Saturday, March 07, 2009

Don't Whore Your Rate!

In these tough economic times, it's tempting to whore your rate just to keep busy or to make up for declining work. Clients are aware it's a bleak economic landscape out there for photographers and just about everyone. Always looking to save a buck or two, many of those who hire shooters are more apt to ask those photographers to discount their rates these days.

"C'mon! Do me a favor. My budget's tight for this one. Just knock something off your rate and I'll make it up to you next time."

Don't do it! They will not make it up to you next time or any time. They probably won't make it up to you ever! You just took a pay-cut, most likely a permanent pay-cut with that client. Why? Because you just re-set your rate with them. And you re-set it in the wrong direction.

Some of you might be thinking, "If you're work is good, they'll pay your rate." Well, that sounds reasonable. But the people writing the checks often tend to be less reasonable than the people receiving the checks in these matters. And while your work might be good, there's other shooters out there whose work is good as well. Certainly, good enough. And if they're willing to work for less, you might be out of a job with that client, especially if and when you give them a reason to go looking for your replacement; like when you balk at continuing to work for a discounted rate.

Here's what happens when "next time" comes around. You quote your usual rate, not the one-time discounted rate. They look at you questioningly.

"But last time you only charged me this much." They'll say.

"Yeah, but that was because you asked me to do a favor. 'Just this once,' you said."

"Why would I pay you more this time than I paid you last time?" They might ask, suddenly developing amnesia regarding the "last time" conversation.

"Because this is what you paid me all those times before last time," You might answer.

Their condition of Sudden Amnesia Syndrome continues to reveal itself.

You see where this is going?

Nowhere.

Like I said, when you agreed to that "one time" discount, you effectively reduced your rate permanently. Certainly, semi-permanently.

I know a photographer who worked regularly for the same company for 5 or 6 years. They paid him a decent rate and worked him often. He decided to ask for a $50/day increase in his rate. Suddenly, someone else is shooting for that company. And I guarantee that "someone else" is working for less than the original guy worked for. The company wouldn't pay the lousy fifty-bucks and now they're probably saving another hundred bucks or more. Good for them, bad for the guy who gave them excellent service for more than half a decade.

Here's another risk when whoring your rate: People talk. Clients talk. Sometimes, amongst themselves.

"I used Jimmy for my last project," says Client A.

"What did you pay him?" asks Client B.

Client A mentions the rate, i.e., the discounted rate I worked for.

Here's what happens in this scenario: Client B now wants that same discount. And if Client B is someone whom I work for quite regularly, he or she is now pissed! So, the result might be even worse than suddenly having to work for two clients at the same discounted rate. I might lose Client B entirely!

Obviously, this update is targeted at shooters who work for the same clients repeatedly. I'm one of those guys. I don't know how many others there are like me out there but there has to be a few, probably more than a few.

Here's some advice for newer shooters: Don't offer to work for a ridiculously low rate just to get the gig! Yeah, doing so might score you that gig. But you also set your rate low. Probably permanently low. Once you decide to go after what you should be paid by that client, the client will start looking for some other dumb ass who will work for that stupidly-low rate that got you in the door in the first place. Remember: Your work should get you in the door, the numbers are secondary. Also remember that doors are used for entering as well as exiting! You suddenly might find yourself exiting through that same door you whored yourself out to enter if that's what mostly got you in there.

Here's a personal story that typifies what I'm saying here:

Many years ago, while attending film school, another student and I stumbled on an opportunity to bid on a local television commercial spot. It was for two, already successful, Beverly Hills attorneys and it would be their first-ever TV commercial. (Ours too!)

We bid low. Break-even low. We got the gig and did a great job producing the spot. A few months later, the attorneys wanted to shoot another spot. (The first spot netted them tons of new clients.) We, my friend/co-student and I, were ecstatic! This was it: We were on the road to success in Hollywood.

