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Archive 2014 · Eliminate the Price Objection by Differentiation

  
 
SynergyatICG
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p.1 #1 · p.1 #1 · Eliminate the Price Objection by Differentiation


I’ve been a lurker here for a long time as coronasteve, and have enjoyed the benefit of the years of experience & knowledge present here. If you would be kind enough to respond to this post, I think we can collectively help “de-commoditize” commercial photography services. A long post, I know, sorry.

This scenario specifically addresses commercial studio work like product photography, images to show a service, collectively advertising & marketing photography. NOT weddings, head shots, or the cocker spaniel.

How many of you have significant ancillary services that you just “include” in the normal workflow and is included in your hourly rate? An example:

The assignment is a full studio day of table top widget photography, with the client on-set. The images require minimal direction, some props (pulled from your stockpile of 25 years worth of crap). The objective for the day is to get 5-6 approved images let’s say. You provide a simple pizza & salad lunch.

Your workflow might be to get the 1st file to your retouching guy for a little quickie editing, converted to CMYK, then out to a hard proof from a calibrated HP, Epson, etc. Your client approves, and that image is now the benchmark to finish the day.

The next day your client comes by for hard proofs for each CMYK file; files are on DVD and they have also been dropped onto your ftp site for other print vendors to access.

Your client is billed for full 8 hour day at your usual hourly rate. But you have included many benefits to your client that he would not have received at the vast majority of the other photo studios. It would appear to me that you have provided a distinctly different service compared to the studio that soft-proofs and then drops RGB files onto a dvd.

Stop competing on price.

Any thoughts? Thanks in advance.






Jan 09, 2014 at 03:30 PM
Peter Figen
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p.1 #2 · p.1 #2 · Eliminate the Price Objection by Differentiation


If life were only that simple. I've been doing variations on that theme for something like a dozen years now, except that we only provide CMYK when a job is going to print - and because most are going to web sites these days, there's no reason to do CMYK. But when I do, it's a CMYK custom tailored to where we're printing. In addition, because clients are constantly evolving their own vision for their products, we're often doing multiple versions for several weeks after the initial shoot. They get high and low res sRGB files (no need to confuse them with anything else) that are delivered with hightail or the equivalent so we have a record of the digital delivery and they avoid the sales tax that a client direct client would be paying. On top of all that every file that has gone through this studio since 1995 is archived and catalogued and can be pulled from backups in a matter of about a minute. I can't tell you how many times clients lost discs in the early days or simply never archived or even organized the files that were sent to them. Having a system in place to be able to retrieve at a moment's notice is a HUGE added value to long term clients, who then consider you part of their team and not just another vendor.


Jan 09, 2014 at 05:26 PM
SynergyatICG
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p.1 #3 · p.1 #3 · Eliminate the Price Objection by Differentiation


For sure, on the archiving; we have digital files since 1995 sitting around on tape in the vault. We have had Scene 7 in place for years for certain of our clients to access as needed.

About a year ago, an early, early client brought in a 80mb Syquest disc that they had some photos archived that they could not access. Without laughing too hard, we just went to the vault and got the tapes.



Jan 09, 2014 at 06:38 PM
jefferies1
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p.1 #4 · p.1 #4 · Eliminate the Price Objection by Differentiation


I agree with what you are saying but at least in my area the bottom line is still price. I can't seem to get away from it due to lack of knowledge of clients. I would say 90% or more of my clients (business owners and ad agency both) have no concept of what it takes to provide a good image. No matter what detailed information I provide in the bid process I know they think the ONLY reason my images look better than what they could do in house is because I have a $5000.00 camera and they are using a $500.00 one.





Jan 09, 2014 at 06:49 PM
Micky Bill
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p.1 #5 · p.1 #5 · Eliminate the Price Objection by Differentiation


What else can you suggest?
Most everyone I know archives work for an extended time.
Doing CMYK for clients? That seems like something from 1998, CMYK is not one size fits all. i believe the file needs to targeted for a specific printer...and if printers have half a chance to blame someone for problems, they will. I don;t want it be me.
In 20+ years of shooting for magazines, design firms, giant ad agencies and direct to corporations I have been asked for CMYK files....about 3 times.

As Peter mentioned, (in CA at least) once the client takes delivery of the proof you now must charge sales tax for the entire job.



Jan 09, 2014 at 10:42 PM
GoGo
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p.1 #6 · p.1 #6 · Eliminate the Price Objection by Differentiation


Charging $$$ for photography is charging for USAGE!

The fees vary depending on what the photography is used for!

USAGE = publication for billboard advertising, or magazine advertising (10,000 circ or 2,000,000 circ?) point of purchase display , or website, or or or ...

