Raising my rate?
Hi - I read through a good amount of the archive, but I don't think I've seen anything on this issue.
I charged $1100 for a videography gig I did last year of a dance recital. There were two days of shooting (one just a few hours, the other about five or six hours) with my own DVX. The first day was easy behind the scenes stuff, and the second was the main show.
However, I also made a DVD (with basic menu/music) and used DiscMakers to make 100 copies of the disc. I made an initial rough cut disc for feedback/criticism, and then sent out the final cut to get mastered. The final copies had art on the discs and case (front/back, no insert) that I designed/laid out in Photoshop.
Looking back, I spent more on production costs than I hoped. The duplication alone cost about $350. The location was over an hour from my home, so I had to pay gas/tolls/etc.
I was at first happy with my $1100 (as it was my first gig I got - got it right while finishing college), but now I'm afraid I've set a precedent of a price that's too low. I'll be working with them again this year.
However, I'm afraid to negotiate a price I already agreed to last year. Is $1100 fair for a recent college graduate (I've only been out almost a year now), or should I be asking for more? I'm starting to wonder if $1300 or $1500 is more fair. And if so, how do I negotiate my price UP instead of down?!
Just be upfront with them. Find out what it will cost you out of your pocket and let them know that you'll need to charge them for these items. Charge the mileage, and charge them for duplication costs. Be sure to mark up the duplication costs, so you can make a profit and also be compensated for your time. Don't be afraid to increase rates. Remember how much food and gasoline cost last year? Everything goes up
Sorry to say this, Roger, but the simplest way to raise your rates is by winning new business. The theory I've discussed here before (OK, in the REALLY old archives) is to actively recruit new clients while raising the rates so you end up adding at the top while the bottom drops away over raised prices. Of course this only works if you're successful in getting new business.
That said, I agree with Greg. Approach them about your costs -- hey first time you didn't understand the scope of their needs, but you wanted to deliver a top notch product and did so at your own expense. This year you're able to have a better handle on the scope of the project so you have to get a better match between your time and expenses and what you charge them. Reasonable people will go along with this. Usually. OK, sometimes. Actually there is no substitute for adding new clients who are given the new rates right up front.
A very fair question Roger. This happens to people at all levels of business, more when you're just starting however or anxious to get work, and it will probably continue to happen to you at times throughout your career no matter how meticulous you become at budgeting and negotiating.
The most important factor for you now with this client is your relationship. You not going to get rich even if you triple or quadruple the budget, right? However, if you're not careful, you could exceed their comfort level and lose them, and its never good to lose repeat customers, whether you're just starting or whether you've been in business for decades, unless they're grinders, cheats, meanies, or just downright talentless.
So, since they came back, we can assume they like you, your work, and your prices. Do you like them? If so, then go have a sit down with them and explain just how much time and effort you put in last year, and see if they have any more money in their budget. If you can get them to divulge what their max budget is, then you have a better chance of determining what's possible and what's not.
One more thing BTW, under no circumstances should you pay for the duplicating. This time around, make it absolutely clear that it is "customary" for the client to pay that expense. If anything, you should be entitled to receive a markup - it certainly shouldn't come out of your hide.
Hope this helps...
David Roth Weiss
David Weiss Productions, Inc.
POST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
When ever you're new to a business, you have to tread carefully. Whenever you negotiate, give them "introductory" pricing. That way, you have an open door to adjust the price up to where it should be if appropriate.
You should price everything with line items. It gives you more room to adjust later.
Shooting = $ XX
Edit and DVD master = $ XX
Disc art = $ XX
Entrapment (disc sleeve insert) = $ XX
Duplication = Cost plus 20% Find a local guy. We get $3, printed in a jewel case.
Delivery = Cost plus something
Mileage = Your problem. Why should they pay you to live an hour away, UNLESS you are centrally located and they are in the boonies?
You didn't mention editing. Did you load it into FCP or what was your process. Did you run a cable straight to a laptop or Firestore, put a nice title on the front and your name on the back end (No credits)? We get $100 for the credit roll because we hate to do it.
Also, we usually pull a still from the show and that becomes our disc art. If they want a custom insert, that's $75 plus printing.
You may want to give them something for free as a gesture of good will but make it something that doesn't cost you. The mileage would be good.
