Quick pricing question

I'm in the process of starting up my photo business and before I get my marketing campaign on the go I want to nail down my pricing strategy. I know it'll change somewhat down the line, but I'm going back and forth on this and would like some advice.

This is going to be subjective (at least I think it will) but what pricing strategy do you prefer and why?

Option A) Flat rate session fee (e.g. $150), 1-2 hour shoot, and photo packages on top of that or photos "a la carte".

or

Option B) DIfferent photo session prices with included packages (e.g., Family session- $250, 1 hour shoot, x amount of images on a CD. $750 engagement session, with 3 hours of shooting, x amount of 8x10, x 5x7's, etc etc....).

i do a flat session rate and pictures la cart.

I sort of do both :

(a) Flat session fee including a small product credit (the credit is to encourage purchases)

or/

(b) Pay upfront and get reduced session fee and slight discount. This involves a lump sum paid in advance - so you have a guaranteed minimum sale. The benefit for the client is the reduced costs overall - assuming they're serious about it.

Not saying the above are the best options - just what I do.

I am starting with option C:

Flat session fee and product pricing which includes packages and a la carte pricing. I haven't offered credit toward purchases yet, but it is something that I'll probably do eventually.

However, there is some work put into the package and a la carte pricing. I want to avoid the client who walks away with a single 8x10, hence the packages. Pricing is specifically setup so that there's a discount for going with a package vs. a la carte. Furthermore, there difference from package to package has to be special items that someone may want - don't give away the house with the lowest package. For example, albums, large prints, metal/acrylic prints, and digitals are not in the base package. Do clients want these items? You bet they do, so put them in the higher packages and price accordingly.

Further, a la carte pricing is purposely set so that it's not effective to buy the base package and add those other items; note that all items that are in the packages are listed in the a la carte listing. There is more value (products/price) in moving to larger packages than going with the base package - which is why all items are listed a la carte, so they can do the math and figure that out themselves.

When you go to McDonalds, is it cheaper to buy a value meal or each item separately? If you want a burger and a drink, it's something like $0.10 more to add fries. Once you realize that, who isn't going to get the meal? It's not that the fries only cost $0.10, it's because the a la carte pricing is inflated. This is on purpose. Large corporations spend TONS of money on studying consumer behavior and I'm happy to take advantage of their research and follow their model.

Both sensible choices. I used to do option one but have switched to option two, but with print credits. This guarantees a minimum print order.

drvnbysound wrote in post #16008248
I am starting with option C:

Flat session fee and product pricing which includes packages and a la carte pricing. I haven't offered credit toward purchases yet, but it is something that I'll probably do eventually.

However, there is some work put into the package and a la carte pricing. I want to avoid the client who walks away with a single 8x10, hence the packages. Pricing is specifically setup so that there's a discount for going with a package vs. a la carte.

This is what I want to avoid as well. Hence my back and forth about how to price my work. This brings up another question...how to price prints accordingly and discount for packages? I've heard "print area x 0.40 (or any value to cover overhead)"....I've heard "price around your profit p/print" (i.e. profit = $25, costs from lab = $5, price of print = $30). Then to discount for pakcages reduce the price of each print by X%. Is this sensible, you think?

I keep hearing about "print credit". Those who do it, can you elaborate a bit? Is it as simple as offering a flat rate session fee and $X print credit? Do you inflate your session fee a bit to make up the difference? I like that idea so that I can price for my target market but still entice the tighter budget clients without having to sacrifice my target market.

Do you show your pricing online?

rivas8409 wrote in post #16013183
Do you show your pricing online?

I don't. I'll explain why...

What happens when you decide to raise your prices? You also have to go in and change it on your site. Is it just listed once on the site, or more than that? How much time does that take? ...and you'll have to do it each time you decide to change pricing. I try to make adjustments every 6 months or so.

Additionally, when you list the price for an 8x10 on your site, you allow a customer to directly compare your 8x10 price to other photographers. Just because the size of the print is the same, does that mean that they hold the same value? If a client sees that your 8x10 is $30 and someone else's is $20, are they still going to call you? Maybe... but have the odds changed?

What I've done is explain what most customers average. Are most clients spending $100, or $800? I want the potential clients to have a ballpark expectation of what others are spending. I'll explain that I'd want to meet with them to discuss my pricing with them, in person if possible, to explain what you offer and associated pricing in more detail. This gives you an opportunity to meet with them personally and begin to show your service and what all you have to offer.

Hmmm....good points drvnbysound. I think I pretty much got my "portrait package" and print prices nailed down, but there is a substantial jump between the two middle packages. Now I'm thinking with your frame of though, I don't want potential clients to see my price for Senior Portraits (where the jump happens) then compare it to Jane Momtographer down the road who charges 1/4 of my price...and there are PLENTY of momtographrs around here (as I'm sure they're everywhere). Perhaps I should just advertise a fixed session fee but have them contact me for portrait package prices.

As some people have mentioned, it's possible to do both. Depending on what you're marketing, some types of work are better marketed one way, some the other.

In many cases, it's easy to market "packages with options." Many customers will want to know "what do most people get?" or they'll want to know "good, better, best." Many people will suffer "analysis paralysis" if you present them with a hundred decisions to make. You can often sell better by doing a degree of decisionmaking for them, then allow options.

Having packages can answer that question for them, but allowing options to the packages gives them the tailoring they will want. By offering some packages, you can also offer items in a package that substantially enhance value without substantially increasing cost. You may never sell the exact package that's on your price list, but that's okay.

For instance, the obvious offer of volume discounts: You may offer a la carte 8x10 prints at $50 each, because if someone decides she only wants one 8x10, that's what you need to earn your nut. But a second 8x10 of a single image is only fractionally more than the first, and even an 8x10 of a different image from that session is mostly gravy compared to the cost of the session. So you offer a package of five 8x10 images at $150 or $200 that is less than the same number at the a la carte price.

rivas8409 wrote in post #16007960
I'm in the process of starting up my photo business and before I get my marketing campaign on the go I want to nail down my pricing strategy. I know it'll change somewhat down the line, but I'm going back and forth on this and would like some advice.

This is going to be subjective (at least I think it will) but what pricing strategy do you prefer and why?

Option A) Flat rate session fee (e.g. $150), 1-2 hour shoot, and photo packages on top of that or photos "a la carte".

or

Option B) DIfferent photo session prices with included packages (e.g., Family session- $250, 1 hour shoot, x amount of images on a CD. $750 engagement session, with 3 hours of shooting, x amount of 8x10, x 5x7's, etc etc....).

I have a base price which includes the first hour, password protected proofing page, basic retouching, download link with final images and or cd,dvd, or bd. Everything else is extra and must be ordered however prints can be purchased directly from their private page.