Fair pricing

[Doug Nelson]

Once, during a legal squabble, my lawyer told me that the legal definition of "fair price" is "the price a motivated buyer is willing to pay to a motivated seller" (or something like that, it was a long time ago).

This stuck with me (obviously). If you think about it and apply it to your own business, it has pretty far-reaching ramifications. Assuming you really want to do the work, and assuming customers really want to have the work done, why do so many back down when a price is quoted?

My own take on this is that they have their own mental picture of what is involved in restoring a photo (I imagine they picture something along the lines of a magic photocopier), and are shocked to learn that actual human labor is involved. How else could you explain that they'd gladly pay someone more to dig a ditch than to restore Grandma Minnie's wedding portrait?

The only other option is they found someone cheaper, and since they rarely contact me to explain why they changed their mind, I prefer my first explanation.

So, if customers go elsewhere, or simply don't get the work done at all, are you charging a fair price?

[Ed_L]

I think selling your work is the same as anything else you might consider selling. It is worth whatever is agreed on. The only way to figure what anything is worth is whatever the seller is willing to sell it for, and whatever the buyer is willing to pay for it. There are an awful lot of people who go by price only, but there is another set of people who think they will get what they pay for. Do some of your customers go for the cheapest? Probably so, but what about the ones you get? In my estimation, selling your work too cheaply is a *huge* mistake.

Ed

[thomasgeorge]

Its been my experience that while a good many folks do value their photos, they dont value the work involved in having them restored to pristine or near pristine condition, thus the tiered pricing structure I have adopted. Many will settle for less than a complete job and still be happy. There is also a lot of distrust of digital prints due to past problems with fading and folks associating "digital" with low res copys run off on a $79.99 desktop printer on typing paper or low grade "photo quality" paper. Some in the traditional photo arena also play on these fears and misconceptions by leading people to believe that digital prints are in all ways inferior to traditional processes, to the extent of even showing "examples" which are purported to be accurate examples of what to expect from digital prints, even though they are not printed on correct paper, with correct inks on dedicated photoprinters, by people who know what they are doing. Fair price is what you value your time at, as that is what you are selling...your time. The cost of the actual print material and inks is miniscule. Also, You have to consider the area in which you live...some areas have a population whose disposable income is high...in other areas, disposable income is minimal. Since Restore work is a luxury item, there is no way a person living in Rural Alabama is going to be able to get the same fees for a job thatr someone living in Boston will. I have had folks get a price quote, then take the work to someone they know who has an Image Editing program and get them to do the work, and even though the results are less than appealing, they are happy because it didnt cost anything...some folks are just cheap. But, diversifying your operation and offering more than just photo restores, such as prints, CD albums, and so on does help keep the cash flowing....of course this is just my opinion, and not necessarily correct. Tom

[Ed_L]

Originally posted by thomasgeorge
and not necessarily correct. Tom

Sorry Tom -- can't agree with you on that one.

Ed

[thomasgeorge]

[Jim Conway]

Fair pricing

>Assuming you really want to do the work, and assuming customers really want to have the work done, why do so many back down when a price is quoted?

Hope you don't mind me saying this but it's not the prospective customer, it's the presentation if this happening more than one time out of a hundred.

Suggestion ...break up your services.
Example: When I quote a restoration and the prospective client is obviously thinking in terms of something less costly, I back it off to making a 4x5 negative with the explanation that by doing so, WE WILL HAVE "frozen" the deterioration problem and it can get recreated anytime you want to do it in the next hundred years or so - and we can do that for less than $20.00. I emphasize the WE because I am working with the customer on a preservation project here - not saying I will do this or that for them.

Making a negative or for the "Digital's" here - try pricing just the scan to a gold CD - the objective is the same as far as extending the time is concerned rather than the "must do now" or you'll lose the image type of explainations they get everywhere else.

I've had more than one agree to have the negative made and while I'm writing up the order say oh - why don't you just go ahead and do the whole thing now.

Better to have them on your books as a client for a small fee then it would be to have them going somewhere else. Lots of other ways to accomplish this but this is one I can offer for starters that is fast and easy to implement into any sales system.

Jim Conway

[jeaniesa]

Thanks, Jim, for a very important point. If the current state of a photo is preserved, then that is certainly an important service and far less costly then a full restore for a customer. And you're right - that a customer will often decide to just go ahead and do the full restore if they have time to think while you're writing up the order. I know I've done that sort of last minute switch myself plenty of times - when I start thinking about the time it already took me to get to the shop and the extra time it will take me to come back at some other time to get the whole job done - heck, might as well just DO IT and be able to cross that task off of my "to do" list!
Jeanie

[Mike Needham]

Good point about the conservation aspect. However ultimately the product is only worth what the buyer will pay for it - as far as I can see the 'seller' doesnt really come into the equasion (sadly)

[Jim Conway]

Can't agree on that idea! The free enterprise system is based on great sellers! Those who can will succeed in business, those who can't are weeded out by the system unless you are unfortunate enough to live somewhere where there is state support for you.

When I bought my first tape recorder there was great message on it. It started with faint background noises from a marketplace - cash registers ringing and people talking as the volume kept building louder and louder - then the announcer voice came up with a booming voice;

"The sounds of America ...over a hundred million people selling to a hundred million people!"

