Five years ago, I wrote a blog post on pricing photography. Looking back it was overly complicated, and I think failed to address the questions I see photographers ask every day. Now I am starting to think of a much simpler way to talk about pricing. While Professional Photographers of America, and countless experts offer all kinds of advice such as basing your prices on a percentage markup of your costs. Or calculating your costs, plus your desired income, and using that total as your price. However, those methods are pretty arbitrary.
I also realize how difficult it is to be an artist, especially one focusing on the people and emotions that go into wedding photography, and then have a very analytical discussion about money and business. But there is no reason you can’t be a caring artist and a good business person. I love what I do, and I love and care about my clients, and those are the two biggest reasons I care about my business. I love what I do, so I want to be able to continue to do it. That means caring about my income. Secondly, I love my clients, which means that I work really hard to give them creative unique photography and an excellent customer service experience. I don’t see passion for photography and my desire to have a successful business at odds with each other. In fact I see them intricately connected.
The reality is that there is only a single factor that determines what a photographer can charge: what clients are willing to pay. That is probably not what photographers want to hear, and it might even go against some of the other advice you have heard, but consider this.
Let’s say the cost of running my business is $50k per year, and I want to earn $250k. That means that if I photograph 25 weddings a year, I need to earn $12k per wedding. That is probably not very realistic. What If I based it on a simple percentage. Some people advocate a 40% markup on expenses. If my expenses are $50k, I markup 50% to $75k, now I only need to charge $3k per wedding. But that only leaves me with a $25k annual salary.
So that brings me to my suggestion of pricing based on what the market will allow. Potential clients don’t care about your costs or how much you want your salary to be. Just because it costs you twice as much to run a business, does not mean they will be willing to pay you twice as much for the same job.
In any businesses pricing is determined by the laws of supply and demand. Your supply is you. It is limited and unique. Demand is just how much potential clients are willing to pay for your services. What many photographers also fail to understand is just how much influence they have over the demand for their services.
If you are a business that sells widgets, you are competing with other businesses that make widgets. If all the widgets are the same, the only way to compete is on price. In reality, two companies will ever really offer an identical product. One business can have better customer service, or make their widgets out of better materials, or something else to increase demand and thereby increase price.
Photographers have an even easier time doing this. The very nature of our product is unique art. In fact the more unique what we offer is, the easier it is to set ourselves apart and increase demand for our services. Uniqueness isn’t our only tool. I see so many photographers put up a website or Facebook page and then just expect the phone to start ringing. It takes a lot more effort than that, but this post isn’t about advertising.
Customer service is one of the most powerful tools we as photographers have. For example, I have a 100% satisfaction guarantee, where I will refund a client their money if they are unhappy with the images. I have never had to use this yet, but it creates a climate of trust from the very first time I speak with a client. To me, that is a huge part of good customer service.
I am sure you were hoping that you would find a simple formula as to how to come up with the appropriate price to charge clients in this post. Unfortunately no such thing exists. The reality is that running a business that sells creativity is complex. There is no magic formula, but hopefully my words have helped you to understand how the market is the sole determining factor in what you charge.
What I would like to do is to give you a fairly simple metric:
- If you are turning clients away because you are too busy, you are not charging enough.
- If clients are turning you away because you are too expensive, then you are charging too much for your level of demand.
Lastly, I do want to bring in how your expenses factor in to this. Your expenses or desired salary does not factor in to what you can charge. However, it does tell you the minimum you need to charge. If the market will not sustain those minimums, then you can’t be in business. This is the sad truth that many would be professional photographers discover; that the market will not allow them to charge enough to cover expenses. If that is the case, you either need to work on increasing demand, reduce expenses, or determine if your business is sustainable.