New business question - when to raise prices?

[Christian Hansen]

I am still pretty new at this - I have done several weddings with a friend who did them regularly but recently decided to go after it more on my own. At this point I have finished (delivered) one and have a total of 4 more booked for the summer. My prices are comparatively low (very) because I want the experience and something to show others who are interested.

So far craigslist has been the only means of initial contact (I am on facebook as well but haven't generated any leads there) and I titled the original ad - Videographer - 'Looking to build portfolio'. This got me a lot of interest and a few contracts but I wanted to quickly change the message. After I changed to the typical 'Wedding Videography' ad the interest went down to almost nothing and I hadn't received any contracts. To see what would happen I put the original one back up and two days later (today) I have another gig lined up. Ugh. Apparently the budget marketing is working but I really don't want to be a budget videographer. How and when can I raise my prices but still get interested clients? How much to raise? Is word-of-mouth one of the big ways to grow? Any advice would be great!

Christian
P.S. - Web page is coming soon which is what I imagine to be one of the big things that establish credibility. Also, I would love to make this a full time career - I do have a 9 to 5 job now so doing this cheap doesn't keep me from feeding the family.

[Travis Cossel]

When and by how much to raise your prices? That is loaded question and the answer depends on so many variables.

I think the best advice I can give you is to just always charge what you're worth. So if you're still learning and getting experience right now, then charge appropriately. But just because you have a 9-5 job, don't charge less. Having another job shouldn't change how you value yourself. One of the biggest problems in the industry is that there are so many people who have full-time jobs and think that because they don't 'need' to make more money they shouldn't charge more money. Charge .. what .. you .. are .. worth ... at all times.

If anything, when you have another job that is your primary, THAT is the time to be the most aggressive with your pricing .. BECAUSE you don't need the money. Don't wait until you go full-time in video to try and start raising your prices. Do it now and learn from experience when it's not going to hurt you. Once you're out on your own and full-time, it's a lot harder to figure out price increases because now you're counting on the money.

As for when and by how much, we've always just make judgement calls. If we're booking fairly easily, then it's time to raise our pricing. If we're feeling overworked, it's time to raise our pricing. Keep in mind that you can also raise your pricing by just taking things out of your packages and keeping your price the same. This is a great way to test the waters.

Another thing to keep in mind is that as you raise your pricing you will eventually move up through the various layers of your market. If you're at the bottom level and not getting any inquiries for the level above that, then raising your prices is going to hurt you. At that point you need to figure out why you aren't getting better inquiries (product quality, marketing, etc.).

My advice again is to just always charge what you are worth .. ALWAYS. Don't give away your time or product for free just to get a job. Make people pay for your time and skill. I would also recommend starting off as high as possible. The lower you start off the longer the road ahead will be.

[Christian Hansen]

Thanks Travis - I will take all your points into account. I think my biggest issue is just undervaluing my time. I think I will play with different messages in the ads and see what happens. I'll probably go up with my pricing from here on out since I do have several booked already. The question I guess I need to ask myself is how much....

[Johannes Soetandi]

Hi Christian. I'm at the moment revising my price as well. I charge ridiculously low too at the moment and that got me started with few contracts. But then I do need to charge more if I want to build the business (otherwise I might as well work in a local burger shop!)

From my little experience, most of my contracts were build from clients referring to friends. I have over 3 couples coming just from one happy client's reference.

I think once you set several contracts (with that very low price), try deliver the best and make your client happy. Automatically they will spread the words and you'll score more contracts than you would've in craiglist. Once they've heard the good referrals, see your samples, then they'll appreciate why your work is worth how much you will be charging now.

[Chris Davis]

I've been in business since 1982. Not always videography, but I've been running at least one business, sometimes part-time, sometimes full-time for the past 28 years.

For any business, it comes down to what the market will bear. You may live in an area where the most amazing wedding videographer ever in the history of the world wouldn't get more than $1000. You may live in an area where a "fair-to-middlin'" videographer could still get $3000. It all depends on the market.

