Creating Packages that Work – by Laurence Kim
March 8th, 2012
Laurence Kim is a Seattle-based portrait photographer who blogs about the business of photography and coaches photographers worldwide. We are fortunate to have Laurence write a small series of posts for us sharing his insight on the photography business. Previously he has shared the power of pre-selling for more portrait profit and how to stand out from your competition. Today, he goes over how to create packages that work.
*Did you know you can create and offer packages with your Premium and Premium Business Zenfolio account? See here for step-by-step instructions.
Creating Packages that Work – by Laurence Kim
Here’s the bad news: my conservative guess is that the typical wedding photographer easily leaves $500 – $1,000 on the table with every single wedding. That’s based on what I’ve learned about their pricing practices during dozens of coaching sessions.
Now the good news: you can earn back that extra $500 – $1,000 per wedding overnight just by redesigning your price list. You can do this without improving your photography, marketing, website or sales skills.
This post is about my pricing principles and how I use those principles to construct packages that work. Now there’s more than one way to successfully price wedding photography, so please don’t get all bent out of shape if you’re successful doing the opposite of what I’m recommending here. What follows is a method developed through trial and error that has worked for me. Your mileage may vary.
Principle #1: packages work
Do you think that McDonald’s would make more money if they did away with packages and sold everything a la carte? Seriously? The concept of packaging together products and services to increase profit is a business practice that’s lasted hundreds of years because it works. I’m confident that the practice of packaging will be here thousands of years from now.
Believe me, I’ve tried a la carte pricing in the past. Do you know what a la carte pricing really means? In practice, it means that every single client gets your “base” price, which typically includes coverage only with no products. After the wedding you hope and pray you can sell them stuff – most commonly an album. But how many couples are broke after the wedding? Most of them are. If you want to sell an album to the majority of your clients, you’ve got to include them in packages.
Principle #2: packages are good, but too many are bad
Okay, if packages are good, why not create a dozen of them so you’ll be sure to have something for everyone? Bad move. Too many packages just invites confusion and, ultimately, paralysis. In addition, a long price list is instinctively something associated with low-end products. Think about going to a restaurant. The diner has an enormous menu with pages and pages of items. The fancy restaurant has a limited menu with just a few choices. Which one would you rather be?
Over time I’ve found that three is the perfect number. Four at the most. Give your potential clients a short, simple menu with three basic choices: base, middle and high-end. That’s all you need.
Principle #3: the middle package is the “money” package
75% of my clients end up purchasing my middle package. That’s all I care about – selling the middle. That’s because the middle package contains an album, and upselling the album is what gets me an extra $900 – $1,200 on average. In fact, I’m pretty much indifferent between my top package and my middle package. Sure, the top package costs more, but since it also includes more stuff there’s less room for upselling. All it takes for me to hit my goal is that middle package.
And remember that people are not rugged individualists – most people want to be in the middle. With three packages, the majority will gravitate towards the middle, especially if you make it very attractive to go there.
Principle #4: don’t include too much “stuff” in your packages
What’s wrong with this package?: 8 hours of coverage + engagement session + rehearsal dinner coverage + 30 page leather 10×10 wedding album + dvd with wedding and engagement images + mounted 20×24 print from the engagement session to display at the wedding + 2 parent albums + sign-in album with engagement images + one 11×14 print + five 8×10 + one 24″ canvas gallery wrap.
Okay, this is kind of extreme, but let’s repeat the question – what’s wrong? The very first thing the couple will ask is: How much will you reduce the price if you remove the rehearsal dinner? the sign-in album? the parent albums? the 11×14 print?
You get the idea. The more “stuff” you cram into each package, the more you are inviting your clients to bargain you down by taking stuff out. You don’t have to let them do this. Make the packages so simple that there’s really not much they can take away.
