A frequent topic of conversation in our office is pricing. Our product is attractive for many reasons, but one of our core advantages is that by leveraging a variety of technologies and building smart we’ve been able to build a product that completely shatters existing pricing models. Hell, even the fact that we make our pricing publicly available online is something our competitors wouldn’t consider.
The real story though isn’t that we have the capacity to offer an attractive rate… it’s that we do. We’ve introduced a pricing model that’s completely different than the alternatives. We don’t try to undersell our competition – our prices don’t even fit on the same chart. We want someone’s boss to give them a promotion because they saved the company $1Million last year by buying smart software.
Recently, Monica and I had some pictures taken of/with Henry. Our photographer came to our place, was easy to work with, took great pictures, and did a great job of touching them up afterwards. Even the website surprised me with it’s quality and ease of use – really, the whole experience was wonderful and I would recommend them to anyone. So, why do I bring it up?
The pricing model is antiquated.
The whole idea of the photographer owning the pictures that are taking… just doesn’t work for me. I might have felt different when film was being used, when someone was spending their evenings in a dark room, and mistakes touching up pictures couldn’t be corrected by ctrl-Z. What I want is a more modern model. A model where I am paying the photographer to take pictures FOR ME to own. I want to pay for your time, expertise, equipment, AND pictures.
With the current model, I have to assume that prices are set by coming up with a number: “I want to make $100/hr”. So, the price for the photoshoot is easy: $100 to come take your pictures. It’s after the photoshoot that things become more cludgy. The goal is still to make $100/hr but now the buyer isn’t paying you by time – they’re paying you for the pictures. So, how do you set your prices? Will people like your pictures? Will they have the cashflow to buy prints? Will they have third cousins demanding 8×10’s or do they just need one for the living room? It’s hard… and it doesn’t have to be.
Let’s make a deal.
So, here’s what I’m proposing. Our agreement will be 1 hr photo shoot + 2 hrs touchups + a CD for $400.
For the photographer: you’re going to make your $100/hr goal guaranteed and that guarantee is a big deal. The risk is someone printing an army of 8x10s and you not getting anything extra for it, but you’re eliminating the risk of someone ordering nothing and leaving you way under your goal.
For the buyer: you’re getting the rights to your pictures. That’s the big deal. I don’t want anyone to own pictures of my family except me – you can download them from Flickr if you like, but only if I choose to share them and I never have to worry about them showing up in your pro-life ad. The buyer’s risk is that if they don’t like the pictures, they’ve just paid $450 for effectively nothing. The thing is though: I don’t feel like this is a big risk. I’ve seen your portfolio online and I know that you stand by your work. Add a five minute conversation to that to assure me that I’m going to be comfortable working with you and I’m feeling pretty good about it.