pricing, business-structureI am a new family photographer and getting the pricing structure right is a big part of my business and something that is always on my mind.
I am constantly worried about the way I have listed my prices because I have a lot of drop-off’s from the pricing page on my website.
I receive about 400 visitors a month to my site and it is this page where most visitors leave after seeing it, some return a bit later but usually don’t come back.
There are two main types of charging for this service in my area: 1) low session fee, high price products (usually sold during a viewing session) 2) high price session fee, lower priced products
I am using the second method but have developed packages (bronze, silver and gold) to give clients an idea of what they will receive for their money. I am always worried though that the prices are perceived as being too high and that may be the reason they’re leaving this page.
I always want my clients to be absolutely clear as to what my prices are before booking a session and I have thought of a way I might be able to alter the pricing strategy slightly without adjusting my prices or deceiving people. I usually take a booking deposit of £40 and some people like to choose their package after viewing the photos so I am considering doing this for all clients. The booking fee will become a session fee which I will discount from all of my packages and offer the packages as “extra value packages” that they can choose following their session, as well as being able to simply order prints or digitals away from a package.
This could benefit in a couple of ways that I can think of 1) it splits the payment down into two chunks which may be appealing 2) the perceived upfront cost is lower (although I will still list all the other prices). I am worried though about it becoming confusing if not done right.
I am no expert on this kind of thing but basically I am looking to direct more people to call or book after viewing the prices rather than just leaving the site.
My question is: What is visually the most enticing pricing method to get more conversions, other than simply lowering the prices. Are people more keen to buy when they see the cost broken down somewhat?
Are people more keen to buy when they see the cost broken down somewhat?
Rarely. When selling freelance work, breaking it down by the hour or by bits and pieces exposes you to micromanagement and fussing over itemized lines that appear on your invoice.
There are multiple ways to price something. In a nutshell, they are:
Cost-plus. e.g. (item 1 + x%) + (item 2 + y%) + …, or total cost + $x.
Market. i.e. market price = $x so charge the same give or take.
Value. i.e. $x of value to be delivered, so charge $y aiming for a nice fat ROI.
They all have merit. For freelance work, you’ll usually be pricing based on market or value. Value earns more, but requires that your marketing doesn’t look like a dog’s breakfast.
If I get your question right, you’re charging a $x consultation fee for being the expert around, plus $y per photo. Or something to that order. And packaging it at three different ($x, $y) price points. Which seems sensible.
The way your question reads, the main two things you might need to fix are probably unrelated to prices:
You might need to do a better job at explaining the value that your clients get.
You might need to get more qualified leads onto your site – and make them return.
For the value part, basically answer these questions in your marketing: what were past client goals, did you allow them to meet those goals, and (ideally) what ROI did they get? By the time they reach your order form, it must be clear in your prospect’s mind that:
They will get a benefit (e.g. “Attract more clients by looking more professional” – read this).
They’ll get a positive return on their investment.
With respect to getting more leads to come and come back, I’d stress the qualified part. If your site is getting 400 visitors per month, then there’s little chance that all visitors that visit your landing page are qualified leads.
Set up a purchase event in analytics and tag users that do so if you haven’t that up in place already. This will allow you to monitor which sources of traffic are actually pulling customers in, as opposed to random traffic looking for photography tips. And then focus on content and sources of traffic that actually get you those leads.
There’s also something to be said about repeating your message. Sales are seldom completed after a single interaction. More often, it’ll take something like 6-8 interactions to close your sale. So you need to get those leads back onto your site.
For this, offer an interesting freebie (e.g. an eBook) in exchange for an email address, and send the latter another 5-8 emails using an auto-responder in the followup weeks. Don’t be pushy in the initial ones. Offer valuable tips and insights free of charge, and slowly progress from 0% selling anything in the initial one, to 80% in the final one. This will further establish that you’ve something interesting to deliver.
Lastly, it’s easier to sell something to a client who you’ve already sold something to, so try to get your leads into that situation. If possible in your business line, offer some kind of digital product (typically an eBook or a piece of software) that may be interesting to your leads, and sell that for a small enough price (e.g. $29.99). Pitch that product one or twice in your auto-responder.
