Getting undercut by the competition

I have the unfortunate circumstance in working in the same arena as another photographer who apparently doesn't value his work. Even customers agree he is charging too little but he's been around a long time. Since it's a money making hobby it's a bit annoying to lose sales because of this even though people like my work. I'm not too inclined to lower my prices since I value the time and effort I put into my photos. I guess this is more of a rant than a question but how have other's dealt with a similar situation?

i suppose that you might have to rely on repeat customers who are happy w/ what they paid; from the sound of it, your competitor might not have much repeat business?

Not much you can do. In most cases, you have to count on the fact that your images are better than the competitor's, and that justifies your higher prices.

In some cases (and by the sound of it your case), you're on par with the other guy, and he just doesn't understand that he's worth more. So what can you really do about it? Depends on what you're doing. For some things, you could try to negotiate exclusivity (being THE photographer), such as at sporting events. If this is just a portraiture thing on the side for the both of you, there are really only 3 options.
1. Cry and whine, don't change anything.
2. Drop your prices to compete with his.
3. Produce better pictures and beat him with quality, and count on the quality to bring you more customers.

I'd opt for the third option. It also might not be a bad time to try to expand your client base to people he typically doesn't get involved with. Starting with baby/pregnant

If his quality is on par with yours, why wouldn't people want to spend less? You need to set yourself apart from this photographer to bring in (and retain) the customers. If his prices are indeed too low, I can't imagine he will continue to charge the same amount for too long.

And a fourth option not yet mentioned.

Compete on service. Woo your clients so that its not just the image quality, but the experience and service. Ie, I have a BMW and when I get it serviced, they rape me in costs. But while doing it, they wash my car, they vacuum the interior and seats, they serve me high end coffee while waiting, they fix little things if noticed, they give me a free loaner car if its more than a few hours, etc.

Take the same approach. Give them a upscale experience, and they won't mind the cost. They will be able to brag to their friends that when they had their portrait done with XYZ, was served a glass of wine and expensive chocolates during the proof reviews, the portrait setting was nice, good music, etc, etc.

And who doesn't like to brag. Give them a great experience and they will brag. People like to show off, or share a pleasant experience. Excellent word of mouth advertising. These things will cost more, butyou could probably even raise your rates slightly to cover the increased costs, and still do very well in spite of the competition. Unless he follows suit, he will be servicing the clients that shop on price, while you will be building a stable of clients that appreciate quality and service.

I always say this, because its so true. A Kia dealership can open up right next door to a Mercedes dealer, yet the two never compete. Its no different with photographers! Two different classes of clients. If he is going after the low end, pick the high end, take aim, and go for it. Its the better road to travel anyway!

I've been taking the #3 approach, it is in the motorsports arena so it's competing for the same customers.

Crazy Idea but.....

Raise your prices to double his, and hope everyone believes you must be twice as good as he is. Joe public tends to think more expensive is better without really knowing any better.

Its like cars a VW and a Skoda are built in the same factory from the same parts, but people are willing to pay a lot more from the VW, they don't look at the technical side they believe the VW is better because it costs more.

yea i know its a crazy idea but it does work for some people

Perhaps this other photographer does value his work but he is happy with what he is getting. This is America and we have the right to set our rates. If the competition doesn't like it then too bad. That is what free enterprise is all about.

Seriously people, lower rate photographers is only going to get worse. You have 2 options:

1. Stop whining and complaining and learn to adapt and overcome.
2. Sell your equipment and find something else to do.

There are no ifs, ants or bugs about it.

KarlosDaJackal wrote in post #5928224
Crazy Idea but.....

Raise your prices to double his,

Not a crazy idea at all. Not sure if it would work on the OP's situation but definitely worth a try.

On another board there was a story about a guy selling his basement recording studio. The seller told the new owner that he better take what he can get for clients. First thing the new owner did was tripple his hourly rate then it didn't take long and he was fully booked. Which many repeat customers.

There is always a market to charge more then what something is worth. Chances are, if these parents can afford to have their kid(s) in sports, they can afford a bigger price.

When a parent comes to you and asks you how much you charge and then they say the other guy is half your price. Just tell em, "well, if you want 1/3 the quality at half the price, by all means, go to the other guy!". hahah

KarlosDaJackal wrote in post #5928224
Crazy Idea but.....

