is should never be discussed with the client. This is for you only.
Now if you have a client for example in a ditch with their car in the middle of no where and you have a tow truck and are there to help them you are in a great position, especially if they are in a hurry. This is when you can get a lot more money than had you been in a large city with many more options for the customer to choose from than just you.
Take the time to get to know your market and what prices are typically being charged for these services.
Determine your Target Audience
Now if the going rates are lower than your figure you need to charge you have a problem. You will need to somehow convince people that you are a better solution. That is possible because an oil change can run from $19.95 to $20,000 for a Bugatti Veyron.
Believe it or not there is a formula for true luxury and it is called the Intrinsic Value Dependency Index. Now I am not an expert in this, but in general a product must be of the best quality and in the process creates a space in the market of it’s own. It is important that this item be rare as well. True luxury comes with over the top service as well.
When you get a $20,000 oil change they are doing a lot more than you driving into a bay and stay in the car while they change your oil. They are offering your wine, Champaign or a wonderful latte. Good chance they even picked up your car from your home and brought it back to you at your convenience.
Once you know your figures that you need to charge and you know the market place and have decided where you want to be in that market you not only set your price you create a marketing plan to execute.
You have a website, portfolio, brochures, business cards and other materials you will use to help showcase your work, which is a solution for the customers problem.
Going back to the side of the road with our customer in distress you give them your sales pitch. I am here to help you. I can have my limo driver come and pick you up and take you to where you need to be next and while that is happening I can get your car out of the ditch and take this to the repair shop of your choosing. If you don’t have a repair shop you prefer I have a few that I use regularly that will work with your insurance and get you back up and running.
They love it and ask you how much. You give them the price and they gladly pay. Your limo driver picks them up and offers them some beverages and takes them to their appointment.
Your business is grounded as every other business–you solve other people’s problems. The key is much more than the cost of doing business, copyright or having the latest camera gear. Knowing your client first and foremost is the key.
Photography/Video/Multimedia is the tool to solving problems for customers. Those who are the most successful are not waiting by the phone like a plumber getting a call because a toilet overflowed. The most successful are like Steve Jobs creating products to solve the problems for clients that they didn’t even know they had until they saw the solution.
- Start with the problem of the client
- Come up with a solution to that problem
- Know all the costs involved in providing that solution
- Create the sales pitch that addresses their problem with your solution and how the outcome will look if they use your services.
- Create a price that will cover your costs and help position your services within the market place. Hopefully one that is a luxury and not a commodity.