But this time out, instead of just breaking even, we wanted to, at the very least, make a couple of bucks for the many hours we would have to invest producing the new spot. Our bid was still low but not ridiculous low. We would end up making something less than the kid working at MickeyD's but that was okay. We were making television, not french fries. Long story short: Some other dumb asses ended up producing the spot, probably for less than we produced the first spot for.

So remember: Don't whore your rate! Doing so will cost you in the long run and make your Kung Fu weak.

The pretty girl at the top is Mika from about two or three years ago. Mika's Kung Fu is strong!

NOTE: Be sure to read the comments section for this update! A PGS reader provided some truly excellent and informative subject-related links to articles, by John Harrington, posted over time on his Photo Business News & Forum blog.

22 comments:

MDKauffmann said...

Good advice (as always), Jimmy - now how do we convince the shooters (often noobs or weekend warriors) that are whoring their rates to knock it off - that they aren't doing the client a favor, they are hurting us?

jimmyd said...

@MDKaufmann, Whew! That's a tough one!

Generally, those aren't people who make their livings, or big portions of their livings, doing this thing we do. Not only do they whore-out their rates, often they give their work away for free. How do we compete with free?

Obviously, with quality.

But if you're dealing with rather unsophisticated clients--like wedding, event, and some other shooters often are--many of those clients don't recognize the quality anyway. They go with word-of-mouth for choosing a photographer or, if a shooter gets the opportunity, as a result of the sales pitch. Quality becomes secondary! The clients are baffled by bullshit rather than dazzled by brilliance.

So, in answer to your question, I'll ask one in return: How do we compete with whored-out rates offered by weekend warriors or, worse, how do we compete with free?

Wish I freakin' knew.

MDKauffmann said...

Spot on!

My realm happens to be weddings and I couldn't have said it better myself! The client doesn't realize what quality is, and certainly aren't willing to pay for it when Tommy-up-the-street is promising them the same product for free. They don't realize it until AFTER the once in a lifetime event that the quality isn't there, or their pictures aren't there (for whatever reason).

Frustrating indeed.

Anonymous said...

JimmyD,

Another great article. I'd like to direct you and your readers to some other articles that have the same theme. It helps to reinforce the point.

A Triumph of Hope over Experience.

A good read, with a strategy of how to deal with, "let's do this one deal at a low price with the promise to make it up in volume later."

Working For Free - Commentary and Responses to Selected Comments.

The above article is the third article in a three part series. At the end of this article are the links to the two prior articles.

By the way, I like this great YouTube:
YouTube Video Link.

Actually, here's parts one and two:

Professional Photographers vs. "Hobby" Status (i.e. Working for Free).

Working for Free – Interns and Apprentices.

Here's one last article to read.

Spec Comparative to Salary


KS

tom said...

Even tho your bang on with this Jimmy, you've got PRO's out there writing in their blogs about newbies offering their service for Free to break in. I'm pretty sure that the strobist of all places started it.

Whoreing the rate? Jim, their working for free for crist sakes.

tom said...

Found it.

http://strobist.blogspot.com/2008/12/four-reasons-to-consider-working-for.html

Stephen said...

This whole subject is a catch 22. If your client comes to you and says his budget was cut and you can't accommodate them you might lose them too, because if their budget really got cut they might not be able to afford you any more.

What I do think everyone should do is look and see where we can cut expenses. That way you can lower your price and still make a living. Look at things like your cell phone bill, internet bill, and your TV bill and see if there is anything you can cut. Things like paying $14 a month for HBO if you never watch it anymore or unlimited texting when you don't use enough that a lower priced plan doesn't cover what you use.

Now I'm not saying everyone should lower their prices. But if you can shed some of that overhead you just might be able to.

Anonymous said...

