Pricing is an art and science and setting the right prices for your wedding photography packages is crucial in today's competitive New York City market.
Roles of Best Prices
The best price has a few roles among which we can list:
- It covers photographer's costs and the capital invested
- It is fair for both the couples and the photographer
- Anticipates competitive reactions
- Leaves no money on the table
- Contributes to achieving photographer's goals and strategies (maximization of profit, maximization of the number of weddings photographed, maximization of market share, etc)
- Provides amazing value for the client
One of the most basic roles of prices is to cover costs and capital invested. As such let's price our packages keeping that in mind.
Among the multiple methods to set wedding photography prices and packages, there is one that could help you charge 25% more than you are charging right now.
Most pricing specialists agree that there is one best method to set your prices and it works in any business, not only in wedding photography.
Before we start, let's take a look at the most common price setting strategies: Random Pricing, Direct Cost Pricing, Total Cost Plus Pricing, Competition Driven Pricing and Value Based Pricing.
This is the least sophisticated method to price wedding photographer packages and it happens to the professionals who have no experience in the industry. They do not know their costs of operating, what their competitors charge or what the typical bride pays. As such, the newbie wedding photographer either charges too little (in most cases) or too much.
In both cases the result is a disaster as the clients don't book. Most of the time couples avoid vendors whose prices are too low as that, in many clients opinion, is a certain proof of low quality.
On the other hand, most people avoid high prices when the perceived quality is ordinary.
We suggest avoiding this method at all costs. Keep reading and we will find other strategies that will help you charge more and keep your clients happy.
Let's see how many of the perfect pricing criteria are met using this method.
First, if the price is too low, this method does not cover the wedding photographers' costs.
It is definitely not fair for the artist or for the couples. If the price is too high, it is unfair for the brides and if it is too low, it is not fair for the wedding photographers.
This method does not anticipate competitive reactions and it is the most probable way to start a pricing war in a market with a few players.
The professional has no strategy or goal to be achieved so this method does not help her towards that goal.
Finally, because the newbie has no idea what the bride wants, the packages do not provide value for the couples.
Price per Photos
The price per photos method is an interesting one. The image professional charge a flat fee for each of the photos he captures on the big day. Some artists have a minimum number of photos needed.
The package usually works like this:100 minimum photos, price per photos is $3/image captured.
This method has its merits among which it provides values to the client and provides an incentive for the wedding photographer to create stunning imagery.
However, it does not guarantee the wedding photographer will recover her costs, not leave money on the table and it does not help her achieve any financial objectives.
Hourly Rates Method
In this method, the Manhattan photo professional charges a flat fee per hour wage, but neglects to consider direct and indirect costs. It is a simplistic method that is unfair for the photographer, his competitors and the couple.
However, the method has its merit as the couple who has a tight budget knows for a fact the final amount they will pay.
The massive disadvantage of the method is that the artists look greedy when their rates are compared to other professions. You are charging $200/hour when I have a Pd.D in Rocket Science and make only $150/hour?
Most of the time, this sub-optimal pricing method leaves money on the table and does not help the photo professional achieve her goal of maximizing the number of weddings and photo shoots, the revenue nor it provides exceptional customer value.
Direct Costs Based Pricing
This is another pricing tactic used by most wedding photographers who lack pricing sophistication. Our New York wedding photographers simply look at their direct costs (hourly wages, transportation and parking cost) and based on that approximate calculation, the professionals set prices.
Sadly, this method misses other overhead costs, rent, utilities, advertising, etc. While it works for part timers or the so called weekend warriors as they in effect subsidize their wedding photography business through the full time job, it does not meet the criteria of a perfect price.
First, because it only considers direct costs it ignores indirect costs, overhead, amortization, etc. so it does not cover the costs. For that reason, it is not fair for the wedding photographers. While photo professionals enjoy the capture of images to immortalize special events, it is only fair that they not only recover their investment, but also turn a profit.
Because the pricing is low, the New York City wedding photographer leaves money on the table and does not achieve the volume or revenue goal. Also, this method provides no incentive for the photographer to take into consideration the features and attributes the brides love so it does not provide good value for the couples. In effect, they end up paying for products and services don't need.
Cost Based Pricing
The total cost based pricing is used by many professionals in the wedding industry. They look at their total costs of operating the business and add a profit margin. For example, if the total costs of a studio are $30,000 and the studio does on average 10 weddings per month, the cost per wedding is $3,000 per wedding. The package will cost $3,000 plus % profit. If the studio targets a 15% profit margin, the price will be:
Package = Total Cost/Number of weddings + Profit Margin
$3,450 = $3000 + 15% x $3,000
This main merit of the method is that it ensures the packages are priced in such way to cover the costs but fails in the rest of the criteria.
Value Based Pricing
In our opinion, the value method is the best option of setting the rates for the new services or for adjusting existing prices.
This method creates value for the brides and increases their willingness to pay a higher price.
There are a series of steps that the professional needs to follow to determine the value.
1) First, we should identify what items the couples value. Is rapid photo delivery important or maybe retouching? Brides might appreciate a boudoir session bundled in the existing package. To determine the products and features that couples consider valuable, the professional needs to design a basic survey and ask former brides. Chances are the current couples are interested in the same items/features.
2) Next, analyze the survey data and see which of the features and attributes appear in the top of the customer preferences.
3) Determine the value of the benefit provided by each of the attributes
4) Repackage the collections to include the new items and adjust prices to reflect the changes.
The end result will be a series of collections that clients love, do not leave money on the table, cover photographers' costs and are fair for both the brides and for the artists.
The adjusted packages also help the professional grow their business by maximizing the number of weddings shot, the market share and achievement of the other pricing objectives etc.
Veteran photographers always advise newcomers into the industry to raise prices fast. It is good for the new entrant who can survive in this competitive marketplace, for the established artists who can recover their investments and for the couples who have a healthy competition between strong companies. After all what good is a cheap photographer who goes bankrupt the day before your wedding?
If you are a wedding photographer, we strongly advise that you take a look at how your colleagues set their prices. Please visit the New York City wedding photography prices and Toronto wedding photography prices pages.
Selecting a good pricing methodology is important for the wedding photographers in New York City and around the world, for the couples and the marketplace in general. We consider the Value Based Pricing the method that for now meets the criteria for the best prices.