I'm abolishing hourly rates from any of my pricing, and not even allowing customers to get a hint for what we make per hour on weddings or kids packages. Hourly rates tick people off...

I also work for a web design firm. We recently raised our hourly rate from $55 to $85 for all of our services. We haven't raised rates in 5 years. We're still WELL below the industry standard of $165 for programming and $110 for design. When I brought this up to a client, he damn near choked. The funniest part, he's a lawyer! He charges $250/hour and raises his rates to keep up with inflation and the cost of living annually! Even people who use hourly rates hate hourly rates!

Have you ever hired a plumber - you'd hate to know he's charging $100/hour and the clock starts when he leaves his office. If he just charged a flat $350 that included his drive time you'd feel better about it because you wouldn't think you're paying a high rate for something worthless like driving. You probably hate hourly rates too! I know I do!

Of course everyone has to cover their costs. Hourly rates are a great way to figure out how to price profitably, but a bad way to quote costs to clients...

Interesting point. I use hourly rates for commercial work because businesses expect an itemized bill, but I agree that it doesn't make much sense when dealing with wedding and portrait clients.

I've had a couple brides this winter talk me into giving them an hourly rate because they want to limit expenses and see limiting my time as the way to do it. It just doesn't work however and I'm not going to do it anymore. The first one was last november and shes the only bride so far that hasn't raved about my work and the reason is obvious (to me), the picture set is limited, so the whole story isn't there and when she compares my work on previous weddings to her own, it doesn't stack up. She's pleased and has put in multiple print orders, but in this business 'pleased' isn't enough... So I have one more of these '3 hour specials' coming up and I've already decided I'm just going to work the whole day and tell the whole story as if she was paying full rate, it'll be better for everyone and it's a lesson learned (maybe I'll make part of it up in print sales...) ;-)

I don't even talk about hours in my contract or packages. When I used to do that, *I* ended up feeling far more stressed out and anxious, watching the clock more than my clients did.

There are ways to itemize without giving out your hourly rate. I itemize flat fees for modules or a breakdown of the service I'm providing ex: Design = $2500, Copy writing = $500, etc. It is based on an hourly estimate, but I never sell it or even drop hints.


I talk more in terms of deliverables, and what they’re getting. I also outline the benefit of my service vs. competing vendors (though I never mention my competition).



This way people get a sense that they're paying for a finished product, which has value. People value their own time, they don’t value other people's time. Funny how that works.

We’re on the same page. I’m just not listing hourly rates at all, ever, for anything... period.

Really? That's the only way I work. I've probably only had 2 people complain (out of the 20-ish weddings I shot last year) about the hourly rate deal and you know what.... they didn't book. Good for them.



Something worthless, like driving? Hey, the drive is required of the job. I guess it all depends on the kind of person we're talking about here. Do you like knowing how much the Army pays for a screw, or do you just want to pay your taxes and sleep knowing you're safe at night? It's all the same in the end.

I would figure just the contrary - "You're charging me 350 bucks to fix a dripping pipe? Are you crazy???" - Well, by the time he leaves the shop, pays for gas, pays his mechanic $75 for an oil change and lube, pays the lease on his van, pays the insurance on his van, sits in traffic, does the work, fights his way back to the shop in traffic, pays the girl answering the phones, pays the rent on the shop, pays the insurance on the shop, covers the rack of tools the last employee ripped off, pays the $$$$$$ a month for the yellow pages ad I dialed his number out of, and still hopes to cover his mortgage payment, feed his kids, pay into his retirement and maybe still afford a well deserved beer at the end of the day, I'd say asking $100 an hour is pretty reasonable.

And you know what - if I've got a pipe squirting water all over my carpet that cost a lot more than $100 - I don't care if he's charging $75 an hour, $100 an hour, or $140 an hour - I just want the leak stopped before my carpet is ruined.

I guess you've got to charge the customer and make your living somewhere so it's just a question of where. You can charge them $400 an hour which includes your overhead, travel, editing, etc, or you can charge them $3850+tax for an album that only cost you $400 - the latter sounds a lot more outrageous to me.



