Reading
blue-triangle-element

Articles

PFRE is the original online resource for real estate and interior photographers. Since 2006, it has been a community hub where like-minded professionals from around the world gather to share information with a common goal of improving their work and advancing their business. With thousands of articles, covering hundreds of topics, PFRE offers the most robust collection of educational material in our field. The history of real estate photography has been documented within these pages.
All Articles
blue-triangle-element

Latest

The Render Flames tool in Photoshop is a very powerful and dynamic tool that lets you add fire in just a few steps where there otherwise wasn't one in your photo. In this video, I demonstrate step by step how you can have Photoshop render a fire into a ...

COMMUNITY
blue-triangle-element

Forum

The PFRE Community Forum is an online resource for discussing the art and business of Real Estate and Interior Photography.
Join The Discussion
blue-triangle-element

Latest

View Now
Contest
blue-triangle-element

OVERVIEW

For over a decade, photographers from around the world have participated in PFRE’s monthly photography contests, culminating in the year-end crowning of PFRE’s Photographer of the Year. With a new theme each month and commentary offered by some of the finest real estate & interior photographers anywhere, these contests offer a fun, competitive environment with rich learning opportunities. 

Contest Rules
blue-triangle-element

CURRENT CONTESTS

View / Submit
blue-triangle-element

PAST CONTESTS

View Archive
Conference
blue-triangle-element

Conference

PFRE’s Annual Conference in Las Vegas provides real estate and interior photographers from around the world an opportunity to meet on an annual basis, to learn, share best practices and make connections. Many of the leading names in our field are selected to speak on topics aimed at improving our craft and advancing our business. It’s a comfortable, relaxed environment that is fun, easy to get to, and affordable.
blue-triangle-element

Upcoming

PFRE Conference 2020

Registration not open yet
App Store
blue-triangle-element

Latest News

PFRE Virtual Conference 2020 Announcement: Presenter Line Up Part 1 of 2

We're a few short months away from the PFRE Virtual Conference 2020 an ...

Reader Poll: Which Topics Should Be Covered at the 2020 PFRE Virtual Conference?

Planning is well underway for the 2020 PFRE Virtual Conference and we' ...

PFRE Conference 2020 Announcement

As many of you know, last year we hosted the first-ever PFRE Conferenc ...

Podcast
blue-triangle-element

Podcasts

The PFRE podcast is focused on having meaningful conversations with world-class photographers, business professionals and industry leaders, with the goal to inform and inspire.
All Podcasts

Coming Soon...

Resources
blue-triangle-element

Resources

PFRE prides itself on the depth and breadth of the information and professional development resources it makes available to our community. Our goal is to help real estate and interior photographers be successful while bringing the community together and elevating the industry as a whole.
blue-triangle-element

Directory

Coming Soon...

FOLLOW-UP: Thinking Through Your Pricing Strategically

Published: 08/05/2020
By: Brandon

Ken, from Pittsburgh, PA writes:

"Hey Brandon, I liked your recent article on helping beginners set up their pricing for their photography. I think you highlighted the key points. Any ideas or suggestions for those of us who've been doing this for awhile?"

Thanks Ken, I'm glad you liked that article. For those of you who may have missed it, you can find it by clicking here. Your bringing up this topic reminded me of an article that I read a little while back from a website (sage.com) that I subscribe to about blog articles focused on small-to-medium sized businesses. I thought it would be good to use it as the foundation for this article, which will be a follow-up to my last pricing article.

This particular piece focused on looking at pricing "strategically" and even though it was only a short article, it gave quite a few nuggets that I think will be helpful to more experienced photographers including:

  • it's pricing, not operational efficiencies, that is most likely to determine your overall profitability.
  • it doesn't take a huge price increase to generate a significant increase in profitability.
  • it's a bigger mistake to set prices that are too low, rather than too high.
  • the importance of setting up multiple pricing tiers--i.e., most buyers don't have a specific price in mind when making a buying decision. Instead, they tend to have a price "range" to gauge if a price is acceptable (This is why it's important to have tiered pricing, as this allows us more opportunity to hit that range.)
  • knowing the difference between "cost-based" pricing and "value-based" pricing.

