Should You Raise Your Prices This Year?
During my coaching sessions, I am often asked “How do I know when I should raise my prices?” There are a lot of different theories about how a wedding photographer should raise their prices, but you need to find the model that works the best for your business. I rely on supply and demand as it relates to my geographical market.
I know that pricing in general can be an overwhelming task in itself. So if you need something more hands-on and specific to your business, I would suggest a 2 hour coaching session dedicated to pricing. It wouldn’t be wise to copy someone’s pricing because it isn’t going to work the same for your business. By following the information below and applying it to your business, I really think that you can set yourself up for some success. From here you can develop projections and financial plans and goals for the business.
USE SUPPLY AND DEMAND - My economics professor really hammered this idea and I find her opinion brilliant. It’s simple because it doesn’t require a lot of pieces and it applies to almost every business. So let’s talk about how to apply it to a business in the wedding industry.
Supply - You photographing x number of weddings this year at a specific price
Quantity Demanded - Number of weddings demanded at a specific price
There are a lot of window shoppers out there. And Anthropologie is not deciding their prices based on the number of people who look through the windows of the store. I call that consumer interest. No one is demanding a service or product… yet. In the wedding industry, window shoppers most often look like inquiries. So be sure that quantity demanded is not the number of inquiries that you are receiving, but the number of weddings that you have booked.
For example, I am only booking 15-18 weddings for 2015 while I transition into being a mom and opening new aspects of my business. When I only had 5 weddings left to book for 2015, I raised my pricing to reflect my availability. It was a good decision for my business to increase my pricing in the middle of booking for 2015 because my business could afford (and needed) to slow down on the number of bookings.
UNDERSTAND YOUR MARKET - Every market has a minimum and a maximum.
Say that one dozen eggs are priced at $3 and someone wants to sell you one dozen eggs for $0.01 at the market. Wouldn’t you wonder if something was wrong with the eggs? The seller obviously wants to get rid of the eggs and I would ask myself why the seller is so desperate to get rid of them.
On the flip side, let’s say one dozen eggs are still priced at $3 and someone wants to sell you one dozen eggs for $3.96 at the farmers market. You would probably go ahead and buy the eggs, right? Especially if farm-fresh eggs are something you value. I’m not experienced in the farming market, but I imagine that $10 would be too high to charge for those eggs.
The same is true in the wedding industry. There is a top and a bottom to every market and it will do you well to understand what those numbers are. Once you understand the numbers, look back to the supply and demand model to see what you should be charging so that you can book x number of weddings this year.
For example, the California market can handle 20K for a wedding photographer, but 7K is about all the St Louis market will handle. I am not ever going to create a 20K package for St Louis because no one would buy it. How will I handle pricing if someone decides they want to spend that much on a package? I will create a custom package for them! But the majority of the market in St Louis doesn’t want to spend more than 7K on a wedding package (up front).
*It’s important to note that the maximum for a market is different than the average for a market. Where the maximum is 7K for St Louis, the average for all of St Louis might only be 3.5-5.5K.
If there is something specific regarding pricing, supply and demand or understand your market, just leave a comment below! And since I want to continue to share what I know in a way that benefits you, holler at me on Twitter or Instagram (tagging me) and use the following hashtag: #askjordanbrittley. You can also connect with me through the #ASKJORDANBRITTLEY Facebook group! Let’s build a little community!