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The Loss Leader in Photography

July 31, 2015 in Business Tips, How to start a photography business, photography education, Photography Entrepreneurship, Photography Marketing Tips, Photography Tips, Photography Workflow by admin

Today I want to talk to you about using a loss leader in your photography business.

The portrait industry didn’t start out using loss leaders, but once corporate, multi location studios began popping up everywhere, the loss leader became the name of the game for portrait photography. I imagine most of you already know what a loss leader is, but for those of you who don’t, this is how it works. You run an ad. It’s a very attractive ad, because it offers a ridiculous number of portraits for a very small price. The photography ad draws in lots of business! You take lots of pictures. You even sell some. It works, right?

Well, let’s look a little deeper. It’s called a loss leader because is leads your customers into the studio… but at a loss. A loss, you say? Yes… you see, you can’t possibly stay in business offering portraits for less than they cost you to produce them. So, why would anybody do that? The supposed logic behind this strategy is that you will attract lots of buyers, and you will, but the only way for you to keep from losing your shirt in the process is for people to buy more than the deal. If they don’t, you will spend more money than you make, and that’s a terribly bad losing strategy for any business. You might as well be sitting on your butt watching tv rather than taking pictures at a loss. So why did the photography industry build it’s entire marketing model on this strategy? It sounds terrible, doesn’t it? The reason is that it works… at least it did for a long time. And, not only for photographers. The big box stores still use this strategy all the time. They advertise a few items at a big discount, knowing they will lose money, just to get you into the store. Why? Because, when you take the time to get your kids dressed and into the car, to drive all the way to Walmart in 100 degree heat (in Austin anyway), you sure as heck aren’t going to leave the store with just that one little item on sale. So yay for Walmart. It still works for them, and probably will continue to do so.

But the loss leader doesn’t work for photographers. It worked for the big chains at one point, but even they can’t use it much anymore. Why? I believe there are several reasons.

1. Digital has made it possible for people to scan their photographs and make more themselves. When Olan Mills gave you one 8×10, they expected you would buy more for friends and family… and you did. But, when your client can essentially steal your images from you, they have no incentive to buy more. Even some people who would never consider taking a piece of candy from a grocery store without paying, won’t think twice about copying and distributing your images without permission or compensation to you. That’s not a judgement about the morality of our clients… it’s just a fact about the way most of our society has come to view digital images.

2. One of the main reasons why the loss leader works for big chains is that they are BIG. They can spread out the risk. If 100 people buy their deal, and only 50 of them buy additional items, they are probably still going to come out ahead. But if you, as a photographer, only do 10 sessions each week, and half of them only take the deal, well, how can I say it… You’re Screwed!

3. Your work is custom. It takes a lot of time, energy, skill and creatively to produce a portrait. When Walmart’s client doesn’t buy an additional item, they might lose a dollar or two. But when you give something away for free, or, God forbid, at a loss, you lose $100’s or $1000’s of dollars. Why? Because you are one person, spending a lot of dedicated hours on that one client’s portraits, and you are not making any money. You also have an opportunity cost, because you cannot photograph another client or work on a paying client’s images during that time period. Walmart can spread out that labor, but even if you have an employee or two, your risk is extremely high.

4. Probably worst of all the loss leader is … well… deceptive. People are getting more and more marketing savvy. They can smell a rat. And they already know that the loss leader is a rat. They know you will want them to buy something else. Heck, they know you “need” them to buy something else. Even if they have no idea how much you really should be charging for your work, they know it’s more than what you are advertising. This sets up an adversarial position between you and your client, a psychological tug of war, and a very messy situation for both of you in the ordering appointment. Even if you get away with it and they do buy, you probably won’t get this client back in the future, and they sure won’t recommend you to their friends, because they won’t want done to their friend what you did to them. Ick!

So, is there ever a time to use a loss leader? Sure! I just used it a couple of months ago… and very successfully. But my goal wasn’t to make money or even produce a profit at all. My goal was to get images for my marketing, and FAST! So, what did I do? I gave it all away. I ran a Facebook ad for a FREE newborn session with 5 high res digital files. WHAT, you say? Kate!?!?!? How could you do that? I told you, I needed marketing images, and fast. I had just returned from an amazing class with Julia Kelleher at Texas School on newborn photography, where I learned a TON of new tricks for photographing newborns. And, I wanted to completely update all of my marketing and pricing with beautiful new images that reflected my heightened skill level. I also needed a test run for my workflow. How long was it going to take me to do a session with all these new props and wraps and such? How would I track everything with all the new steps I was putting in place? Would I need an assistant? I had lots of questions that needed answers, and photographing a gazillion babies in a short amount of time was going to answer a lot of questions and provide me with exactly what I needed. So I did it. I photographed 22 babies in  about a month and a half. I processed every image myself, presented every image myself, charged, tracked, culled, backed up, and posted to Facebook every image… myself. And I got exactly what I needed from that campaign. Did I make a lot of money? No! I had a lot of people take their 5 free images and go. But I also had a bunch who bought additional photographs, because I did a really, really good job for them. So, I said it was a loss leader, but as you can see, it really wasn’t. Because I was compensated in many important ways. And, I wasn’t being deceptive. I really meant it when I told them they were not required to buy anything and I wouldn’t be upset if they didn’t. Because I meant it. I knew I was getting something as valuable, if not more valuable, than the money. I set up a complete newborn studio system that creates repeatable, consistently beautiful images, that thrill my clients in less than two months, and I couldn’t have done that without using my Facebook “loss leader” ad. Will I ever do it again? Probably not. Everything I needed from that ad I got photographing those 22 gorgeous babies. And, my work got MUCH better because of it. So, now I’m worth more.

