Merchandising Your Product

Merchandising Your Product


Did you know that you don’t have to raise your prices in order to make a bigger profit on each sale? You can accomplish this by using creative merchandising or packaging techniques. The key is to create value in your merchandising. Let me start off by giving you a proper definition of what merchandising really is. The true definition is how the product or service is presented to the customer. The premise is “Make it hard to buy a little and easy to buy a lot.” Let me give you an example. Buy two get three, or if you charge $100 for an 8x10 portrait, effective merchandising would be to have a second print price at a lesser amount at say $75 and the third one at $60. Instead of charging $300 for 3 8x10, we charge only $230. All your costs are built into the first 8x10, but within the second and third 8x10 lay the bigger profit margins, because all the cost and work are already covered with the 1st 8x10. You actually make more money on the second and third print than you do on the first, even if you charged less. The only extra work in selling 3- 8x10’s instead of (1) is to write on the lab bag (3) 8x10’s instead of (1). The principal applied is the more one invests the less one pays for each item. We create a win win situation where the customer wins because he feels he is getting a deal and we win because we were able to enhance the sale and thus make a larger profit, not only in percentages but also in actual dollars.

In making purchases that entails hundreds or even thousands of dollars, customers find it very difficult having to make a lot of buying decisions. That’s the problem I have with selling only from an a la carte price list. By only offering a la carte pricing, it requires them to make many buying decisions if they are interested in different sizes and quantities and coverage. This can happens in merchandising wedding photography. With all the different coverage’s and album styles available it is much easier for the customer when you can packages as much as you can up front so they only have to make one decision, that being “I’ll take package A” instead of having to pick and choose thus adding to the confusion. I do have an a la carte pricelist in my pricing guide, and if the customer wants to buy off this list he is more than welcome. It is not the best value, but if the customer only needs one print he can buy just one. We have to make enough profit when selling only one print, therefore justifying the a la carte price, but the real reason for a la carte pricing is to create value. Remember we said “make it easy to buy a lot and hard to buy a little”. Now the customer can do comparative shopping. He can compare a la carte pricing to package pricing and actually see the value in purchasing the package. The package price is higher but it’s a better value. The principal is the more the customer invests the better value it becomes. This is especially true in wedding photography. The more you can sell up front the better. After the wedding the excitement sort of wanes and the couple have many other expenses, and will often say “Can we get this at a later time”. You know and I know that the later time will never come, so it’s better to get a bigger commitment up front rather than later.

Another important consideration is making it easy for the customer to read and understand your pricelist. How many times have I looked at some pricelists and couldn’t figure out how to read it. It required the customer to jump through all these hoops in order to qualify for discounts. When this happens and the customer is unable to understand something in the sales process, he won’t make any decision except that he “wants to think it over” or “I’ll get back to you”, or some other stall. Let me suggest a better option. Why not give the customer something he can understand. One of the things many studios have implemented is an “Order Information Guide”.One can be developed for each of your product lines. This guide will include an introduction and a Table of contents. Some of the information included would be:

• Table of Contents

• Information on you guarantee

• How To Order

• Information on cropping

• What’s included as far as retouching and finishes.

• A la carte pricing

• Package pricing

• Special items

• Photographs of all your products

• Collections and collages

• Payment options

Another important feature of this guide is that you can have picture illustrations of all of the products. This gives the customer a visual of what they are purchasing and everything is spelled out in a clean and informative manner. These can be printed in house and bound with a plastic or wire spiral binding. This looks much more professional and gives the customer all the information they need in making a buying decision

There are exceptions to the a la carte vs. packages argument. If your business model is high price low volume, and you are able to spend more time with the customer you can utilize the a la carte method. If your sales techniques are very good and you want to spend more time, and have done all the other things building up to the sales session, a la carte selling could be better. But if you are doing higher volumes such as children or seniors, I believe you can earn more dollars per hour using information guides and package pricing. Remember the two principals; “Make it easy for the customer to do business with you”, and “Make it hard to buy a little and easy to buy a lot.”



