PRICING FOR WEDDING PHOTOGRAPHERS
Meet Calin, the MBA turned wedding photographer
Who am I to talk about pricing for wedding photographers? I am a Toronto wedding photographer with over 10 years of experience in pricing and an MBA from McGill University.
The tips below are the result of pricing research in various industries, including wedding photography. Those solid prices are applied when setting our Toronto Wedding Photography Prices.
Tip 1. Offering three packages is generates more revenue than when offering only two.
Research shows that offering three packages is better than offering only two. Present packages starting with the most expensive.
Table 1: Revenue generated when only two packages were offered
|Wedding Photography Packages||Price||Volume Sold||Revenue on 100 Sales|
In this scenario, clients were presented only two packages, Gold and Silver. About half of the clients picked the more expensive one.
Table 2: Revenue generated when a new Platinum package was introduced
|Wedding Photography Package||Price||Volume Sold||Revenue on 100 Sales|
Interpretation of the tables above: when two packages are offered, the split between the higher and the lower package is relatively equal (43% of clients bought the Gold package vs. 57% the Silver one). The revenue generated in this situation was $443,000.
When a new premium package was introduced, most clients bought the middle tier package, which, in the example above generated an extra $57,000 per year or a 12.8% revenue increase.
Conclusion: offer Best, Better, Good or Platinum, Gold, Silver packages to maximize revenue.
Present prices and packages in descending order for best results. When prices and packages were presented in ascending order, most people buy the most affordable package. Spending more money becomes hard once you saw the low price
Tip 2: Purchasing decisions are made based on the left digits in the price amount
Clients think the difference between $1,999 and $3,000 is closer to $2,000 than to $1,000 because the decisions are anchored on the left digits. Also, $2,999 is perceived as more affordable than $3,000 even though the difference is only $1. When the left digit remains the same, the difference is not noted. For example a Customer doesn’t perceive a significant difference between $2,699 and $2,700 because the left digit is the same. There are intervals where customers are completely insensitive at price changes. In other words if we increased our packages from $4,399 to $4,799 the number of sales will not change.
Tip3: The way prices are positioned in customer’s mind makes a big difference
Studies show that the way pricing is positioned to the prospects makes a big difference. Here are some examples:
Table 3: Pricing positioning influences purchasing decisions
|Good Positioning||Poor Positioning|
|50% off on the second one||25% when you buy two|
|Taxes apply||TAXES EXTRA|
|Price change||Price Increase|
In the table above, the left column shows how we should position pricing related moves.
Tip 4: The Fairness Effect
Customers evaluate and decide if prices are fair based on a few factors:
a) How is photographer’s price relative to previous prices clients paid for similar services
b) How are this wedding photographer’s prices compared to other photographers
c) How is the quote in comparison to what friends paid for similar services. This is a good reason to ask the client who referred them, and to look at the packages the previous bride bought, then be consistent.
Tip 5: Price Fences Increase the Perception of Fairness
Price fences are tools used to make price comparisons difficult and to increase the perceived fairness.
Table 4: Examples of price fences used to increase perception of fairness
|Time||Book us at this Bridal Show and save.|
|Service||Our Platinum package includes 2 consultations versus none in the others. If seems fair to pay more for Platinum.|
|Branding||Nike vs. Noname…it seems fair to pay a higher price for the Nike shoes.|
|Distribution channel||Buy online and save 5%.|
Tip 6. Round Numbers Seem Arbitrary and Unfair
Avoid round numbers. Odd numbers seem fair and interpreted as results of cost calculations. Instead of charging $3,000, charge $3,125. Telecom companies master this pricing strategy among others.
Question: which price seems more realistic, based on cost calculations? $3,000 or $3,125?
Tip 7. Small Fonts Make Prices Seem Lower
Writing the price of a big ticket item using small fonts sends the message the price is actually lower
Tip 8. Brand Image Influences Pricing Expectations
Each brand is associated with a price. What happens when you say Mercedes? You automatically expect the brand to command a premium price. In Toronto, when you say Mango Studios, a high end studio, you expect to pay over $7,000 for their photography services.
If your wedding images are breathtaking but your prices are below average, the disconnect will shortcut the brain and clients will not book you. The phenomenon is called cognitive dissonance, or "something is fishy". If you want to charge higher prices, invest in your image so that your brand identity matches the prices associated with it.
At the bottom of the market are the photographers who charge low rates. The challenge of positioning yourself as an affordable or worse, a cheap photographer is that clients focus on prices instead of value or quality. When you compete on price, it leads to a downward spiral. There is always the next photographer who offers his services for less. The results are disastrous for the low margin studios. Shoot and burn photographers are a commodity and price is the only differentiator. Clients care about only one thing: pricing. The second one of your competitors give them an extra print, your clients will disappear. Unless you are shooting a high volume of weddings and can keep your costs under control, it is very difficult to be a low cost photographer. There are always photographers who go out of business at the bottom at the pyramid while successful studios are in business for a long
Tip9: The Word “Only” Makes Prices to Look More Affordable
Studies show that by using “only” in front of a price, the service is perceived as reasonably priced. For example, Full day coverage for only $5,000 sounds better than Full day coverage for $5,000.
Tip 10. The Direction of the Digits in the Pricing Amount Matters
The way the digits increase or decrease, influences our perception. Studies show that for example $2,789 (where the last 3 digits raise), sounds significantly more expensive than $2,765 (where the last 3 digits drop) even though the difference is of only $24. Do you want be perceived as an affordable photographer? Price your packages so that the direction of the digits is falling. Are you building a premium brand? Your prices should look like $5,789 and not $5764.
