Please stop undervaluing your work, at least for my sake, OK?

Pricing is a thorny issue at best, and we’re all aware that these are not the best of times. Frequently, business owners in service industries will discount their rates in tough times in an attempt to garner more business. This is both dangerous and foolhardy.

I recently had a conversation with an architect about pricing, so I’ll use his industry as an example to illustrate this point.

Consumers of architectural services have come to expect that if they shop around, they’ll find an architect who’s willing to do a particular project for what amounts to a loss for that architect, because the architect has an attitude that work is scarce and they need to chase it. For example, if they tell the potential client that it will cost $10,000 to design a building, the architect knows that chances are good that the client will also solicit bids from other architects until they find one who will do the work for less. When a client shops on price, we all know quality is the first thing to suffer, but that’s either not apparent or not an issue to our fictitious client, as he knows that architectural fees are all over the map and they’ll eventually find someone to take their sucker’s bid.

If, on the other hand, someone steps into a law office and asks the attorney to take their case at a discounted rate, they’ll be shown the door, albeit very politely. Attorneys present a united front when it comes to valuing their services. It’s not collusion or price fixing; they all know what it costs to run their businesses and they know the market value of their services.

Why, then, for the love of Ansel Adams, are photographers so willing to do a shoot for less than the cost of producing one? Do they actually think it’ll help them to get more business in the future? Do they think that working for a loss will keep food on the table?

Not only will that practice quickly drive them out of business, it also serves to devalue the entire industry and our entire craft, not to mention driving down the quality of output and, by extension, the clients’ expectation of quality, which further devalues the industry. You can’t tell me that folks will go the extra mile for a client who’s underpaying them, even if that underpayment was the photographer’s idea in the first place.

If you go into a bank and ask for a loan, they’ll tell you that it costs what it costs; there’s no dickering on the fees or rates, even in tough times. You want to have cable television? It costs what it costs, good times or bad. How about a cup of coffee? Or a manicure? A chiropractic adjustment? Have a new set of new tires installed on your car? Those services always cost the same, and only go up over time. Sure, there are discounts and coupons available, but the core price never changes.

There’s a reason for that - the companies providing those services know how much it costs to deliver them, what the profit margins need to be in order to both maintain and grow their businesses. An occasional discount serves to build customer loyalty. A fire sale is a whole different matter.

Do you for one second think that, once the economy turns around, our clients will suddenly think it’s OK to go back to paying $5,000 for something they they’ve been getting for $2,000 or less, even though it really cost $5,000 to produce all along? Of course not. How does one buy and maintain expensive equipment, studio overhead, etc., etc., on hobbyist rates? The short answer is that they don’t.

If you’re looking to curry favor with a client who’s also on hard times, by all means offer them a discount, but for heaven’s sake don’t cut your rates; by doing so you immediately devalue yourself, both in a professional and personal capacity.

By arbitrarily lowering your rates, you are telling people that you were either overcharging them to begin with, which is not good, or that you have no confidence or self-respect, which is almost worse. You’ve immediately declared yourself an underling instead of a peer. Have you ever noticed that the clients who pay your full rate will usually treat you better than the folks to whom you’ve granted a deep discount? That’s because you’ve earned their respect and they see you as a partner in something. The converse is they the client treats you like the garbage collector; someone who is performing a necessary task that doesn’t require much skill and therefore isn’t all that worthy of much attention or respect. It’s not all about money; it’s about knowing how to be a businessperson. Like it or not, if you’re self-employed you need to be a businessperson. If you are not, you’re causing harm to more folks than just yourself.

This could be the beginning of a rapid industry-wide downward spiral unless we create a unified front; otherwise we’re all working for peanuts and photography is going to be looked upon as a cute little hobby that people make a cute little amount of money from. “Oh, you take pictures. How nice. My nephew got a camera for his 15th birthday, … what was it, … a 5D something or other -- I think it’s a lot like that one you’re holding.”

Do you really know how much it costs to produce a photo shoot? Honestly? If not, that’s a large part of the problem. That’s symptomatic of not being a good businessperson. Attorneys are all service providers; they produce nothing tangible, there are no cost-of-goods-sold computations, etc., for them to make, yet they know exactly how much an hour of their services costs, and don’t waver on that, as they’ve got to cover those costs if they’re to make money.

Your profit margin is a cost of doing business; that’s your salary, your future operating capital, and your business savings for the inevitable equipment upgrades. You may have noticed that your local photo equipment shop isn’t cutting its prices; neither is the electric company, your ISP, your cell-phone provider, your automobile mechanic, your bank or your landlord, you still need to pay their regular rates or fees, even though the economic times are tough.

Why, then, have many photographers decided that their services worth less, even though their cost of doing business has not gone down? Photographer services should actually be worth more in tough times, especially in the commercial world; providing valuable images to help companies market their wares in tough times helps companies to maintain sales levels. Produce good results and the client makes more money. That’s valuable. Why do photographers seem to feel that the opposite is somehow true?
Why on earth have photographers decided that the first serious communication with a client includes dickering over the value of their services? This hasn’t “happened” to us, or to architects, or to graphic designers or any other creative types; we have allowed this to happen to us.

There are a million ways to justify cutting rates, but most all of them come down to a lack of business acumen, a lack of confidence, or some combination of both.

Then why have we begun this seemingly desperate race to the bottom? Panic? Fear? I have no idea, but if people don’t pull together we’re all gonna be looking for a different line of work.

There will no doubt be squeals of protest about this article from folks justifying their cuts -- I have kids! I need to make a living! Well, by providing $1,000 worth of work for $500, I’m here to tell you that you’re not making a living. You’re losing money and doing nothing more than burning the furniture to keep warm. When the furniture is gone, you’ll be cold again but will have nowhere to sit while you shiver. To continue with the allegory, if, instead, you were to instead sell some unused furniture to make ends meet while still charging properly for your work, you’ll still be able to afford to heat the place, albeit modestly, but when things turn around you’ll be able to replace that furniture with perhaps something even nicer than what you started with.

Short-term desperation is causing serious damage to this industry; we’re already dealing with a complete removal of the financial barriers to entry. If we add to that the perception that we ourselves don’t value or respect our own hard-earned skills, talents and wisdom, then there’s nothing left.

Real enough for you? I’m not trying to tell you that I think this is the end; I’m telling you that I can see the writing on the wall and it ain’t a pretty read. If anyone out there has an intelligent counter-argument, one that explains how a full-day photo shoot that requires a top-end camera and lighting, takes two full days to plan, a full day to execute with the help of at least one assistant, and another two days to edit and deliver, can be effectively produced for $1,500, I’m all ears. And, yes, people have been bidding $1,500 for jobs like that; I know, as I’ve been underbid three times this summer alone for jobs just like that and the “winning” photographer charged exactly that.

Please explain to me exactly how $1,500 is going to cover a full week’s worth of your work, pay for an assistant, cover gasoline / mileage, equipment, meals, etc., let alone a creative fee.

I’m listening, ... 

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