As always you are in the spot of the whole problem, many tend to think that companies are Armani dressed people with tin cups asking for a quarter... setting your prices back only hurts you as you explained but they don't realize other factors:

People are so desperate to fit in that they start to do ridiculous assumptions into the way they price their service without realizing there is an expense attached to a business venture:

1)Gear:
Main camera, Back up cameras.

Batteries -be it camera or hot shoe strobe or any other battery you require-

Lenses, back up lenses.

Lighting gear, back up lighting gear.

Assorted grip, speedrings, stands and modifiers, and backup for all of those.

Computers, Monitors, licenses to the programs you use, hardware maintenance, backup media -online, HD's, DVD's and/or Blu-ray-, monitors, calibration devices, etc.

2)Studio:
Electricity, Water, Phone, cell phone, Internet service, etc.

3)Taxes: self explanatory.

4)Savings -401K, gear reparations, gear upgrade (lenses, cameras, lighting, etc.), etc-

And that's the problem, the price isn't only set to put money in your pocket but also to keep the business running in black numbers, there is a price for the gear we use and they won't be lowering it at all, so the by whoring their rate people only affects themselves.

People also have lost the art of negotiating, if your client has a project and the budget doesn't covers for what you charge, then it is simple: the client needs to order less photos in order for you to accommodate the project in the budget. Example:

Let's say a wedding package (with x number of prints, x numbers of hours, etc.) costs 3,000 bucks but your client has only 2,000 bucks you don't go offering the $3,000 package for $2,000, you advice the client that if they take out some hours of coverage and if they order less prints they will be able to get a $2,000 package... negotiations FTW! the client has a top class wedding coverage and you don't whore down your rates to fit in the budget of the client! you make the client order less stuff!. If I go to the supermarket and grab 16 tomatoes I can't tell the cashier to sell 16 tomatoes me for the price of 10 tomatoes, if I only have enough money for 10 tomatoes then I will buy only 10 tomatoes! simple.

:)

My best wishes

Eduar

Anonymous said...

"So, in answer to your question, I'll ask one in return: How do we compete with whored-out rates offered by weekend warriors or, worse, how do we compete with free?

Wish I freakin' knew."

Quality of your work Jimmy, the line that will divide it is the quality of your work ;).


Eduar

jimmyd said...

@Tom, Don't think Hobby, over at Strobist, meant to go after work that is ordinarily paid word, or to take work from others by offering for free as a way to compete. If he did, he's straight-up wrong.

@Stephen, I'm running as lean-n-mean as I can. The problem is the "my budget is tight" line is almost always bullshit. It's like bluffing in poker. I can call or fold. In these cases, I almost always call. The only way I'll fold is if I see a bunch of their cards. But they don't let me do that. It's draw poker and I'm supposed to take their word for it. I call bullshit.

@Eduar, I'd love to believe that quality trumps most everything. But the same people that whore their rates or offer for free have lowered the bar. Quality accounts for much, but not AS much these days. That's my take on it.

Javier G. said...

I look at the client base not as a pond but as an ocean, if I lose a client because of 50 bucks,
there is also a client that will pay me what I'm asking. There will always be clients that sacrifice quality for price.
Just because you find clients that don't want to pay your rates
doesn't mean that you won't find clients that will. I had this experience in december, I've sent lots of quotes with my rates
and no real response (which I think was because they saw my rates as too high) I got in contact with a client interested in
photos for a shoe catalog, I sent them my rates (they tried to negotiate) I stood my gournd.
As a result I got payed what I asked for 4 sessions. If a client doesn't have the budget, look for another that does.
If your client says, "hey I can find a photographer that has lower rates". What do you do?
This in my opinion is my chance to market myself say what makes me better, what kind of quality I provide, explain that
not only is the client paying for my quality work (but also paying for good gear, good software, experience), explain what
will your client be losing if they decide to go to someone else.
You can give examples of resolving problems to make your client aware that if something goes wrong you'll be ready,
and if they go with someone with a lower rate, will they be ready?
I was looking at a documentary about photography that included history, art, and the times. I started thinking:
Did photographers stopped getting work when kodak introduced the brownie? Did photographers stopped getting work when
the 35mm camera was introduced and now general Joe could take photos without the expense of medium or large format? Just because the weekend warrior does
it for free, does it mean that he has an advantage in quality of end product? Does he/she have the experience. Can he/she deliver?
Maybe its me being naive and positive but that's how I see it.

