Some thoughts on charging clients for your services...

ClipMan wrote on 5/12/2005, 12:00 PM
.. when I first started out in this business, my approach to clients was to be competitive and give them a better deal than they could get elsewhere... this meant I had to analyse all the market segments and compete with pre or post production houses, with other editors and with all the wannabees with software out there.... this also meant I had to do business on THEIR turf and I wasn't generally successful or happy or making any money ... using this approach, I found that my prices were always being compared to others and if I gave them competiitive prices, they'd still go with the more "established" studios.....

....I also used to put together highly competitive "package" deals and charge for the amount of "glitz" they wanted but I'd lose out anyway to some twelve year old wannabee who would do it for the price of a Britney Spears concert ticket and do it from his bunk bed....

... then I said to myself, hey ClipMan, why do you wanna torture yourself? Forget about competing on their turf and become a "media consultant" that offerred solutions to their "communications problems". ... suddenly I was on a different playing field and all I needed was to make sure I never left money on the table ... this meant smartly estimating the size of the project, whatever it was, and multiplying the hours by what my time was worth... it was never worth less than 40 to 50 dollars an hour and mostly 80 to 100 per hour.... it didn't matter what the nature of the work was ... editing, post, pre, directing, producing or defragging their computer ... all that mattered was at the end of the project, I made money and they were happy with the "solution" to their problems........ when it came to out-of-pocket expenses, I'd pass it on to the client as previously arranged and NEVER put a mark-up on it... there's no faster way to lose credibility by marking up a piece of equipment they can compare prices with a million catalogues out there...

... so, how am I doing? ... once I acclimatized myself to the fact that I will never direct, produce or edit a Hollywood movie and to the fact that I will never lose money again, I'm quite OK, thank you...anyway, this worked for me .... FWIW ...

Comments

Dan Sherman wrote on 5/12/2005, 12:17 PM
Hey Clipman,
You became a consultant.
How did that change things?
You're still really doing video, but just under another title.
You still have to compete for the same business against the same competition,---right?
What changed?
'splain to me again, slowly this time.
ClipMan wrote on 5/12/2005, 12:32 PM
>>How did that change things?<<

... for me, it immediately stopped the comparisons to other production houses ... does the client just want to pump out finished or rough cut video or does the client want a novel approach to his communication problem..? ... most clients make emotional decisions when they buy, not necessarily on price only ... this has been well researched and documented ... in business terms, it's called Value-Added Services... and yes, I do lots of video....
PossibilityX wrote on 5/12/2005, 12:58 PM
ClipMan, I kind of understand what you're saying.

As long as people can be and are affected by WORDS, titles can have some sort of bizarre pyschological / wallet-enhancing effect. For instance, why is "gambling" called "gaming?" I bet it's because they've learned they can fool most people into thinking they're PLAYING A GAME instead of LOSING LOTS OF MONEY, just by switching words around and convincing everyone else to use the same words.

(By no means am I suggesting you're doing anything wrong or deceptive, by the way.)

Here's something else I've found interesting, though I've never tried it:

I think the guy's name is Ted Nicholson. Not sure on the name, but he wrote, published, and marketed a number of books including one you may have heard of (probably still in print) called "How To Incorporate Yourself Without A Lawyer for Under $75."

I listened to Ted talk about pricing. He said they would test different prices on the same book to see which price was most attractive. For instance, they'd send 1000 cards offering a new book for $20, 1000 cards to different people offering it for $30, and so on up to maybe $100. Based on sales, they'd know how to price the new book.

Surprisingly, most people bought the book at the mid- to higher prices, say $50 to $70! Why? You tell me---it was the same book! (Though obviously, in the test marketing, few people recieving the postcards knew of the other offers...and if they found out, Ted would refund the difference and give them some free books, along with an honest explanation that they were price-testing.)

My point is, if you wear a suit and call yourself a consultant and charge 25% more than everyone else (and, of course, do really good work!) sometimes people just ASSUME they're getting something better, and their wallets open faster. That's why Rolls Royces aren't "cars," they're "motorcars" and are "elegant." Kinda makes me gag, but evidently it works.

I bet Walter Murch has edited film in his underwear while drinking a beer, but if people saw him doing that they'd be frightened about his ability to edit. Go figure---it's the same Walter who occasionally wears a suit.

So more power to you. If you come up with another term that makes even more money, please share it with us. I think you're being smart, especially if it works.
ClipMan wrote on 5/12/2005, 1:13 PM
>> bizarre pyschological / wallet-enhancing effect <<

.. clients enjoy dealing with a "personality" and not a room full of production people regardless of how well they do their craft ... today, all successful businesses, large or small, have a "personality" either on payroll or chosen and bought from among dozens of high profile sports or other media personalities ... the lone editor/producer must convince his/her clients that there's added value in working with them ...
Dan Sherman wrote on 5/12/2005, 2:36 PM
Decided, about a year ago, when I left working for others in radio/TV for 30+ years to work for myself. So I set up shop and offered my work-related experience as a videographer. Struggled with a name, then decided to use mine. Also have my mug and a bit about me on website, All sounds egotistical I suppose. But I beleive business is about people. A VP with a lot more experience than myself agrees. He says, "it's ALL about people."
Business is slowly picking up, But I'm committed to succeed. Too far into it now! And the more I learn the more I'm beginning to realize it's about marketing and perception. Not decpetion. But beng set apart fro the long list of people now doing this full-time,part-time, as a hobby, as a retirement thang, as the video guy at church etc.
I think you've got something Clipman.
Our job is solving problems,---communcating mostly,---be it advertisiing, training, bios, whatever. Our service is never "video" as in the wedding guy (not that there's anything wrong with that). But to move on to the next plateau. We need to get away from the video guy image. Maybe video's even a bad word. When i say "video",---people say "wedding". Not that there's anything work with that. Just not my cup of tea.

ClipMan wrote on 5/12/2005, 2:44 PM
>> But I'm committed to succeed.<<

... and that's why you will ... ask any entrepreneur how he/she became successful ... they'll all tell you the same thing ...... unrelentless pursuit bordering on obsession .... that and a total confidence in their abilities .... it comes through powerfully when you're providing solutions to clients ....