The answer to the question of How Much to charge depends on the answer to the question What is the intended USAGE of the photography.

The production costs of the photography are only one part of the equation when determining the value of the work.



Jan 11, 2014 at 11:07 AM
GoGo
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p.1 #7 · p.1 #7 · Eliminate the Price Objection by Differentiation


Ouch, 666 posts.
Odd number...



Jan 11, 2014 at 11:07 AM
SynergyatICG
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p.1 #8 · p.1 #8 · Eliminate the Price Objection by Differentiation


This could be for some folks, but not for us.

Since 1995, we do the photography for the client, they own the images 100%, use them however, whenever, doesn't matter to us. We treat the image as the client's asset. For some customers we catalog, manage different sizes, allow access to their catalog to others, whatever the client wants. Just about every image we capture; photo or scan, is used in their print catalogs, website, brochures, whatever.

Trust me; Conagra Foods, Subway, McDonalds & their peers are not going to pay over and over and over and over again for a single photo of a $2.00 scoop of french fries.

I realize the policy of "giving" the image to the client vs. licensing usage is sometimes cause for hot debate, but not my problem.

GoGo wrote:
Charging $$$ for photography is charging for USAGE!

The fees vary depending on what the photography is used for!

USAGE = publication for billboard advertising, or magazine advertising (10,000 circ or 2,000,000 circ?) point of purchase display , or website, or or or ...

The answer to the question of How Much to charge depends on the answer to the question What is the intended USAGE of the photography.

The production costs of the photography are only one part of the equation when determining the value of the work.




Jan 14, 2014 at 01:46 PM
tcphoto
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p.1 #9 · p.1 #9 · Eliminate the Price Objection by Differentiation


You lost me at "hourly rate", I am a creative freelancer who creates custom images not a layman. I hope that you start thinking about the value that you provide to your clients. I draft an estimate that describes the images I am asked to produce at a rate that we both deem fair for the application they have described to me and for a term that I license. I find that nearly everyone has in house editors that prefer RAW files and I have no problem delivering them as long as they honor our licensing agreement. My hard drives are filled with nearly every RAW and edited image I have ever shoot in case it is needed by clients or Stock Agency.


Jan 14, 2014 at 05:06 PM
Micky Bill
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p.1 #10 · p.1 #10 · Eliminate the Price Objection by Differentiation


Sounds like a printing company to me... I recall a couple printing companies in the midwest would give away the photography but make it all up (and more) on the printing side. Very hard to bid against as a photographer when the printer is charging next to nothing for the photos in exchange for printing up pallets of menus and flyers.

Maybe things have changed but not many photographers are willing to take on the duties of a pre-press shop.

An acquaintance of mine made a very good living in Chicago shooting for quite a few food companies, McDonalds was his main gig for many many years. They paid very high fees and usage as well. Maybe they don;t anymore



Jan 14, 2014 at 05:14 PM
SynergyatICG
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p.1 #11 · p.1 #11 · Eliminate the Price Objection by Differentiation


The value that is provided is the very essence of this thread!

When I use the term "hourly rate" I don't mean to imply that we work on a time & materials basis & the client has to pay for all that. We too, provide an estimate based on the scope of work involved. If we are tasked to provide 150 images in total, of which 50 are going to involve a food stylist, props, linens, etc. We figure we are probably going to get 3-4 heroes each day for those. The other 100 images are fairly basic; cooked food in a bowl or plate on white seamless, nothing crazy. We'll get 30 or so in the can each day.

The value part of all this that I can't reconcile is this: Let's say that you are asked by the client to create a custom image and you figure it will take 1 full day to get an approved image. BTW, this is NOT stock photography. At that point you could assign a $$$ value to that image for it's use in a local magazine ad for example. A month from now, your client wants to use it for a national advertising initiative. This time, the client is charged again, at a much higher price because the same image has more value now based on the greater number of impressions expected.

How is the image "different" the second time? If the idea is that the client is going to receive a greater ROI the 2nd time, wouldn't you be sharing in the client's expected profit for this usage, even before the client has received a dime on his ROI?

I don't understand why that would make sense for the client. That is why we never used this business model in the almost 25 years we have been doing photography.


tcphoto wrote:
You lost me at "hourly rate", I am a creative freelancer who creates custom images not a layman. I hope that you start thinking about the value that you provide to your clients. I draft an estimate that describes the images I am asked to produce at a rate that we both deem fair for the application they have described to me and for a term that I license. I find that nearly everyone has in house editors that prefer RAW files and I have no problem delivering them as long as they honor our licensing agreement. My hard drives
...Show more



Jan 14, 2014 at 11:05 PM
SynergyatICG
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p.1 #12 · p.1 #12 · Eliminate the Price Objection by Differentiation


I could be wrong, but I don't think $1,950 - $2,250 / day for studio photography is giving anything away.

