We all know that prices for photo booths can range anywhere from extremely budget friendly to exuberantly expensive. While it does not matter where your rates currently fall as you read this, we want to help you deliver value to your clients to create an opportunity for you to charge your clients a rate you are happy and comfortable with.
To help illustrate and compare between targeting clients on tighter budgets vs high end clients, let's take the below for as an example:
At one end of the spectrum, you can charge $400 for a 4 hour event, targeting the lower hanging fruit where conversion is relatively easy. At the other end of the spectrum, you can charge $1,500 for a 4 hour event, targeting the higher end clients who may take a little more convincing of your services until conversion.
There are about 4 weeks in each month, and let's say for this example that you are booked only on Saturdays for the entire month. At $400, the maximum you are able to earn is $1,600 per month. At $1,500, the amount jumps to $6,000.
The difference is pretty substantial, right?
In order for you to even touch $6,000 per month charging $400 per event, you would have to render services for 15 events vs only 4 at a price point of $1,500. Obviously this example should be taken lightly, but it at least gives you an idea on the amount of volume and work required if you charge less, not to mention this does not take into account your expenses or any attendants you may hire. You will need to analyze your business priorities and figure out what price point makes the most sense for you.
If you are unsure what the "Race to the Bottom" means, it's simply a situation where you are competing on price with your local competitors, eventually lowering your prices so low that you are no longer profitable. Avoid this at all costs. There is no good outcome that comes out of this.
Although you may think that beating a competitor's pricing is good for one client, this will ultimately affect you going forward as your competitor may lower his or her prices and you will be forced to do so, leaving you to work for pennies and hurting the devaluing the industry overall. We all value our time with this business, and we all need to make sure we can all work for a strong enough rate to support the business as well as being comfortable with your earnings.
When we first started out in our photo booth business, we were obviously worried that price was the only determining factor when clients book your services. While with some clients they are, but price is just a myth. If you are able to deliver on your clients' pain points and provide a great solution to make them look fabulous, then price can actually become very subjective. Let's take for example if someone mentions "Remember that one time when Dave took that hilarious photo with the photo booth at X event two years ago?", you are able to proudly say that your photo booth created memories that become talking points for years to come. It's about the experience!
Quite simple, actually. Instead of focusing on being competitive with prices, shift your marketing and sales strategy to provide more value to your client. This will move you away from the "me me me" tactic where you say how great your service is and how low your pricing is, and switch it to becoming a problem solver and providing value to your clients.
Think about it, would you rather hear someone talk about themselves nonstop or would you be more interested in having someone listen to what your issues/wants are and provide a valuable solution to achieving a certain goal? More than likely, that goal is to simply hire a photo booth company to provide a great experience for their guests at their event. If you bring the value you are able to provide to the table and work on creating a relationship as a problem solver, you will stand out from the competition but also have a higher chance at converting them into a client!
I understand that this depends on your local area and its current market conditions, demands, and rates, but if your entire area charges a low price, do you think following the crowd is a good idea? Position yourself as a premium service and others will take notice and hopefully follow suit. Not only does this raise up prices, but this also puts more money in your pockets!
Focus on providing value instead of selling and watch your conversion rates increase.
Shifting from a price-based mindset to a value-based mindset takes time, since prospects can be very sensitive to pricing. However, combined with effective marketing, branding, and customer service, you will soon ask yourself why you didn't price your services higher in the first place! Over time we will be releasing more blog articles to help empower you and your photo booth business to take it to the next level. We are here to try to help you succeed and provide valuable insight to the industry to book more clients and earn more. Let's get to boothin'!
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