The loss leader does permanent damage to your brand. If you train your clients to expect a deal, they will expect a deal, every time. Be straight with people about why you charge what you charge, and don’t discount it. Can you run a special every now and then. Sure. But I would run specials that add value, rather than take away money. Then it is more like you are giving gifts. And most clients would rather receive a gift than a “gotcha” any day.

 

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by admin

Time Management – Delegate

March 2, 2015 in Business Tips, Goal Setting, Photography Entrepreneurship, Photography Marketing Tips, Photography Workflow, Time Management by admin

Time Management – Delegate

Building on our time management techniques from the past three posts, today I want to talk about Rory Vaden’s “Procrastinate on Purpose” step of Delegate. Once you have asked yourself… “can I eliminate this?”, and “can I automate this?”, if your task has not been handled yet, you move to the next stage – delegate. This is when you ask the question… “can I delegate this”? Now, I have to admit, delegate is the hardest step of time management for me. It always has been. For years, decades even, I have struggled with delegating things. Why? Because I did not have, what Rory Vaden calls, the permission of imperfect. I have always felt that, for the tasks that I needed to get done on a daily basis, that I could do it either faster, better or both, than having someone else do the task. I know that sounds ridiculously arrogant, but it was also true. After all, for most of these tasks, I was doing things inside my own business, things that related to systems that I myself had developed. I knew these tasks inside and out. I could practically do them in my sleep. Delegating them seemed like a ludicrous option. Even Rory says I was “right”… which is probably the only reason I was willing to listen to his explanation of why I needed to delegate anyway (LOL).

Rory says that it takes up to 2.5 hours to teach someone how to do a task that takes 5 minutes. YIKES! 2.5 HOURS! No wonder I was thinking I couldn’t afford to delegate anything. That’s a lot of time management! However, I was missing a key ingredient to this thought process. And that was this… once I have taught that person how to do the task, not only can I focus on something else, but they actually get better and better and better at doing the task. This speeds up the efficiency of the task, and ensures that my clients are being handled much more effectively than they were when I myself was doing everything. With someone else handling the time management of these tasks that are less significant to my making an impact on the world, now I can focus on those things that are significant. If you don’t remember from my earlier post, significance is how long something matters. Significant things are things that will matter years down the line. Me answering my phone right now, is not significant years from now. However, me developing a training program for my team to answer the phone effectively and efficiently, will matter years from now. Once I have delegated incoming phone calls to my team, and trained them to do it well, I can move on to the next item on my list that will be significant to my life or my business.

Here is Rory Vaden’s focus funnel again. Notice how each of our first three steps have handled a lot of tasks already. Just you wait until we get to the next stage. You are going to LOVE IT!

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What can you delegate inside your business? If you are a photographer, unless you get some sort of fulfillment and enjoyment from retouching your own work… DELEGATE IT! Retouching is time-consuming… and boring. It is tedious! And, it is extremely cheap to delegate! If you don’t already have a source for this, I recommend www.retouchup.com . They are inexpensive, professional, and fast! If you are not happy with what they did on your images, you can have them re-done for FREE. I get most of my images back before 24 hours are up. And… you can try them for FREE. Click HERE if you want to try them out.

There are probably many tasks like this in your business that you can delegate. You can delegate using a virtual assistant. You can delegate SEO, social media, email marketing.

Leave your answer to the question… “What can I delegate in my business?” in the comments below. And, I’ll see you here next time for the last two steps of the focus funnel. 🙂

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by admin

Photography Tips – Understand Exposure and White Balance

May 13, 2014 in How to start a photography business, photography education, Photography Tips, Photography Workflow by admin

To maintain consistency in your images for your photography business, it is critical that you understand proper exposure and white balance, and how to obtain them in your camera. In this photography tips video I show you a couple of tools that we use to get proper exposure and white balance. You don’t need to get these specific tools, although the X-Rite Color Checker and the target/reflector we use are great ones to choose, you do need to have a plan and a system for how you will consistently get good exposure and white balance in your images.

