Establishing Your Market Position
What is Your Brand’s Market Position?
To start thinking about your brand, you have to first and foremost consider the position you want to occupy in the market. Market position refers to the value proposition your brand will occupy in the market, but more importantly, in the buyer’s mind. There are three main positioning areas to consider: budget, competitive, and luxury.
If you’re in early days of your business, you can charge budget prices to fill your pipeline, but eventually you’ll have to raise them to make a living and become competitive in your market. As you’ll see throughout this episode, that might take some reworking of your brand, but hopefully, as we continue through more episodes, it will all just happen incrementally.
Competitive pricing is where you want your business to not seem either much cheaper or much more expensive than your competitors. In order to price yourself competitively, you have to do some market research. I recommend building an Airtable, making a list of all your competitors in your service area — if you photograph newborns, that might be hyperlocal, but if you photograph interiors, your competitors might include your whole province, state, or country, depending on where you are in the world — find out what they charge for their services, and then price yourself among the middle of the pack.
The third place you could position your business is as a luxury brand. Whether you photograph national print campaigns in large warehouses, destination weddings in Morocco, or just stunning portraits for families withing a one-hour drive from your studio, a luxury brand is more expensive, but it also requires a high level of quality and customer service, from the first meeting with an art producer to the packaging of large wall art delivered and hung in your clients’ homes.
The price you charge for your services is directly linked to the value you provide your clients. You cannot charge luxury prices and deliver a budget experience. Likewise, you cannot charge budget prices and deliver luxury products. Both ways will quickly put you out of business.
Once you decide on your market position, it is difficult to raise your prices, maintain your client and referral base, and move up the ladder of value proposition. There are two ways to improve your market position: make a big leap that increases your value proposition all at once, or make small, incremental improvements that increase your value proposition over time.
Take a Big Leap
It’s not impossible, but you can do it. And actually, the middle of a pandemic, when a lot of weddings are cancelled and postponed is a great time to do it. Or over a winter holiday, while you have a lot of time on your hands. Wedding season here in Canada is typically from mid-April through late October. Breaks like that, when you’re not working in your business, are the perfect time to work on your business.
You could increase your prices and redefine the value you are offering to your costumers. You might do that by improving the quality of albums you offer, by creating treatment templates for art producers for your lifestyle photography, by assembling and producing a print portfolio — I have an awesome, custom made 11x14 bamboo portfolio from Klo Portfolios that I ordered during a slow period — or you might streamline and automate your client experience by implementing a CRM like Tave, BlinkBid, or Sprout Studio. Obviously, I use and love Sprout Studio because nothing is better for my business. Ugh, it’s so good!
Big price increases require big increases in your value proposition, so don’t skimp on the details. What you raise your rates to is up to you, but a good guide I’ve heard from some advertising colleagues is to charge “fear plus 10%.” That is: set a price that scares the crap out of you, and then add 10% on top of that. I’m not recommending that, and I’m not not recommending that; what you set your prices at is up to you. However, no matter what you set your rate at, make sure your clients are getting what they paid for, and then some.
Small Incremental Improvements
If you happen to live in a place where you can work all year, or you shift focus from one revenue stream to another at different times of the year, such as I do between weddings and families, to portraits and headshots or other commercial work, you might need to take a more incremental approach. For those of you solely in the consumer space, or who are just starting out and still dealing with limiting beliefs such as imposter syndrome, this is great way to get yourself established and feel confident about your prices.
One way you can do this by consistently increasing the value of your business over time and raising your prices accordingly. I would recommend doing this on a set schedule, such as monthly, quarterly, or every fiscal year. Put it on paper, so you know at the start of January these are your new rates.
If you use Sprout Studio, a great way to do this is by duplicating your price lists and then renaming along the lines of Commercial Rates 2021, 2022 Weddings, or Boudoir Collections 2023. Then when the new year arrives, or clients are wanting to book for the new year, your prices are already put together and you just send the booking proposal with your updated rates and upgraded products.
If you shoot headshots, maybe raise your prices by $25 every six months. In fact, if you raise your headshot prices by $25 dollars today, your clients probably won’t even notice. If you think about it, you probably don’t even notice when the price of a cup of coffee or tea goes up by 25 cents, but the coffee chain that sells a million cups a day definitely notices it.
If you think your rates are already too low, raise them right now. As soon as this episode ends, sit down and think about your rates. Do they cover your expenses? How much is left over after you pay for rentals, insurance, gear, seamless paper, print production costs, taxes, parking, catering, AA batteries, travel, vehicle costs, Internet, website hosting, bookkeeping, studio management system, hard drives, online backups, and everything else? Can you survive off of it? Better yet, can you thrive off of it?
Don’t just raise your rates inline with the cost of living. If you do that, you are actually lowering your market position, because you are increasing the value you provide, but your rates have gone up respective to the cost of living and not to the cost of the value you provide.
Whenever you change your market position you also need to change your value proposition. Moving up the market ladder requires a shift in your brand’s voice, look, and client experience. You need to look, sound, and act the part.
Right down what you want your rates to look like five years from now and work backwards from there. If your signature wedding collection in five years is $3000 more than what it is today, then maybe increase your rate $600 each year over the next five years. If your commercial day rate is $2000 more in five years, then create a schedule where your rate goes up by $400 each year. But don’t just set it and forget it. Reassess each quarter or year to make sure you are not pricing yourself out of business, and that you are always delivering the quality and value of your position in the market.