...over the years the numbers may have changed but we all spend our entire lives selling our products, services and ourselves - so embrace the system, there has never been a better one!

Jim Conway

[Jim Conway]

Originally posted by jeaniesa
Thanks, Jim, for a very important point. If the current state of a photo is preserved, then that is certainly an important service and far less costly then a full restore for a customer. And you're right - that a customer will often decide to just go ahead and do the full restore if they have time to think while you're writing up the order. I know I've done that sort of last minute switch myself plenty of times - when I start thinking about the time it already took me to get to the shop and the extra time it will take me to come back at some other time to get the whole job done - heck, might as well just DO IT and be able to cross that task off of my "to do" list!
Jeanie

Jeanie in the cases you just cited, the seller had gained your full confidence right? And the second question (if they had your confidence), would it be fair to say that pricing became secondary to you?

Another "tested selling sentence" that we use here to build that type of confidence is to ask a prospective new customer if they have checked with other family members and are absolutely SURE that there are no other good copies in existence before we start working on the project.

Pricing is like a balancing scale, you put the price on one side, the benefits on the other and watch which way it tips. If it goes down on the price side, you either did not offer enough benefit for your pricing or you did not present the benefits well enough to gain your customers confidence.

Jim Conway

[jeaniesa]

Jeanie in the cases you just cited, the seller had gained your full confidence right?

Yes, definitely. If they have not gained my confidence, I would have walked out the door no matter what price they gave me.

And the second question (if they had your confidence), would it be fair to say that pricing became secondary to you?

Yes, I think that's fair to say. Certainly I think of the old adage "time is money" and when I think about the time it would take to go check out other places/prices, or even the thought of making a second trip in the future to have the restoration completed, it drives me crazy to think that I'll waste all of that time. So, the price becomes secondary (for me) when I factor in the extra time I'd have to spend on other options (and I'm very short on extra time these days!)

Mike, I think in a commodities market that your statement is correct. However, I don't think it works that way in a service market. Even if someone chooses just to get a copy of the original without restoration, if they are happy, then they will tell others about the service - and there is no better marketing than word of mouth, which is impossible to put a price tag on (IMHO).

Jeanie

[Royce]

I'm on the opposite side of the fence on this one.

To me, while there may be some personal satisfaction to retouching, it does not make much business sense for me to do it for anything other than a fixed price. Very few customers are going to give me a job that they arent sure how much it will cost them. At the same time, I can't reasonbly give a fixed price because it always seem to take longer to retouch a job than I originally estimated. I then have to balance that with the 'sticker' shock that my customers get when I tell them how much a restoration job will cost.

For example, I might estimate that a job will take me 4 hours to do. If I quote my standard hourly rate, I usually get a look of shock on the customers face and so I will usually quote the job for 2 hours work. On the flip side, it will probably take me 8 hours to do a decent job!

I happen to be in a strip mall with a Walgreens next door to me that does 'all' retouching for $49.95. I've never used their service, but I have to believe that they can do a job that will satisfy most folks, most of the time. I've recently had luck with outsourcing my retouching jobs (for a fixed price). That solution works for me because it frees me from having to do the work as well as from having to try to stay within the estimate. It works for me and my customers so far.

[Doug Nelson]

I've always had a customer-centric view on business (not as good an idea as it sounds), but it seems to me that if you don't get the job, you're charging too much. Whether the customer is paying for your retouching skill or your marketing skill, the only reasons they'll walk away is a) they don't trust a good job will be done, or b) they don't feel the price is appropriate.

Assuming retouching competence, that leaves price as the deciding factor. Obviously different people are going to have differing levels of skill in convincing the customer that the price is fair. In my experience, no one minds paying as long as they're confident they're paying a fair price.

It is the sorry state of modern life that a bad product/service sold well is worth more than a good product/service sold poorly. And since most people aren't equally good at all things, those good at one thing (in this case retouching) often have to decide which is more important: getting the business to begin with and working on improving profitability over time, or passing up the business and maintaining their sense of self-worth.

So, which is more important to you?

[Jim Conway]

Doug ....you said "It is the sorry state of modern life that a bad product/service sold well is worth more than a good product/service sold poorly. And since most people aren't equally good at all things, those good at one thing (in this case retouching) often have to decide which is more important: getting the business to begin with and working on improving profitability over time, or passing up the business and maintaining their sense of self-worth. So, which is more important to you?"


In response - I don't know of any way that anyone can keep a business alive with a bad product unless you are doing it with outside support and never intend to make a profit. In this business in particular, the cost of reaching the market is so high (the Sunday paper here is over $46.00 an inch) that you have to be VERY GOOD at what you do in order to keep getting the client referrals because that is your best souce of business ....I emphasized good simply because clients do not generally refer mediocrity.

For an existing business - pricing and presentations are a matter of "tweaking" and making minor adjustments that tell your story better or give you some small competitive advantage to keep it profitable. In a startup business the problem is entirely different and you'll need all the promotional skills you can muster along with some financial support while you build a name for yourself and play catchup with the competition.

If (or when) you introduce any new product or service into your existing business it will STILL fall into the same classification as a startup although it's certainly a lot easier to do ...so why would getting the business and working on improving profitability have anything to do with someone losing their sense of self worth? Did I miss something here?

Jim Conway