Raise your prices to double his, and hope everyone believes you must be twice as good as he is.

This isn't crazy at all. When I first started, I was charging significantly less that what I charge now. I was trying to be competitive, but I was choking myself. Things were tight, and at times I felt it just wasn't worth it.

So last ditch effort, and I decided that I need to either s*(#$ or get off the pot. I went through the finances, increased my budgets for salary, marketing, growth, equipment, customer service, added in some retirement funding, etc, and ended up significantly increasing my rates.

To my surprise, I started booking more clients than I had before. One aspect was that I had more money for marketing to attract better clients, as well as more money to service them better. I also think the clients took me more seriously, and a by product was that the quality of the clients was much better overall. My rates are now 3 times what they were back then, and I stay fairly well booked up.

I think if you target the right clients, give them exceptional service, and price yourself accordingly to your services delivered, there will always be a market for you to tap into. Not everyone wants McDonalds for dinner, and choices are good at all price levels.

Guerrilla Marketing, 4th edition: Easy and Inexpensive Strategies for Making Big Profits from Your SmallBusiness by Jay Conrad Levinson (Paperback - May 22, 2007)

Along with everything that's already been said, eveyone should buy this book and read it. Twice.

My version has yellow stickies and flags on many pages.

There are plenty of techniques and ideas in here to help differentiate yourself and market your business.

Tough market.

sfaust wrote in post #5925931
And a fourth option not yet mentioned.

Compete on service. Woo your clients so that its not just the image quality, but the experience and service. Ie, I have a BMW and when I get it serviced, they rape me in costs. But while doing it, they wash my car, they vacuum the interior and seats, they serve me high end coffee while waiting, they fix little things if noticed, they give me a free loaner car if its more than a few hours, etc.

Take the same approach. Give them a upscale experience, and they won't mind the cost. They will be able to brag to their friends that when they had their portrait done with XYZ, was served a glass of wine and expensive chocolates during the proof reviews, the portrait setting was nice, good music, etc, etc.

And how doesn't like to brag. Give them a great experience and they will brag. People like to show off, or share a pleasant experience. Excellent word of mouth advertising. And these things done cost much more to deliver.

You could probably even raise your rates slightly to cover the increased costs, and still do very well in spite of the competition. Unless he follows suit, he will be servicing the clients that shop on price, while you will be building a stable of clients that appreciate quality and service.

I always say this, because its so true. A Kia dealership can up right next door to a Mercedes dealer, yet never compete. Its no different with photographers! Two different classes of clients. If he is going after the low end, pick the high end, take aim, and go for it. Its the better road to travel anyway!

Exactly my thinking. I would defo put a bit more effort into throwing in the little things for clients even if they do not want it. Its just a more secure way of getting people to recommend you without any hesitation.

Where I live, everybody is becoming a photographer and repeat business is hard due to someone always undercutting. We're talking $25 portrait sessions and studio work done with point and shoots and on board flashes. but they are getting what they pay for... It is a small community and most people go to people they have know and we have only lived there a few years. I get a few weddings a year and have to cut back my prices in order to compete. Most are charging $200 to $300 a wedding; not including some of the established photographers that were already there. And one of the eastablished pros actually had to close her brick and morter shop due to the economy and competion.

And I sometimes have to travel up to 70 miles just to get some business...it is hard but I am slowly get there.

KarlosDaJackal wrote in post #5928224
Crazy Idea but.....

Raise your prices to double his, and hope everyone believes you must be twice as good as he is. Joe public tends to think more expensive is better without really knowing any better.

Its like cars a VW and a Skoda are built in the same factory from the same parts, but people are willing to pay a lot more from the VW, they don't look at the technical side they believe the VW is better because it costs more.

yea i know its a crazy idea but it does work for some people

Karlos is right. People will pay more, just because ... it costs more! I remember back in 1994, there were a brand of blue jeans called Marithe' Francois Girbaud. Those jeans sold for $80. Of course, they weren't WORTH $80, but millions of people bought them, just because they were $80 (they thought they were SOMEBODY in those high dollar pants). How rediculous!