With all that being said, I’ll conclude by insisting on the importance of actually talking to your existing clients and of collecting data on your leads. You need to understand precisely what they’re looking for, and what problems they are trying to solve, in order to execute the above successfully. Not superficially as in “looking for a photographer.” Why are they looking for one is powerfully more salient.
You need to think about three aspects of pricing. They’re not independent, but nor are they as closely linked as most people seem to think.
First think about your pricing strategy. This is essentially where you choose your sphere of competition. Think of the zone as luxury, premium, main market, value, low end, and refine that by where you want to be (e.g. “best value” within the premium market).
Second, think about your pricing structures. This is how, from your customer’s point of view, you ask for cash in exchange for the value you create for them. A lot of your question sits in this space.
Third, think about your pricing tactics. This is how you use price as a tool for building your marketing funnel. So for instance, offer-led is a marketing approach that’s really a pricing tactic. (It’s much loved in your market, as you’ll already know.)
Because most people don’t think about these in a structured way, by being intentional you can usually use pricing to target profitable niches that aren’t being well-served by others. The way you do this is to work systematically through your competitors - all, or at least a good sample - and analyse their pricing through these lenses. Then you look for opportunities from that map. An opportunity could be an empty area, especially if there aren’t too many local players, or more often it will be an area where there are competitors, but they’re all offering minor variants of the same approach, giving you the opportunity to stand out as different.
So for instance, there’s no global right answer to how detailed to make your pricing, or to where to capture and where to yield margin. Being different to competitors who are in the same broad space has a high probability of finding and keeping a new niche.
Because you’re thinking about the funnel, you’re focusing on pricing tactics. As you’ll see from any supermarket, the three headline tactics that bust through inertia are first “free,” second “scarce,” third “new.” Each of these is a marketing tactic that can be delivered in part or whole by price. So I would be looking for how to leverage one or more of those.
Picking up on the specific - the booking fee, refunded, package chosen later - I suspect that what you’ve really learned is that the idea of choosing a package adds in friction. So I’d be experimenting to find out whether taking the whole idea of price packages away - from your website at least - is better still. I’d also be wanting to do some tests to see whether the optimum funnel comes from
A high booking fee - 75-100% of a typical transaction today
A moderate fee
A nominal fee - just something to establish a first payment
A cancellation fee
No fee
A booking fee that is itself an offer (e.g. 25% off all products)
Pricing can be hard work, but it’s the place where you turn your work into income, so the investment in time and effort can pay back over and over again. Good luck!
I think that in your market sector , there are a lot of competitors advertising very low or nil cost sessions. Consumers don’t realise that they are going to pay at the other end i.e. high cost for the photographs chosen.
So possibly you are losing custom because consumers are comparing your prices to the free session options and either
I think the way round this is to make it REALLY clear to your prospects a typical total price and how this compares with ‘free’ photography.
I went for a low cost session once and was then horrified at the cost of buying photographs and the fact that I still did not own the picture I purchased. I would never go back there again and would much rather he had been upfront with me. It wasn’t really the total cost, but the ‘trick’ that was annoying (as not all consumers are aware of this way of operating).
I think you can make yourself stand out as an honest and trustworthy company if you spell out in clear terms to your prospects what’s going on here - i.e. at the point where they are looking at prices , some kind of call out that shows them the TRUE cost comparison.
Having said which, my experience in other areas is that most consumers fall for a cheap up front cost even when total cost is same or more. eg I am involved with software and find that buyers generally are drawn to a monthly ‘forever’ subscription at £10pm as against a one off £200 - even though the £200 is much cheaper - e.g. if you assume that the software is used for 3 years say.ie £360
Buyers are not rational is the main thing to bear in mind !
A good book on this whole topic is Cialdini’s: http://www.amazon.co.uk/Influence-Psychology-Robert-PhD-Cialdini/dp/006124189X/ref=sr_1_1?ie=UTF8&qid=1423436726&sr=8-1&keywords=psychology+of+persuasion
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