Explaining a hike in cost

[d2creative]

Hi, I did a commercial job for someone recently that I ended up way underbidding. This was an accident, mainly due to inexperience with this particular client and not quite understanding how the shoot was going to work that day. I gave them a quote for a full day shoot, expecting to do a certain number of shots in that time, and we ended up shooting at least triple this amount. We moved so fast that day. So i totally lost my butt in post processing.

Anyway, when something like this happens, how do you explain the higher cost of the next job when they come back to you for more work?

[Tom]

I would flat out tell them that the previous job ended up being a bigger job than I expected and I lost my shirt with my low bid, but I took that loss and produced great work you are happy with.

[WarrenG]

Dennis,

I have been there before! Generally, I am pretty honest and forthright about it. I would explain that there was significantly more work on the back end (PP) than you typical include in your day rate. Let them know that if you have another project that is similiar, you may need to charge an adder for the extra back end work. Come up with a rate that covers you, but is fair.

W

[HotHolly]

I dont think you have to explain at all. When people explain, I tend to think they screwed up. In the business world, screw-ups arent something that are really desirable. In other words, I dont think you have to justify your higher prices by saying your undersold your services last time.

Just raise your prices, give them the real price, and dont apologize for it. If you try to sell your services by justifying your prices, you're digging yourself into a hole, and eventually you'll get trapped in it.

[SJHester]

I'm not in the photography business, but I am in business. I agree with Holly, don't explain, just give your real price. If they were expecting to get a low bid from you, then they will ask. At that time your in the drivers seat (knowing they got higher bids from others and expected yours to be low), you can say you purposley underbid the previous job to get their business (to show them your work and quality), but now you have to charge your normal rates, as you really lost money on the last job, but were willing to in order to get their business the first time.

Just a thought

[d2creative]

Thanks for the replies!

How do i not explain?
They will definitely ask why it's more than before.

[SJHester]

Just don't. I recently had a contractor do some work for me. I had him bid a second job (one i thought would be cheaper) but it was more. I got some other bids, found his to be in line, and because i worked with him and liked his work (and working style), i went with him. Never even thought to ask why it was more, the other bids sealed the deal.

[bryanlindsey]

I wouldn't offer an explanation at the begining, but if he asks I would be prepared with a BRIEF statement - something like "The last job was much more work than I was expecting, and I ate the cost. I can't afford to do that again."

If I was a customer and you said "prices are higher" and had no explanation whatsoever, it would really turn me off.

[ldelacruz]

If you had done a job for me and I hired you again then I would absolutely question your higher pricing! I would prefer that you were upfront to me and say that you made a mistake last time and the job ended up being more work than you quoted.

[jeffkohn]

Originally Posted by bryanlindsey

I wouldn't offer an explanation at the begining, but if he asks I would be prepared with a BRIEF statement - something like "The last job was much more work than I was expecting, and I ate the cost. I can't afford to do that again."

If I was a customer and you said "prices are higher" and had no explanation whatsoever, it would really turn me off.

Agree on both counts.

[HotHolly]

It depends on how much time has passed b/t jobs. If it was yesterday, the question will be prompted whether you prompt it or not. If it was last year - well that was last year.

I also think (many times) WE are the person who prompts the question in what we say to the client. They are following your lead. If you feel like they are gonna ask, then something you are saying is leading them that direction. And many times it's b/c you don't feel like its OK for some reason. It makes you uneasy. Uneasy people talk more than they should.

And you dont have to be defiant and not explain on purpose. Its not like that at all.

Similar example - My boudoir prices went up from this time last year. The min session fee more than doubled. The top of the line session fee from last year tripled. Why? Well, I could tell you why for a really long time. And I would ramble if I felt I had to convince you. But since I dont feel like I have to justify my prices to you, I would just say those were our prices last year. Due to supply and demand, the prices climbed to where they are now. Which package do you want?

Does that make sense? Its an answer, but there is no excuse in it.

btw - I own another business where we have to work with contractors and other vendors. NOTHING is ever set in stone until you pay and prices flux like crazy right now. Its part of working with individuals, and expected. Ive found some vendors are cheaper at certain times of the year, while at others they are 3x as much money. Its part of business imho.

[dmcantrell]

I've often found that, in a business negotiation, the one who does the least amount of talking ends up on top.

Sometimes, when I am in the midst of a negotiation, I'll pause -on purpose- to force an uncomfortable silence. Usually, the one who breaks the uncomfortable silence gives something up in the negotiation.

[jeffreypkane]

There is also some "supply and demand" - it is possible that the first job you shot was done to back-fill another customer that cancelled - and you gave your client the benefit of that income.

Another idea might be to simply put the same price on the table, with a more closely defined scope (pp, quanttiy of images, etc) so they see the same price, but you have defined the parameters better - this assumes that you'll made adequate profit by doing so.

The real variables would seem to be availability, scope and price (not cost) in this equation - you control all three - and I would use them as dependent levers during discussions/negotiations.

[WarrenG]

Wow, I am pretty shocked at some of the responses. I took this as an "ongoing assignment" situation (say an agency or pr group). When I get called for a job from one of them, they pretty much know what my rate is, and have a decent idea of what I will charge for the assignment. If I suddenly said I was charging 600.00 more, they would most certainly ask why I had increased my prices.

While I see Holly's point about "explanations", I cannot agree that by giving the client an "explanation" it equates to trying to justify ones self? I also cannot see how that reflects a "screwup" in the work?

Now, I can see if someone underbid due to inexperience, and then tried to get an adder for the work. But if an assignment is normally X, and then winds up being Y, I have no problem stating to the client (on the next job) that the last project was really a lot bigger in scope then the ones you normally send us out to do. If we have another like that I will need to charge some more.

Now, as I sit here typing this... I guess I can see some of the perspectives here if it was a job you did once or twice a year? I guess I was really speaking from the perspective of commercial, corporate, or editorial type work where you are doing a fair amount of volume with them. I mean, I have pretty good relationships established with those clients, so I would not hesitate to explain why I needed to charge more, and I would not be worried that they felt I had messed up. In fact, if I didn't explain, I might not be on that call list for the next assignment.

Just my .02 cents

[HotHolly]

Originally Posted by WarrenG

I also cannot see how that reflects a "screwup" in the work?

Now, I can see if someone underbid due to inexperience,

That's the flag. Admitting underpricing your work flags that you were green. As a business owner, inexperienced workers have a price - that I will pay as the business owner. Sometimes its worth it. Other times, it most clearly is NOT. If you bluffed your way through the 1st time, I wouldn't shoot up the flag now.

And you are 100% correct in thinking you'd explain if it was a week to week gig. I agree with you there. It sounded like some time has passed. I assumed less than a year, but that the price hike was enough to make the OP feel like he needed to explain it.

In teaching workshops and hearing new photographers talk about pricing or what they tell their clients...oh my. Too many people are trying to justify prices that are leaving them underpaid. Several will figure it out at the end of the year when their account smacks them in the head.

It may not be the case in this post, but that is what it reminded me of. People who dont value their services as they should tend to feel the need to convince the client why they cost what they do. Those who are comfy with their prices dont apologize and rarely explain - mainly b/c no one thinks to ask them. Their demeanor is different.

I think either extreme is incorrect - you shouldn't refuse to explain and you shouldn't over explain. There is a happy middle where you can say your prices went up because you're awesome, smile and ask them to sign with you again. Its kinda hard to communicate tone in a post. I hope you get the idea...