Real Estate Photography Building Blocks: Market Analysis – Pricing Strategy

Real Estate Photography Building Blocks: Market Analysis –  Pricing Strategy

I’m Kevin Klages and welcome back to the iGUIDE Building Blocks channel. How you decide to price for services is critical to your business. For this Building Blocks episode I’m talking about pricing and profit and I’m gonna be referring to the pricing and profit worksheet that we use with our new iGUIDE Pros. There are five sections to our pricing and profit worksheet: our pricing and profit summary, labor costs, service costs, hardware costs, and lastly business targets. To start I asked our pros a few simple questions: What do you charge for a 2500 square-foot home photo package? How many photos does that include? Next I ask for some labor details How much time does your photographer spend traveling to and from appointments? Typically, it’s about 30 minutes. Then I ask how much time the photographer spends shooting photos for that 2,500 square foot home. Next I asked how much time the photographer spends completing the job. I break this down between editing images and uploading and transferring the files. If pros are using a third-party photo editing company I enter that cost in the service section and I zero-out the time for the photographer’s editing. For the iGUIDE labor section we have a benchmark of 30 minutes shoot time and ten minutes post-production time. Travel is already covered with the photography and you should have little to no editing time for your typical properties. The other section I complete is your service costs. I add in the iGUIDE processing fees, I add in the photo editing costs, and I include any other direct costs like booking, scheduling, and invoicing. I typically bundle those up and benchmark ten minutes. With all this information entered, I now start analyzing the pricing program. I start by looking at the photo packages first. I look at the photographer service costs. Does the compensation look attractive? Could I get entertain good photographers for this amount of money? If not, I start to adjust the compensation percentage until the dollars make more sense. Then I look at the gross margin. Am I within the range of typical service companies? Once I’ve done that, I go back and I look at my competitions pricing: am I competitive with the businesses who have the clients that I want? If not, I start to play with my numbers until I have a package price that I can win business with, and margins I can be happy with. Once I’m done looking at the photo packages, I start looking at my iGUIDE packages. My goal is to maintain the same margin for my photo packages for my iGUIDES. I start by using the same margins, then I go back and I look at my competition’s pricing for similar services: am I in line? If my prices are lower or significantly lower, right away, I’m happy because I’m hitting my profit dollar and margin goals. I caution all iGUIDE pros from setting prices based on market rates without understanding their own costs and profits first. There’s one last section of this worksheet that I call business targets and it’s a great test. I talk with the pros and I want to find out what their profit goals are. Then I translate that into iGUIDE tours to see if this is achievable. Whether you’re just starting your real estate photography business or you’ve been at it for a while, a pricing and profit analysis is a great process to go through. Our pricing and profit worksheet is available for you to look at and use. There’s no doubt that this information has made us more successful, has made many of our iGUIDE pros more successful, and can help make you more successful as well. Thank you for your time, and if you found this helpful subscribe to our channel so we can let you know about our next iGUIDE Building Blocks video.

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