Pricing Comments from Bill McCurry

   Two weeks ago we published my comments on pricing and the need for your pricing to reflect the true market value of what you are giving your customers. Thank you to all those who sent in comments - You're right, pricing decisions determine your success or frustration.

   Many otherwise savvy readers "just don't get it on this issue" - do you get it?

   Your customers aren't coming to you for lowest price (if you work at Wal-Mart, excuse this last comment, it doesn't apply to you.) If you're a specialty store, your customers expect to pay more than the lowest price. They expect to get value for what they are paying. Give them value. Give them a rationale for spending more with you so they feel they are making a logical choice to spend more and get more.
(If you want proof of this, email me and I'll get you the latest NPD Techworld information on customer satisfaction in the specialty photo channel - photo specialty customers are very happy with the value they are receiving.)

   Some of you are lamenting the drop in roll volume. Others are embracing the opportunity digital brings. Many successful labs are promoting their "Gold Package" or "Full Service Package" which includes a CD, sleeved negatives, double prints and replacement roll of film all for the special price of $24.99 . . . We've seen some labs advertise this at $19.99 and one at (my humble opinion) the ridiculously stupid price of $14.99 - - - What price you charge is important. So is the perception that you give your "best package". If your customers are coming to you for quality, give them an upscale package with an upscale price.

   Pricing and packaging go together. You should be delivering a lot of images on CD. Are you using a distinctive gold CD with the highest image storage characteristics? Are you telling your customers this is a special "photo archival CD"? Or are you using the cheapest CD you can find so you look like everyone else? Is your CD package worthy of your store's name or are you trying to shave a half cent off the package cost? You wouldn't put your traditional finishing out the door in a plain brown wrapper, don't do it with your CDs.

   Look at the services now available to your customers if you have a digital lab. Bordered prints are back with some labs charging $ 0.50 per roll surcharge, one west coast lab is getting $5.00 per roll and a few labs are giving it away. Does giving it away create demand for your D&P? If not, reconsider what you charge for this service. It's not what it costs you to do the service; it's the benefit the customer gets from it. What you need to get from your customers is enough revenue to pay the higher lease payments and service contract costs that your digital lab has created.

   Bordered prints are only one example. What about all the other services you can offer that you hadn't thought of before like cropping on standard size prints for $2 fee? Don't offer this at no cost as it has a high perceived value.

   Next to hiring decisions, pricing is the most important decision you can make. Don't sell you or your organization too cheaply. Deliver the value and earn the profits you deserve.