Lessons

Lesson Info

How to Price your Services and Build Packages that Sell

So let's talk about the fancy-pants price list now. And one of the things I think is really great that you should do as a higher-end photographer in your price list, your marketing, think about experiences from elsewhere in your life. One example would be a really fine dining restaurant, alright? So you go to a really nice restaurant, and you read their menu, and it'll say something like "the rarest, freshest beef, raised "in the hills of Montaquazlosmandzz, (audience laughs) "fed on," you know, "supple green grass brought down "from monks by hand, handed to virgins "who massaged the beef and cooked them for you "over a flaming hot grill for 72 days," you know, with this juju wa wa wa sauce ba ba ba boom, and then it's $65, real small on the bottom. So by the time you get down to the $65, you're like, "I gotta have it, I love," drool, drool, drool comes down, right? They build it up, they get you excited, they get you hungry for this amazing beef steak, whatever it is you're going to g...

et, and then they kind of throw the price. Oh 65 bucks, right? But if they just put on there, "slab of beef, 65 bucks," (audience laughs) you're gonna be like, "Come on, now way, "you're not selling me on this thing," right? There's a difference between just slapping it on there and expecting them to pay the price, versus telling them why they should pay the price, what's special about this, make them drool before they buy. So kinda think about that when you're building your price lists and your marking materials and things. Are you involving the emotion? Are you making them hungry for your product before you throw out that big price? 'Cause most the time we're not. We just think of it like this is the menu at the carwash. Do you want the deluxe or do you want the basic? You know, there's no emotion in a carwash, you just pick what you want. But we're selling emotion, so I think your price list should be a little more emotional and get them involved, alright? So here is an example of a really bad price list. OK? (chuckles) This is just totally hypothetical, bad prices, it doesn't belong to anybody here or anywhere. But what what do we notice about here that's bad, first of all? First thing that's bad, I'll tell ya, it looks stupid. (laughs) It's got dumb names on it. First thing is bad is the first thing that jumps out at you is the price, OK? And, the cheapest, least profitable-priced is on the top. And when your customer looks at a price list, what it is they do, they scan for a price, boom, they start at the top, they work their way like we do. Start at the top left, they work their way down. And the first thing they look for is the price, so now they've got that locked in their head, 100 bucks. Alright, so that's kinda what I'm working from, 100 bucks. So now you've got a lot of work, if you've gotta try to convince them to go to your $700 package down below. And I haven't sold, I haven't made them drool at all. I've just thrown out there, 100 bucks for this bunch of this crap. Right? What kind of drool-inducing price list is this? It's not. Also on the other side, (laughing) you know, this is no joke, I see this on people's price lists, all that negative stuff, right in their face, you're already settin' up all this negative crap, you know. This is one of my favorites, I've never seen this on actual photographers, but you see this on doors of businesses all the time. Isn't that funny? Half the time when I see that, I just turn around and leave. Like, just that negative energy, I don't wanna deal with that, you know, it's settin' it up for like, "If we don't like you, "we can kick you out at any time, "so just walk on in on eggshells, yo." I'm like, "No, thank you," alright? "You must pay a deposit to reserve your day." Yes, they do, but that doesn't need to be said like that, it'll be later on in the fine print somewhere else, we'll talk about that. And non-refundable, yes, that's true, but we wanna have it nicely somewhere in our terms, not boom in their face. It's not the first impression. OK. (makes a raspberry) (audience laughs) Don't do that. OK so here's another hypothetical version of a package that we could present it in a little different way. This would be a nice little two-fold brochure. And let's read this one right here, it might be small here. "Collections of the finest services and products we offer-- "truly the best way to preserve your family memories. "We dedicate and focus ourselves on you, and only you, "with up to two hours of creation time "at the location of your choice." And then the second paragraph is sort of a suggested sale, which we'll talk about that too. "The best way to relive and enjoy your images "is through the pages of a handcrafted leather book. "We guarantee a stunning presentation "created by a collection of artists "and bound in the finest materials. "Complement your main album with a smaller "coffee-table style book, easy to carry and share." And I like that little, throw in a little quote there, "Nothing is worth more than this day." Which is something that I used to use in my wedding, years ago on all my pages, to kind of remind people, what we truly believe is that those images are the most valuable thing you'll have at the end of that wedding day, or even that portrait day, that