Customer says I don't charge enough!

[George Tasick]

I got a job today from a customer who has been using me a lot lately. After giving him a quote for the work he actually called me back to double check on the cost because it was so inexpensive.

I have to agree with him that I’m not charging much ... but he's not asking me to do a lot of work. According to my standard rates I’m charging him the same as I’m charging everyone else.

Here's the job ...

The customer is a fireworks display company out of Buffalo, MO and they're doing a fireworks display at a convention near Orlando, FL. I live in Pittsburgh, PA and they want me to fly down to Orlando to shoot video of their display and do some "man on the street interviews" with spectators.

All in all I’m only going to spend about 2-3 hours shooting video and I charge $100 per hour for myself and my equipment. So the actual job is only going to cost him about $300 for video of a 12 minute fireworks display and some simple interviews. However, I will arrive at the convention on Friday and go home the following Sunday ... so that's three days taken up by this one little job.

He's also paying for all my expenses. So ultimately he's going to be getting charged about $1000 for this shoot.

The camera I use is a Z1U and a Miller DS-10 Tripod along with a few other accessories ... so it's not like I’m bringing down three F900's and a six man crew.

My biggest question is ... should I be charging anything for the days I’m sitting on a plane or the time I’m walking around the convention networking with potential clients?

The part that I have a hard time charging for is that this convention is a fireworks convention ... my company caters specifically to the fireworks industry ... so everyone at the convention is a potential client. Not only that but I love the idea of going to Orlando in April to hang out with some colleagues, play with some fireworks, search for some business, do some research and get feedback from customers.

Despite all of that, the only reason I’m at this convention is to shoot 12 minutes of fireworks footage and a few simple interviews.

Am I being too nice with my pricing or is the benefit of being at the convention enough to offset the meager amount of profit that I’m actually getting from the job?

Also, the footage being shot is part of a larger promotional video that will be produced once we have enough material. For the editing i'll charge $65 per hour and it will probably take between 80-100 hours. So in the end this video will be integrated into a $5,200 - $6,000 promotional video.

What is the right course of action here regarding my pricing?

Thanks,

George

[Don Bloom]

well every charges differently but for me, having done travel jobs before, I charge my day rate for shooting and 1/2 day for travel as well as a per diem and any other expenses involved. IE mileage to and from the airport if I have to drive (if it's over 25 miles an since there are 3 airports in my area it could be that or not) parking the car (can run up to $10 per day). Cabs if needed on either end etc.
I'm not trying to gouge anyone it's just when I'm sitting on the airplane (or worse-the runway for 3 hours) I'm not making any money and have no chance of making any since I can't book any other work.
Generally, I price it as a package-3 days for $XX.xx amount includes my per diem. I know the mileage and parking charges at the airports so I include that as well. My day rate is for a 10 hour day so if it's only 3, well that's the way it goes. The client has me for up to 10 hours before we get into overtime. My travel days are just that. Travel. Even though he paid for the tickets and hotel room it doesn't make sense to me NOT to charge for my travel-I can't do any work hence the 1/2 day rate.
Hope that makes sense.
Don

[Greg Boston]

Similar to Don here. Only thing is, I'll do 1/2 days but the cost is more than half of a full day. Rate is based on 10 hour day + T&E. Travel days are 1/2 my day rate.

So yes, I'd agree with the client that you're not charging enough. Be thankful that they feel so good about your skills as to bring that up. They are, in essence, saying that they want you to be able to remain in business for future gigs.

-gb-

[George Tasick]

Well my only concern is that since I service a specific industry ... and since the convention I will be at is part of that industry ... if I am charging him a full day and 70% of that day I’m out marketing myself ... is that fair to him?

Like I could understand if he needed me for 3 hours and I could do nothing else because I was in the middle of nowhere.

But for me, the time not shooting video for the customer is time I can use to market myself directly to my customers, develop relationships, do research and get feedback from customers.

In addition to the "for hire" jobs ... I’m also producing a documentary series about the industry that will be marketed to the people who would attend this convention.

In fact, I may even take the extra time to shoot a segment about the convention for my series.

