Ways commercial photography studios can increase profit
Commercial photographers and studios servicing clients for marketing collateral don’t have an easy time.
Clients are under constant pressure to increase the value they get from their suppliers, which can lead to a long term decline in prices, and subsequently your revenue – without any guarantee of any future work or retainers.
This hand to mouth situation makes it very hard for studios to look at long term investment and development, which often just exacerbates the situation.
So how do you break the cycle and create real growth? Here are a few tips to help maintain and improve your profit.
Know how much each job is costing you
If you do nothing else, you have to do this. No employee likes filling in time sheets, but it is the only way you can truly evaluate profitability on a job by job level. You can create your own method for collecting this data, or you can buy online packages offering ready-made systems. Whichever way you go, it needs policing because no-one will stick to it of their own accord.
Once in place you need to analyse this information. It’s much more than a measure of profit; it’s an insight into the strengths and weaknesses of your business – and your clients.
- Understanding if the briefing process is lacking and impacting the delivery cost, e.g. re-shoot
- Realising that clients are taking too long to approve shots
- Seeing that clients are making more changes than quoted for
Where we have evaluated jobs that haven’t hit profit targets, we’ve gained a clear understanding of why it happened, and been able to take action to resolve the issue, and able to make successful cases to clients to pay more for the job.
This monitoring has to be constant. If you only check at the end of the job, then how can you make any changes when the project is in progress to turn things around?
Don’t sell yourself short
Putting quotes together is a minefield; you’re under pressure with competitors and often hours are underestimated and rates get reduced to land the job. There are ways that you can approach your quoting productively:-
- Can you use the quote to get in front of the client and get a dialogue going to build a relationship and to get more understanding of the job – and the client’s knowledge of photography?
- The more information you put into the quote the better.
- Be clear about what is and what isn’t included.
- Show your respect for the client by breaking the job down into as much detail as possible. Include detail about your processes and the service levels that you will give your client.
Estimates without the detail, the clients natural reaction is to wonder how their budget is being spent.
Remember, the way you present your quotes are an opportunity to differentiate yourself from the competition, and give clients confidence they are going to be well looked after.
Tighten up production process
Lack of processes, or processes that are self-managed reduce profitability. Ask yourself these questions:
- If you have processes in place, how are they policed?
- How is their effectiveness measured?
- How often are they reviewed?
- Are your employees trained and appraised on their own use and adherence to the processes?
The idea of policing production processes may seem draconian to those businesses preferring a more fluid approach. In our experience, employees often work well within structured environments. Lack of process and structure can be demoralising, as employees don’t feel clear on what they are doing and find it difficult to assess their own performance.
Go back to your client for more money – if they are moving the goal posts
Why not? Often this doesn’t happen, and certainly it is tricky, but it can be handled sensitively and constructively.
Photographers can feel defenceless against a client’s effort to negotiate the price, and then add more onto the job spec. But don’t assume this is all a deliberate tactic to get more for their money. In some cases, the client genuinely doesn’t understand what they need until the job starts.
You have to be transparent with this for it to work, but at the core of this approach is clarity of what you are selling (or not selling) and have a clear process in place:
- Support your client by making it clear what is involved in the process and what they are buying at what stage
- Tell them about your processes and how they benefit them (for example reassure them they will never go over budget without signing off extra spend)
- Implement real-time job monitoring to check when extras are being requested or the job is going off brief
- Immediately communicate and additional costs to the client, in a way that is clear and gives them control over the decision to spend any more.
You will make the commercial decisions about what you want to charge for, and what you will add for free. But don’t expect the client to know this. Give yourself credit for the extra mile you have gone, and in doing that, manage the clients expectations about whether this is a one off (say, for a first job), or whether you will always give them more than they have paid for.
Keep checking back
It’s always worth taking a step back for a minute and having another look. These things have a natural tendency to start to slip after a while, so this is an opportunity to re-evaluate how it’s working. Regular reviews of all of these issues are always wise – it allows you to refine your processes and your approach, by understanding what has been effective and what hasn’t.
Blog image kindly provided by eposure member Malcolm Birkett
If you have any questions on any of the detail of this post, then please contact us. If you feel you need more help, then we can offer you more specific and tailored support too on a consultancy basis. Drop us a line at email@example.com
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