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Why and How to Increase Your Rates

Published: 23/10/2019

Author: Garey Gomez

I turned to the awesome community students in my private Facebook group for some questions/ideas on what to write about for a few blog articles and not surprisingly, I got some great feedback. This question from Tara M. is a favorite topic of mine, so I'm starting with this one:

"Price increases when your clients are price conscientious and how to over come the transition with losing those clients to the more high end." - Tara M.

WHY: My favorite question. What are some reasons to raise your rates?

  1. Your availability is an issue; scheduling is difficult for your clients. In other words, supply (your time) is failing to meet the demand (number of listings).
  2. You are working too much and balancing life with work is increasingly becoming a challenge.
  3. You just want to work less. It does not have to specifically be a supply/demand issue with your calendar. Maybe you just want to work less for other reasons. I fall into this category and for me, it is mixed in with some of #2 above. At the end of this post, I elaborate on this a little for my own personal feelings and decisions on this.
  4. Raising rates is a normal thing to do. If nothing else, based on inflation alone there is precedent to raise your rates by a few percentage points each year. Just about everything you buy on a day-to-day basis is increasing by that amount each year. To say it in business terms, your costs are increasing annually, so to keep your profits, your rates need to increase by an equal amount.

HOW: It's not so scary! Here are some important considerations and steps you can take:

First thing's first. You will lose some clients. If your "WHY" is one of the first three of the reasons above, then this is actually a good thing. So get that into your mind right from the onset. You WANT and possibly NEED to lose some clients. What you want out of an effective rate increase is to work less and earn the same amount of money. This way, the increased rate offsets the revenue lost by shooting fewer properties. Or your goal might be to work on that personal project, which will help you earn more in the future or advance your career. Or maybe you want more time to generate more business with more of your targeted ideal clients. Working less in your day-to-day shooting will open up your schedule to work toward your goals.

How much? You can't just double your rates. You will lose too many clients. You need to increase your rate by a reasonable amount. 20% is the most I would recommend, but your mileage may vary based on your specific market conditions; what your current rate is; as well as your desired outcome for increasing your rates. Get a handle on your costs of doing business, as well as your goals. Then decide what your rates should be.

Change the rates immediately for new clients. If you advertise your rates on your website, then go ahead and update your website right away once you establish what your new rates will be. Anywhere you have your rates in writing, update them. I list my rates in my contract, so that's where I would make my update. The benefit of doing this is that you can test out your new rate on the first handful of new client inquiries and see how it goes.

Notify your existing clients with a reasonable timeframe for when the update will take effect. While you are implementing this rate change right away for new clients, it's fair to give your loyal client base a little heads up. One month is fine, but the bigger the rate increase, the more notice you may want to give. If you have any high-volume clients and you don't want to rock the boat too much, you can increase their notice to as much as three months. They will appreciate it, and it gives you more opportunity to remind them why you're the best photographer for them. Every shoot you book with that client from now until your new rate takes effect, you just make it your job to knock their socks off and SHOW THEM THE VALUE.

Deliver the goods. The most important thing is about you and the service you deliver. To implement a successful rate increase, you really need to deliver your best service and your best photos. Don't compromise on that. You have competitors, and while you should never, ever compete on price, you do need to compete on value. If your clients can't differentiate between you and your competitors, then you will just appear to be overpriced by comparison. To be truly competitive, you need to offer something unique so that if your rates are higher than your competitors, your clients have a "you get what you pay for" mindset when they compare prices between you and your competitors.

Tell your clients why this is good for them. Always, always, ALWAYS make it about your client. Never about you. Wouldn't it make your client feel really good if you told them, "The market demand has been very high and the last thing I want is to sacrifice on quality or the experience that I provide to my clients. Because I care about you so much, I am implementing this small rate increase to match the market trends, and that will allow me to give you my undivided attention and take the time I feel is necessary to do my best work for you, without being rushed to get to my next appointment. With a focus on your needs and my technique, you will get my very best work every time."

Competing goals, and my personal choices.

Note that you can have multiple goals and they can compete with each other for your time and resources. So it's not just a matter of work/life balance but it's also about leaving enough time to work on those goals. This, for me, includes advancing my career with shooting for architects. If I am shooting too many listings on a daily/weekly basis, I will not have the time I need to work on that goal. I have a wife and two young kids. I know that for me, on a personal level, it's really important to have dinner together every evening at our dining room table, to be there to put my kids to bed, and to have quality time with my wife after the kids go to sleep. If I shoot too much, it usually means there's editing to do that evening, so my personal life goes down the drain and I'm not happy about it. I carry that with me into the next day. It affects me negatively and as a result, I might not do my best work. Over time, this is a major issue. So to do my best work, and to be as productive as I can be, and to earn a better living, I need the quality personal time. So this is a business decision as much as it is a personal one!

