Is Price Transparency the right marketing strategy for photographers?
Image by: @jakubzerdzicki
Photographers, don’t mistake price display for price transparency or for trust
I find the concept of transparency an interesting one. In a blog post from a few years ago, I talk about whether photographers are truly transparent, because showing numbers that you arrived at randomly or not by proper business calculation isn’t true transparency but price display. Read more here.
The definition of transparency within a business context is the breakdown of the true cost of a product. How the price was built, what components are being billed within it. This can include materials, labour, storage, shipping/ transportation and other fees not typically disclosed such as environmental and disposal costs.
Transparency is a marketing strategy applied to pricing and typically is used within the commodities industry where items are sourced, assembled, shipped, inventoried and sold. In that world where most of the costs aren’t disclosed, some retailers or manufacturers have decided deliberately to pull back the curtain, to leverage a competitive edge or differentiating factor. Online retailer Everlane was one such company known for its Radical Transparency strategy, where now industry watchdogs say they were better at marketing it rather than honouring it. Because alongside this true cost reveal strategy that was initially hailed as innovative and forthright, it was also discovered that Everlane was not so transparent about inner workings of the company. Stories of racism, discrimination and a toxic culture were revealed.
Trust transparency versus true cost transparency
Photographers typically consider transparency to be price display rather than true cost reveal. But you can be equally transparent in stating that you serve by creating a custom proposal for everyone and that requires them to reach out because they will receive personalized service and quotation. You can also be transparent by stating a minimum investment or average. The definition of the word transparency is to able to see through or into something, as in being open and available to all. So in this case, telling people you will give them a custom price on their needs, or an average or starting price is fully transparent because you’re not hiding anything. With a minimum or average investment, you are giving sufficient financial information to decide if it’s in or out of budget. With a custom proposal, you aren’t hiding anything because you haven’t calculated anything yet!
Clients want to be shown the value of what their money will buy and to deal with an honest, open and ethical professional. Everlane publicly listed the breakdown of all costs, sure, while unsavoury moral and ethical transgressions were rampant within. When those issues were revealed, we realize that trust building needs to go beyond itemizing costs. The entire culture of an organization needs to have a core value of openness and along with true cost reveal.
Why true cost transparency may not be a good photography strategy
If you were to break down the true cost of a Picasso piece of art from a material perspecive — the painting supplies — it probably wouldn’t be a high price tag. In fact, Picasso was known to find or trade some supplies, which would drive down material costs. And yet, Picasso art sells for millions of dollars; the most expensive sitting at just shy of 180 million dollars.
Cost-plus pricing is the model that companies like Everlane use and in Everlane’s case, was made publicly available. They outlined their costs of producing their items and showed their markup which would equal the consumer price. That pricing model works because they sell mass-produced commodity items with mostly fixed cost elements. There is no other cost factors involved such as luxury perception, craftsmanship, rarity of materials, complexity of production or artistic merit. So this is where it gets tricky for us.
Picasso’s work is greater than the sum of his supplies. Much greater, by a factor of several millions! Valuing art work depends on many factors not considered in cost-plus pricing models such as how recognized the artist is (and even if they are alive or deceased), their education, career experience, number of pieces available, condition and age of the art work, market demand, mediums used etc. If artists sold on supply costs plus a markup — well that could very well be where the “starving artist” expression came from!
While we aren’t at the level of Picasso, photography is a creative and artistic industry where many of the same “soft” or “invisible” factors play a role in pricing. We produce something new, unique and never seen before with every single shutter click. Nothing can ever be mass produced. Moments gone can never be reproduced.
Final Thoughts
My guess is that photographers actually want trust transparency rather than true cost transparency. The concept of price transparency (which manifests as price display) emerged from a mix of price aversion/ fear, mixed with wanting/trying to build trust and get bookings in a saturated market.
To understand the right price reveal strategy for your business, you first need to evaluate if you are displaying prices to avoid an uncomfortable money conversation. If this is where your price transparency stems from, then mindset training is something to consider to become more confident in the pricing realm. When you shift your money mindset to be more positive, then you may naturally start to make different decisions around your price reveal strategy.
You must also evaluate who your ideal client is, and whether they benefit from “shopping” you or receiving personalized guidance on an experience and outcomes with you. You may think people need all the prices up front, but your clients may actually need someone to guide them to the appropriate services, products and investment level.
Join the Facebook Group with over 6,000 like-minded members to chat with others on this topic, and more!