And yes, we also provide digital printing, trade show graphics, fulfillment, and many other marketing support services to agencies and in-house marketing groups.

Micky Bill wrote:
Sounds like a printing company to me... I recall a couple printing companies in the midwest would give away the photography but make it all up (and more) on the printing side. Very hard to bid against as a photographer when the printer is charging next to nothing for the photos in exchange for printing up pallets of menus and flyers.

Maybe things have changed but not many photographers are willing to take on the duties of a pre-press shop.

An acquaintance of mine made a very good living in Chicago shooting for quite a few food companies, McDonalds was
...Show more



Jan 14, 2014 at 11:11 PM
Micky Bill
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p.1 #13 · p.1 #13 · Eliminate the Price Objection by Differentiation


SynergyatICG wrote:
I could be wrong, but I don't think $1,950 - $2,250 / day for studio photography is giving anything away.

And yes, we also provide digital printing, trade show graphics, fulfillment, and many other marketing support services to agencies and in-house marketing groups.



Your company is not a stand alone photography business so the relatively moderate rate you mention is just part of the equation that may include design, printing of brochures and catalogs, trade show support, logoed shirts and hats to trucks rolling out the back door with frozen foods. Who cares what the photography costs are? The photography line item cost could be $100 or $10,000 as long as the bottom line for the entire program makes a profit and the client signs off on it, all is well.
The cost of photography is just like the paper for the flyers or per shirt cost to the end client, a commodity.
If you isolate your "day rate" of $1,950 to $2,250 for an unknown (5-6 hard proofs and retouched photos?) amount of photos that are given to the client without any usage restrictions, in most cases, if you are handling the printing, design, packaging fulfillment your "photography" bid/cost can be much lower than a stand alone photography studio that has to make it's money only on the photography fees and usage.

It is a different way of doing business. To your multifaceted company the photography is a minor part of the deal. To individual photographers it is the major part of the deal.




Jan 15, 2014 at 04:12 AM
GoGo
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p.1 #14 · p.1 #14 · Eliminate the Price Objection by Differentiation


Micky Bill wrote:
Your company is not a stand alone photography business so the relatively moderate rate you mention is just part of the equation that may include design, printing of brochures and catalogs, trade show support, logoed shirts and hats to trucks rolling out the back door with frozen foods. Who cares what the photography costs are? The photography line item cost could be $100 or $10,000 as long as the bottom line for the entire program makes a profit and the client signs off on it, all is well.
The cost of photography is just like the paper for the
...Show more

You hit the nail on the head, well said.



Jan 18, 2014 at 10:38 AM
SynergyatICG
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p.1 #15 · p.1 #15 · Eliminate the Price Objection by Differentiation


By far, most of our photography is not printed here, and definitely not catalogs, nor do we sub-contract out for it. Our press is not of the "long run" variety anyway. Most of our photography images are used by the client in catalogs & web, with marketing & sales collateral a close second place.

However, I can see why there might be this perception of photography only being a minor part of the "big picture" of many centers contributing profit. However, that is definitely not the case for us. Photography, retouching, re-purposing, & other image asset management is still our focus. That is what product managers, marketing managers, business owners look to us for support in this area.

We added digital photography about 17-18 years ago as a natural progression from being a "color house" with drum scanning, retouching, proofs, etc. In fact, we had the very first digital back out here in the I.E. for med. & lg. format bodies. Then, up until 8 years ago, we didn't even have a press, and the Kodak Nexpress is only a 13" x 18" sheet size anyway. Definitely not a long run press.

What I still can't reconcile, is the idea of licensing images that a photographer created for a specific client.

For example, if a photographer is contracted to provide 10 images of a brand new chain saw made by Stihl or Husqvarna. A few glamour shots, the rest are basic on seamless. These 10 images would not be useful to anyone else, other than the manufacturer.

When discussing the assignment with said manufacturer, you are told that the images are for catalogs, web, mailings, brochures, Home Depot flyers, magazine ads, on and on etc. Many times over the next few years, the more the better because their product will be selling like hotcakes.

Why in the world, would the manufacturer be expected to pay a licensing fee each time these images are used, based on the purpose of the use, and in the medium that is used. It appears to me, that by licensing these images, the photographer is expecting to share in some minor portion of the expected revenue generated by sales of the product based on how the images are used. Seriously?

Maybe I am misunderstanding how the licensing concept is being explained, or it could be that I just don't "get it."


GoGo wrote:
You hit the nail on the head, well said.