special family gathering, or whatever it is, that they just can't underestimate the value of that moment. You know, so just kind of reinforcing that. And then, now we look at this. The biggest package up top is the first one. That's the one we want to start with. Alright, we'll talk about that in a little bit. And notice that we do have the values of everything in there, but the actual price, being a pretty amazing price considering the value, I also have this little thing here just to kind of draw their attention and make that feel like special, you know. It's not saying, "Buy this one," but it does kind of draw them to. You wanna somehow draw them to and make that feel special, like this is the one we need to go with. And then it goes down here, down through the list. So the bottom package is always gonna be on the bottom, and notice, we could put fancy names on the collections. I really don't care if you wanna use some fancier name to make it spruced up. But this is kind of nice because A feels like the best. We always associate, "I'm on the A list," you know, A is good. So it's a simple way to insinuate, boom, this is good. D sounds like a failing grade. (chuckles) And we all associate Ds with failing grades. So we don't wanna be associated by this, subconsciously, just because it's called D. Now you could call it Collection Sucky, if you want, (audience laughs) be a little more obvious. But I think D's a little more subtle. Or D for Dumb... Nothing, won't tell. Alright, make sense? Good, alright, so let's kind of break that down and analyze it step by step here. So the first thing is, you wanna create steps that you can walk them through. Alright, so it's easy enough to walk 'em up to the next package if you need to. So for example, if your packages, like from the bad price list are something like this, one, three, and seven. That's a big jump between one, three, and seven, so somebody's focused on 100 bucks, to get them to jump to over twice that to 300 is gonna be pretty tricky, gonna take a lot of convincing. And then to get 'em to bump to even 700 is even trickier, right? So instead, we'll start and have something like this. Now having a few more options, the reason you have more options in your packages is not because you wanna confuse people. I don't think you should have more than five options for packages. Generally, for most things, general. I do believe that simple is better, so you don't wanna make the packages themselves confusing. But I also believe that if you have only two or only three options, then you don't have anywhere to walk them between, and you always wanna figure out that your bottom package is something that you almost never wanna book. That's to get people interested. If you have to say on the phone, "My packages start at 100 bucks," that's fine. But you don't want anybody to buy that, 'cause technically that wouldn't make you a whole lot of money, right? The top package, which we're gonna talk about in a minute, should be out of a lot of your clients' reach, and you wouldn't expect to sell a lot of those, but you probably will. And your target, your second package, somewhere between B, C, and D, should be all very profitable for you and kind of a good average, alright? So this is kind of like your lead-in, this would be your baseline minimum, like if you make this, it's good, you're gonna make money, everything's fine. And you target these as your goal, like this is where you want to sell, and if you end up here, fine. Notice also that the pricing is smaller steps. 195, 295, 395, 495. Once you get above that amount, then the jumps are not as bad. You know, somebody who's spending 595, they'll look at 795. But when they're in the lower range, big steps are harder to make. OK, so you'll notice it jumps a couple of hundred bucks from 495 to 695 on that one. Alright. And then... We'll look at how the packages are broken down. So these are taken from the price list that I showed you earlier. Package A, your biggest package should be the best value. So if you look at what I've included in here, this gives you basically a 43% better value than the package price. The next one down is a 31%, this is a 20%, and the lowest one is a 10%, 'cause otherwise, if it's not even 10%, it's not even a package, it's just buying 'em a la carte, so there's no point. So you need to have some sort of bonus, and the bonus, notice, is not a discount. What's our bonus? A bonus item that we add in to add value to the package. I think it's a much better idea to offer bonus gifts, bonus items, bonus giveaways, bonus whatever, than to discount. As soon as you start discounting your packages, your price list, your services, you're one of those discounters, you're one of those price choppers, and you're fighting on price, right? And you're giving the message to your customers that you're a bargainer. But when you add on bonus goodies, those are better because you can give them a bonus item, valued at 200, that cost you $4, somehow, if you want, or $10. Right? But much better than a 20% discount, or a 10% discount, which would be a whole lot more than that. So the value to the customer's the same, they're getting that extra value that's worth way more than the discount of 10 or 20%, but it cost you a lot less to give that. Does that make sense? OK, groovy. Then, let's break it down a little more. We should always have an ultimate package. Ultimate package, and it doesn't have to be sky high, and I've seen a lot of wedding photographers that put, "Here are my packages ranging from," you know, "2-5,000." "And then I have my $25,000 package, "if you wanna fly to Jamaica and bring me and my kids "to Jamaica with you and we'll do a photo shoot "on the beach," and all that, and that's great, but it's kinda ridiculous, and you know it's put in there just for shock value. But you should have something, a primo package. If you wanted to bump up beyond E and have something extra special, again, to bookend your other prices. 