I don’t know if that changes how I should charge? I guess I’m in a unique situation.

[Eric Darling]

Rates are rates for good reason. If you vary your rates based on circumstances beyond the scope of the time and work in question, you're really doing yourself and the entire industry a disservice. Charge the same rate you'd always charge, no matter where the location or other circumstances, and no matter whether you perceive the circumstances to be otherwise beneficial to you personally.

If your client(s) get used to you cutting back on your rates for what amounts to arbitrary reasons, you'll be the one who pays in the end.

[George Tasick]

Well can somone explain the philosophy behind the "day rate"?

If i where to hire a painter to paint somthing that took him 3 hours ... i'm not going to pay him for 10 hours.

Why does this change with video?

I could understand charging a full day if i could do no other work ... but the fact is i can do other work when i'm not shooting his video.

And the travel time is 2 hours and 10 minutes ... i wouldnt even charge for fuel if i was driving that distance. And in this situation he's paying for my travel.

I'm just having a hard time going up to somone and saying ... pay me for 10 hours even though i'm only going to give you 3 ... then the days that i take a two hour flight and am doing no work for you i want you to pay me for half a day?

I just don't see that as fair?

[George Tasick]

I just want everyone to understand that I’m not trying to fight this ... I’m just trying to get it into my head.

I truly understand when you say not to randomly lower your prices for any reason.

I just feel as if I’m asking too much to say "if you need me for 5 minutes or 10 hours ... it’s going to cost you $1000."

Just keep drilling it into my head and it'll sink in.

[Eric Darling]

Well, first of all, you're almost never going to be needed for just 10 minutes (at least I'm not). But in those rare cases, and where relationships might dictate, use your discretion to be fair to your client/friend. Otherwise, you just shouldn't charge hourly rates as a camera/operator package.

Like a few others have already suggested, I do charge a different rate when the day runs under 5 hours - a half-day rate around 70% of a full day. Any rate should be based on a summary of factors:

1) The cost of renting the package you own (what you or anyone else would need to pay if your gear was in the shop, for instance)
2) Your time
3) Your hard costs (tape stock, mileage, per diem, etc.)
4) Your skills and experience
5) Competitive market analysis

You are nearly completely ignoring #4 and #5, but I also think you are not fully thinking through the ramifications of committing to a job, having your gear go down and then spending all your proceeds from the job on renting an equivalent package - perhaps on short notice. It happens, and it's not something to dismiss as extremely rare and unlikely.

You might want to consult with a CPA to get a full handle on running your own business. Do you have adequate insurance on your equipment and liability on yourself and sub-contracted crew? Do you have any plans to upgrade your camera within a few years? Do you have any plans to make money? What money will you use to augment and maintain your production package? What happens if you get sick and need a real pro to cover for you on a planned shoot date?

As far as travel goes, yes, that's always a half-day. OK, so you were only on the plane for maybe a couple of hours, but what about being away from home base? You CAN'T do any other business that day BECAUSE you were traveling. Plain and simple - it's an industry standard. Buck the trend at your own peril, but don't be surprised when other pros take offense at the damage you're doing to established protocol.

[Matt Newcomb]

Originally Posted by George Tasick

I just want everyone to understand that I’m not trying to fight this ... I’m just trying to get it into my head.

I truly understand when you say not to randomly lower your prices for any reason.

I just feel as if I’m asking too much to say "if you need me for 5 minutes or 10 hours ... it’s going to cost you $1000."

Just keep drilling it into my head and it'll sink in.

It's exactly like when you get tech support, and they charge a minimum of an hour of work, even when the job takes 10 minutes. They do that because it's not worth their time to charge for less than that. Would you honestly take a 10 minute job and charge that person 1/60th of your day rate?

You are gone for 3 days, and only charging the guy for 3 hours, that looks to be the issue here. If you're not at your work, then you should be getting paid for your time.