Jan 21, 2014 at 04:06 PM
Micky Bill
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p.1 #16 · p.1 #16 · Eliminate the Price Objection by Differentiation


Ok, I stand corrected. In looking at your website I got the impression that photography was less of a part of the big picture than you say. I assumed ICG is a printing company that also does photography (and retouching, packaging, fulfillment, polo shirts, trade show setups, etc) but in reality it is mainly a photography company that does other things?

Since you added digital photography 18 years ago you/ICG are not a newcomer to the industry yet you say that you still don't get (or want to get) the usage/licensing model of pricing commercial photography. Don;t worry, after 15 years (or more) it is on the way out in many markets. With the internet there is no easy way to limit uses by a client. Once a picture is out there it's out there. Many clients are building up image libraries rather than doing shoots with a single intended use. A high day rate covers the many images created and the multiple uses...hopefully!

There also is a shift in trying to get a % of the entire ad buy but I think that may difficult in that agencies don't like people seeing behind the curtain and they don;t really know what they are going to do until they do it!

The way that US copyright law is applied the artist owns all rights to their images and sell/transfer reproduction rights to agencies or directly to the client. The cost reflects the use by the client, how valuable is it to the client. These things are determined by the size of the client, the area the pictures are used, how many images, and for how long. Also the market (trade or consumer) and usage realm (Adv, PR, Corporate, Editorial).

If a photographer works for a company, he/she probably is in a work for hire situation as they are an employee of the studio/company. The company can then do with the image what feels best without any additional $ to the photographer aka original artist.

Many photographers have a scale of fees, if a local company like "Tiny Toddler Day Care" wants to use a photo of a toddler in an ad in the local paper and online the cost will be a lot less than if "BigGiant Life Insurance" wants to use the same picture in worldwide ads and billboards and collateral and online...same photo different use and value to the client. How many eyeballs are seeing the image? A few for Tiny Toddler, a lot for Big Giant.

There is also work for hire in which the client buys all rights to all the pictures forever, this usually carries a high price tag.

For example-I do a lot of work directly with some major worldwide manufacturers, the work is limited to use in PR, Editorial, Social Media and Internally. This is done at a day rate / creative fee. Sometimes the ad agency or parts of the company outside of North America need a usage upgrade as they are re-purposing the images for wider use and distribution., outside of the original use. I then get paid more for the additional use. More eyes, more value.

I don;t think the photographer is expecting to share in the expected revenue more like getting a share of the expense of running the ads.

It's not the easiest thing to explain.



Jan 21, 2014 at 06:52 PM
SynergyatICG
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p.1 #17 · p.1 #17 · Eliminate the Price Objection by Differentiation


I think it is just a different way of doing business, the licensing model vs. the "give them the files, use them as you want to" I guess you could call it.

Our model just evolved from the color house & prepress business in which we earn a specific fee for a service performed as agreed. Although we were of limited use & licensing, that didn't mesh well with the way our clients (and we) were accustomed to doing business together.

Most of our clients back then were manufacturers who would give us 200, 300 or more 4 x 5 transparencies or chromes at a time, to scan for catalogs, ads, collateral, or whatever. We scanned, proofed, they marked up the proofs, we edited, proofed, gave them back the files and proofs. Done deal.

So it was a natural progression for us, to have a truckload of products delivered to our shop, and the agency person or art director would spend a couple of weeks with us while we did the photography. Shoot, proof, mark up the proofs, edit, give them the files. Done deal. Just like the scanned files previously, no restrictions on use from us.

We have always considered images as the client's "assets" that should be cataloged & managed by us or them. We still do this for some clients we've had since the very early 1990's. I can't tell you how many times we have heard a newly hired art director, marketing director, etc. from one of our long term clients tell us they have NEVER worked for a company that had an such a well built image library, literally at their fingertips.

Guess who they call for photography services after their career has taken them to a new company.


Micky Bill wrote:
Ok, I stand corrected. In looking at your website I got the impression that photography was less of a part of the big picture than you say. I assumed ICG is a printing company that also does photography (and retouching, packaging, fulfillment, polo shirts, trade show setups, etc) but in reality it is mainly a photography company that does other things?

Since you added digital photography 18 years ago you/ICG are not a newcomer to the industry yet you say that you still don't get (or want to get) the usage/licensing model of pricing commercial photography. Don;t worry, after 15
...Show more



Jan 22, 2014 at 09:46 AM
JoshI
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p.1 #18 · p.1 #18 · Eliminate the Price Objection by Differentiation


If your business model is working, keep to it. But you have to remember that not all commercial photographers work for hire. It's really dependent on the market. Your company works for hire, which works for the type of photography you're providing your clients and isn't unique in your market. But that model doesn't work for all types of commercial photography.

Josh




Jan 22, 2014 at 10:52 AM





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