A new photography business needs to establish a price for its services that accounts for its costs and aligns with Customer Perceived Value in a market Racing to the Bottom with many others focused on price competitiveness.
15+ years ago I started with a camera and a dream and built it into a successful photography business making over $250,000 in annual revenue. The lessons I learned along the way have been immensely valuable to many aspects of my life, especially these 2 I'm sharing in this article about customer value.
Perceived Value
Customer views your product favorably, they're willing to pay a premium for it, right? Elevate the brand!
I knew the words, but I didn't truly understand it until I hit I what lovingly refer to as my "Fuck it" event while growing my studio.
It helps to understand some of the stages I went through while building out the studio.
Stage 1. The Hustle - Just Starting Out
The cutover from hobby to getting paid. Posting ads on Craiglist, pinning cards on boards, anything I could do to get a paid client. My services were priced at $100 with 50% off. Customers haggled, and I happily conceded. It was common to make $50-$100 per shoot, but this was pure excitement.
Stage 2. Reaching Saturation - But With Lowballers
My site looks great and was optimized to maximize returning clients and conversion of new clients from increasing site traffic because SEO is on point. Profit per shoot remains $50 - $100, and I tire from the haggling and try self-purchase galleries to increase my profit per shoot.
Stage 3. Fuck It - I Was Done Haggling
Weekends were booked with 2-3 client shoots/day. Weeknights are spent processing into the night. Profit per shoot remains $50 - $100. I finally said fuck it! I'm not getting out of bed for less than $500. I updated my site to have only a single $500 package including select prints. $150 non-refundable booking fee, $200 paid on the day of the shoot, and balance due at the viewing and print selection. Planned to take a break for a month, but keep up the site and solid SEO.
Making Sense
When I made the price/package changes I immediately noticed the drop in contacts and requests (from 10-15 a week down to 5 or less). It took a week to realize that a new type of client was engaging now. 聽Asking qualifying questions, and not negotiating down or bargaining. Quicker to book with a non-refundable fee too.
High-Value Client Profile
- Attracted to the artistic work.
- Wanted the experience and personal touch.
- Vetted for confidence and trust.
- Interested in staying connected.
- Willing to pay the premium.
After 1-2 months I was consistently booking clients that placed a high value on my services, emphasizing the end-to-end experience and looking to establish a long relationship. 聽Revenue was up significantly, but with a much lower volume so I was able to focus on the boutique service model.
Lesson Learned: I used to think you had to change your services to increase perceived value, but it never occurred to me that I might need to change 聽my customers instead.
Expected Benefit
While transitioning to the new clients I realized what I thought the primary customer benefit (high-quality artwork) of my service was turned out to be only a part of what the customer considered valuable with my services.
- High-Quality Artwork
- The Total End-to-End Experience Creating The Memory
- Cherished Heirlooms
I was being invited into their homes for important family events. They shared the experience of my services with their loved ones and wanted to trust the quality and delivery. They chose my studio, and I became part of their family and was invited to major life events (engagement, wedding, maternity, etc.) to capture and memorialize them. 聽Both an honor and a joy, I fully understood the value they expected.
Lesson Learned: I originally thought the customer's expected benefit was only the tangible deliverable of prints and pictures. 聽I was able to learn and fully understand benefit they valued was this wonderful personal/professional relationship that I had with many families right up until I closed down my studio. (I'll share in a future article.)
Wrap Up
I have no intention at all to try to build out another studio as I did before, but it is fun reflecting back on what happened, and what I learned along the way. 聽It was tough to pick the lessons to share in this article, but looking forward to sharing some other lessons learned in the future.