Tip 11: The Funny Money Pricing Technique
Smaller amounts are easier to be accepted than large numbers. Instead of presenting the price as a total “My platinum package is $1,876” (you saw what I did there? The last 3 digits are decreasing) you could present the price as only $157/month for one year or for under $6 a day ($1876/12months=$157 or $1876/365=$5.1). This technique is used successfully in many industries to make services look more affordable.
Tip 12: If Your Clients Pay Instalments, They Will Value Photography More
Studies done on subjects who paid monthly subscriptions showed that they were more inclined to use the services those who paid annual fees. The monthly installment/fee is a constant reminder that the service is paid for and as a result, used and valued more.
Let’s assume a couple comissions you in August this year and are getting married next year in August. By charging them every month a percentage of your total fee (say 8.33% per month), you achieve a few things.
First, the monthly fee reminds the couple periodically of you; as a result, your clients will be more inclined value your services more.
Second, by receiving monthly payments, you will be able reduce the seasonality of your cash flows (in the summer you charge a lot while in the winter there aren’t too many weddings).
Third, it makes it easier for the couple to pay the cost of wedding in installments as opposed to one or two payments.
Last and very important, you can actually charge more when you spread the your service fees over a longer period of time. Say your Package is $4,800 and the couple is getting married in one year. If you charge a monthly fee of $400+$5 ($4800/12 months= $400 +$5 a convenience fee.) It is standard practice to charge less when client pays upfront versus a monthly payment or a payment after the wedding.
Tip 13: When Clients Pay for Something, They Value and Use It
When brides pay for a service, they tend to use the service so that they don’t waste money. Consider the packages below:
|Package A||Package B|
|8 hours of shooting|
Free engagement shoot
|8 hours of shooting|
|Cost Package A:$3,876||Cost Package B:$3,876|
The only difference between Package A and Package B is the way prices are presented. In the Package A the engagement is listed as FREE, while in Package B it is part of the collection and it implies the clients need to pay for it. Many clients who book Package A will not take advantage of the Free Engagement session. On the other hand, when you present your collection as Package B, couples will do two things: either have the engagement photo shoot because they feel they paid for it, or ask you for a discount if they don’t need engagement portraits. As such, if in your packages you add items that your clients do not value, mark them clearly as FREE. Otherwise, the clients will start bargaining if they don’t value the service/product included.
Tip 14. Wedding Photography is Subjective. Pricing is an Indicator of Quality and Risk.
Higher prices means higher perceived quality and lower risk. If you want to target affluent clients, you need to charge premium prices.
The opposite is valid too. Low prices indicates poor value and high risk. Here is my story. As a fan of pricing research and price testing I did an experiment. Through a separate channel, I offered a bargain price for my services and surprisingly, I booked fewer weddings…Why? In a bride’s mind, a low price is an indication that the quality is questionable, that the photographer is not booked. That poses a risk as he might not be in business by the time the couple tie the knot. Brides don’t want to take the risk of losing the down payment or not having their photographer present on the couple’s Big Day. As a result, they just book someone else. The internet is flooded by stories of couples whose cheap photographer did not deliver the wedding or engagement pictures. These days, cheap equals very risky.
Tip 15: The Way Pricing Sounds Makes a Difference
The sound of digits in customer’s heads also impacts price perceptions. We associate short vowels with low pricing and long vowels with…you guessed, long prices.
Tip 16. If You Don’t List Your Prices, you are Considered Expensive
Not convinced? Just think of the luxury brands. Did you ever see a price tag on a Tiffany ring? If you are an affordable photographer but don’t list your prices, that will hurt you as many brides will not inquire your prices. Listing prices ensures that clients who want to see you are qualified. In other words, they can afford your services, they like your work and are serious prospects. Don't list you prices online and nobody will even bother contacting you. At a bare minimum you should list a starting price.
Tip 17. Fonts Convey a Subtle Message
Major brands have brand books where they stipulate clearly what fonts and colors should be used.
The font used to present the price should match the brand identity, what the photographer or studio stands for.
For example, Times New Roman equals Traditional. If you are a wedding studio that is fresh, you should list your prices using a font like ITC Avant Garde Extra Light.
Studios that want to position themselves as creative, romantic, elegant, should use cursive fonts such as Lavanderia, Edwardian script, Bicham Script.
As we mentioned above (Tip 8), if there is a disconnect between the brand image and message the font conveys (cognitive dissonance), the brain senses something is not right and will not approve the purchase.
Tip 18: Cutting Prices Are Not the Solution
I always try to work with a couple to build a custom package that satisfies their needs. However, I rarely discount my packages. What I am willing to do for the right couple, is offer extra time or services that do not have a cost. For that strategic client who is getting married at the best location in town, do not add an album, but give them 1-2 extra hours of photography or a pre-wedding session. By doing that, you are still the $4,000 photographer and the clients they refer to you will expect to pay the same price. In conclusion if you discount your work, you are cheapening it. How many times did you see an iPhone on sale?
Wedding photographers should consider the subtle aspects of pricing and be careful when selecting a price point. A price change can impact sales more than expected because of the psychological aspects of it.
The Psychology of Pricing and Your Brand
Authors: Jones, Graham. Brand Quarterly. Nov2014
Pricing and the Psychology of Consumption
Authors: John Gourville and Dilip Soman
Harvard Business Review, Sep 2002
The Psychology of Pricing by Ted Lawrence, Published in Pool and Spa Marketing Aug 2014.