Offering packages can do so much for your business and your bottom line, but there is an art and a science behind packages that sell. Today I’m excited to share 10 strategies that you can use to increase your profits!
10. Packages work everywhere! They work for weddings, families, SENIORS... Heck, even Apple computers!
The concept behind photography packages is to create an offering so incredibly enticing when compared to your a la carte pricing. It will then be stupidly obvious to the client that she needs (and thus wants) to say, 'YES!'
9. Think before you speak. Consider using the verbiage 'collections' versus 'packages.' For the average consumer, packages convey bargain ("When you bundle with Comcast..."). But a collection is more valuable ("Did you see the new fall collection?”).
My clients only ever hear me refer to my pricing as al la carte or collections. From this point forward, I’ll be using the term 'collections' in this article.
8. When structured correctly, the average consumer (80% of your buyers) will choose to purchase the middle collection most of the time. This is because they don’t want to look overly extravagant by choosing the most expensive option (5% of your buyers will choose it, though!). They also don’t want to look cheap by choosing the base collection (5% may choose this collection). Instead, they want to look just right! Ding, ding, ding.
And here’s a bonus: If you’ve created your packages really well, the percentage of buyers for your base collection will drop. I’ve never even sold my base collection.
7. Because of the Goldilocks Syndrome, you’ll want to create 3 to 4 collections so that you can create the ‘too hot, too cold, and just right' effect.
If you offer 4 collections, be sure that you’re making your target profit margin in your middle collection. I personally offer 3 collections; they are priced at $2,900, $1,800 and $950. My average sale is my middle collection plus add-ons (typically a canvas cluster) equaling just over $2,000.00.
6. Keep your C.O.G. (cost of goods) below 25%. It's crucial that you make plenty of room for profit. After all, what's the sense in collecting thousand dollar orders if more of the money goes to your labs?
In other words, if you’re offering a collection for $1000.00, your cost of goods to produce the products for that collection should be no more than $250.00.
5. Collections should be simple! The number one mistake photographers make with collections is in adding too much to the offering. If you're feeling nervous about your price point, you'll probably start considering adding more to the offering in hopes that your clients will see a bigger value. Don’t do it! This can actually (and usually does) have the opposite effect on your clients, convincing them to talk themselves right out of the offering by saying things like, "I don't need all of that."
4. Low Cost = Big Value. The way to keep your cost below 25% is in building big value around low-cost products. Low cost/big value items are the key to successful collections. Think Digital Negatives, Slide Shows and Sticky Albums. While Digital Files don't technically cost much to produce, their value is huge.
For example, the cost for me to produce a slideshow is less than $5, but my a la carte pricing is $125; this adds big value without big production costs.
3. Creates an average sale. Hands down, the most valuable aspect of offering collections is in their ability to create consistency in your sales averages. If you’re offering your products a la cart, one order may ring in at $150 and the next at $1,500. There’s no consistency. But with collections - and what we know about buyer habits - you can create an average sale you can count on.
2. Accept credit cards! Accepting credit cards is a must; even the guy at the fruit stand on the street corner accepts cards these days. And with options like Square and PayPal Here, it couldn’t be easier to get set up. I just pop my PayPal Here swiper into my iPad or iPhone and I’m ready to ask, “Will that be Visa or MasterCard?”
1. Don’t try to sell what, instead focus on why! It’s not what we’re creating (photographs) that clients really want; it’s why (preserving their memories and, more pressingly, showing off to family and friends).
If you focus on the why, your clients will focus on the “yes!”
Pricing & Sales can be one of the most stifling aspects of owning a business. It’s also one of the key components to success. In fact, it’s one of the key indicators that I consider when determining whether a business is on the path to success or failure.