It's a dry heat!
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2-Sony EX-1 HD .
On top of all this good advice, look back at your production workflow from last year and see if there are places where you can do the job with less effort and time wasted, now that you have the experience. How can you do the job more efficiently this year, so that you are making more per hour in profit?
I'm in a similar position -- although, I'm still in college. Actually, I haven't had any major problems with raising prices with existing clients. However, they're mostly business people -- they understand that I do need to make a profit, gear cost money, and expertise is valuable. YMMV. If you're on good terms personally with your clients, explain to them why you need to charge more, but explain to them how they benefit.
Have you heard a variant of this? "Well, a friend of mine's uncle has a video camera. He'll do it for us for $200! I don't understand why we have to pay you so much..." The reason you can charge what you do is not just because you know how to run a camera. They're paying you for your expertise. They're paying you for your degree. They're paying you to know that it'll get done correctly the first time. So, how can you explain or show this to your clients, in a way they value?
For instance, one of my clients used in-house house to get a project done, and the employee took basically two weeks of work time to complete the project, to a mediocre quality level. I took over the project as a sub-contractor one year, for very cheap ($600, I think). That was two years ago. Last year, I raised my rates, and the project cost $1,500. This year, the project was $3,900 (including duplication). I already told her that I had raised my rates again this year, but she still had difficulty understanding why I charged that much. So, I explained to her the value of my experience, even over the past year. I used SmoothCam and color correction to fix almost all of the video they shot that I was given to edit. I showed them how to deal with paying royalties for the music they used. We were able to quickly compare the value of my rate, compared to the former employee's salary & benefits (plus time off of doing what he NORMALLY does at the company). Paying my rate for the project, and paying that employee for two weeks was comparable. And, I didn't disrupt the flow of work in the office during production, the product was better, and the final presentation flowed more smoothly.
Again, YMMV. It depends a lot on the personality of the client and your relationship with them. Try adding in something that has a great perceived value, but little effort or cost to you -- maybe offer to throw on a Magic Bullet filter for free in one segment, use a slick Motion template for the intro titles, add SmoothCam, do a custom label design for free, give 5 free copies of the DVD to whoever is writing the check for the whole project, something like that. The value comes in the presentation. e.g., "I'm sorry, I can't drop my price any more than $____, but I'd be willing to throw in (extra) for free. Normally, my rate for something like (extra) is around $__, but since you've been so great to work with and gave me a start last year, I'm happy to add that in for you." Maybe it'll work, maybe it won't.
Or negotiate for an intern, to drop crew prices -- maybe there's a young eager student related to someone in the dance group who wants to learn how to make videos. Tell him about what you're doing, and get him to help carry gear. (That plan can also fail miserably; again, YMMV.)
I'm just trying to figure how how this works, too. This is just some of what's worked for me.
Steve said "We get $100 for the credit roll because we hate to do it."
I love that. I wish I could use that approach when it is time to do the dishes at home.
There are a few ways of charging dance studios for their recitals. 1. to charge the studio 2. charge the individual customers 3. charge the studio a per disc price, etc..
It sounds like you charged them a fee for video shooting and editing. Your fee was $1100. Based on your duplication of $350 I will guess that you had 100 discs made. Now if the studio charged their students $35 per disc, that would be a total of $3500. Less your fee of $1100, the studio made a profit of $2400.
I think that a good way to go about this would be to negotiate a per DVD price for the studio, say $25 per dvd, then they could still charge their students $35 per disk. They could still make $1000 and you would be getting $2500.
This way is good if their is going to be many sales. You would also want to maybe have a minimum. Say, $2500 for 100 disks, then a reduced rate for each next group of dvds. 101-150 would be $20 per dvd. This way the more they sell the more they make and if there are less than needed sales then your minimum is covered.
This would all be up to negotiations. What has the studio done in the past? Are they a new studio? Who have they used before, and why did they choose you?
Roger, you will never find a more diplomatic way of weeding clientele than raising your rate.
If they say yes, cool. your billing where ya need to be billing. If they say no, cool, you are open to bill what you need to be billing.
It's not easy to pass up on a half rate when no rate is offered. But if you keep working for half price, you are removing the need for someone to offer you full price.
In short, to raise one's rate, one simply has to raise it and stick to it.