Why ‘affordable’ pricing is misleading

People in my small town have no money. They make what I make. I know what they make and I don’t want to be out of their budget. I want to be affordable to others. Does this sound like you?

Affordable is an interesting word. What does it mean? Dictionary.com states: “believed to be within one’s financial means.”

So what exactly are our financial means?

You are in a store and you see something you love. It costs $200 and you’ve got $100 in your wallet. One might say you can’t afford the item. Oh, but let’s say you have a credit card. That item has suddenly moved into the realm of your affordability, or within your financial means. If the means and desirability match, SALE! Your credit card may represent indebted affordability, but that is rightly your own decision.

I might be a closet millionaire living frugally. I might be a single mom who has made it a point to save and invested well and now has a quarter million socked away. I might be a family member who recently came into an inheritance. I might have a low paying job but with a side hustle that brings in extra money. I may have married someone who comes from money. I may have a very generous brother. I may have 10 credit cards and never afraid to use them. I may make little money but spend it in ways that are of the utmost value to me. Can you tell if you might be affordable to any of these people by looking at them? If they inquire about your service? If they live in your town? What defines affordable – under $100, over $100 but not more than $200?

This is the problem when we project our assumptions about people’s financial means and translate it into trying to be affordable for them.

Financial means can be beyond what a person makes, because even the fast food clerk may fit one of the above scenarios. It comprises not only their main income but their savings, alternate streams of income, generous family members, personal loans, credit cards, as well as their desire to purchase your product. When people really want something, they tend to find the means. So let’s be blunt – what business is it of ours if the $10/hour fast food clerk inquires for family portraits, and says their budget is $500? Will you open an inquiry into their finances, or accept their payment with thanks in exchange for your services? Would you be dumbfounded that you low-balled yourself only to find out they want to, and can, pay you that much?

The main person your prices need to be affordable for is YOU. You need to be able to afford your life and afford to keep running your business. Your pricing should primarily reflect what you require to cover your expenses, make a profit, and pay yourself a fair and desired income. Now, I’m not saying you shouldn’t take market factors into mind when scanning the environment and determining prices. It’s important to consider what the market will bear in your area. It also may be a good idea to have different budget options, such as package A, B, or C, to appeal to a range of buyers. But at no time should those pricing options ever be amounts that your business cannot sustain or place it at risk. For example, if a market scan clearly demonstrates the highest ceiling for even the most talented and successful photographers in your area is $200, then your flexibility might be regarding what you offer for that amount. It’s not affordable for you to offer a session and 25 images for that price, but it might be if you only offer 5 images.

This vague statement of ‘being affordable” for others, without having a crystal ball to see what that affordability truly is, is like throwing darts into an ocean. Other people’s finances or means, are none of our business, and you cannot run your business shortchanging yourself based on guesses about those means. Instead, determine prices that will sustain you and your business first, with openness to negotiate should ever that be required, second.

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