Ed said...

Playing Devil's Advocate:

Why SHOULD the client pay for work he deems acceptable, and CAN get for free (or close to it)?

Why should a photographer expect to compete with an ever-growing marketplace full of photogs capable of providing what THAT client wants -- good enough, free pictures?

If THAT is your client. You lose.

Find the client that values what YOU specifically offer. And what you offer better not be what everyone else can do for cheap, or at all.

And, there better be enough clients that want the same thing to make it worth it to you. Or, again, you lose.

Simple as that.

jimmyd said...

@Ed & @JavierG,

I'm not disputing clients' rights to a better price.

I do, however, think some clients are--lately and because of factors like the economy and the plethora of shooters--taking advantage in a way that resembles the price-gouging some retailers might engage in when various types of factors exist.

I'm very aware of the usual and customary rates for this stuff and I can assure you I'm not an overpaid "employee" when clients hire me.

Here's an example from a completely different industry: If GM offers their manufacturing employees, e.g., the ones who are getting paid a union-inflated hourly wage, a very-low-ball rate, and they refuse, and GM replaces them with inexperienced people working for minimum wage or for free, there would be a hue and cry going up. And I don't think too many would say GM has a right to a better price simply as a good business practice when its obvious GM would be engaging in employment practices that resemble reverse price-gouging as a way to take advantage of certain current economic factors. If GM offered lower but still reasonable employment rates, that would be a different story.

All that aside (and I think I said this in my article) I'm simply advising that shooters refuse to accept a clients low-ball offer (for the reasons I mentioned) and not whore their rates out. If that means losing the client, prompting the need to find replacement clients who value the work, so be it.

In addition to economic issues, there are integrity factors going on here and I, personally, choose to maintain my professional integrity even if it bankrupts me. That's just how I roll.

Willie said...

http://www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm

This is a link from the NPPA providing costs and how one can figure how much they need to make to make money.

Jeremy Shaw said...

The best thing to do is probably to set your rates significantly higher than everyone else. If you try to compete on price, you will always get undercut by someone cheaper. It is a losing game. But there is always room at the top end.

Since most people can't really judge quality anyway, they are going to use the universal indicator of quality: price! Something that cost more *must* be better!

Ironically, many people find that raising their prices also increases their demand (which, in turn, further justifies their higher prices).

The most important skill when asking for a high fee is not photography, but being able to keep a straight face :)

If you are truly in a commodity photography market, where people only care about the lowest price, then you need to get yourself out of that market.

Anyway, if you are better than the other guys, then you owe it to your clients to charge a higher price so they know they are getting a better quality product.

We already know that people like Chase Jarvis do not have special photography 'secrets', so why does he make so much more than the average photographer? I don't think it is skill, connections, a lucky break, or anything like that. I think 90% of it has to do with the fact that he has the guts to ask for a high price with a straight face.

Sure, he is a good photographer, he works hard, and delivers what his clients want -- but there are many people who are just as good or better who are not making the same $$$.

That's my opinion anyway :)

- jeremy

p.s., this is a great video to dispel the belief that high paid photographers have any special secret techniques or special abilities that are not available to the common photographer:

http://video.google.com/videosearch?hl=en&safe=off&q=chase%20jarvis%20photoshelter&um=1&ie=UTF-8&sa=N&tab=wv#

Anonymous said...

@ED: The client is free to choose, however they will likely find that cheapie cheap means appearing in photoshop disasters: http://photoshopdisasters.blogspot.com/ or the likes...