To read the entire article, just click here. While it's not geared to very small businesses like we see in our field, the principles it reviews got me thinking creatively at the time about my own pricing and I'm hoping it'll do the same for you. It's not a step-by-step guide but I think you'll find it interesting. I'm hoping it will spur some creativity in you with regard to your own pricing.

I'd love to hear from some of the more seasoned shooters in our community about the variables you've mulled over in setting up your own pricing structure.

 

 

10 comments on “FOLLOW-UP: Thinking Through Your Pricing Strategically”

  1. I shoot mostly for architects & construction companies these days - so for me, it's a new quote for each potential project coming in, based on the following:

    Travel Costs: Automobile Association-based (depending on the specs of your specific car) cost per kilometre, to the photo project & back.
    +
    Travel Time Costs: How many hours will you spend travelling to & back from the project - also keep traffic in mind, during the specific time of travel - decide on a rate per hour.
    +
    Photographic Costs (includes editing for me) : How many hours will you require (based on info from the potential client), to do a great job of photographing the project?
    This is the important one - depending on your years & expertise in the architectural photography game, decide on an hourly rate which will cover your monthly costs & bring in your required percentage of profit.
    Also keep the editing hours in mind for the project.

    Pricing & quoting is the tricky & fickle part of the job - sometimes even your gut-feel must play a role in adjusting the final price (downwards or upwards) to hook a certain client.
    When business is plentiful, it seems much easier to land new clients, but in the drier months, the art & science of pricing is not so clear...

  2. I disagree with the first 3 items. They aren’t wrong, just that they are very conditional on the specific market and sets of specific conditions.
    Operational Efficiencies:
    If you are shooting million dollar+ homes and/or can demand a high price for your work, you can shoot 2 homes a day. For many of us, there just are not enough million-dollar homes to sustain such a business model. Our bread and butter is the average home. If we shot only 2 average homes a day, we would starve. We need to have efficiencies in place so that we can shoot 5-10 average homes a day and do so without working ourselves to death. In most cases, people make more money by working smarter not harder. Also, increased efficiencies mean those rainy days or reshooting become far less significant, that you are more available to the agents, and that you have more free time. Price and efficiency go hand and hand. Besides, you can always increase your efficiency, you can’t always increase your price.
    Price increase equals more money, setting prices to high/low:
    Thinking that increasing your prices will result in increased profit can be very wrong and even fatal to a small business. Generally put, increasing prices generally will reduce the demand for your product, decreasing the price will do the opposite.** Your goal is to determine the point where you can do the least amount of work while creating the most amount of money. Your job pool and bank balance are two of the best gauges of correct pricing. Are they increasing, decreasing, or stable. If your job pool is increasing, but your bank balance isn’t; increase your prices. If your job pool is decreasing and you are not happy with your bank balance, decrease your prices. Small changes are better than large ones.
    ** There are markets where very high prices will result in increasing demand. In those cases, you are dealing with idiots that want to show others how much better they are than everyone else by spending money foolishly. My suggestion is to do them a huge favor by allowing them to show as much as possible. Set a price somewhere north of your child's college tuition.

  3. @neal,

    Your first part is good. Markets are very local in this business. Even to there being differences from one side of Los Angeles to the other. You then kinda get off in the weeds that points up some of the problems of using a low price/high volume model. I can shoot 2 homes per day and do well. Doing 5 or more each day with as large of an area that I need to service to bring in enough customers isn't viable. I can also survive if I'm only doing 1, a drop of 50%. With a low price model, that's 50% drop may be pretty brutal.

    I agree strongly that being efficient is necessary. It's especially important to spend minimal time on anything that isn't part of making the photos. All of the back end work is paid for with money made from shooting and delivering the photos. Getting a good workflow to get all of the off-location work done fast means getting photos turned around and too the client and that's part of the process they don't see. What they don't see, they won't appreciate and therefore, won't value as much.

