When I first started my photography business, I tested a variety of pricing schemes and tried too hard to please everyone. I didn’t have a well-defined market because it wasn’t in my plans to do portraits and pre-wedding photography; clients found my website, liked my pictures and started enquiring if I provided such services in Seoul and/or Jeju.
It took a bit of trial and error before I realised that the enquirers were not on the same page as me and instead of trying to be affordable to them, I should be marketing myself to paying clients who are looking for the same things as I am.
At one point, I charged non-commercial clients by a per-image pricing scheme, in hopes that it will allow clients more flexibility in controlling their budget. I had hoped that by doing so, I could reduce their burden of paying for my travel expenses and yet at the same time, I could provide quality work at a overall lower cost for clients since they are only paying for images that they want to keep. In other words, the pricing scheme meant that I remained expensive. But it freed up more time for me as I was providing fewer edited images and with that time freed, I was able to take up more clients in order to cover all my expenses and still profit from it. It worked for a while, but I realise it was not the industry norm and it took too much time to educate clients.
Eventually, I decided that I had to stop trying to meet the budgets every client who approached me. I had to be expensive in order to cover all the expenses and still profit from it after deducting taxes and other expenses on equipment. FYI, my initial rates weren’t even enough to cover my flight, accommodation and travel expenses, because clients didn’t understand that I am from Singapore and that I incur such costs, even though I base myself in Seoul or Hong Kong every now and then. Even so, I was never cheap enough for some of the enquirers because there is always someone cheaper.
These days, I charge an all-inclusive price for my photography services and a separate travel fee.
And that brings me to the point of this post.
A profitable business does not only look at what you as a business owner can provide; a profitable business studies market trends and spending habits.
Photography is a luxury and my potential clients are those who are willing to spend on travel and personalised experiences.
I am convinced that affordable luxury for the middle-class is dying a slow death. I used to think mid-price goods and services provide the best value. But if you look at what’s happening in the market right now, most retailers seem to have gone either budget or luxury. The number of retailers that target the middle class are shrinking because middle-income consumers are increasingly shopping at discount stores and taking budgets flights, in order to save up for luxury fashion items. Judging the spending habits of people around me, this does seem to be the trend.
For more clarity, I’m taking the definition of middle-income from this article:
The survey defined high-income earners as those with incomes over S$8,000 per month, middle-income earners as those with incomes between S$4,000 to S$8,000, and and low-income earners as those with incomes under S$4,000 a month.
On a side note, is anyone else as shocked as I am to find out that earning $3,500 per month will make you a low-income earner these days?
Let’s take MUJI for an example.
MUJI’s target market is the middle class who wants affordable luxury. The company has, in recent years, been threatened by competitors such as Iuiga that claims that their products are manufactured by the same manufacturers of MUJI. Consumers who are not brand loyal will be quick to jump ship, since the competitors offering the same quality for lower prices. It’s hard to justify why you should pay more when you can get the same thing for much less.
This exemplifies why business owners should avoid branding themselves as mid-priced in a world of polarised pricing. There will always be someone who will be willing to provide products and services for much cheaper prices and your branding will not allow you to charge at prices that luxury brands do. You will be losing customers from both ends of the spectrum.
That said, in recent years, there seems to be a rise of mid-priced startups (in the United States) where companies try to educate and convince consumers that the higher prices are a result of ethical business practices, e.g. paying labourers more so that they can have better lives too. Consumers are becoming more discerning about what goes behind the scenes and are gravitating towards conscious spending. But growth for such companies is slow and ultimately, a consumer’s spending power is determined by many more factors.
The trend now.
Provide something for free for the masses. And charge at a premium for personalised service to those who can afford it.
This applies to infopreneurs, where information is provided for free on blogs, YouTube and other social media platforms. After building a following, infopreneurs then charge advertisers at a premium price to have their products and services appear on the formers’ platforms. Either that, or they provide consulting services at a high price.
But what about photographers?
As photographers, there are many ways to provide value for free. One way is by sharing your knowledge on how to take better pictures and self-portraits (a major trend these days). Put yourself out there on different social media platforms and teach others how to create better photos using the most basic camera setup that most people have these days—a smartphone. By sharing, you are also building trust with potential clients who wish to employ your services.
Alternatively, you can also offer to shoot for free in exchange for publicity or for a portfolio. Cold call companies and offer to shoot for free and if they are satisfied with your work, they can then choose to pay you the price that you quoted beforehand. I’ve personally never tried this method for photography, but I’ve scored writing gigs by showing completed works for my clients to consider.
Cheap does not work in the service industry.
Being cheap will not work in the service industry. When clients pay for a service, they expect good customer service and quality work. And the only way for a service provider to make more money without sacrificing quality or being overworked is to increase prices. This is especially true for solopreneurs who are fundamentally selling their time to provide services. Unlike product-based businesses that can undercut competitors’ prices as a business strategy, a solopreneur will suffer by undercutting a competitor’s price because time is limited and it cannot be mass produced and scaled.
Monetary rewards makes people happy. And when service providers are paid adequately, naturally they will be more willing to go the extra mile for you. On the flip side, it will show when a service provider is overworked and paid too little.
Have you ever bought a cup of bubble tea but felt discontented because of how you were served by the staff behind the counter, who probably feels like he or she is not paid enough to put on a smile for you? But still, the product (bubble tea) was what you were paying for, so you forget about the unpleasant experience.
Therefore, take pride in your work, charge at a premium and make both you and your client happy. Instead of looking like you’re trying to nickel-and-dime your clients (like when I charged by a per-image pricing scheme), charge at a premium. When you charge at a premium, you can afford to be more generous with your time and services, which in return makes your client feel like it is worth it to pay more for you.
If you look at the wedding photography industry in Singapore, the bigger brands are charging at premium prices and they are fully booked all year round. Meanwhile, smaller brands tend to have fewer bookings. Bigger brands, by charging more, can also afford to put aside money for marketing and advertising, which in turn brings in more business.
Essentially, the key to a profitable photography business is this: Go free or go premium. Provide information or certain services for free, and charge at a premium by providing real value and irreplaceable personalised experience.