The Art of Differentiation
Jennifer Gilman
Notes submitted by Peggy Steinberg
Marketing and Pricing
Pricing is the starting point of marketing, not the how to, bur the psychology
and branding.
Mark judges wedding work and thinks this is the strongest wedding work/album
area. Florida and Texas are strong,
too, but Ohio is tops in the nation.
The Competitive Market
Shifting demographics:
· Dayton if the #1 city in Ohio with a shrinking population
· Ohio is #1 state for foreclosures and Dayton is the #1 city
· Many business layoffs and closings
· 75 OIP graduates per year who are taught by master photographers
and 17 stay in the Dayton area
It is a tough area to do business in this field.
State of Photography:
Used to work 40 hours a week - now up to 70 for no price increase.
People perceive that digital is cheaper….no proofing costs
Time is money!
There is a lot of training the competition
banks give away digital cameras
local retailers provide free camera lessons
Whattheduck.net - daily cartoon for photographers - humor helps
Advertising, marketing, branding are separate concepts with different rules
and plans.
Advertising is the vehicle in which you deliver the message Marketing is
the sum of how
you get your word out: from clothing to your voice mail message.
Branding is the sum total of marketing and advertising pus the mental image
the public has of them.
All 3 must function at the same time.
Roy H. Williams asked, "When business is slow, what does the wise business
owner do?
" The average one usually only wonders what is wrong with his advertising.
Photography is 50% service and 50% product. People tend to forget the service
part.
It needs to be stressed to stand out. Differentiate your products and service
from your competition.
Avoid service cutbacks like shoot and burn. It has crossed over from just
weddings to portraits.
It devalues the experience you provide, and photographers are service providers.
Your work goes out unrepresented this way.
To succeed in today's market as the following:
1. How good are you at what you do?
2. How good are your competitors?
3. Are you pricing yourself for success?
4. Do you realize the 3 ways to make money?
"Pricing is the moment of truth. All of marketing comes to a focus
in the pricing decision."
Raymond Cory from Harvard Business School
Your price says so much more about you.
How good are you at what you do? Quality of work - the bar is being lowered.
Quality of experience - this is key. Remember to talk with people more than
the time you
spend in front of your computer. Do you consistently deliver what you promise?
Do you go
above and beyond your promises? How good are your employees at communicating
your benefits,
skills and talents? Does your marketing and advertising reinforce what you
are trying to communicate?
How good are your competitors? The competitive market has changed. How do
you define good:
good work, good marketing, good customer service, good image? What do consumers
think about
your competition? Where do you fall on the bell curve? In the Dayton-Cincy
market, the bulk of
wedding packages are priced between $1,000-$2,500. If these are your rates
you have the most competition.
Mark and Jen have a $4,000 retainer with their average order falling around
$7,500, Lesco is about the same.
Are you pricing yourself for success? Many raise your prices only 3% to
account for inflation.
If you raise them 5%, you can do 13% fewer clients and make the same income.
Raise prices 10%
and service 22% fewer clients. Any discounting of products/services should
be taken from products only.
7 deadly pricing sins:
1. Not realizing the true goal of marketing: not to process orders at what
the client is willing to pay,
but to increase the customers' willingness to pay a price that better reflects
the products' true value.
2. Not understanding that your price is your image and will determine your
marketing plan in the
competitive market. Remember that photography is a luxury good. Every consumer
has a different
trigger point - the experience and packaging is what sells most people.
A photographer should have
his work displayed all over his home and should have at least one 30x40
piece.
3. Not realizing that discounts and reduced fees are rewards for resistance.
This becomes more frequent
even when the product has value to them.
4. Numerous studies have shown that consumers use price as a quality cue
event to the point that they
associate a lower price with a risk.
5. Comparison Effect: buyers are less sensitive to the higher price of a
branded produce especially when they
have a different comparison to potential alternatives.
6. Making price the cornerstone of your business plan. Trying to compete
on price alone or thinking that low
introductory prices will allow you to gain a market share which will allow
you to raise your prices in the future.
Market share doesn't equal profitability.
7. Not understanding the full implications of pricing in the minds of consumers,
Harry Beckwith said, "Setting
prices is like setting a screw…a little resistance is good."
Implications of Pricing:
Reference Effect - the recall of prices seen (the package scenario) the
B package will be the average
- safe in the middle zone.
Relationship of price sensitivity - $1000 v. $600 and $34.87 v. 34.99 v.
$35 v. thirty-five.
There is psychology to the pricing numbers.
Giving away the farm - free engagement pictures; credit toward an album,
unlimited session…..
When you give something away the customer no longer values it.
Price Incentives not Discounts! Jen wants the brides to have the camera
files (she doesn't have to store them)
but they have to earn them. The more they spend, the cheaper the files become
to purchase. The same incentive
is done with portrait packages. This rewards the desired behavior. They
offer a price list with a bonus menu.
Wallet album (Culver)
Wallet album and concertina (Art leather)
Camera files that they ordered from
Camera files they saw (not all that were taken)
Gift certificate for future purchase
The first couple listings are things that will fit in a purse and could
be shown to others. (free advertising!)
Remember: Time is a resource that never renews itself. Are you truly paying
yourself for all the time you invest?????
Phrasing: Retainer vs. deposit. (Deposit is legally refundable.)
Three ways to make more money:
1. lower costs
2. raise your prices
3. sell more to the clients you have and/or sell to more clients
How to communicate price:
Consumers must perceive the value for the product/service for which they
are to pay. Uneducated consumers
will almost always underestimate the value. Your studio must effectively
communicate that value for financial success.
Comprehend what drives your customers and create value for them. Then, communicate
the value you create,
both tangible and non-tangible. Convince customers that they have reasons
to spend more money.
Quality of life:
1. Shooting too much has financial and social consequences. Just because
you can doesn't mean you should.
Jen and Mark like to shoot 700-1500 images at a wedding and edit down to
400-500. They've learned that
minds shut down when overwhelmed….see this in their customers. They
redesign their wedding albums because
when a bride sees the whole thing finished it becomes what they want. It
is retouched, laid out and color corrected
but a bride can make a simple change. It has increased their wedding sales.
2. Outsource!!! Let your lab do the color correcting. They use Madison Photo
Works in Covington.
3. Change your delivery times. They produce handcrafted works of art 8-12
weeks for portrait delivery and 4 weeks
for brides to proof. Zuckbinders assemble their albums. Phrase how you want
the message to be heard: Six weeks
or less instead of 4-6 weeks.
4. RAW v. JPG: they don't shoot RAW. Takes more time to burn, costs more
in CD's and labels. RAW puts you
behind the computer more….that is evil!