Principle #5: don’t include albums in your packages, only album credits
This is my most important principle. If you included, for example, a 30 page 10×10 album in a package, then that automatically sets a ceiling on the album. Anything extra is an “upsell”. And that 30 page number gets embedded in your clients’ brains. They begin to expect just a 30 page album and that’s all. Instead of including albums, include album credits. That leaves the number of pages to be an open item. The client may end up with a 20 page album or a 60 page album. It gives you freedom to sell big albums, which is where big profits come from.
Principle #6: put your most expensive package at the top of your list
Imagine that you’re moving to a new city – one that’s a lot more expensive than where you’re currently living. You want to spend up to $500,000 on a new house. You spend time online looking at houses and all of the ones you’d consider living in cost $800,000. You’re in shock. Then you find a good realtor who shows you a house you love that costs $700,000. Now does that house seem cheap or expensive to you? Well, it used to seem hugely expensive, but now it seems cheap! Magic, isn’t it?
That’s why you need a top package. You don’t necessarily care if anyone actually buys it, but it certainly will make your other packages seem quite reasonable by comparison.
Putting it altogether
Okay, now that you understand my principles, let’s go through the exercise of constructing some sample wedding packages. I’m going to assume you’re in that vast middle range that charges about $2,500 for your base price. Here’s how I would construct the packages:
Base Package: $2,500
- 6 hours of wedding day coverage
- DVD with your image files
That’s it. Pretty simple, eh? The package is so simple that there’s nothing the client can remove to lower the price. The client can understand it in an instant.
Middle Package: $3,500
- 7 hours of wedding day coverage
- engagement session or 1 extra hour of coverage
- $1,000 album credit
- DVD with your image files
album pricing:
- large (12×12): $60 per page
- medium (10×10): $50 per page
- small (8×8): $40 per page
So what’s happening here? First, note that the price differential between the base package and the middle package is exactly the amount of the album credit. In effect, that means that the extra hour of coverage and the engagement session are the “bonus” or the incentive for moving up to the middle package. That’s a pretty big bonus and is a strong motivator to get your clients to move up to this package.
Next, note that the second item in the package is the e-session or an extra hour of coverage. Why did I write it that way? Because if your client has already done an e-session, or if they don’t want to do one, then they can’t bargain me down by removing it. I just say, “okay, great, then you get 8 hours of coverage instead of 7″.
Lastly, note that the album credit is enough to get them a 10×10, 20 page album. This is critical and the holy grail of my system. On average, my clients end up with albums close to 40 pages. In this particular example, a 40 page 10×10 album would result in $1,000 of extra revenue. So instead of $3,500, you would have made $4,500.
Now this is quite different than a standard up-sell, where you include a 30 page album in the package and then try to sell them 10 extra pages. In my system, the client doesn’t know how many pages to expect. I tell them right upfront I have no idea how many pages the 1st draft will be, only that my first draft typically averages between 40-60 pages. How many pages they decide to keep are up to them. This is all above-board, non-confrontational, and results in very happy customers.
You can read about my album sales process in-depth right here.
[By the way, 1 page = 1 side. Make this clear on your price list. It’s kind of incredible that people get confused by this, since every book they’ve ever read in their life is 1 page = 1 side. Since when does 2 page = 1 page? Whoever messed this up in the first place deserves to be eaten alive by red ants.]
Highest Package: $5,000
- 7 hours of wedding day coverage
- engagement session or 1 extra hour of coverage
- 2nd photographer
- $2,500 album credit
- DVD with your image files
The same principles apply here. The price differential between this package and the middle package is exactly equal to the increase in album credit, so the 2nd photographer is the bonus incentive for moving them up. Again, you shouldn’t really care if you sell this package or not, but it makes my middle package seem less expensive.
Wrapping up
So there you have it. These are the principles of my package construction process. It doesn’t matter if you’re a $1,000 photographer, a $2,500 photographer or a $10,000 photographer. If you use these principles, you should be able to boost your revenue per wedding by 20-50% with your very next wedding.
Keep it simple and you should be good to go.
