Thursday, October 30, 2008

Business Day Thursday: Nickel, Dime, or Dollar Approach To Selling

Good Morning Everybody,
Lots going on as we head into the weekend. I finally got a good start on my book outline and plan to hammer the keyboard a lot more this weekend. This is a brand new experience for me and I'm stoked at getting it all together. It's like eating an elephant - you just have to do it one small spoonful at a time - so a few more spoonfuls today and a few more tomorrow..... Anyway, how about on with news and views this Business day Thursday...

Nickel, Dime, or Dollar Approach To Selling
So what's your approach to selling? After returning from NYC this past weekend, we all settle down for our Monday morning quarterback meeting. One of the last topics to come up was billing on a job I did the week before. That happened to be the "Black Eye" job, by the way. The client had booked in at our level three coverage which is our low-mid priced coverage. It is the first of our coverages that has a six hour time limit associated with it.

We arrived on site at 3:00 P.M. which is when the clock starts ticking. In my planning conversations with the bride's mother, it was determined that my team would be wrapping about 9 P.M. or shortly after - hey, that was close enough to six hours for me, so no problem. In reality, my team left the event at 10:45 P.M. - almost 2 hours longer than what was contracted. At out $200/hour rate, and I round down to just 1 1/2 hours of extra duty, that means the client should be billed an additional $300.

First of all, I would never approach a client on their wedding day and asked for more money because I needed to stay longer than what time had been contracted. I feel is the height of impropriety to bring money matters into the spirit of this joyous occasion for the client. Needless to say, the topic never came up at the wedding.

I believe it was about Tuesday that one of my team members came up to me and asked what we were going to do about the additional one hour and 45 minutes that Nicholas and his assistant spent covering the wedding and reception. I simply brushed it off and said I wasn't going to worry about it since it's quite rare that my clients book at this level of coverage which includes a time commitment. Let me say that I have one of the best team members in the world when it comes to watching out for how my dollars are spent at the studio.

The topic came up again at our Monday morning quarterback meeting. I tried to brush it off again but she was insistent about discussing how I was "giving away the store" if a client books one of our lower coverages and the time is extended indiscriminately. She thought it would set an example for future clients who may also book are mid-priced coverage knowing that I would give them the extra time needed, without charge, to adequately photograph the event.

My point was this, to call the client on a Monday or Tuesday morning after the wedding and claim more monies were due was just bad form and would leave a sour taste in the mind of my client. The last thing I want to do is, in any way, is to create any kind of negative feelings about my studio from any client. This issue seemed so minor to me because it comes up so infrequently - like once every 2-3 years. It just was not a big deal to me.

We discussed it further and most everybody agreed that making that call would be BAD Public Relations for the studio. I know some of you reading this may take objection with me on this, but hear me out. If I had called the client and mentioned the extra monies due just a few days after the wedding, I would have gotten my additional monies but at what expense - in my opinion - of good client relations we had nurtured up to this point. To me we would have been just looking at the nickels and dimes of the sale. To me, the nickels and dimes were not worth jeopardizing the client relationship.

Here is how to take a "Dollar" approach to selling. This also reflects our strategy in this and future situations. First, we are not calling the client to tell them of additional charges, even though, according to my staff, monies are indeed due. When the client comes in to view their images in a few weeks and to make the final selection of images we will determine how to handle the outstanding balances due.

Scenario #1: The client comes in to review the wedding images and selects the bare minimum number of images. This rarely ever happens for my studio. In this case, I would handle it this way. "Mary, your selection will make up in a beautiful album and I can't wait to get started on it for you. Let me just review the costs so far - 3 extras prints for the album, and an 8x10 for each parent, and the 90 minutes of additional time over the agreed amount we discussed. The total will be...."

Scenario #2: The client selects many more images for her album than originally contracted for. Folks, this has been the normal scenario around here for over 25 years - I know it, the client knows it because I mentioned it at all our previous meetings. In this case, we will use the outstanding monies as a closer for the sale. "You know, Mary, you have really put together a great selection of images. At your wedding, Nicholas and his assistant stayed an additional 90 minutes to be sure you had everything well covered. What I would like to do is waive those additional charges if we can go ahead with this order. That would be a $300 savings for you, what do you think? I think the client would be thrilled to save the additional monies - it's a win/win situation - nice sale for us and many dollars saved for the client.

Do you get the idea here? I'm thinking of the entire client experience. The client loves the images and wants many more in her album. The amount of the sale for the additional images far outweighs that 90 minutes my team was needed and stayed over on the wedding day. And, on top of that, I get to make a very gracious gesture of waiving those charges. So you tell me, should I have had my studio call the client in the week following the wedding, asking for more monies, or just let it ride for the time being and see where the sale leads and handle it at that time. I told you my call, what's yours? More food for thought.