'Cause what happens when you have a really high top package? The ones in the middle seem much more affordable, right? It's just, by comparison, they look more affordable. And you will probably book it once in a while, so yay for you. I know I did that when I started messing with my price list, somebody told me, "You gotta have like an ultimate "something," and I'm like, "Nobody's gonna buy it." I don't know, it was like 10,000 bucks or something, and my weddings at the time were... I think up to 7,500. And somebody said, "Well how 'bout "a $10,000 wedding in there?" I'm like, "Well I rarely sell the 7,500 ones." "Well just put it in there and see what happens." And so I did, put a 10,000 one, put in all the cool stuff, like if I could just do a wedding like the exact way I wanted to do it, present it the way I wanna do it, the perfect products and everything, and spend the time. If I could do anything I would do as a wedding photographer to give you the perfect wedding, this is what it would cost, and it would cost about 10,000 bucks. I put it in there, lo and behold, I booked it like twice the first year I had it in there. And I continued to book it every year after that, at least once or twice a year. So you'd be surprised. Alright, so here are some little package-building tips for you. Kinda covered this, but include more low cost, high value items. You know, there are things that you can get for a pretty good price from your lab or distributor, but it looks like it has a lot of value, so you can charge a good amount. And those are great things to throw as add-ons or bonuses or incentives to people. You know, again, much better to give them a product that cost you 20 bucks but it's worth 200 to them, say, "I'm gonna give you a $200 bonus "product or print when you book this "particular package with me as a special," you know, "as a gift," or whatever. Versus saying, "Well, I'm gonna take "200 bucks off of your package." What does taking 200 bucks off the package cost you? Tell me, what does taking 200 bucks off the package cost you? 200 bucks. 200 bucks, thank you. (laughs) Not a trick question. (laughs) What does giving them a $200 product that cost 20 bucks cost you? 20 bucks. OK, thank you. (laughs) Include the engagement session for weddings, we call it complimentary, but it's built into the price for sure. Those of you who shoot weddings, do you do engagement sessions for all your weddings? Or try to, anyway? I think it's a great idea. That was a big selling point for us, that we could say, "We'll include a complimentary engagement session," you know, "if you book this package or higher." And bottom line is, we had better images at the wedding day, 'cause you get to know the couple, you guys are like friends, you're best friends already, and you give them some beautiful images. So the wedding day goes so much smoother, and they end up buying more stuff in the long run. So even if you discounted it quite a bit to be at cost, I think it'd be worth it in the long run, as far as how it affects your wedding sales and your wedding quality of your images. And, you can also make quite a bit of profit off of an engagement session, if you do it right and you sell it right, as well. So it can be a nice bonus. The session might be free, but they still gotta buy prints if they want from it, right? OK. As we talked about, if they need a deal, give them goodies rather than discounts. And I know, digital files, everyone wants to know, do you sell digital files, can we sell digital files, of course you can sell digital files. You just need to make sure it makes sense, and when you sell them is important, and how you sell them is important. But a few years ago I would stand up here and I'd pull a little soap box out here, I'd stand on it and tell you, "You can't sell your digital files! "We're artists! "Maintain control!" And, you know, I was wrong. (audience laughs) No, times change, times have changed. And it sort of hit me actually a few years ago. Little story for you, my wife, she has a friend who has her daughter in a little ballet school. And a friend was telling my wife, they did picture day at the ballet school, and the photographer came and took these really cute pictures, and the friend asked the photographer, "I love these, I'd love to buy "a digital file of this print." And the photographer said, "No, we don't sell digital files." And she said, "But I don't print anything, "I have a small little apartment, "I don't have room for prints, I put everything online, "and I share it with my friends, and I put it on Facebook, "and that's my life, I'm digital." And the photographer says, "No, we do not sell digital files, period." And she said, "Fine, I will not