Another thing to consider is value. Don't get hung up in thinking price is a factor of cost. In other words, don't be so quick to say "it costs $x to do this, so I'll charge $y." Instead, price is a factor of value. If the value derived from your service is $x, then charge $y. That's much easier to quantify in corporate video, where the client gets a financial benefit from your service. It may not be so easy to quantify in wedding video.

[Andrew Smith]

One thing I would suggest is to retain a part-time job for the near future. This will enable you to avoid being in the direct line of fire for financial stress, and as a result you can think more clearly when it comes to business decisions. It doesn't pay to get too emotional.

You also need to distance yourself and have an objective evaluation on a regular basis. And I suppose this is actually what you are doing.

If possible, always fire your bottom 10% least profitable clients each year. Do this by raising the pricing until they are more profitable. If they still pay, you win. If they walk, you still win.

Andrew

PS. Definitely get a web site with your best examples. The better they are pre-qualified before they get to calling you, the easier it is.

[Kelly Langerak]

I was charging $899 for one videographer / 10 hours / 5 copies of the DVD. I then looked around on other sites to compare. I was giving my work away. I also had more time to spend on the projects cause i wasn't busy but with about 4 weddings a year. After I designed a "Highlight Video" from a very nice wedding in Big Sur, California, I posted it on my site (which I created myself, not knowing any code, all flash) then the gigs started to pour in from craigslist, so I kept adding a $100 about every month to my packages and giving less hours and certainly less copies of the DVD's. I'm booked with 32 weddings so far this year and my summer is sold out. I even put that my first package was "Sold Out For 2010" People began purchasing the two camera package like crazy.

It comes down to quality you can provide. You personality and professionalism in person and the market around. I still charge a lot less then the crude here in SF. I'm not even the best around but now my rates are $1300-$2400 a wedding and I'm very happy with my prices.

Also, consider adding features to your gear. I added the Glidecam recently and now it ups the value of my packages and my demos. Now it's time for a DV Slider to add that extra touch to my demos and then my rate will increase by $200 more.

Consider hiring a someone for your next GREAT wedding location, who shoots on a steadicam if you don't have one and take the loss. Add that to your demos and consider it an investment.

Bottom line. Raise your rates when you know it feels right. Compare yourself to the videographers that are around you.

[Aaron Mayberry]

every 3rd booking, raise your prices by $200.00.

[David Barnett]

Christian, I'm in somewhat a similar situation as you. However I created website myself this past winter using Dreamweaver & the responses have increased dramatically by having a website versus simply putting up youtube & vimeo links. Definitely get the website, then slowly raise you rates.

[Sigmund Reboquio]

Hi Christian,

Im in the same boat as you, having a 9-5 job as well.

Im currently charging $750 and got 3 gigs lined up. (I got these from craigslist)
I already know that it is the lowest price compared having the same and service hours as many others here.

One client who just recently booked asked me "why is the price too low". i had the hard time answering it. : ) But I came up with "I have a full time job as an engineer." (it might not be the right answer)

however, I only have three weddings on my belt so far. and save the date videos. I needed more videos to show consistency and quality.

My advice is before you raise your price, make sure that your product is really worth the money. I mean, literally wow people with your videos and if you have that, and do a test. If people who goes to your website says "your videos are great" and wants to sign,then raise slowly.

Thats what I plan to do , but for now I will continue making my porfolio. 5-6 weddings should be enough for me to raise my price.(as long as those 5-6 are great video samples)

I have a friend who is also starting, but he started with a 3k package with basically nothing to show.

check out my website : REB6studios | Wedding Cinema

I wish you luck! and Good luck to both of us!

[Christian Hansen]

Does anyone else have a problem getting logged out before you finish typing a response? Seems like it is on a very short timer. Just lost my last one.