    Maximizing the price for each job and finding the best return is the tricky part. I'd rather be charging twice as much if it means I only get half the work. I'm bringing in the same amount of money, but only doing half the work. Chances are that unless I get to the point where I am in high demand, those numbers aren't realistic, but there can be something between here and there that does work. I don't find pleasure in rushing through jobs. I like the photographic process so spending more time at a location to craft images is more my speed. Perhaps I could make more money by being more of a machine, but if I were thinking like that I'd do something else with a bigger return than REP.

    You can charge too little for a quality product. It's not that people are idiots, it a common perception that a lower price is going to mean a lower quality product and vice versa. If you have found a way to create a high quality product for less than what the low quality provider has to spend, you don't WANT to bet their price. People will automatically be looking for the catch and most just aren't going to take the chance there isn't one. Apple doesn't set the price of the iPhone based on cost. They make so many their build cost might be less than a competitor's with the same features. So Apple goes over the top on the quality of their features for a few cents more and picks a price that is at the top of the market before you get to the products were they are gluing on precious gems and gold plating the exterior. There are people that are willing to pay for quality and service. If there is enough of them in your area and you can capture that market, you can a few jobs a week and do exceptionally well. I wish I had the chops to do that and spend days at a time in Bel Air mansions instead of seeing one beige box after another where I am.

    ------------------

    If you are providing some of the best photos consistently and get high praise for your service in your area, you should be the most expensive. Part of that might mean taking fewer jobs and spending more time on each one. Trying to achieve a high level of professional satisfaction has always been one of my goals no matter what I'm doing. My temperament doesn't work with just being a machine stamping out the same part day after day. I have to feel I'm always improving and giving maximum value for my fees.

  4. I do not believe I have ever seen anyone bring up the point that real estate photography could possibly be one of the cheapest and easiest industries to get into that exists. You could spend under 2k and have a completely viable business. 2k is almost literally nothing.

    Compare this to a restaurant, or a company that is going to have 50 employees and office spaces. See, the mistake people make is thinking the same principles in the business would somehow apply to real estate photography, where you can go all in at 2k. It is ridiculous.

    Charge as much as you feel you can possibly get, with careful consideration on what pricing will enable steady growth and also how you will increase prices when you have become established.

    That is it! All these charts and codb stuff is a complete waste of time.

  5. "In Business...Like Attracts Like"

    That's one of those little maxims that I live by which has proven to be true. I got the idea sometime back when Fred Light comments on one forum or another saying something to the tune of:

    "You have to do whatever it takes to create the kind of work you want people to buy from you."

    The idea there was that if you want people to pay you to photograph bread-and-butter homes then then you need to create some of that kind of work and put it in front of the target customer in order to get business. If you want people to pay you to create video AND photos of "Junior Luxury" homes...you need to do whatever it takes to start creating that work.

    Once you are up and running thought it becomes a self-fulfilling prophecy. If you are shooting higher end homes using a higher quality workflow and charging MORE for it...you will naturally attract customers who appreciate that kind of thing and you will get more of those kinds of customers. On the flip side, if you position yourself as the "Any house, any size, unlimited photos for $150"...then don't be surprised if people who are focused on getting "good enough" for the "lowest price" multiply before your very eyes and call you again and again and again.

    Since adding video to what I do in late 2017 I have seen that as my business grows I don't just get more orders (which is true) but that more and more of my customers are adding video. I look through my Freshbooks account though and see how many customers I have done business with in the past and compare to how many I shot for this year...and that numbers is much smaller. So many of my customers have either quit the business or have gravitated towards different (likely cheaper) options. For me though? I get more and more business where people order video in addition to photos.

