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AN
ESSAY ABOUT RECESSION-PROOFING YOUR BUSINESS (more added today)
I've been in business through two recessions. Business
proceeded in a healthy way and my numbers continued to grow. I had to
do some adaptation and what really saved me was getting prepared before
the pullback arrived. Here's what I did:
1) Photography-related services - relationships
are recession-proof. In fact, in hard times the referral
base became even more loyal and devoted. Rocky Gunn gave me the
simplest, best advice I have ever gotten in a single sentence...
"nobody needs another salesman knocking on their door, but everybody
could use a good friend". In rough economic times, good friends are
even more valuable. My transcriptionist is really good. And I just
wrote her an email and it said, "you're so good, I'm going to use you
FOREVER!" Customer supersatisfaction is recession-proof.
Family is even more valuable. It is SO easy for a
photographer to make a huge increase in revenue by simply adding new
revenue streams to an existing business. Here's a great example:
 I have a friend
who is an amazingly successful photographer here in Los Angeles. His
name is Joey
Ikemoto. His business does close to a million a year. He has
an unbelievably loyal clientele among the japanese-american community.
He has been in business for probably 25 years and went through the same
recessions I did.
One day I was visiting him at his former little studio in a
strip mall, about 23 years ago. He had a huge staff of photographers,
and he was doing something like 200 weddings a year with a healthy
average. He shot many of these himself, and his business was all
referral. While all this was going on, he actually had a full-time job
as an x-ray lab technician at the local hospital! He was making
something like $30,000 a year working this job, while his business was
grossing in the many hundreds of thousands. I asked him why he had the
job, and he said, "security". So I got out a calculator and said - OK,
let's just assume you sell one additional parent album to each of your
weddings. Say you had a $195 special for parent albums, and include
some of the unused proofs in your orders. There's $40 grand right there.
It was wild, but that suggestion really registered with him.
He quit his job, focused his energy full time on his studio instead and
expanded it greatly with intensely higher profits. He now has one of
the largest, and most beautiful studios in California.
If I were a photographer today, I would simply add new
relationship-sensitive low-initial-cost portrait sessions to my
offerings. If you have a loyal clientele anyway, who love you as a
person as well as a photographer, then it is a super easy thing to
collect them in front of your camera again. Missy brings her Canon with
the L lenses to horse shows, and a lot of people come up to her asking
to see the images online, which result in sales, completely out of
nowhere.
I remember when I did children's portraiture. I did it differently, we
would just go to a park with the mom, and I would make it a point to
not shoot right away, and just talk to the mom. Ignoring the child at a
playground is a guarantee that this kid is going to be a performer. The
more I acted disinterested, the more they would go, "Hey Mom! Look at
me go down this slide!" Then they would try harder and harder to show
me how awesome they were. This is when I would start shooting, and I
would get the most awesome photos of the kids.
While at the playground, I'd show the LCD of the image to the
kids, who would go wow, and the mom would go wow, and the next thing
that would happen is another parent would come up to me at the
playground and ask for my card. I would give them my website address,
and a link to today's session on Pictage. This would turn into another
session - so long as the shoot fee was low. Then I would let the prints
sell themselves.
In a recessionary economy - remember that people become very
negative and careful with their wallets. So having a large up-front fee
is most likely going to result in an empty calendar. I would much
rather shoot on spec than with a large upfront fee. While that may work
with the ultra high-end customer with a lot of discretionary dough,
it's still risky. I remember that I used to do engagement sessions for
$15. That's right, fifteen bucks. And I always sold nearly $300, and it
took me not even half an hour to do. Same with weddings. Having a low
up-front fee and selling a large volume of images once I 'owned' the
right to sell them exclusively was my ticket to prosperity. Later, I
would do high-end stuff, but that took years to earn that clientele. I
had it great from the very beginning by starting with a low fee,
predesigning albums, and selling reorders. My calendar was completely
full, and my average sale was multiple what other studios were getting.
Another thing I want to add, I never paid to advertise my studio. I
never did ads or bridal shows. Those are so expensive and what they do
is bring you a skeptical prospective customer. They're skeptical
because they found you through advertising. So not only are you
spending money on attracting the wrong kind of client (the client you
REALLY want is the one who heard that you are the best friend they
never had, with a camera and a smile!) Who would you rather meet with?
The awesome person who shot your best man's wedding, or someone who you
saw in an ad in a magazine? Exactly!
When things got hard for me, I put extra effort into
improving customer satisfaction. If every client who uses you drags two
people by the ear into your business and insist that their friend use
you, your business will grow regardless of the economy. Think about it
- we all know a business or service that we swear by- tell all of our
friends about, right? BE THAT BUSINESS! And you will have a clientele
that will remain solidly, stable and growing.
I know how to play a recession, even a deep one. The first
thing I did in my products business was start to develop lower-cost
products like the $19 Puffer or $29 Origami. Sales were up 194% YOY for
GFI because of this. I knew that there would be a risk with higher-end
pro lighting attachments like the Whaletail or Lightsphere, so I
started preparing to market smaller trinkets.
I would do the same with photography. I'm not saying lower
your prices in response to a recession, I'm saying buffer up the
consumer fanaticism (loyalty) by endearing yourself to your clients.
Foster that referral, and then have products which have a low-cost
entry point. Once you produce beautiful images, sell the images and not
the session. Increase the volume, diversify your offerings into more
types of portraiture, and you will be fine. In fact, overall I would
say you could prosper in hard times.
With all sincerity,
Gary
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| | Posted 1/26/2008 10:39 AM - 31634 Views - 113 eProps - 78 comments
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Marc Weisberg: in the beginning there is more resistance to the predesign. I found 1/3 did massive reductions, 1/3 removed a third, and 1/3 removed less than a third. As time goes on and your referrals become further down in generations, you'll find that the incoming referral is very aware that the albums could be larger. This is a key part of the Storybook concept - you invest your efforts in the early weddings - remember the goal is the referral... not so much the check. The goal is to have every bride replace herself next year with two. That's the goal. If two people are vying for the same spot, then you have upward pressure in pricing.
These basic strategies work all the time, in good times and in bad. Sickness and health LOL