Also consider that a photographer that whores down his price is only shooting his own foot, I mean you can't haggle with B&H, Adorama or Keh, nor you can't haggle with the electric/water/internet company to reduce your bill, and it would be difficult to tell your bank to lower your monthly payment of the mortgages you have to pay.... so it isn't only that you lower your rates and you are set, it is that actually the pricing you are offering is in touch with reality and the expenses a photo business requires.

Eduar

Anonymous said...

Hey Jimmyd

Great words, like what you have to say as I am trying to figure out a way to make money with photography.

Here is a photo agents website with blogging and articles about what you have been talking about.

Jon
http://www.burnsautoparts.com/BAPsite/Index.html

Justa_Newbie said...

Sadly, usualy people will agree with you about not dropping rates. But when presented with the situation of "WORKING" or "NOT WORKING" they cave, and drop rates. 80% of the time or so,,,(guess-timation)

Robert E Carter said...

Jimmy, Good Information. I have a question though. I am wanting to start being a professional photographer. I have the opportunity to shoot a wedding. Here is the thing though. They originally weren't going to have a photographer because they couldnt afford one, I found about this through a mutual friend. Would it be wrong in your professional opinion to do the shoot, give them a CD of the images and not charge them so I can build my porfolio? I mean if I tell them that I can't do free for their friends? Kind of torn here.

Anonymous said...

Ask them if they mind your practicing at their wedding and you won't charge them for the coverage. Then mention right then and there, that all your images are processed only at pro labs and if they want any images, you will be willing to provide prints at "these reasonable prices" and give them a price list with your current pro rates.

That way, They are aware of the "deal" = no coverage fee, but also know that real good prints are available at real prices and no, no CD of all the images is available or electronic delivery. You can even offer to post them on a website that their family and friends can go and order pictures from.

This way there are no surprises and they can turn you down, before you hold them Hostage.

I charge my family and friends full rate on photographing weddings. They would have to pay a pro otherwise and I don't want to undercut my contemporaries.

As to "doing it as a gift" I wouldn't be giving most wedding couples a $3200.000 gift, if I was attending as guest. I would give them a toaster to a Kitchen-Aid mixer, depending on how close we were, so why would I give them a full wedding service and albums and prints?

Offer a free Engagement sitting so they are comfortable being photographed by you and if they don't like those, they can stop you from shooting the wedding. If they do like them, have wallets printed up with the webpage of where the images can be ordered from and pass them out to the guests.

jimmyd said...

@Robert E. Carter,

FWIW, here's my take on your question: Every professional photographer has, at one or more times or another, given their work up for free. And they've done so for exactly the reason you stated and probly for some other reasons as well. I have, we all have.

When you're starting out, you need to build a portfolio so you can later show prospective clients your work. Your intention is to become a paid photographer. Go for it dude! I have no problem with what you're gonna do and I don't think most other shooters do either. Do a great job! Knock their socks off and then go get some paid work and keep knocking clients's socks off!

What's happening lately is that it seems everyone's a photographer. But the vast majority of them have no intention of pursuing photography as a career. For them, it's a hobby. So I say to them, the hobbyists that is, keep hobby shooting and quit offering for free (or for chump change) work that falls into the domain of professionals just to feed your bloated freakin' egos! It's not so much about whether you can do a professional looking job, some hobbyists are incredible photographers, it's that you're taking bread out of the mouths of others who do this thing to put food on the table.

I guarantee there are some things I know how to do, quite well in fact, other than taking pictures. And some of you might do those very same things for a living. But I don't go out and offer my skills and know-how and services with these things for free or for shit money, offering them to your employers, that is, putting your job and your livelihood in jeopardy. So don't do it to me!

Anonymous said...

Let me make one thing perfectly clear.

Never give away ( or sell cheaply) a proof book or CD/DVD of all your images to a client. All you have to sell is your images. Once they have them all, they don't need you.