If you want more information on the Information Guides mentioned in this article, contact us at businesssurvival@verizon.net

Projection Appointment/Order Appointment
Remember the form we filled out during the initial telephone call. We now are to take this form and review it and make sure the customer gets what he wants while at the same time enhance the sale to its maximum. You have to determine before hand what is it exactly you want the customer to buy. My goal was always to sell at least 1 wall portrait. Not that you can’t make a reasonable profit selling 8x10’s and 5x7’s. We make most of our money selling 8x10’s, 5x7’s and 11x14’s. I’ll always sell the client what they initially called for and then do an up sell. Do I want to sell a wall portrait or a collection? One thing we have to be careful about is not to sell yourself out of a bigger sale. I’ll explain later on.
Less is more. With digital we are able to take more images than we would with film. Don’t over whelm them with too many choices. A rule of thumb is the law of 20. Don’t show any more than 20 images. This can vary if you are doing an extended family and then individual families, but the customer will become over whelmed if he has too many choice to make, and most likely he won’t make any choice and will say he wants to “think about it” or ” I’ll have to ask my husband”. Edit them down. What they won’t see they won’t miss.
Sell size before pose. It is usually harder to select the pose rather than the size. A trial close I use is “Suppose this is the pose you like. How do you feel about this size? They’ll ask what size it is and we’ll tell them and than quote the price. We also tell them that it can be purchased a’la’carte or within a money saving package. Which ever would be the most economical? I think you know where I going with this. A lot depends on how we merchandise our products. Most times merchandising is more important that pricing. The principal is to “Make it easy to buy a lot and hard to buy a little.” I’ll have more on this with “How to merchandise you product.” Remember I said don’t talk yourself out of a bigger sale? What I mean is that sometimes the order in which we sell things can hurt our final sale. Composites and collections have become very popular with digital capture. We can fall in love with a product and some times we’ll sell a composite for less even if it costs us more to produce; just because we think it looks cool. I’ll talk more about this when we discuss merchandising. My recommendation is that that you sell the basic items first, then offer the collections as “addons” latter, at a discount. Have a list price for the collections, and when a certain purchase level is reached, offer the “addons” at a discounted price.

The Sale in the Camera Room

Remember whenever we are in front of the customer we are always selling .When we are able to make the session fun and have them enjoy the experience, we are more likely to have a higher sale when we take the order. Make a friend before you make a sale. Remember names. Use their first names during the session. Let the family get involved by looking through the camera. Build excitement. The anticipation of seeing the proofs whether they are paper proofs or projection can only enhance the sale. Make the event a memorable experience. I might say something like “This portrait is really going to look nice displayed over your couch in the living room.” We want the camera room experience to be fun, enjoyable, exciting, and memorable. This positive experience will diminish buyer resistance. Remember…
“The price is always too high until the customer gets emotionally involved.” This is planting a seed and building excitement for the sales session.

Telephone sales

• Making the Sale –Telephone Inquiry
  
  It has been said that nothing happens until a sale is made. Yes, it’s important to market our studios but if we can’t close the sale, we’ll soon be out of business. In today’s economy all businesses are feeling the effect, and almost all businesses are down in sales. It is imperative that we maximize (optimize) every sales opportunity and turn it into a sale. Every time we have a contact with a prospect we have the opportunity to close the sale. Every time we have contact with the customer we want to somehow close a sale and get a desired outcome. We need to be aware of what outcomes we wish to accomplish with each contact. Let’s take a look at each contact starting with the telephone.
  
