I’ve spoken about pricing your services here on Filmmaking Lifestyle before. We also had a very well received expert roundup on pricing not too long ago. People like Vincent Laforet, Larry Jordan, Ron Dawson (and others) chimed in with their thoughts on pricing your services.
Still, I didn’t say much personally in that article — I kinda handed it over to my friends — so I still have a lot to say on the subject of pricing your services and video production costs.
If you haven’t already read that article, I recommend you do so. Because I’m going to go quite advanced in this one.
Pricing Your Services — How Best to Do it
Here are a few opening thoughts.
1. Never give the prospect a single solution
Always have at least two choices — one being a super deluxe one with all the bells and whistles, and the second a more “economy” version.
You don’t want to be a “one size fits all” company. By giving options, you suggest a premium feel to your work. No one wants to deal with a one size fits all solution.
And always, always present the most expensive option first!
If the prospect bites on the expensive one, you will earn a lot more money. But here’s the killer:
If the prospect says no, it doesn’t end there. You then present the economy option.
According to Robert Cialdini, you greatly increase the chances of the prospect buying the second option by anything up to 300%.
There are many reasons for this: some prospects feel guilty at saying no to the first option, equally others genuinely can’t afford the more expensive one.
The moral of this technique is that if you keep going — even after a hard “no” — many prospects will still buy as long as they like you and your product, have a genuine need, and see real value.
Actual results: 28 videographers I know were given this strategy by me and asked to use it for 12 weeks.They were then asked to provide anonymous feedback.
Of the videographers who took part, 96% had noticed a substantial improvement in their close rates. The average improvement was a 56% increase in closing.
Maybe Cialdini is on to something!
2. Before presenting all the major benefits of your video solution, identify a minor disadvantage that isn’t a fundamental deal breaker
And once you done this, you then give this to the prospect first before you present all the enormous positives.
Here’s a fictitious example for a life insurance product:
“Mr Prospect, before we look at how the ACME plan will protect you and your family, there’s something I need to tell you first.
Although the ACME plan is the best in it’s class, unfortunately it doesn’t provide cover if you decide to do extreme bungee jumping in Central America.
Aside from that, it will pretty much cover you for everything else, but I thought I should draw this to your attention first before we look at the plan in more detail.
So, are you likely to do any bungee jumping in Central America?
No? Well, that’s great. Here’s why the ACME plan is the right one for you…..”
This approach works because most people subconsciously expect most sales people to lie about the products they are selling, or over-exaggerate the benefits and hide the drawbacks.
And they will, therefore, expect the same from you as a videographer. Because, despite selling something that offers a creative (or even “artistic”) solution, you’re still selling them on something, right?
By giving a (minor) drawback or disadvantage upfront, the prospect is far more likely to think of you as a trusted adviser rather than a salesman.
Note: This technique also ties in with the classic sales technique where you tell the prospect “We are not the cheapest….” upfront. Not only does this weed out time wasters, but it also helps you to come across as a more genuine and trusted adviser.
Actual results: They’ve only had this strategy for two weeks, so a little early to tell. Having said that, I’ve had 6 emails so far from the group of 26 videographers who have already used it successfully to close deals with new clients.
And yes, this is another Cialdini. 🙂
Before I talk in more detail about the above pricing strategies, it’s important to know where the buyer is in the buying cycle. For example:
- ready to buy now,
- interested in buying needs more build up, or
Selling video services to businesses when I don’t have an established trust or brand in their market
When you enter a new market, it’s doubtful tat you’ll have established trust or a brand that the companies in that market recognise.
Sure, you may have a strong referral. Or maybe you have great testimonials that give credence to your awesomeness.
By moving into a new market, what we’re talking about here is when you start selling your video production services to different types of companies. For instance, you’re known as the conference/event/seminar shooting guy in your area, but then you decide to move into filming industrials.
Price is an exchange. Whatever the dollar amount people must feel they are getting more value in the offer than the money is worth to them.
You need to sell your services and suggest it’s an offer (they have to see and believe), that they are paying less than its worth. But don’t make your services sound cheap — there’s a fine line between making your services look like great value for money and coming across as some kind of bargain basement cheap and nasty.
Here’s a little more on this process:
STEP 1: The first step is priming/positioning.
I need them to know what I am about before the meeting — this one has cost me lots of dollars not following this.
You need extensive marketing and proof elements to sell five figures without being seen. In most cases, you will need to meet them.
STEP 1: I first determine the dollar amount that their problem costs or that they will get in return based on conservative estimates.
Not everyone will buy based on dollar amounts. Sometimes people will throw a lot of money at a simple problem because of the emotional attachment.
STEP2: I have to find out what they want and what they hate and constantly talk about that so they will connect what I am offering to that. This = much less price resistance in general.
STEP 3: Now to the close.