buy anything then. "See ya later." And she was tellin' my wife, like how pissed she was, like she would never use this photographer, she's bad-mouthing this photographer all over town, 'cause there was just no flex, there was no "let's work it out, "let's figure it out," whatever, no option. And so now, this photographer's screwin' themselves, you know, she's telling my wife, who's telling me, and I'm telling you, and I of course won't mention the name (laughing) out there, 'cause that'd be really bad. But it really hit me like, yes, our lives are digital, we live in a digital world. I don't print pictures anymore, hardly. You know, once in a while I do. For myself I'm talkin' about. I put 'em all online, I have 'em on my phone, I have 'em on whatever. So yeah, we gotta flow. We gotta sell digital files if that's what they want. Alright, but it has to be worth it, you're not gonna just give 'em away. It can be a nice bonus, that can be one of your add-on items if they spend X amount, above X amount, you get the digital files, yay. Right, so you encourage people to bump up to a better package with that little incentive. Something you already have, costs you no extra money. You've already worked the files to print, you know, it may take you a few more minutes to prepare them, but literally it costs you no more money to add that on as a bonus rather than just giving it away with the cheapest package. I think that's the stupidest thing ever, to just say, cheapest package, you get all the digital files. Why would they ever go any higher than that? There's no reason, OK? Did you have a question? Yeah, are you giving them the retouched files? If they buy the digital files, then I do a basic retouch on them, very quick, yeah. Just enough, I mean I don't go into Photoshop, it's all Lightroom, just real quick color correction, da da da, if there's big like blemishes I'll bop bop bop hit 'em with the retouch thing really quickly, yeah. You don't give 'em the whole set of pictures, just... Just my edited final collection of images, yeah. Yeah, I never give 'em all the files, I think that's... Honestly, that's the one thing I think is stupid. I wouldn't say that about a lot of decisions, (laughing) but giving 'em all your files that you shot, regardless, unedited files, some people do that. You know, just shoot and burn, just hand 'em all over. I think it's stupid, 'cause they're gonna see all the crap. We know that, they don't need to see that, and they're never gonna use those, so why make yourself look bad? Anyway, yeah. What size do you give the digitals in? (audience laughs) The original? (she laughs) Web size, or...? I usually just give them the original. I make a JPEG from the RAW file, in the original resolution. And one of the reasons is, my files are pretty darn big. So it actually kinda discourages them from doing anything with it, 'cause they're so huge that they like, "Gosh, this is hard to manage, "I'm just gonna order it from Kevin." (laughs) You know, a lot of the times I give 'em the files, and they still end up ordering from me, 'cause they'll order their own print, and it doesn't come out nearly as good as the prints I made for them. So they'll call me back and say, "We tried to print this one on our little Epson printer "at home, and it didn't really look very good, "so can you just order us a print? "'Cause the first one you made "looked beautiful," so, you know. I've had several clients mention to me that, "Can you just please make 'em fit into my digital frame? "That's all I want. "I mean I'll gladly pay for the prints," and you know, "whatever prices you wanna charge, "but I also wanna have it," you know, "on my digital frame, "on my grandma's digital frame," you know. So they don't want the big, you know. Yeah, then batch process 'em down to whatever size they want. OK. Make 'em happy. And charge 'em? Hm? And charge 'em? And charge 'em, yeah, charge for that service, whatever you wanna charge. Yeah, Pete. Real quick, if you do give them let's say the RAW size, the original size, and they have Photoshop savvy at all, are you concerned that they're gonna retouch or redo your photo, but then your work isn't actually your work anymore, it doesn't look like what you did? How do you accommodate for that, what do you do? Well I can't say that I ever, except for a few commercial clients that I've worked with and trust, I never really hand over RAW files. It's always processed JPEG, high-resolution JPEGs, or a TIFF file, some agencies, and we're talkin' about fashion or commercial work. Now portrait and wedding work, I've never handed anything over than a high-resolution JPEG. Which you know, they can print from, and that's OK, you know, they take that risk. And we do have that as a disclaimer, that if you do print it, it may not come out as good as what you're gonna get from us, and we make that very clear they understand that. But are you referring to more like a commercial type job? Yeah, some people like you say, we're digital. A lot of people don't need physical head shots anymore, they just have their head shot on their social media, or even models too, it's really on their Instagram or whatever. But instead of giving them the full size, like people ask, "Can I have the original files?" I might send them a smaller social media-friendly size. Yeah, web size, or Facebook size, you