I’m excited to reveal Maurice O’Carroll from Velvetine Studios as my first guest blogger. Maurice runs one of Ireland’s leading wedding film studios and I asked him to give us his take on the sometimes thorny subject of setting a suitable price for our wedding services. I hope you enjoy reading it and I think the advice given applies to all wedding services and not just videography. Take it away Maurice…
I returned to Ireland after a decade abroad to start my new business and I will always remember the words of one of Kerry’s busiest and most successful videographers. He told me with great conviction and belief “You will never get more than €1,000 for wedding video in Kerry.”
Five years later, a videographer from the capital said to me “I can’t charge €2,400 starting prices like you because Dublin is far more competitive than Kerry! My full day prices are almost third cheaper than yours.”
My argument against this assessment would be that there’s far more money floating around Dublin than there is in Kerry. The fact is, it is a lot harder to charge higher prices in my end of the country.
It goes without saying that getting your pricing right is vital for the survival of your business – and sanity – and there is no magic one-fits-all method out there at the moment.
Keith has asked me to write about my own experiences but before I share my pricing policies at the higher end of the scale, I’m going to start by addressing the lower end where the bride bases most of her decisions on price alone.
The Lower End
Even though the budget conscious bride is weighing up your service on the bottom line of price, she still wants value for money. So, it’s up to you to make your package as attractive as possible to her at her price point and still make a profit.
In order to do this you need to have a lean, no frills, streamlined service in place and you must be prepared to take on a lot of weddings and turn them over as quickly possible.
Before you ever think about pricing you need to determine want she wants for her money and if you can make a profit from it.
In terms of wedding videography, I’ll bet she’s looking for someone reliable to capture all the key moments of most of her day for around €500 to €700. Can you make a profitable business out of this? Absolutely.
Shoot with one solid camera on a tripod for the day, move as little as possible, try not to fall asleep, template the edit so that it is a streamlined and fast process, package in generic covers with your advertising all over it, and hand deliver the package with a smile before they go on honeymoon.
The lower end is a dog eat dog market which is made up of newbies, hobbyists, has-beens-who-don’t-care-anymore, and simple no-frills outfits.
If you are not overly proud about your product/service and don’t mind becoming part of a wedding factory then this market can actually turn into a nice earner when you get the pricing and product right.
In fact, the middle end of the market is often considered as a far more dangerous ground to play in.
The Middle Market
This is where most of us sit and it is a tough place to do business. I know because it’s where I jumped straight into when I first started out.
The Middle Market suppliers are largely made up of talented businesses who take great pride in their work; so much so that they will often give the client more than they are paying for. “It’s good enough” rarely comes into the equation.
So, not only are these suppliers competing on price but they are also competing against egos.
These vendors are constantly looking over one shoulder at the low end market and worrying if the low-low prices are tempting away business. They must look over the other shoulder and keep a firm eye on their direct competition in the middle market. And, in many cases, they find themselves attracted to the higher end bride and the temptation to raise prices and step up toward bigger pay days.
How does one price for The Middle Market? Very good question.
Obviously, the bride wants something a lot more special than what the cheapest guy in town has to offer. She and her fiance both have good jobs and they are making a huge investment in their day. They want the best they can afford. They expect a professional service and a good product… I’m willing to bet that they don’t want to receive their wedding DVDs in a Dunnes Stores bag before they jet off on honeymoon.
They want a good price, value for money, peace of mind… and a piece of you. A piece of your pride. That piece that always makes you question “when is it ever good enough”.
And this creates perceived value in your service. It’s always hard to put a number on it.
My humble advice to the Middle Market suppliers is to tuck yourself firmly in the middle. In other words, stay a safe distance away from the guys who are either flirting with or worrying about the lower end and don’t get drawn to the higher end unless you are able, committed and brave enough to put it all on the line.
Through market research figure out what you must to do to satisfy your clients needs and wants, develop a package for them, and price it so that you make at least 40% gross profit for the year. Then, be brave; add some perceived value to your pricing. You should be worth it!
Are you finding it hard to make such a profit? Is your service more time consuming than you thought?
If the answer is yes then the first thing you need to consider is to raise your prices! The other alternatives are to embrace “good enough” and either find cheaper materials or pare back the package so it’s less time consuming.
The Higher End
From day one, I always wanted to service the higher end of the market. I wrote out a detailed business plan and despite getting lost on occasion with some experimental pricing, I pretty much followed it to the letter and reached many of my goals on schedule.
My pricing policy is simple: Always make a profit, prices on the website and freely available, no discounts!
My studio offers a very unique, personalised service to a select group of people each year and this, along with our commitment to a professional and friendly experience with us from the first contact and beyond, our use of the latest technologies, producing broadcast standard wedding films, and our consistent body of work and experience all justify our pricing.
In fact, I honestly believe that we are too cheap… but, one step at a time!
I have goals for the next three years and in order to reach them we need to improve our service every year. And this means we need to raise prices accordingly. It’s never an easy thing to do and always scary. Just one month ago, I raised my prices by €200. It doesn’t sound like a lot but when your studio is twice as expensive as most other companies and everyone around you is slashing prices in a crippled economy, trust me, it’s a risk and it’s scary.
However, it’s a calculated risk; after all, half my calendar is already full for 2011 and I’m confident that I can book it out with my new prices… and make a significant increase next year.
Selling At Your Price
Some of our prospective clients nearly drop the telephone when they first hear our prices. Sometimes we go on to make a sale but even when we don’t, we are always able to educate them on why our service costs what it does and that it represents great value if one can afford it.
No matter what market you are in, if you have taken the time to do your market research, discovered you customers’ needs, developed a package that suits your target market, and priced it so that it is competitive but profitable then you should have no problem in believing in your price.
All too often, suppliers don’t believe in themselves or their pricing. They pluck the magic number €1000 out of thin air and work in hope off of that. So how are their customers supposed to trust them?
Knowing exactly what’s involved in producing your service and being able to articulate its costs to a prospective buyer are of huge importance for making a confident sale.
Dealing With Hagglers
The simple answer is we don’t.
I’ve nothing against anyone asking me for my best price – or even simply chancing their arm – but I’m very upfront on my pricing. There’s nothing to hide. We give the same high service to everyone… at the same price!
When anyone says to me we’re looking at a company that’s X amount cheaper than you I say without hesitation “If you honestly believe – 100% – that they are going to do what we do for that price then you need to hire them straight away!”
Some businesses like to have a premium price which gives them wiggle room to “give the customer a deal”. Some businesses enjoy the art of haggling. Everyone to their own but the only art I enjoy is filmmaking and I’ve always preferred to give every customer my lowest price which is never open to negotiation.
It works a treat for me.
“Velvetine Studios is one of the Top 25 Event Filmmakers in the World” EventDV Magazine Awards, 2008 and 2009.