Anyway, just wanted to thank everyone for the replies! Definitely what I was looking for.

I will do a small raise in pricing now and then incrementally increase as I continue to book weddings and grow in experience and exposure.

[Christian Hansen]

Originally Posted by Kelly Langerak

I was charging $899 for one videographer / 10 hours / 5 copies of the DVD. I then looked around on other sites to compare. I was giving my work away. I also had more time to spend on the projects cause i wasn't busy but with about 4 weddings a year. After I designed a "Highlight Video" from a very nice wedding in Big Sur, California, I posted it on my site (which I created myself, not knowing any code, all flash) then the gigs started to pour in from craigslist, so I kept adding a $100 about every month to my packages and giving less hours and certainly less copies of the DVD's. I'm booked with 32 weddings so far this year and my summer is sold out. I even put that my first package was "Sold Out For 2010" People began purchasing the two camera package like crazy.

It comes down to quality you can provide. You personality and professionalism in person and the market around. I still charge a lot less then the crude here in SF. I'm not even the best around but now my rates are $1300-$2400 a wedding and I'm very happy with my prices.

Also, consider adding features to your gear. I added the Glidecam recently and now it ups the value of my packages and my demos. Now it's time for a DV Slider to add that extra touch to my demos and then my rate will increase by $200 more.

Consider hiring a someone for your next GREAT wedding location, who shoots on a steadicam if you don't have one and take the loss. Add that to your demos and consider it an investment.

Bottom line. Raise your rates when you know it feels right. Compare yourself to the videographers that are around you.

My next wedding looks like it is in a very nice spot... Sodo Park in Seattle with a live band. I think I will hire my friend (who hired me several times) on this one. Also get some type of stabilizer before then... hopefully.

[Philip Howells]

Originally Posted by Chris Davis

(snipped)
Another thing to consider is value. Don't get hung up in thinking price is a factor of cost. In other words, don't be so quick to say "it costs $x to do this, so I'll charge $y." Instead, price is a factor of value. If the value derived from your service is $x, then charge $y. That's much easier to quantify in corporate video, where the client gets a financial benefit from your service. It may not be so easy to quantify in wedding video.

I'm sorry to appear to disagree with you again Chris but as you've expressed it I think price is very much a factor of cost. By that I mean, if it costs you $x to produce what the client is asking for and your profit on that job is $y then the price is $x+y.

If someone else is quoting against you and their price is lower, your choice is to reduce the $y component of your price to the point at which you secure the job or make no profit. After that, since your costs are fixed, you start to make a loss.

If the competitor has lower costs and or a lower profit expectation then he will be able to go lower than you.

But either way, price, in my view, is very much a factor (using the word in both its senses) of cost.

It's the situation every business, and wedding videos are a good example, find themselves in when competing against amateurs or people coming into the business and doing a second job and effectively subsidising their wedding productions.

[Mike Harvey]

Originally Posted by Christian Hansen

My next wedding looks like it is in a very nice spot... Sodo Park in Seattle with a live band. I think I will hire my friend (who hired me several times) on this one. Also get some type of stabilizer before then... hopefully.

Are you in the Seattle area?

[Chris Davis]

Originally Posted by Philip Howells

I'm sorry to appear to disagree with you again Chris but as you've expressed it I think price is very much a factor of cost.

I don't disagree with you at all. My point was that we should not focus completely on cost (i.e. "get hung up on".) I see that attitude all over this (and other) videographer message boards: "I bought a new computer so I need to raise my rates", "I got a new camera so I need to raise my rates", or conversely: "Can I raise my rates if I buy a new camera?"

My answer to that is no, if your clients do not see an increase in value they will not tolerate an increase in price (beyond normal inflationary increases.)

Since we're talking about weddings (and I tend more to think of corporate video when discussing these issues) that's not such a problem because most weddings are not done for repeat clients. In that case, you can change your rates as often as you like because almost no one will notice.