When I was working on my MBA five years ago (which I completed), I noticed how much businesses and industries study other businesses and industries. If you are a car company, you don’t just study other car companies, you study clothing companies, watch companies, etc. Most of the successful photographers I see are extremely tuned into the trends around them. Take a look at Apple’s pricing structure. If you apply the same philosophy to your photographic packages, you can predict with 80-90% accuracy what most of your clients will spend.
With this in mind I started studying Apple Computer’s pricing structure on their iMacs. I looked at both what was offered in each model and the price jumps between each model. Let’s take a quick look here.
I quickly noticed a few things. The first thing I noticed was that the second iMac in the group of four was the target package. This was obviously the greatest value. And looking at their yearly sales this was the best selling iMac for them.
What’s important to understand here, is that this was no accident. Apple wants this iMac to be their best selling iMac. This is probably their most profitable Mac. If you sell more of one item in your menu, then production costs go down. If you can predict what people buy, then you cut down on stagnant inventory.
Let’s take a closer look here at the other packages. The lowest package is cheaper, but you lose essentials, like a dedicated graphics card – essential for Photographers, gamers, graphic designers, etc. The target package jumps about 25%. The next package jumps less, but all you get is a bigger screen. This is an easy choice, not confusing, straight forward. The top choice isn’t really that great a deal. You just get a better processor and you pay a lot for it.
So what are we really talking about here? Apple has created four choices, but when you look at it, 70% of people will choose package 2, 20% package 3 and the rest the other two. If you use the same techniques you can have an almost unfallable system in the studio. Focht and I have started using a system like this and we’ve increased sales across the board and our clients are much happier. Why are they happier? Because we’ve made these middle two packages the best value for them. When they receive their purchase, they can see the value in it and they spread the word for us.
It is these middle two packages that you want to create the most value in and sell the most. If you have clients booking your bottom package, you have too much in it for the price. If they are booking your top package, great news, time to raise prices and make a new top end package.
I hope this helps you when you create your photo packages. We are using similar pricing structures for our weddings, families, kids, etc. I encourage you to take a look at your packages and see if you can apply this same technique.
Fundy
Fundy is the creator of the Fundy Album Builder, album software suite and is launching Mobile Fotographer, studio management software for the rest of us.
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3 Comments at "Create Packages That Sell Themselves"
Ok, uhhh, this is so old school that any photographer who’s been doing this for any time does this. Newbies, probably not.
Geo, there’s a significant portion of old and new photographers whose pricing model makes very little sense.
The cost savings in inventory prediction and management don’t necessarily cross-over to a service industry like ours but the practice does have merit. I follow something very similar, even going to mark the target package as “our most popular collection”. It’s the second collection of 4. The third has a decent price jump but includes the files on disk – if they *really* want the files, they are available but will necessitate spending $$$$ to get them, either a la carte or via a package upgrade. I should probably try selling the upper 2 collections more, if for nothing else but to make the target package seem more like a $$$$ bargain
Brides purchase the target package for me 90+% of the time.
Speaking of studying other businesses and industries, I nowadays handle “packaging” totally different than any of those models, taking my cue from several fine dining experiences I’ve had over the years. So here I offer this for your amusement.
You know how in some great restaurants, instead of a menu (which we could say is the a la carte method) or prix fixe or specials (those are like packages), the waiter or owner says “we can make anything you want…” and then starts describing all this great stuff they can do and it sounds like quite the dining experience? That’s what I do. The focus is not on dollars or savings, per se, but on creating something wonderful. Sure, we’ll talk numbers before we’re all done, but that’s not what the photography, and accordingly, nor what the conversation’s about.
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