The Discounts End Here

It’s that time of year when photographers, for some reason, feel the need to cheapen their services, hopping up on the Black Friday Bandwagon.

What actually is the purpose of Black Friday sales?  Generally speaking, they are designed for big retail stores to move product quickly and jumpstart the holiday shopping rush.

Is it appropriate for a small service-oriented business to discount for Black Friday?  I personally believe the answer is no.  Here’s why….


j-martYOU CAN’T AFFORD IT. 
As a small business, your salary is directly proportional to your sales revenue. Your business is not designed like a corporate or big retail business.  There is no buffer between your sales and your salary. You do not have shelves full of thousands of pieces of merchandise to move out the door.   There is a reason why you didn’t use your first initial and add “mart” on the end when you created your business.

When is the last time you heard of an employee who approaches her boss with, “It’s the holiday season, please lower my salary….”  This is what you are doing as a small business owner.  You are saying that your work is not worth full price.  You are simply taking money from your pocket, from your family and tossing it out.

LET’S NOT FOOL OURSELVES.  I bet you think that offering a discount will increase your bookings, and while it may temporarily, you are throwing out bait for price shoppers.  Price shoppers are not a solid client base.   If they like what they get, why would they ever purchase a full-priced session when they can simply wait for another discount.  If price is extremely important to them (which is most likely why they came to you), as soon as they see another photographer with decent work but a lower price, they will just hop over there.  Price shoppers typically have no loyalty – only price matters.  Slow and steady wins the race.  Quality customers over quantity will win every time by building a solid client base that you will keep year after year.

YOU CANNOT COMPETE ON PRICE.  Read up on business and economics.  If you are competing on price with others in your area, someone else will just come along with a lower price and outbid you for these price shoppers.  I cannot fathom why anyone would want to be involved in this race to the bottom.  Economics also proves that when an industry as a whole competes on price, the industry will crumble.

YOU REEK OF DESPERATION.  When you offer sales and discounts often, you are sending a message to your clients that you are desperate and/or have a weak business.  You are also sending a signal to your competitors that your business is in distress.  This is when your competitors will come along and cut you off at the knees, offering your potential clients an even better discount.  This will leave you unable to grow your business successfully.

CONFIDENCE IS ATTRACTIVE.  There is something to be said about exuding confidence.  Humans are attracted to confidence.   Have you ever looked at someone and thought – “You are an idiot, how on earth did you get that promotion?”  I bet the answer is – confidence!  haha!   When a brand or company appears confident and successful, the customers are confident to purchase that brand’s product or service.  Why would a customer be confident to purchase from a company that appears weak or in distress because they are offering discounts left and right?

 

Whoah wait, is it ever appropriate for a small business to offer discounts?   If you are that set on offering discounts,here are some tips.

DO NOT OFFER DISCOUNTS IF YOU ARE NOT PROFITING

First and foremost, you need to be priced for profit.  If you are still not making a yearly salary after expenses that is worthy of a business owner or are operating on a loss, DO NOT OFFER DISCOUNTS.  The only exception to this rule is if you are portfolio building, you can offer a clear discount on original prices that are industry standard.  (For instance, 8x10s at $50 each are a fairly good industry standard.  Make sure your client knows that is your full price, and be honest that you are portfolio building, and you are offering, let’s say 50% off of print prices).  This will insure that even though that portfolio building client will probably never come back to you (many tend to be price shoppers), it is clear that your prices will go up when you are done portfolio building – so there are no surprises, and no one gets angry, and you don’t start off your business being known as the cheap photographer.

DISCOUNTS NEED TO BE MUTUALLY BENEFICIAL

There is this weird thing that photographers do – every time there is a holiday or a tragedy, they jump on a “sale” bandwagon, having no real purpose behind them.

What is your purpose for discounting?  Make sure you are targeting the correct clients.  As above, price shoppers are not solid for growing business.  Deter them.  If you are targeting the higher end clientele, putting a $100 discount on your session won’t bring them in.  To the higher end clientele, pushing a $100 discount can be insulting or it’s just a drop in the bucket, and you are not going to convince them of your worth, if you are devaluing your work.

You want this discount to be mutually beneficial, and not just beneficial to your client.  I understand that you may have a kind heart and just want to give, give, give with nothing in return.  The problem is, that is not how a business operates.  You can be giving of your talent, but still get monetary compensation that provides for your family, who should be those that you want to give to the most.  Giving  your family security, some extra income, and your time not spent with dead end price shoppers is quite the gift.

Here are some purposeful discounts that benefit the clients but also benefit you, the business owner.

Private Gratitude.   Don’t announce public sales – Public discounts/sales attract price shoppers.  Private discounts or incentives for your returning clients is a great way to thank them for their loyalty, and give them that extra push to be thrilled to keep coming back and speak highly of you.  Word of mouth goes a long way.

Moving Product.  Are you discontinuing an album but have a few left?  Offer a discount to get them out of your stock.

Price Increase/Call to Action.  Raising your prices?  Now is a good time to offer your current rate if you book now, but after January 1st, “our prices will raise to XXXX.”

Referrals.  Keep your customers close – keep them wanting to refer you to their friends.  Offer something special for every referral.

KEEP YOUR SELF IN CHECK – DON’T GIVE IT ALL AWAY

Pull a few $20s out of your pocket and shred them. When you give away monetary discounts, that is what you are doing.  You are just tossing cash out the window.

Offer a gift that has a tangible value instead of money or percentages.   For every referral, give a print. For instance, my 8x10s are $85.  If I give an 8×10 as a “free gift”, I’m losing $5, but the client feels as if they are gaining $85 in value.  For me, it’s not much; for them, it’s a hefty discount.  Be careful offering a free digital file.  They have more value.  If you offer a free digital file with every session, you may not get a sale at all – they may just get their free digital file and move on because now they can print it 100 times for all friends/family.

Incentives.  One area that a customer can feel they are receiving a discount is “the more you buy….” theory.  If you have packages, the higher package can contain more of a “percentage” discount built in. Maybe putting together packages, you have the lowest package a 5% discount, but the middle is 10% and the top package is 20% discount.    Another incentive is after a purchase of X amount, they can receive something else at no cost.

Think through discounting carefully.  Try not to get caught up in these bandwagons.  Just because everyone around you is discounting does not mean you have to, and in fact, you can set yourself apart by showing your work is valuable.  Let everyone else fight over the price shoppers and keep your head up high knowing that if you are discounting, you have thought it through and made sure you are not losing money.

A little hint:  Before offering a discount or incentive to bring more clients in, consider using the money you are losing on this discount and applying it to marketing – increase that marketing budget!   Market directly to your target clientele and bypass the discount game.  Targeting exactly what you are looking for will build your business with strength and longevity.

Work Smarter, Not Harder

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