[Matthew Pugerude]

George,
I do not see anything wrong with you charging a Half Day rate. I charge half day rates all the time. I will have to say that I do do only 50 percent of my day rate. My Rate is based on my time only no gear. From what it sounds like your client will need your services for 3 hours. Charging for 5 hours is not that unreasonable considering you have to set up and break down your gear get back to the hotel clean up all the loose ends and then you are finally done really working. You also will more then likely run into less problems switching to a the rate system. The client will know how much they have to pay you. It is never a guess of how many hours you worked on the project. Every company works on budgets just as we do.

You should Also separate your rate from your gear rate. I am saying this because of a what if situation. What if your client is production savvy and they want you to use a camera that cost $600.00 or even the f900 that can cost $1000.00 a day to rent. With you already separating out your time as one rate and your gear as another rate. Your client will more then likely be a lot more understanding of the price increase due to the extra rental.

Of course if they are production savvy then that really wouldn't happen but I think you get my point

[Giroud Francois]

rates are very simple to calculate.
how much money per month do you want to earn ? or if you are the conservative kind of guy, how much money are you paying each month for your life.(take everything, from regular invoice to small expenses).
just divide this amount per the number of hours you reasonably accept to work.
or even simpler, is there still money left in your pocket at the end of the month ?

if yes, you are an happy man who earns more he can spend and do not change your rates.
If not, you are a survivor who delays his dreams or needs (take holidays, get a new car or furnitures ?) to better days (if they ever come) and you should raise your rates.

[George Tasick]

Originally Posted by Eric Darling

Buck the trend at your own peril, but don't be surprised when other pros take offense at the damage you're doing to established protocol.

Well just understand that any bucking that I do is because of the fact that I’m new to the production industry.

I do want to make a profit and I know that my skills are worth money.

Anyone taking any offense can just relax and know that I’m learning and listening to everyone posting here.

It's just going to take some more time and experience for me before I have it all figured out.

[George Tasick]

On the issue of rates vs. equipment and time away from "the office" ...

On a scale of 1-10 the fireworks industries advertising/media is about a -2.

All of my equipment cost me less than $40,000 and the result of that equipment is astonishing to my customers. I will NEVER need an F900 for ANY project for a fireworks company ... and even if I did the rental cost would get tacked on to the bill.

The fireworks industry is very small and therefore they have very small advertising budgets.

Having worked in the fireworks industry for the last 6 years ... when I went to start my media company I geared it toward the fireworks industry. I knew that the industry didn’t advertize a lot (enough to sustain me) but I wanted to offer a service that would provide affordable production services that where of a quality that would far exceed anything that was currently found in the industry.

My philosophy going into this was that I would use pro-sumer equipment (like the Z1U or newer EX1 along with the comparable audio equipment, editing systems and accessories. This way I could spend 10% of the money with 90% of the overall quality.

Also having been born into a digital world, I have no need for a recording studio or editing suite with hundreds of thousands of dollars worth of equipment. I literally carry everything I need for a full shoot on my back (minus my tripod which I sling over my shoulder).

I communicate and do business through my Blackberry and laptop; I edit on my laptop via my firewire connection and can do it from any country in the world.

Quite literally I carry my office around with me.

So to say that "I’m out of the office" really doesn’t mean anything to me. The biggest waste of time comes from me BSing and hanging out with industry friends at these events!

Which is why I guess I have such a hard time charging someone for a full day.

If I work for 3 hours than that means I’m spending the other 10 hours of the day working on sales or editing or design. I can do this because again, my office is on my back.

That's my perspective.

Certain jobs do require more effort ... especially when lighting is involved ... but for this job it's going to be very easy. Plus I know that this customer is coming back to me next month to do "phase 2" of the job that will be worth a lot more.

[Eric Darling]

George, it seems to me that you want to do this more as a hobby than a business. That's fine, honestly. Just bear in mind that you asked in a professional forum how it's done. So, that's what has been returned to you. If you don't want to do things that way, well, that's your choice. I think your own customer pretty much told you how it is - you don't charge enough! I don't know a clearer sign than a customer telling me to charge him more.

[George Tasick]

I suppose you're right!

Thanks!

I think the real problem is that i have so much fun doing what I do ... I still can't grasp the concept of actually being paid for it!