Hey gang, these posts as I plan for them seem to be quick and short, many times are just the opposite. That means I got to get back to my real job around here. So how about I see you tomorrow for another Gear Bag Friday: Or maybe I call it, Fish-Eye Friday. See ya' then, -David

19 comments:

  1. You made the right call. If it happened more often, I'd say restructure your tiers. For the occasional situation, that's $300 well spent on good PR.

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  2. I definitely agree with you on this. Any time you can get more back in psychological money, it is nothing but good for the studio. I thought at first you were going to just brush it off all together and I would have disagreed with that.

    Whenever I waive a fee off, I always want to let the client know that I waived it. Otherwise, you get nothing out of it if they don't even know you just gave them $300.

    Definitely a take-off of "penny-wise, pound-foolish."

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  3. This is a tough one. I can see both sides of the coin (no pun intended). We never used to nickle-and-dime people either, and then we ran into a string of several in a row that somehow thought the "about 8 hours of coverage" we discussed in the meeting was somehow equivalent to ten hours of shooting with a three hour gap in the middle, or "Oh, you can just hang out for a couple hours so we can use our last half-hour of coverage at 11:30pm to get the sparkler go-away". So we felt we had to put the hard-limit into our contracts.

    Our solution, which has worked like a champ, is to be very forthright with the clients at pre-event consultation meetings, and very organized with our timeline. We share our experiences with clients and let them know well ahead of time when we think they might run into a time crunch with their proposed timeline. On several occasions, they book extra hours ahead of time to make sure, and on only one occasion we've had to approach a bride at the event and let her know that if she wanted more coverage we were going into billable time. Under no circumstances do we ever demand money at the event (which I've heard of several photographers doing), we just inform them that as we discussed at the meeting last week, our contracted time is approaching and of course we'll stay to cover the whole event, but we will be into billable time, etc.

    Then again, we do not rely on print sales to garner more than a small percentage of income from a wedding, so we have a drastically different outlook. To us, our time is much more important than the possibility of upselling a few more prints down the road. Just a different perspective on where the value lies.

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  4. dwdmguy@optonline.net12:36 PM, October 30, 2008

    Once again you show nothing but professionalism and class. Now, while I am NOT a pro wedding Photographer (I come here because you can apply your lessons to ANY type of photography), I will say that a) This is good common business sense and b) Your going to see things chance a lot in the next 2 years whereas People (Brides?) are going to get a wee bit tougher.

    When in Doubt, I try to remember it's called "Show Business" and NOT "Show Friends"

    Nice blog here.

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  5. I would have to agree with you 100% David. As in any business, not just weddings, you've got to have your eyes on the long tail if you want to be around in five years. This is a perfect example of keeping your eyes on the future growth of your business.

    You made the right call.

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  6. I agree that you made the right call. Obviously, you wouldn't want to do it too often. When I was starting out I would let time run over and not say anything. I didn't have the best head for the business at the time; to me it was more about the art. Sure I got lots of referals from these brides but usually the new clients would take advantage of my generosity. When I moved to a new region, I took on a view closer to yours. I don't approach the bride directly after the wedding but at sometime the extra effort & savings will be mentioned.

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  7. I completely agree. Anytime I do anything for free or waive a fee it is reflected in the invoice. Even if I do completely free work as a favor to someone, I generate an invoice for the amount of time and value with a $0 figure. If you don't put a value on your time, nobody else will either.
    -Kerry

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  8. Business brokers are often used when buyers or sellers want to maintain confidentiality. In some arenas, all the players are so well known that the market itself could be changed by knowledge of a pending sale or purchase. World Business Finder

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  9. Good call on the 'overtime' charge. The 6 hour time frame should be a guide to your customers so that at that price point they don't expect you to be onsite from 8am to midnight. If they want more than 6 hours they need to move up to a different package that provides no time limits.

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  10. Great post David. I particularly took notice in the choice of words used in Scenario #2 when you said "savings" of $300 rather than calling it a "discount."

    By the way I read your interview over at Crash Taylor's site. I really enjoyed reading your comments - thank-you for sharing your knowledge; on Digitalprotalk and all the other ways you share.

    - Michael

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  11. Save yourself the grief of having that bad taste in your mouth of a customer going away unhappy. Like you said, more than likely, you will make that money back on print sales anyway. Hang back. Let the time pass and see what the outcome of the final sale is. The field of wedding photographer is all about public relations. Just don't let it happen too often. Take care.

