Business

Raise Prices Without Stressing Yourself Out

May 2020 issue

Raise Prices Without Stressing Yourself Out

Raising rates is scary. You’ve worked hard to build up your clientele, and there’s a natural fear that bumping up prices will alienate some of your hard-earned clients. However, raising prices is an essential part of any business’s evolution, especially a creative, service-oriented business like photography.

Samantha Bennett is a business coach to creative pros, a speaker, and author of the bestselling book “Get It Done: From Procrastination to Creative Genius in 15 Minutes a Day.” She says that almost every photographer she’s talked to could consider raising their rates three to 10 times above their current level.

Being an entrepreneur is so incredibly hard, Bennett points out. People don’t necessarily fail so much as they get tired. They get discouraged after underpaying themselves for so long, and eventually they just quit altogether.

“Photographers do their work because they love it,” says Bennett. “It’s not about the money, but it’s not not about the money, either. When you’re the talent and the business owner, like most photographers, you deserve to be richly compensated.”

Also note that when it comes to raising prices, everyone’s doing it. Your plumber raises rates. Your hair stylist raises rates. Your massage therapist raises rates. You’re in business, and you need to raise rates to stay in business. “Bottom line, I’ve never come across anyone who went out of business from raising prices,” says Bennett.

Here’s how to raise your rates and feel good about it.

 

Ask for the payment you want. Business owners typically get paid in the currency they request. You might be asking for dollars, Facebook likes, visits to your website, or something intangible like love and approval. “Start by recognizing that there are many different currencies, and money is just one of them,” says Bennett. “But you don’t necessarily have to sacrifice one for another. People often think if they keep their rates the same people will like them more. That is simply not true. You can have money and love and approval.” So ask for what you need to make your business thrive and help you become a better professional.

Detail how you over-deliver. On your proposal or invoice, list all the things you do that the client may not notice. Let people know the value of those items even if you’re not charging for them, such as prep work, prop and wardrobe purchases, and post-production work.

Convey value with pricing. “If I buy a sandwich for $8, that’s nothing remarkable,” says Bennett. “But if it that sandwich was $800, that would convey something entirely different.” You can communicate value for your most distinctive offerings through pricing. Show that certain items are truly special by pricing them on another level.  

Bennett suggests including a top-end package that adds perceived value to every other option on your price list. Even if no one buys that top package, it makes every other option seem much more affordable and may drive up purchases of mid-range packages.

Master the art and the science of pricing. Pricing is both an art and a science. To master the art, it helps to understand the science. Bennett points out that there is a psychology to pricing that correlates to certain price levels, or barriers. At each barrier, people’s mindsets change about the purchase, so consider these tiers as you establish pricing:

  • Anything under $100 is an impulse buy.
  • Most people feel they can spend around $250 without discussing it with a partner.
  • $500 is the next psychological barrier.
  • Another is at $1,000.
  • Another is at $5,000.

“For example, if you have a $57 product, you might as well charge $99,” says Bennett. “It’s the same psychology.”

Tell a story with your pricing. Whenever possible, attach meaning to your pricing to help people conceptualize it in terms that appeal to them. Bennett gives the example of one of her programs that provides daily insights. She charges $365, which equates to a dollar a day. Broken down, that pricing conveys the incremental value of the program in a way people can understand.

You can also attach a price increase to a meaningful milestone or significant event, such as an anniversary for your business or the receipt of a new degree or certification. When you provide context and tell a story, people are more supportive.

Price for the Pareto Principle. The Pareto Principle, also known as the 80/20 rule, states that 80% of the effects come from 20% of the causes. To put that in a business context, 80% of your revenue tends to come from 20% of your clients.

“With that in mind, you could probably afford to lose the bottom half of your clients, in terms of sales, and not suffer,” says Bennett. “Meanwhile, that top 20 percent is waiting to spend more money with you. Just remember, you’re not for everyone. If you want to raise your prices and a segment of your clients won’t meet the new level, then you have to go find different people. That’s good for the evolution of your business.”

Turn price increases into a windfall. You can use a price increase to generate immediate income—almost like a sale but without the discount. Tell clients that your prices will be going up on a specific date. Offer them the opportunity to pre-purchase at a rate that’s higher than your current prices but lower than the new rate. This way, you get paid in advance at a higher level while easing clients into the new pricing.

Use new prices to reach old clients. Got some old clients who you haven’t heard from in a while? New pricing is a great reason to reach out to them. Let them know you have new pricing and new packages coming online soon. Give them the opportunity to book now or set up a session to take advantage of your new offerings.

Compare prices. The question of how much to charge is less about a number and more about comparison. What are your clients comparing your prices to? If they’re relating them to not buying photography at all, then you’ll always be more expensive. But that’s not the comparison you want. You want them to compare your rates to commensurate quality work. Explain that comparison to them. Even if you’re charging more than your competitors, putting your work into context and explaining the superior artistry you provide will help you express value.

Increase until people complain. “If no one is complaining about your prices, you’re not charging enough,” says Bennett. “I’d love to challenge all the readers of this article to find the top of their market.” Bennett says raise prices until no one will pay for the highest package, then back off. “That’s when you know you’ve reached the top.”

Do what works for you. You don’t need to transform your business into an ultra-chic photo boutique if that’s not you. Work toward operating at your ideal level and charge accordingly.

The heart of the pricing question is how much you need to charge to make yourself better. How much should you charge so you show up to a job more engaged, so you are pushed as an artist and a businessperson? Ask yourself, How am I being self-limiting? Why is it important to me to be at this level? Then let the answers guide your pricing decisions.

Avoid the race to the bottom. There will always be someone who will charge less. You don’t want to play that game. It’s a race to the bottom. If someone is buying photography purely on price, then they’re not your ideal client. Instead, distinguish yourself from the crowd by charging more. Being the expensive one sets you apart and attracts a different caliber of client, one who is less inclined to nickel-and-dime.

Do it now. Whether you decide to raise prices gradually or rip off the Band-Aid, start the process today. Either method is fine as long as you stick to it. Just get moving because the sooner you start, the sooner you’ll get to where you want to be.  

Jeff Kent is editor-at-large of Professional Photographer. 

Tags: bridging the gappricing

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