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?
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.