    This makes sense really if you think about it. What kind of agents are going to pay a good bit MORE for photography AND video? The ones who are making GOOD money. What kinds of agents make GOOD money? The ones who are CONSISTENTLY selling higher end homes again and again. What other kinds of agents pay for photo/video combos? Regular agents who normally never list a really high priced, high end home and fall into one. They were shooting their "typical" listing with their new iPhone 11 (because the camera is just SOOOOOOO good. Dont'cha-know?) or hiring the cheapest guy who could deliver "good enough" work.

    Today though...they signed up THAT listing. The SPECIAL listing. The high end house that they have been waiting to list for 5 years. So they want to pull out all the stops and they are ready to spend "good money". With me.

    Simply by offering a higher end product that most of the competitors are unwilling to bother with (the back end of video - especially the delivery process - is much more time consuming than delivering photos alone) I end up attracting customers who want to spend more for photo/video combos. Because...

    In Business...Like Attracts Like

  6. @Ken
    Efficiency isn't just about how you take and process photos, it's about all aspects of a business. It includes everything from scheduling your day to where you market your service. Shooting and processing efficiency only really account for about 30% of it. The biggest portion is time wasted driving from shooting to shooting. We cover a huge area that has generally a low population density. So we have to spend more time than most making sure that our appointments follow the path that keeps mileage to a minimum.
    I wish it was as easy as charging twice as much meant half the work. Then the choice would be easy. But that is seldom the case. Once you get beyond the price/demand equilibrium point, demand tends to drop quickly. A 10% price increase can result in over a 50% reduction in jobs. If you try a 5% price increase and you don’t see a 5% drop in jobs, you were are priced too low. Keep increasing until a 5% increase causes more than a 5% drop in jobs.

    @Brian
    You are in a rich, highly dense real estate market. Keep that in mind as well as the cost of living in that area. Based on the prices on your site, the cost of living in that area, and the excellent quality of your work you are undercharging for your photos.

  7. @Neal, I'm with you on business efficiency. That can be even more important as customers don't see it and won't value what you put into it. The easier it is to do everything that isn't photos, the more time you have to spend on making the photos which is what customers are going to judge you by.

    My area is low density as well or more properly, the density is clumped with fair distances between. I did two today with 20 miles in between and 50 to the first one. Both were photo and video so it's almost like 4 jobs when I was just doing only stills. I just wish that I could double my prices and drop 50% of the jobs, but there isn't that sort of spread on home values. Most of my region is solid middle class with very little high dollar properties. It's the upper end properties where agents might be willing to spend more on the marketing, but the agents around here will do the same marketing for something that's $150,000 or $1,000,000. It blows my mind that they don't put away their cell phone and hire a pro when they finally get a contract for a million plus home. They don't seem to have figured out that they may not get anymore with sub-par marketing.

    @Brian, the agents around me that are doing the best always have their pipeline full. They don't necessarily have the highest priced listings, but they will be closing escrow every 2-3 days on something. Even in December. The one that I'm thinking of right now always, without exception, has the homes prepped and professionally photographed. The photos used to be much better, but they're still way above average for the area. I know I work that much harder when I have a nice home to photograph. One that I did today is a flip by a broker I do a lot of work for and it came out looking very nice, in a very neutral sort of way. He pulled out the stops on lighting which gave the interior some extra bling. He'll be getting some nice photos to post by tomorrow. When I get homes where the owner thinks it's all on the agent to sell the home, I'm not nearly as motivated. Half the time they don't even bother to make beds.

    @Andrew, How can you say that calculating your CoDB is a waste of time? If you have no idea what your costs are, how can you set your prices correctly? Do you just work 6 months or a year and see if you have any more money in your savings account than when you started?

  8. @Ken, I know what you are saying. We shot 3 main areas, 2 of which are an hour away. It's not the small hops between listings that is the issue, it's the hour drive each way.

    This is what we do, maybe it will help you. We tell the agents we will be in their area on specific days of the week, every week. In our case we go to the Farmington area every Tuesday and Friday. The area is a clump of towns totaling maybe 50,000. Over the 3 day span there will be maybe 10-20 new listing and we get a majority of them. We don't give the agents a specific time until the night before. This allows us to optimize the route so that we minimize driving time.

