Setting the service prices for your real estate photography business can be one of the hardest and stressful parts of starting your business. You want to win over new clients, but you don’t want to brand yourself as a cheap photographer and struggle to pay your business expenses.
When setting prices for each of your services, there are many things you need to take into consideration. The three main influences on your pricing are;
- The Market (based on survey results and research).
- Your competitors’ pricing (based on your competitive analysis).
- Your goals (to be priced in the low, middle or high-end of the market).
Each price point has its own set of advantages and disadvantages that you also need to consider when setting your pricing.
Lower-End Pricing
Making your services affordable and slightly lower-priced than your competitors can make it easier for you to find clients in the beginning.
Your low prices might attract less experienced agents; however, it will still give you a chance to build a client base and earn some revenue to help you build your business and get the ‘wheels turning’. This pricing strategy may also be fair if you are just starting, the quality of your work needs improvement and your need to build a stronger portfolio.
There are some major disadvantages with setting your pricing in the lower-end, some more obvious than others. Be careful with setting your prices too low as this can damage your (and your business) brand from the very beginning. Your prices can be an indicator of the quality of the work people can expect.
When many new-comers enter the market with extremely low prices, it can drag down the prices that other photographers can charge, especially if the work is similar in quality. Low pricing can be dangerous, not only for your company image but also your bottom line, as it may barely be enough to cover travel, editing and business expenses. You also need to consider the initial financial investment that you put into setting up the business (i.e. camera, lens, vehicle, etc.) and how you paid for this. If you owe family/friends or a bank money, you need to be making enough to cover any loan repayments in addition to cover your operating expenses.
Mid-Range Pricing
Pricing your services in the mid-range of the market is generally the safest option as your services are still affordable to the majority of the market and you should be making an acceptable profit after
accounting for your expenses.
There will be more competition in this price range; however, this gives you the opportunity to ‘standout’ by offering greater value than your competitors through faster turn-around times, better quality services, and different add-ons to your existing services. You may also find that you attract more succesful and genuine agents in the mid-price range.
Upper-End Pricing
When you price your services at a premium, this means that you have the potential to achieve a high-profit margin for your business and require a lower volume of sales to achieve the same profit than if you priced your services at the low or mid-range. Premium pricing can help to enhance your brand identity and will even add to the aspirational quality of your services which can be attractive to some agents.
The challenge with premium pricing is that this can be difficult to initiate and maintain as you need to have a strong brand and a loyal customer base of agents with generous marketing budgets. The
quality of your work should be an extremely high standard and needs to consistently produce results for your client for them to justify paying the higher prices for your services (or selling your service to their vendors). If you can’t provide them with these benefits, there’s a chance they will work with one of your competitors with more affordable pricing and similar (or better) quality work.
Note: This article is an extract from the resources on the Education page on this website.
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