2. Perceived Value
You listened to your brides and grooms or maybe their mom’s and heard them say, “Do you have anything cheaper?” That led you to conclude the issue is cost or budget and the way to solve it is to find something less expensive.
Perhaps it is not the cost that causing them to balk. Maybe it is the perceived value of what your customers are getting for the price you are charging.
- Quality of Photography
- Design and Presentation
- Physical Characteristics of the Photo Albums
- Customer Service
When we are looking at buying something, we mentally place a value on it. If the price does not match the perceived value, we are hesitant to take action.
If you feel like you are knocking it out of the park with your marketing materials, the next step is to evaluate how you are doing in these areas.
Is your lighting, posing and retouching immaculate? The quality of the photography is something you can work to improve and control.
Do your designs look repetitive using the same templates over and over? You might consider outsourcing, hiring someone or expanding your repertoire.
What about the fonts you are using when embossing, the thickness of the pages of the custom photo album as well as the cover choices you offer? The physical characteristics of your products communicate in a very real and tangible way.
The style and type of Custom Photo Album we offer in our market are not the same ones that may resonate in other areas. For example offering vegan clients leather options probably isn’t going to work out well. Conversely, just because you may personally love organic materials, that may not appeal to someone from higher society.
There are many ways to increase the perceived value of what you offer, and it is on you to address each one to make it the best it can be.
3. Pricing – 3x, 4x, 5x
Figuring out how much to charge starts with understanding the bottom line. Logically, that begins with cost, but it does not end there. I am a big believer in the difference between good questions and better questions.
A good question to ask an album company how much something costs.
The better question is to ask how much other photographers typically sell them.
There is always a way to get something cheaper, but there are inherent trade-offs. Perhaps it is quality, customer service or timeliness.
However, something that initially costs more but people willing pay a higher price can be more profitable than selling the cheapest option available in the marketplace. Typically, that is because of the perceived value.
A good rule of thumb is to keep your overall costs to 25-35% if you are running a home based business.
That is why Three, Four, Five works so well as a rule of thumb.
3x your cost for friends and family
4x for preferred clients to provide them a discount
5x as your retail pricing
This approach does not apply to selling a 4×6 print but does apply to higher cost items that you may sell.
A simple example is an album that costs you $500.
3 x $500 = $1500
4 x $500 = $2000
5 x $500 = $2500
When we examine the Cost of Goods Sold (COGS), you will notice that at 5x it is 20% and at 4x it is 25%. This ratio is what it takes to run a sustainable business, providing for yourself and family while covering the expenses of like taxes, utilities, equipment and labor costs.
Please note that the Friends and Family rate is your actual break even point. Anything less will ultimately cost you money. If you are giving someone a gift, great! If they are just looking for a deal, that is the magic number to keep it fair for everyone.
Stay tuned! This is part 2 of 3 blogs. Last part of the tips on how to save your wedding album sales are coming soon! You can go back on to the first part by clicking here. Our Sales team is always available to give free advice. If you would like a one-on-one consultation please call 1.800.810.5745 ex 4.