It's Impossible to Charge Too Much
It's impossible to charge too much. Period. If you provide a client a figure for your services, and you outline all of the upcharges, add-ons, rush fees, and so forth, regardless of the price, and your client accepts the fees and expenses, then you are not charging too much, as they have agreed to pay that amount. If they don't want to pay that much, then, well, you can't charge them for that. Thus, while a bit of word play, it's impossible to charge too much.
(Continued after the Jump)
Dialing that back a bit, take a minute to examine what you're charging. First things first though, it's important to remember, that the main goal of being in business, is not to be doing lots of work, but, instead, it is to be profitable. For whatever you are charging, if you were to double your fees and licensing, and that resulted in a drop of 50% in your work, not only would you be earning the same in fees, but you would have more free time, and have to carry much less in expenses for each job. Now, this is a risky proposition, and, frankly, much too risky for me, but there are many photographers out there, at the $15/hr, $25/hr, and yes, even $50/hr, or, doing assignments for just $200-$400, that could easily do this, with much less risk.
Surely, a raise in rates will cause your more price conscious clients to drop off. That's ok, that just makes room for better paying clients who are less price conscious. I can't recall the last time a colleague said to me that he was slow and didn't have any money because he or she was charging too much, but I hear all the time from friends who aren't making any money because they arn't charging enough.
Further, low rates will wreak havoc on your profit margins and will damage your credibility. More than once, I was the only photographer, among three considered, that was priced appropriately, the others were so far below me that the client knew - they knew - the assignment could not properly be completed for those low figures, so I recieved the assignment. In addition, when you expect clients to hire you because you're the cheapest, you'll have just that - cheap clients - wanting to do business with you. That's no way to succeed, let alone, get ahead.
There is a general rule in business, which is that if 20% of your clients are not complaining about your fees, you're not charging enough. There's a very interesting article here about pricing and client ratios. The article discusses Pareto's Principle, " It is a common rule of thumb in business; e.g., '80% of your sales comes from 20% of your clients.'" The article posits "Many businesses put up with clients that consistently pay late, change their minds or appointments, expect miracles in terms of timing, insist and haggle over discounts and are just downright stressful to work with. It should be a privilege to do business with you; not a right."
Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.
5 comments:
Is it not likely thought that the ones who are charging 'enough' are also the more confident ones i.e. those with better selling skills (and maybe even better photographic skills also).
What advice do give someone in my situation who is a somewhat new firm and is confident enough to charge enough but doesn't have a client base to help bring leads?
Spectacular article. Thanks for writing it. It's been a boon to me and my employers.
Cheers
-DK
Chris From Detroit:
Marketing is key.
You have to push yourself and get some exposure. In the mean time, you could try selling photos to iStockphotos to try and make some scratch money...or beer money...Beer money.
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