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  12. David,

    In my humble opinion, you are WAY better off going with Scenario #2 instead of calling up only days after the wedding with your hand out (so to speak).

    My experience in sales tells me to always provide a benefit to my client, which you can certainly do by offering to save the new bride $300.00 if she places a larger order for prints, albums, etc. Not to mention the fact that you will still be able to maintain a great rapport with your client by taking the high road.

    Take care,

    Stephen

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  13. David,

    No doubt you made the right decision. In fact, I am more than a bit surprised at your stuff. They should know better than bothering the couple at their wedding or right after. I mean, the couple has to show up again for the selection anyway, right?.

    You are doing something right if you are able to charge per prints, or per hour. In Montreal, I am afraid to say, those days are gone. My package basically commit me for the full day. My limit is 12 hours and 12 PM but it is common to start the wedding day at 9:00 AM and finish after 12PM.

    I do not rely on prints sell anymore because they practically do not exist in Montreal.

    There isn't even one client that does not demand the DVD with the FULL resolution photos on it.

    So we know that we are going to bill for our time and the work that goes into post processing the event.

    In reality we make one album for every 6-7 events. The rest of them just want their DVD.

    David, great blog, keep up the good work.

    Motti

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  14. Dave,
    Once again, a fabulous post. I love to hear you view on the business side. I have been photographing for years but only recently have been looking at it as a business. It's great to see inside a master photographer and businessman's head. Thanks again.

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  15. At the last wedding I had a similar situation. The groom calls me. I tell him about the price.

    Then he says that they would like at the end of the evening every guest to leave with a photo with themselves and the bride and groom. This means that I should process 80 photos there while everyone eats. I talked with a close by photo lab if they can help me with the actual printing. In the end I accepted with an extra cost.

    Then, after the prices were set, the groom tells me that actually they have a double wedding. So, both he and his brother will have the wedding in the same time, in the same place. The he concludes... ok so the price is the same.

    I considered to be rude to double the price. Doing so I ended up with 3 days of extra work in post processing that nobody payed me.

    Now these guys not even told me what they thing about the photos and neither thanked me for the service I provided with so small amount of money. I got the chance to expand my portfolio and to get more experience (I am a rookie having just a few wedding under my belt - it's my first season).

    What do you recommend me to do about this?

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  16. Hello David,
    Great post and way of thinking as usual.

    However, I have one question. You mentioned 200$/hour coverage price. Afterward you say that by selling more pictures you can compensate 300$. Oh my goodness! In my country I would have to sell more than hundreds of pictures to compensate that! Yes, prices here for photography are much lower, but still I do not understand how are you able to compensate that amount of money with selling additional pictures.

    So, my question is: what is usual price of on picture and is there something special about it in technical terms (paper, dimension...)? How many of those do you have to sell to see it justified?

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  17. I have to go against the grain here and disagree with everyone.
    While it may scenario two may sound like a good solution, it doesn't sound like this was discussed with the B&G before the shooters decided to stick around.
    I'm sure that your contract is tight and stipulates the time frame. But I think the responsible thing to do is inform your clients beforehand that by sticking around they are incurring the extra costs that they agreed to.

    So without informing them ahead of time, in all fairness, they should not be liable for any additional charges.

    If you want to put it in perspective of Dollars, I would suggest looking at it as dollars not lost by your clients complaining to other people about the 300 bucks you tried to finagle from them.

    It is always your responsibility to generate the communication that is necessary. And if you can't bring it up at the wedding, then trying to get money after the fact will always be very uncomfortable for both parties. And I guarantee that it will immediately put them on the defensive.

    I pride myself on client relations. I started working at Home Depot right out of high school, when customer service was paramount (it's gone downhill since then). I worked with multi-millionaire clients while I was with my first Architecture Firms, and now that I run my own consulting business and photography business, I know that every single action I do affects them, and how I am perceived by them and their peers, which are potential clients. So it is much better sometimes to forget about the $300. Because you will always mop up with glowing reviews from clients, but when there is a little "yeah he was good, but he hit us up for these charges that nobody told us about at the wedding..." you are not going to be looked at favorably. Not doing anything is sometimes a good financial decision too.

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  18. William got it right. The clients can read a clock. The time is up when the time is up.

    What I do in a situation I see becoming a time crunch is to approach the couple 30 minutes or so before the time runs out, ->gently<- remind them of the schedule and say "we will be happy to stay longer if you wish, the charge will be billed as we discussed at the consultation". This makes them aware of the issue, gives them a chance to turn down the extra coverage (which you did not do) and makes them aware of the impending charge if they DO decide to have us stay longer.

    We do a lot of things to endear us to customers but giving away services is not one of them. Neither is springing a charge on a client after the fact.

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