I understand that things are tough right now for a lot of creative professionals like us. I know several photographers who are really struggling to make ends meet, a couple who have gotten out of the business completely, and a couple who have branched out into completely different fields to stay afloat. I also know several who are so busy they’re turning away work. Regardless of your particular situation a periodic review of your pricing structure is part of doing business. Many times that review will lead you to the conclusion that you need to raise prices. But knowing your pricing is too low and implementing a price change are two distinct steps.
Please understand my point of view first. I’m a commercial photographer which means all of my business comes from other businesses. Most of my work is repeat business. Obviously when bringing in new clients, it’s simply easiest to bring them in at the new pricing. It’s when trying to raise prices on existing clients that things get tricky.
- Give them warning. If you’ve been working for the same client every month for years and never increased your pricing, simply sending them the next invoice for an increased amount is a sure fire way to have an angry client. But tell them, hey beginning next quarter my rate for this will be $X.
- Justify price increases from their point of view. Perhaps you’ve upgraded equipment which will make the images better. Perhaps you’ve brought it staff dedicated to them. Maybe you’re just more in tune with what they want. In any event, look at it from their point of view and make sure you explain why you’re better now than you were at the beginning.
- Go slow. Going from $400 to $800 is probably going to lose you the client, but going from $400 to $450 or $500 is more manageable.
- Be prepared to loose the client. This is the toughest part for most of us and why we’re hesitant to raise prices. But if you’ve done the review you know that you can handle loosing the lowest end of your client list if they don’t come up in price. I would rather do 10 jobs at $1000 than 100 jobs at $100.
- Look for alternatives. Perhaps you’ve got several clients who simply can’t have their prices raised. Consider brining in a junior partner or associate to handle their work, freeing you up to work on the larger projects.
Raising prices is never easy on your customers/clients but if you wish to stay in business, and grow as a business it’s part of life.
Also, please note how difficult raising prices in the future is and keep that in mind when tempted to low ball an estimate in order to get in the door. If you start out being the cheap supplier you’ll never be anything else in their minds.