Best Business Practices for Photographers [61]
Like the friend with a pickup truck, for the uncle with a camera, free surely is not a viable solution. During the time when they were opening up pharmacies in their stores across the country, Walmart's CEO was challenged on the notion of giving away free drugs, as some other companies had, to get a toehold in a market. The CEO's response? "We're in business to make money. Free is a price that is not a long-term sustainable position."
You will frequently encounter a client who says their budget is low. "We don't have much for this assignment" is the common refrain. When the client describes the assignment, you will very quickly realize that, in fact, the budget is unreasonably low. I will always send an estimate, but I will say something generic, such as, "Let me see what I can do, and I will get the estimate off to you." Or, I might say something like, "I understand the budgetary concerns you've outlined. Let me put together an estimate for what this assignment will really cost and send it along. After you've looked over it, please don't hesitate to call with any questions or to discuss it further."
So, what about real dollar figures? If an image is worth a thousand words, what does $1,000 get you? A lot of questions. How about $960? Fewer questions, for sure. The figures $960 and $1,020 fall into a concept that is referred to as odd-number pricing. To be specific, a 1997 research study published in The Marketing Bulletin showed that approximately 60 percent of prices in advertising material ended in the digit 9, 30 percent ended in the digit 5, 7 percent ended in the digit 0, and the remaining seven digits combined accounted for only slightly more than 3 percent of prices evaluated. Thus, my examples that each end in zero supposedly don't fall definitively into this notion of odd-number pricing. However, whereas this concept best applies to products sold at retail, here I am addressing the concept more than the specifics. In our case, a photo fee that is $1,000 seems (to a prospective client) to be more negotiable than one you outline as $960, which seems less negotiable. I posit that if your fee was listed at $999, a client would find that silly.
Consider this, too: Premium pricing applies when the risk of failure in the production of the photo (once-in-a-lifetime moments, costly reshoots, and so on) means that it's worth it to pay the extra money to reduce the risk of failure. Give great consideration to how you price your work and position yourself in the market. Taking the right (and reasoned) approach will make all the difference in the world.
As you present your rates—especially for event coverage, which is one of the very few types of photography where a per-hour rate is fairly applicable—you may get some objection. Some clients will think (and I've experienced this firsthand as they mentally do the calculations), "$100 an hour times eight hours in a day, times five days a week, times 52 weeks in a year…" And they think that you are a $208,000-per-year photographer. They will say, "My attorney/ doctor/therapist doesn't get paid that much," and then you have an uphill battle.
Of course, before you charge a profitable rate, you'll need to have a clear understanding of what is required to be in business. Even if you've been in business for years, you may have been allowing your personal expenses to subsidize your business, and as such, you might have been in the dark about what it truly costs to be in business. You'll need to change that to get a handle on your business and move it forward.
There are a few "cost of doing business" (CODB) calculators online. One that I contributed to (no bias here!) is the National Press Photographers Association CODB calculator, which can be found under the Professional Development > Business Practices section of www.nppa.org. Look for the NPPA's Cost of Doing Business Calculator link. An interactive calculator, it pre-populates the form with reasonable numbers for all the categories. In addition,