Never make price a binary decision. Get incremental buy in and commitments along the way. Then summarize the benefits that they’ve stated and committed to.
Give them options.
I have gotten more sales and no resistance when I went in there super focused with my burning desire = pumped up. Objection handling comes naturally at that point (I have found people are natural objection handlers when they really want something).
Sometimes I’ve walked in there nervous and without having done the priming/positioning step properly and I got blown out.
A while back, I lost the opportunity of a contract with a pretty large brand because of this. You live and learn.
[These silhouetted guys seem to know what they’re doing. Do what they’re doing.]
Evolving The Way You Explain Your Video Production Costs
Price discussions never occur in a vacuum.
This means that price shouldn’t come as a bomb at the end that derails the entire process. Price is part of the expectation that you manage from your first conversation to the last.
You have to think through how price fits into your overall value proposition, the customer’s preconceptions, and your competitors.
Once you’re clear on pricing, you can determine how to position it.
For example, early on, get the prospect to make some commitments and explore their real buying drivers. Some will always buy the lowest price — you need to find that out. Finding that out as soon as possible is in your best interests. It will save you a lot of time.
Others understand that price is not the buy sticker, but the entire life time cost and the value proposition, including the opportunity costs.
Finding out the right mix that they’ll buy on is as important as the final price you get to.
Finesse must be used here. The more rapport you’ve built, the harder you can step on their toes.
That is why I don’t start my qualification process by asking (as most books and sales training teach) what is their budget or what do they expect to pay. I back into that by finding existing costs, existing vendors, existing wasted money. That allows me to build a ROI (Return on Investment) upon which I base and sell price on.
Value Trumps Price. Everytime
Yes, you heard that right: Value trumps price.
Buyers and salespeople almost always use price as the reason a sale fails, but the truth is:
- The prospect didn’t have the money to begin with.
- The prospect really can get the same value cheaper and they know where.
- You haven’t communicated the value or the prospect can’t understand it.
Each of those has to be dealt with not at closing, but during the sales process.
Like all objections or sales killers, you need to proactively answer them early and often, getting and confirming buy-in as you go. Then you getting to the end price is a matter of negotiation where they feel they’re making an even better deal — not getting out of the deal.
Price is an exchange
Whatever the dollar amount, people must feel they are getting more value in the offer than the money is worth to them.
In my video business, I say things like:
“You know my brand isn’t the least expensive. However, because my videos are much more well crafted and scripted than my competitors, my customers have found that they end up making far more money.
For example you can buy an inexpensive car, but if it leaves you on the side of the road the upfront savings don’t seem like such a good deal after all.
How do you feel about that?”
Make no mistake about it, as working filmmakers, or video business owners: we are salespeople for our own work and companies.
Our job as salespeople has changed. We used to be information-givers and consultants.
The internet does the information bit now (and does it well!)
So now we are “buying facilitators.”
That means we have to make doing business with our companies easier and barrier free.
What that means regarding pricing is that we need to break pricing down into digestible pieces.
What does that mean in practical terms? Things like:
- Can we offer a monthly price?
- Can we make a capital purchase an operational expense.
- Can we make the price look smaller through comparisons or by use?
I’m so skilled now at breaking things down into “digestible pieces” that I even do it naturally with blog posts now. That’s why you won’t find frustrating walls of texts with no paragraph breaks at Filmmaking Lifestyle!
Coffee is for closers
Now to the close.
Like I said earlier, never make price a binary decision. Get incremental buy in and commitments along the way. Then summarize the benefits that they’ve stated and committed to.
This is important.
Build your pricing case on what you learned along the way. If you know the budget or their price expectation say:
“Al, earlier you said you expected something like this kind of work to improve you sales to be worth $5000. We’ve got options that cost less and cost more. Lets review your needs again so that we can find an option that fits.
However, let me ask you, if there is an option that fulfills all of your criteria and I can get it to you below that $8000 price, would you buy it?”
Or, you could say:
“Al, we’ve talked about the different options I have and that your budget is around $8000. I’ve got to be frank with you here, based on your needs, I don’t think we’re going to hit that price? What do you think we should do?”
Selling is not a science but an art, and tips need to be adapted to your market and the kind of budgets you’re dealing with.
If you are selling educational videos to the government with a starting budget of $100,000, you won’t use the same techniques, wording and strategies as someone who sells $1000 promo videos to Derek the local petshop owner (he’s a good guy, btw!)
Remember to use common sense and good judgment when applying this advice. And, remember, as much as you might not like to admit it: we’re all salespeople. We’re selling our businesses, our services and ourselves every day.
I hope you’ve found this article on pricing and video production costs helpful. Any questions, comments and thoughts, let me know in the comments just below this article.
And if you have anything to add, I’d like to hear from you in the comments below — especially anyone who has a track record of selling high-ticket video services who like to chime in with more ideas. And please feel free to use the share buttons below to share this article with your network.