Please share your experiences with raising your rates. If you are thinking about raising your rates, let's get a nice discussion going to see if we can help.

Garey Gomez is an architectural photographer based in Atlanta, Georgia. He is a three-time PFRE Photographer of the Month, and the creator of the Mastering Real Estate Photography tutorial series.

Garey Gomez

5 comments on “Why and How to Increase Your Rates”

  1. Great Post Garey, I increased my fees twice in the past 5 years I'm doing RE shoot. Once after the first year, and 2nd time at the end of my 3rd year. I didn't loose any clients at all, in fact my business went from 120 house in my 2nd year to over 700 house so far this year only. I kept my fees the same but I added( and trained) two part time sub-contractor to help me with overload. That way I keep growing my business with power of leverage and keep my clients happy. how's my fee, you ask?
    still good compare to some of my competitors, not too low and not too high, I would say average.
    The point is to provide a service that nobody offers with your price and as Garey mentioned: "Show them Value", then increase your fee when you hit your limit.
    I'll raise my rate as soon as I reach my limit of potential 1k house a year which is happening in 2020. that's my plan

  2. I've only raised my rates one time in the past 4-5 years and ended up doing it around 10 months ago... but I sat on it for probably a year before that. I was extremely nervous that I was going to lose clients over it even though it was a minuscule amount. Fast forward to 10 months later - a small increase, restructuring my pricing and focusing on add on services - this is where I'm at so far YTD.

    +90.14% Revenue
    +35.48% Volume
    +29.16% Average Revenue Per Job

    I've been shooting since 2011 and it's certainly been my most explosive year so far. I plan on raising my rates again right before Spring next year and I'm expecting revenue to continue to climb. I lost a handful of clients with my last increase but I've tripled that in new clients. I'm definitely a believer that clients see value when your rates are slightly higher. It's like when your TV shopping at BestBuy and those 2 models look exactly the same but ones $85 more expensive. First thought that comes to my mind is "must be a reason".... and I always go for the slightly more expensive one. Maybe it's just me. I don't know. But my numbers have certainly showed me that raising my rates is nothing to be scared of.

  3. I'll raise rates Jan 1, 20 percent on small shoots, 10 percent on medium, large shoots stay the same. If I need a reason, my invoicing provider and my website hosting service/storage delivery provider have raised rates by substantial amounts in the last 3 years.

  4. I raised my rates Jan 1st of 2019. The number of customers I worked with this year was less than in previous years. But some agents are doing better so overall revenue was up.

  5. I started out shooting real estate for $250/home. Then someone came in with a dedicated plan and undercut everyone in town by offering $99 shoots that, frankly, weren’t very good. This guy successfully built a team using the business model of out-pricing everyone by taking a loss solely to gain the market and then slowly raising the prices back to market level (and higher) after they achieve dominance in the market.

    Since real estate photography supplements the architecture and portraiture I shoot, I let my fickle clients go and kept the ones willing to pay me more for better work. And even though I had to lower my entry level price to $150 just to try to fill in the gaps in my client roster, that shady method of competition made me decide I wasn’t going to try to compete on price alone ever again.

    After all, my goal wasn’t to own a real estate photography business and shoot hundreds of homes a year. I wanted to work less and make more. My goal was to be a self-employed architecture photographer and only shoot a few dozen properties a year. Instead of ten houses a week totaling $1500, I wanted to do one architectural shoot per week for the same price. So, I turned my focus toward improving my work and my workflow and then calling on some local architect firms to give me a chance. And it’s working. Since that paradigm shift, I've shot dozens of $500+ jobs for developers and builders, several $1000+ commercial jobs and a handful of $1000+ jobs for an architecture firm (and just added a second architecture firm who will be sending me around the country for projects ranging from luxury homes to hotels). On top of all that, I’m licensing some of those images to contractors, builders and other firms as a way of extending the life of existing images and generating new clients.

    I still do some real estate, but only for a select few clients. My primary focus is on architecture, interiors and related commercial work. Since I’m new to the market, I’ve priced myself to be affordable for a small firm, but that will change as I gain experience and reputation. After all, I’m looking for more than just the jobs. I’m looking for the relationships. Because, if I’ve done a good job for them and shown I can represent their work the way they want it represented, then they’ll keep using me. And when they grow I will grow with them. The projects will get bigger and so will their budget. And I’ll be right there beside them. 🙂

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