  When the phone rings we need to determine what will be our objective. Do we want to book the session, book a consultation, direct them to our website, or simply send them some literature? This should be predetermined depending on each product line. If a call comes in concerning a wedding, my objective was always to book a consultation, and if I was successful in doing that I have closed that sale with that first encounter. The next step would be at the consultation, with my desired outcome to book the wedding and collecting the deposit. The third contact or outcome would be the pre sell. My objective was always to try to sell as much up front as possible because it is more difficult after the wedding. The couple usually has other expenses, and is more reluctant to invest more money after the wedding. Many times we get in front of a prospect and ramble on telling them all about the features of our product, how many 8x10’s, how many hours we spend at the wedding and never get to the real heart of the issue, that this is a special day and we’ll create a memorable day for you with wedding portrait that are sure to touch your heart and that you will be able to treasure for the rest of your life. If we keep talking and talking about what we do the prospects eyes will glaze over with information overload and tell us they’ll have to think it over or give some other stall. With a well thought out sales presentation with predetermined outcomes and the skill to effectively close the sale, we will be able to maximize our sales efforts thus improving our bottom line.
  Let’s talk about incoming telephone sales for a family or child’s portrait. My objective is to book the session on the phone without a consultation. The first thing you want to do is establish some kind of repore. When answering the phone I always identify the studio name and say “Hello ABC Studios this is Paul.” The last thing I want them to hear is my name. If they don’t identify themselves with their name I’ll then say “Your first name is?” They will give it to me and I’ll make sure I use their name throughout the phone call. People love to hear their name. It makes them feel significant, and helps to establish the repore’ I talked about earlier. Usually they will ask how much we charge for a particular size portrait. I’ll answer that I would be glad to tell them but I then ask them permission if I can ask a few questions first about the portrait they’re inquiring about.. I’ll then be able to give them a better estimate of how much they can expect to invest. Two things happened here. First, I’ve taken control of the conversation, and I’m the one asking the questions not them. Second, you notice I use the word “Invest” instead of “spend”. It’s a small thing but the words we use are very important. Spending indicates how much it will cost them. Investment indicates that they will reap a return, hopefully bigger than the money transacted. I now have control of the conversation because I’m the one asking the questions. The purpose of the questions is to establish need. I’ve created a form in our studio with these questions and we are able to fill in the blanks as we ask the questions and record the quotes so that when they place their order we are equipped with all the information needed and make sure the customer gets the thing they initially wanted when they called. This makes it much easier at the time of the sale. If they indicated they were interested in a wall portrait, we don’t have to guess at the sales session if they want a wall portrait. It’s now just a matter of size. As we write down all the answers to these questions we will save this form and use it at the order appointment. The first question I ask is:
  · Do you need this portrait by a certain time? (Can we deliver?)
  · Does the portrait need to be taken at a certain time? (Are we available?)
  · Who is the portrait of?
  · How many people will be in the portrait?
  · Are you looking for something casual or dressy?
  · Is this a special occasion? (need)
  · Who is the portrait for?
  · How did you find out about us?
  · Do you know anyone we photographed?
  Optional questions. If yes
  “What did you like about the portrait?”
  “Are you looking for something similar?”
  · If no
  “Have you seen any of portraits”
  “Have you visited are website?”
  · How do you plan on displaying the portrait? Are you looking for something to display on the wall or were you looking for something little smaller like an 8x10?
  When asking these questions, the prospect feels that we’re really interested in them and want to create the best portrait and experience for them. This helps to establish the repore’ that I mentioned earlier in this article. The last question we asked is a very important question. We want to make sure we tell them how much they plan on investing before they have to ask a second time. With the information we just assembled we can now qualify them and give them a range of how much they can plan on investing. This is closing the sale. It’s called a trial close and it goes something like this. “You can probably plan on investing somewhere between $300 to $500 depending on the sizes and quantities. The good thing is you don’t have to decide until you see the portraits. We also have a 100% money back guarantee. If you’re not completely satisfied for what ever reason with your session we will gladly take additional photographs, or refund all your money. What would be better for you? We have some openings on Saturday March 15th or would something during the week be better?” Two things are happening here."
  1. The money back guarantee is called risk reversal. Minimize the risk on the customer and put it on yourself. This eliminates buyer resistance.
  2. This is called an assumption close as well as an alternate choice close. We assume that they want to book and we give them two choices when to come in. Notice that I didn’t ask them if they wanted to book. I just assumed and gave them two options. If they are alright with the quote you are most likely to close this sale.
  The next thing to do is collect the session fee. All session should be prepaid. When people invest their money they are more committed to show up. Also this helps out on your cash flow. You can use the alternate choice close by telling them that all session are prepaid. “Which credit card will you be using? We accept Visa and master card.” Don’t ever be afraid to ask for the sale. The next article will deal with selling in the cameraroom.