For what it's worth...

This kind of logic is just *inviting* low ball, high maintenance clients. Do you think people will appreciate your work _more_ by charging them _less_? That'll never happen.

The reason you're *not* getting calls from people paying the industry standard $165 an hour is because you're not charging $165 an hour.

You're running what, about $100 under industry standard. $100 an hour times what, 20 hours for a web design project? Okay, that's $2000 price difference between an "industry standard" design firm and your outfit. For anyone that's serious about their project, this is such a negledgable amount it's not even worth quabbling about. This lawyer is going to generate what percentage of sales from the website? And he's charging $250 an hour? So he makes up the cost difference for desgin in a day. One single 8 hour day. Here's a clue: He's not generating lots of $250/hr clients because he's tight and low balling his marketing, and your "sub standard" pricing is inviting these types of clients - people who want it all for pennies. If this guy was really making $250 an hour all day every day, he woudn't have called you in the first place - he would have called one of the "industry standard" firms, and he wouldn't have complained about paying $165, $185, or $225 an hour - because he 1) sees value in that level of product and 2) has the means to pay for it.


I don't mean to offend in any of this, just an illustration. By charging what you're worth, regardless of where you put that profit in your package - certain people will be able to afford it, and certain people will appreciate what you're doing, and those people will pay you.

Others are penny pinchers who are always digging to get "more for less" - they think the whole world is Wal Mart. Your service will ALWAYS be nothing more than a commodity to them. You are a guy to push a button on a camera, and they're going to shop for and purchase your service the same way they shop for and purchase toilet paper. They know they don't want the really scratchy stuff, but T.P. is T.P. and they're not about to pay an extra buck-thirty-eight for the 3rd softy ply and the cute bear on the wrapper. (Sorry, the illustration is intended the best sense of humor possible).

Just as the world is full of "Wal Mart" clients, the world is also full of people that hate Wal Mart, they hate rubber-stamp, mass-production products and all that they stand for. They have a certain amount of disposable income because they are successful - usually because they have expected more from themselves, and in turn, expect more from those they hire for various services. These clients are looking for high quality service people to hire, and the quickest way to identify with these "higher than average quality" service people is to put an industry standard price tag on your work.

Those clients are out there - and they are out there in large numbers, but you've got to market to them to get hired by them.

I guess the point is if you need to hide the fact that you're in this to make a living from your perspective clients, then you don't need to change the way you make your living - you just need to find different clients.

Normally at the client meeting or on the phone, I'll go over their general plan on paper and figure out how much time is involved, then right there with them add up the hours x hourly rate and that's the "base" of their package - add on albums, etc on top of that.

Then the day of, I don't charge an extra hour unless we go *more* than an hour over, so there's some buffer time - just make the hourly high enough to cover all your time at the shoot plus the post process.

Just an idea. It's worked out really well for me. Gino talked me into trying it this way a year ago and it's worked very well (as far as a given hourly rate to form a package base).

Clients will either hire you or not, but at least you know you're being paid enough to stay profitable when people do hire you. Otherwise I think it's a bit of an "open door" policy to allow them to begin expecting more and more of your time - your most valuable asset - and it then becomes really hard to charge for the additional time if you didn't extablish it at the start.

Before going to this system I worked SO many hours and I quickly noted that my inclome did not scale proportionally to the additional time and that's never a good recipie for success.

Kevin,

What you are saying is interesting... But... I feel like I would be pressured. I want the amount of time that I want in order to finish a job... I don't want a client having anything do do with the decision.

Wedding days, we want free reign to do our thing... and the same for baby sessions... So I charge enough on the front end to cover the max amount of hours... This seems less like "nickel and dime-ing" to my high-end clientèle...

Just thoughts...

I do charge a flat fee for my sessions (kids, families).

I do agree w/Kevin's point above. I never really thought this way until I started my own business. Now I can totally relate to the hows & whys of other businesses charging what they charge. You do have to figure in all those extras like Kevin said...hired help, gas, insurance, time, etc.