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by admin

Grow your photography business – Photography Tips – Create a Packing List

April 2, 2014 in How to start a photography business, Photography Entrepreneurship, Photography Tips, Photography Workflow by admin

Today’s photography tip is to create a packing list for your onsite events and portrait sessions.

If all your camera equipment fits into one bag, this is not as important as if you have a lot of different equipment options for photography. In our business, we do events, weddings, and portraits sessions on location. Each of these require different lighting, cameras, media cards, backgrounds etc. So we have a list. It’s a list of every piece of equipment we use… lights, flashes, lenses, camera bodies, backgrounds, batteries, props…. everything. Then, when we are prepping for our session or event, we can easily go through the list and circle everything we are going to need. As the items are loaded into the vehicle, we check each one off.
You do not want to be driving three hours to photograph a wedding wondering if you remembered to pack everything. The more organized you are during your prep, the less stress you will have, so plan ahead.

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by admin

How to grow your photography business – Business Tip – Limit your client’s image selections

March 28, 2014 in Business Tips, How to start a photography business, Photography Tips, Photography Workflow by admin

One of the best ways to speed up the photography ordering appointment and reduce overwhelm for your portrait client is to reduce the number of images that you show your client. If you want to be able to grow your photography business, year after year, and have it be profitable and contribute significantly to your clients… this is a MUST!

We try to keep the selections to only 1-3 images per pose. While this may seem like a disservice to your client at first, you need to realize that limiting a person’s selections actually increases their enjoyment and ability to make decisions. There was a study done with flavors of jelly where a large number of selections were made available to the shoppers… let’s say somewhere in the neighborhood of 24 different flavors. Then they reduced the number to just four flavors. When they did this, sales skyrocketed. Your photography clients will be much more likely to purchase and to purchase larger wall portraits if their choices are limited. If they see hundreds of images, they will never be able to choose, and you are going to end up losing that sale. Not to mention, that you client is going to lose out too. They came to you as a photographer to photograph their family and provide them with beautiful images that they will treasure. But if they can’t make a decision, they will not get their needs met.

It seems counterintuitive, but it’s really true… the less choices you give them, the happier your photography clients are going to be in the end… and so will you!

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by admin

How to grow your photography business – Photography & Business Tips – Begin with the final images in mind

March 21, 2014 in Goal Setting, How to start a photography business, Photography Tips, Photography Workflow by admin

Visualizing the final photographic images that you want to create, and even the photography products that you will use to display those images, will greatly enhance your image quality and your client satisfaction.

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by admin

Grow Your Photography Business – SWPPA Convention

March 15, 2014 in Business Tips, How to start a photography business, Photography Workflow by admin

Today we spent the whole day with Jim Cunningham learning fabulous Painter techniques for creating painted art pieces from our photographs. Tonight, here at SWPPA, Bert Behnke will be doing a presentation on posing groups, and Suzette Alllen will be doing hybrid imaging. It’s so hard to choose which classes to attend when we come to SWPPA, but tonight we are going to go see Bert’s class. If you have never seen Suzette Allen, she is also a fabulous presenter!
Stay tuned over the next few days for more from SWPPA.
By the way… make sure you watch the whole video or you will miss my camera man’s outtake at the end.

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by gtpkate

Photography Business Tips #43 – Photography Workflow – The Pickup Appointment

February 13, 2014 in Business Tips, Photography Entrepreneurship, Photography Workflow by gtpkate

Following your presentation and ordering appointment comes your pickup appointment.

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by gtpkate

Photography Business Tips #41 – Photography Workflow – The Presentation

February 11, 2014 in Business Tips, Photography Entrepreneurship, Photography Workflow by gtpkate

Photographers don’t realize that some of the ways that they have chosen to run their business are causing them a lot of unnecessary stress. One of those things is trying to sell their images online, instead of in person. An in person sales presentation, you are able to support your client in making good decisions about their portraits. You are able to guide them. Online photo galleries are a disservice to your client. Unless they are artists themselves, they likely have no idea how to display their images properly. They don’t know what sizes are best for their home or what cool products would be “perfect” for a particular image of their baby, but you do. So you need to help them through the process… in person.

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by gtpkate

Photography Business Blog #39 – Photography Workflow – The Presentation Prep

February 7, 2014 in Business Tips, Photography Workflow by gtpkate

There are critical things that need to be accomplished prior to the presentation to ensure a smooth ordering session for you and your client. At our studio, we confirm the appointment, recommend they review the price list ahead of time, and remind them that this is their opportunity to order. This makes the selection process go faster and easier, and your time can be spent in image selection rather than with your client trying to figure out the best way that they can save money. Some photographers do not show a price list until the clients come in, but we have found it to be less stressful for everyone involved if they know what they are getting into before we ever take a photograph.

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