can call it Facebook size images. And a lot of times, what's kinda cool is if you address that, you know, 'cause most people, that's what they really are thinking, you know, "I wanna post these on Facebook." So they think, "Can I have all the digital files?" And you're thinkin', "Oh my god, they want all my big "RAW files, they want all my originals," and you're panicking, and they really just want a Facebook file. So you might just address that and say, "We'll include," like one of the things we do is that we include a Facebook-sized ready, corrected, prepared image with every print purchase. So if they buy the print, they're automatically gonna get one that they can share on social media, which has our little watermark on it, nice and subtle there. Because they're marketing for you. Hello, why not? (audience laughs) They're marketing for you, sharing your logo every time they post it, right? They may once in a while ask, "Oh, I don't want the logo on there." You know, fine, take it off. But I still embed my copyright in the image, so if somebody just downloads it or looks at the metadata, it's in there and all that. Just been answered. OK, yeah. So were you saying that you include the digital file in your wedding packages only for your highest, most expensive package? Yeah, and actually in weddings, we don't put anywhere in the price list, we don't offer the digital files unless they ask for them. And if they ask for them, they say, "We can include them with the higher packages," or, if you happen to book a lower package and you want the digital files, it's gonna be X number of dollars to buy them. But we actually don't put it into our packages, 'cause we don't want to give them away. Just mainly for fear that they're gonna look crappy, they're gonna print 'em up crappy and they're gonna look bad. So we're not promoting it, but we're not resisting it if they ask for it. Yes, sir. You don't really sell the ownership of the files that you sell them, do you? The what? You don't really sell the ownership of the files? 'Cause you were the one who took the pictures. Right. And if they enhance the files that you sold to them, and they look crappy, and they put it in social media, it's still your picture. Right. (laughs) What do you do with that? They don't look good, it's your name. That's right. So if they choose to take your finished files and enhance them or run some Instagram filters on them, (chuckles) and repost them and they look really crappy... Go have another cup of coffee. (audience laughs) There's really not anything you can do about that. If you're giving the digital files, you've pretty much said, "Go do what you want." And there's nothing you can do about that. It makes no sense to try to track them down, and tell them, "Oh, can you please "take that off, it doesn't look good." You know so either you say, "I'm not gonna "give digital files," or you give them and let it be, whatever happens happens. Do you only embed your logo or your copyright into the digital file for the social media? No, all of 'em have the copyright in there. Oh, OK. The watermark I only do on the social media ones, I'm not gonna put the watermark on the high-res, so they have to print 'em like that, but yeah. What do you put for the watermark, your logo, or your website? KevinKubota.com. OK. OK, awesome. Alright. Research and evolve. One of the things people always say is like, "Well I need to price what my local competition is doing." And I think you should do the opposite, you should research what your local competition is doing, and do something really different. Whether different packages, different pricing, whatever it happens to be. When I first moved to Bend, 20 years ago, 20+ years ago, my wedding packages were at least double what anybody in town already was. I did the research, found out what their packages were. And I could have said, "Shoot, people aren't "paying very much for weddings around here, "I'd better lower my prices." But instead, I said, "Nope, that's what my prices are, "I've based them on numbers, and I've based them "on what I feel I'm worth," and I put it out there, and I got calls immediately left and right, you know? And I don't know if there really, people were just happy to pay more and nobody else knew it. (laughs) Or you know, maybe (mumbles) photographers weren't very good, I don't know. I didn't really look at all their work, I just looked at their prices. So find out how you can be different, one way or another. I think there's some value to knowing what your competition is charging, but I don't think you need to use that as a baseline for what you charge, 'cause you're not your competition, and you don't wanna be competing on price. As soon as you're priced the same as your competition, people are gonna price shop and compare you. But if you're twice as much as anybody in your town, they're gonna wonder, "Why, why is she twice as much? "I'm so curious, she must be amazing!" You know. "She's got the gall to charge twice as much as anybody else. "I'm gonna go see her, have a word with this woman!" (audience laughs) You know? And likely, they'll come and fall in love with you, and love your work and book ya. Yeah, did you have a question? Yeah, so how do you find those clients that are willing to pay double of what everybody else is charging? Through the marketing, puttin' it