Now when I get my plumbers bill for $65.00 per hour I slip my check in the mail & don't think twice about it.

Ah yes - totally true. I hear ya. Maybe I should qualify my packaging better - you can easily adjust your hourly rate on the fly, as well as the cost of other items in the packages themselves depending.

I know what I need to net at the end of the day of a wedding (or apply to whatever other kind of shoot). I'll add up the 6 or 8 hours and knowing I'm now well above that net, I may adjust the rate down a bit and add an extra hour (if I like the client, like the venue, *want* to shoot the wedding, etc) - that way they still pay what they're paying, I have enough time to work, but at the same time, i haven't opened the door for "unlimited coverage for no additional pay".

I often add up the 8 hour deal and then have them say "hey, we want to cut it to 6 for budget", I'll adjust that rate back down, or maybe cut some cost off their negatives CD to keep them at or near their budget, still allow myself the 8 hours I know it's going to require to shoot the event, but there's still a $375/hr price tag on my time.

I guess that's the beauty of not having any set packages.


I'm doing more and more portrait sessions now and those are a bit different - I charge whatever rate I need and say it's a "one to two hour session" - giving myself 25% more time than I think is required. Or I quote the 2 hr price for a 1 hr session then keep quiet if I go an hour over - then they feel as if they're getting an even better deal.

This way - if the day of they invite the whole neighborhood over for kid pictures and it goes from 1.5 hrs to 5 hrs (yea, it happenend!) - I can still pull mom asside and say "hey, it's going to take more time, this is the rate we already established, etc, etc" and I can shoot pics of every cousin and nephew in the family or she can send them all home, either way, I don't have to shoot 3 hrs and edit an additional ~350 images without getting paid.


Nice new avi by the way! I haven't been on the forum much so maybe it's not new. lol. Anway....

Interesting...


The avi is a very very long story... and was a big controversy fun times!

This makes me think back to college when I mowed a guys lawn. He also made $250/hr being an expert witness for plane crashes. What did he pay me? $8/hr and it took me maybe 1.5 hours to get it done. $12 for an afternoon basically. In college I figured any extra money was worth it, but when I think back on it, I should have told him to forget it. Then when I told him I was moving on, he wanted me to help him find someone. I told him he needed to pay a flat rate for each week and he refused. What a waste of time. Then at one point he didn't want to pay me anything till I racked up $50. Oh my goodness, just thinking about it irritates me.

Some things are just not worth it.

Kevin,

I have two points:

1) You assumed we weren't being called by $165/hour clients because we weren't charging $165/hour prices.

First of all, we work with large corporations with BIG budgets $30k+ routinely. The ideal situation is that we LOOK LIKE a $165/hr firm, but we charge slightly less. This is how creative agencies compete with each other, on price, service and creativity.

Your statement is also misleading because it implies that charging $165/hr will attract $165/hr clients. A novice photographer out there might get the idea to hike their prices without investing into their perceived image. The type of client you attract has to do with your brand equity and how your company is perceived by your customers.

A bit on brand equity: I have a client that builds dirt bikes in China and resells them in the US. This client found the chinese manufacturer that also makes dirt bikes for Honda. They're basically selling the same bike and engine design, but they can't advertise that for obvious legal reasons. A Honda bike sells for double what theirs does. If they set their prices as the same as Hondas and even showed that technically the bikes were identical, people would still buy a Honda. Even if they were slightly less, people would still by a Honda. Since they're significantly less, they're competitive.

Brand equity is what allows a studio to justify higher prices. I think you meant to imply that if you look high end but charge low end prices people will question you. That's absolutely true. However, the flipside is equally important, if you look low end but charge high end prices, you'll never get called.

So who wins this debate? I do. Why? Because you contradict yourself. Your website's pricing page states:

Hourly Coverage Packages from $3000
All Inclusive Packages Including Album(s) from $5000

First of all, this looks more like a flat fee than an hourly rate. Yes, I do see that you state "Hourly Coverage" but you're quoting a single price not a per hour price. Secondly, there is a lot more information on your pricing page. You talk about everything you put into your packages, your services, your fine Queensberry albums etc. You only have two lines that address price. You're doing exactly what I said in my first post, talking in terms of the final deliverables and benefits.