Roles and Stewardships

Roles and Stewardships

In running and owning a portrait and wedding photography studio, there is more to it than just taking nice pictures. To be successful one has to assess the various roles and activities that that are required to run any business. Many aspiring photographers and even many of the seasoned ones find themselves on a runaway train trying to keep up with all the other responsibilities of running a business. They have a tendency of attending to the business that is immediately in front of them, the more urgent things. Time is a businessman’s most valuable possession. My goal and objective is to address some of the areas that need attention and sometimes are neglected, and make some suggestions and give you solutions so that your business can be fun, profitable and successful in any way you want to define success.
As a business owner we wear many different hats. We become accountants, IT technicians, human resource managers, salesmen, marketers; the list is never ending of the roles we take on. In Michael Gerber’s book, “The E Myth” he takes on this challenge and states that once you start making money at the thing you love, the thing you love you will soon grow to hate. The reason being that the business takes you away from the very thing you love, photography. It requires that we tend to the roles previously mentioned, and if we don’t address them we are doomed for failure and burnout. What’s the solution? In a nut shell it is two fold. (1) Outsource some of the tasks and (2) delegate.
The first thing I would suggest is to list and define all the roles in your studio. A sample list might be salesman, marketer, trainer, accountant, retouch artist, production, photographer, IT technicians. After having made this list take each role and write a detailed job description for each. For instance it could be the sales person’s job to deliver proofs, first to answer the phone, deliver finished orders. Then decide which roles only you can perform, which ones you can delegate and which ones you can outsource. You have to be entirely honest with yourself. You might think that no one can do the job as good as you, but that usually isn’t the case.
In order to maintain some types of organization it is necessary to define the roles and assign stewardships to each role in the studio. Even if there are only 2 or 3 people in the studio, defining the roles makes it much easier to get control of your time, and delegate certain responsibilities. I use a flow chart and my main responsibility is to do the photography and the overall marketing. Some of the other tasks such as answering the phone, doing sales projection appointments, delivering proofs and orders are assigned to other people in the studio. Almost never am I the first one to answer the phone. There is a pecking order, and on the flow chart it lists the 1st, 2nd, and 3rd person for a particular task. The tendency is to just handle the task if it’s immediately in front of us. This is not the most efficient way of handling things and can cause a lot of confusion and mistakes. Time is your most valuable resource. As a studio owner if you want to know how much you’re worth per hour take your total sales and divide it by 2000. 2000 is approximately the number of hours you work every year. If your sales are $150,000 and are divided by 2000, your value as an owner is $75 per hour in gross sales. You don’t want to be putting orders together or doing retouching when you could probably get someone to do that task for $12 to $15 dollars per hour. Remember the goal is to make a reasonable profit and maximize the dollars per hour. When we think we are saving money, it’s really costing us more in the long run because you are not using you your most valuable resource (time) to its maximum . This type of planning might seem unnecessary and burdensome, but for every hour you spend on planning you’ll save at least 3 hours of work.
When you assign a stewardship to an employee, it gives them ownership, responsibility and autonomy. You don’t want to micro manage every task. You can recommend a method, tell the employee why you think it should be done that way, and describe the pitfalls they might encounter, but in the end just be concerned with the outcome. Give them the responsibility and ownership of their stewardships in their role. They will perform better, and have a sense of pride in their contribution to the business.