    I looked at your area and the real estate markets. Lancaster has more listings than our total area. You should be able to go into Lancaster, shoot 4 or 5 listings and not add much more driving time to your day. Do the same with Bakersfields. Drop the resort listings, those are money losers. In the time it takes to drive there are back, you could shot 3 or 4 other listings.

    That is just my opinion. It and a dollar will get you a cup of coffee. So take it for what it is worth.

  9. @Neal, I'm not so booked that I'm driving like a pinball. If I have a job scheduled in an area and another agent wants to book a job nearby, I'll offer them $25 off if they book theirs on the same day. I come out ahead as I eliminate 2 hours of driving, gas and loading the gear in and out of the car.

    When I started it looked like a target rich environment but it's been a hard struggle to get agents to put the cell phone down and step away. In the mean time, there has been more competition moving in. Frankly, they are better at advertising than I am and they seem to have started off with better funding while I've been bootstrapping my way up in terms of gear and ad materials.

    My max is 3 jobs per day. That gives me time for a un-rushed lunch and some margin between jobs so whatever happens I am always on time for the next job. Always being on time to appointments is at the top of my list, no excuses.

    The resort stuff is far between. I used to have a great agent in Mammoth that has since retired. She'd book me for one or two homes that were up for sale and a whole bunch of rentals she managed so the price amortized out to not much more than what I charge locally. When I'd go up there it would be at least a couple days of solid shooting. It's nice and cool there compared to the edge of the Mojave where I live and the area is gorgeous. To me, those jobs felt more like a mini vacation. I would really like to get more of those jobs and there are several cities along highway 395 that I love visiting when I take a little trip up that way. I'll go anywhere within a day's drive time if the customer is willing to pay although I'm not that enthusiastic about booking work in Los Angeles. The traffic can be a nightmare and what should take an hour can take four. There would be me not showing up on time or not getting home until really late for too little money. When I get calls for the greater LA area, I refer them to other photographers I know. I can't be competitive on price.

    I've only done a couple of jobs in Bakersfield. It's not that hard to get to from my house, freeway all the way into town. That's a place I might take your advice on and just book jobs there once a week. The upside is there are stores I like to visit in Bako, but put off because of time and gas. I need to go to the fabric store again to get some scrim material to act as ND on windows when I'm videoing and the Habitat ReStore is a treasure chest of things for the house. They are the Goodwill of building materials and contractors will donate excess inventory from jobs and take the tax write off if that's easier than trying to return stuff to the store or eTailer. A buddy of mine picked up a dishwasher for $50 that was never used and got replaced because it was the wrong color for the new owners of the new house. Not a bad price for an upper end Bosch.

    Right now I'll take any job anytime they want it done. There's a lot of stuff on the market, but sales have plummeted so many agents are pulling into a shell in terms of marketing. I think I made the right move adding simple walk-thru videos. Every job I get now is photo and video and those customers are doing well.

  10. @Ken - I understand the resorts. We have some places west of us that I just enjoy shooting. That and the homes built in the early 1800's.

    Agents use cell phones for many reason. I wish I could say that the quality sucked, but many times it doesn't. They still aren't as good as professional shots, but they are getting better every year. I believe that one of the main reason is that they can have the owners sign papers, take the photos and have everything online that evening. The demand here in Jackson is so high the agent don't even have to take photos to get multiple orders. Agents are calling in the morning and canceling in the afternoon because the home is under contract. It's the hardest market we have had to work in.

    Given your shooting style, I would see about adding in options. The are 360 panos, 360 video, 3D video, 3D photos and more. Then there are after market add-in. Memory books, canvas prints, and more that the agent can give as a gift or the owner/buyer can purchase after the sale.

Leave a Reply

Your email address will not be published. Required fields are marked *

magnifiercrossmenucross-circle