out there, presenting yourself, make your branding support that pricing. You're hitting the areas where your clients shop and look. So you decide, "Here's my target client. "Where are they shopping, how are they "getting their information, is it word of mouth?" So word of mouth means you're gonna go and schmooze all the vendors, you know, we talked about that, take 'em to lunch, do free family portraits for the high-end wedding coordinators, I'm a wedding baby. OK, in your town, you're gonna look for the high-end wedding coordinators, offer to take them to lunch, offer to do a free family portrait session, offer to do whatever you can do to get on their good side. And you can do it with anybody in town that you know is in touch with this target bride. But your branding, everything on your site, has to support that look. You have to look high-end, if you're gonna charge twice as much. OK, which means professional design for your logo and marketing materials, pure and simple. Alright, just because you gave Sally one price, we don't know who Sally is, but we'll pretend, whoever it is is Sally, you don't have to give her friend the same price. We talked about visiting a retail store, just to reinforce the value in your brain of why you're worth what you're worth, OK? Retail, anyplace else you go, they don't haggle, you don't base prices based on how much you like somebody, or what their situation is. You base the price on what you need to stay in business. That's all, right? Once in a while situations come up. I'm not saying you never bend. I've had a few weddings that I've done where the couple really is in a crazy situation, and it comes to me by word of mouth, "Hey, this couple needs some help, da da da." I'll shoot their wedding at a discount, I'll shoot it for free. I've shot weddings for free, for people who I thought genuinely needed a help, right? And that's fine, you should do good stuff like that. But 99% of the time, you're a business, you're makin' money, right? Yes, we talked about all those things. OK, now we have time for a few more questions, and then I'm' gonna demonstrate Kumu software, yeah. What's your rule on when it's time to raise your prices? And that's on here too, so do you have a system for that? Like percentages, or could you talk a little bit about that? Yeah, well, you could say, I mean everything goes up every year with the cost of living. You know, we pay more taxes, more everything every year, so you could say every year, I'm gonna raise it 2%, just as a rote practice. As your expenses go up, as you feel you've gotten significantly better, maybe you spent the whole year in training, going to conventions, learning, going to CreativeLive, and you feel like, "Man, I made a lot of progress "this year, I'm gonna revamp everything." Boom, boost it up. But I do think at least, you know, 3-5, 10% even, every year, if you can get away with it. And kinda the cool thing about raising your prices, and this is what I did when I was growing really fast, is I would raise them on a regular basis to see how far I could go. When am I gonna stop gettin' away with this, you know, and I was surprised, like I'm raising it, and they're still buying it, (laughing) and I'm raising it and they're still buying it, and I'm raising it and they're still buying. And you'll hit a point where you're raising it, and the beautiful thing about that is you're charging more money, you're booking less jobs, because not as many people will hire you, but you're still making more 'cause you're charging more per job, so you're working less and making the same or more money. Worst case, you're making the same money but you're workin' less, right? So people say, "Well, I raised my prices "and now I'm not booking as many." Yeah. Of course, that's natural. When you raise your prices, some people will no longer book with you. But the people that do book will now make you more money than you made before, doing less work. Follow? So, I think you should incrementally raise your prices, at least when you're kinda gettin' your feet under you, on a regular basis, to see how far you can take it. Because you'll never know if you could've charged 10,000 for a wedding if you never, ever try to charge 10,000 for a wedding. And you can always back it down again. The research can evolve. Just 'cause today you have a $5,000 wedding doesn't mean tomorrow you can't have a $4,000 wedding if that's just not workin' for you. But you have to try. And I honestly, I've heard more stories from photographers who have said, "I just doubled my prices, "and I'm booking just as many weddings." You're like, "That's a miracle!" (laughs) And it tends to happen in all kinds of industries, all over the place, that same way, OK, so you have to try. Do you have a distance radius when you have to start talkin' about travel expenses, things like that? No, I travel all over the world to do weddings, and they pay all expenses, and you know. I do have a, like, if I'm gonna drive say just to Portland from Bend, it's about three hours, and we have an hourly driving cost that they pay 50 bucks an hour for me to travel and drive. And then of course all the hotel and expenses and all that. But yeah, it's all built in, I mean you should just, you know, "Here are my expenses to go there, I'm happy to go anywhere in the world, just cover my expenses."