I dare you, leave everything the same on your web site except those two lines on your pricing section. Change them to, "Hourly Rate is $375 - Call For a Quote". I'd bet $100 you'll get less inquiries.

Hey good call Timothy. You're right and I'm wrong. Sorry about that.




It's nothing that requires a line by line debate. What I write on my website and what I discuss with a client when the phone rings (how I actually arrive at that $3k figure) is beside the point. That's where the "from" comes in. They get 6 hrs at $400/hr plus a CD for $600. That's 3000. Call that "hourly" or a "set package", whatever works for you.

The best part of this arrangement comes when they plan an 8 hour event. That's an extra $800 barganing chip I now get to work with. If I like the client and look forward to covering their wedding, that $800 barganing piece can be much used to my advantage.

You made a post saying you were ditching a certain type of pricing in favor of hiding your profit margin in a different area because the clients don't like knowing you're making a profit. I'm just sharing what has totally worked for me, and I know others have had tremendous success with the hourly base method. This type of pricing has done 3 things for me:

1) I no longer get inquiries from people that complain about pricing.
2) I no longer find myself working for clients who expect me to show up at 9am and stay until midnight for no additional charge.
3) I now have huge flexibillity when talking to clients - I can give them exactly what they want without having to re-structure pieces and parts of written packages.

I had both the above problems when I had packages A, B, and C.

If the hourly deal isn't working out for you I'd suggest the problem is not with how the service is presented to the client, but the rather the type of client you're attracting.

And for what it's worth, I know of several photographers that are getting a lot more $$ for their product than the product itself is worth - for no other reason than they are charging a premium. There are some very average / below average photogs on the referral list for $$$$$$$ weddings at the high dollar venues in my town. Their photographs are below average, their websites are downright aweful, and they're booking $7000 packages.


And as a total asside....

You've also got to realize I'm extremely sarcastic, I've got a very crooked sense of humor, I spend as much time poking fun at myself as I do others - it's just the way I am. Nothing to get upset about and certainly nothing you need to take any offense over. "It's all good."

Please don't take anything I say too seriously. Nobody else does.

Nope. That's' how you may decide to compete, but not everyone does. I'd not see that as an ideal situation. In fact, if I was still in web design, I'd say the ideal situation would be that you look like a $200/hr firm and are commanding $260 through various other services.

It's no different than photography, which is a creative service. There are many hills a company can choose to defend in branding. If you choose more than one, you make your brand identity diffused. You've chosen price for at least one. Fine, but price doesn't make sense in a lot of ways. In many cases, charging _more_ will get you better business because they associate the value with the fee. I've seen it work in my business repeatedly. When I worked in advertising, we saw (and used) it all the time.

You're backpedaling from your earlier post where you were almost embarrassed for charging so much less than the going rate (your client choked when you told him the average, right?). Now you're saying you charge "slightly less." Slightly less would be $155/hour.

I'd say it's brand perception. You're saying it's the longevity of a brand that has built up in someone's mind that allows for high price. Then how do you justify someone shopping for wedding photographers and stopping on my website, paying more than the going rate, but not having ever heard of me before that moment? I know this happens all the time to the high-end photogs I know, they get contracts and checks without ever meeting the client based on their impression of the photog's website.

There is, of course, a certain level of quality that is required to break into the higher end market. But it's not terribly hard to achieve, really. What separates a $4,000 photog from a $40,000 photog is personality, brand, and referral base. It's not the work. It's not the albums. It's not the whatever.

Of course, I'm an opinionated idiot. $.02

I didn't say it


( )

"...opinionated idiot $1,000,000!!

For what it's worth, I've used an hourly rate and my clients seem to like it. I've only had a small hand-full of them ask about it, but quickly agree that it's a reasonable way to work out our business together. Not necessarily the best way to charge, but certainly not so bad that I've ever felt the need to change.
-Eddie