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Tough competition

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Olly Lawer
Tough competition
on Nov 9, 2011 at 6:53:36 am

Hi,

I've recently launched my video production company full time following redundancy. My customers this far had been very happy with my services although I suddenly find myself having to up the ante and get more work in.

Two more production companies have appeared, both offering very, very undercut prices. One of which is an ex broadcaster who boosts a wealth of experience. I've never seen her work but pressume it's good. In addition, a company who usually only deals in TV Commercials and Broadcast has thrown their hat in the ring as their other work is drying up. I image they are charging quite a bit.

I don't want to enter a price war, but I simply cannot keep my prices where they are or compete on the level the TV company are, with a whole team and a huge portfolio.

So, I'm thinking a new angle is needed. What I am conscious of doing is re-inventing the wheel when I don't need to....?

My ideas which I'd really appreciate input in how to make work. These are also meant to help customers in the recession and have been born from conversations with web developers who struggle to sell video as an add on.

1. Pay monthly subscription. Low up front free of say £199, then £49 per month thereafter for 18 months then drops to £19 ongoing. Customer can then opt to have a video refresh for £200 again and back up to £39 for 18 months. Customers link from YouTube. Crease payments and the video is deleted from YouTube, thus their site. How do I protect myself from them just using real player downloader and grabbing the video for themselves?

- suitable for small businesses
- equivlent to one shoot day and one edit day
- typical video cost over 18 months = £902


2. A video newsletter. Essentially a Vlog for the customer, but then combined into a news reel with several over Vlogs and sent out to a mass mailing list as an email link. I've also thought of keeping the videos seperate, and the mass email has a collection of logo's on it saying 'click the logo to watch their latest offer' do customers can choose which they watch. Not sure if their is a market for this? Would a customer respond differently to recieving a link to a video over a text offer...maybe. Costs: £49 per month for the Vlog (one per month, filmed in 3 month segments, i.e. all on the same day). £89 with the newsletter bolted on.

What do you think?

Olly Lawer


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Mark Suszko
Re: Tough competition
on Nov 9, 2011 at 3:53:28 pm

Olly, if you figured your rate card right, you don't dare lower it now. You don't know for certain what the other guys have in the way of a cash reserve. They may be bluffing, they may drop rates to chase you off, only to raise them again. You can't let them drive your rate. It costs what it costs. And if you can't make it on those rates, and can't find new business, it may be time to shut down for a while.


I am not sure your subscription/retainer proposals are going to work out. As you say, there is no easy way to pirate-proof the stuff, once it's online. The other thing is, v-logs are so bargain-basement, and that's part of their perceived charm, that you can't make the value proposition to the client that your higher end look is worth his money. People are loving really crappy webcam shots on vlogs, they don't know any better, but there you have it. I don't think there's any money in that niche that clients would be willing to spend. Perhaps a small webcam mounted teleprompter that would let them make their speeches with better camera eye contact and delivery, but you'd have to make it dirt cheap and easy.

I think you have to "hit them where they ain't", or in hockey terms, don't skate to where the puck IS, skate to where it WILL BE.
Whatever the other guys are doing, find what they don't do or can't do well, and do THAT. Whatever "that" is. The other suggestion I always make is to find a really obscure niche community and get into serving it, using your familiarity with their needs to make a better job than some outsider. There are millions of bizzarre hobbies and interest groups out there. You could become the Warren Miller of one of them.


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Olly Lawer
Re: Tough competition
on Nov 9, 2011 at 4:00:50 pm

Thank you.

Yes, I don't like the idea's of Vlogs either, but thought it could be worth it if I could book out a location and book several customers in slots of an hour or so, filming 3 months worth in one go.

Re rate card, I haven't really worked out one other than about £425 a day, but that doesn't really help much. I've looked at sites on the internet that show their prices, but they are way high compared to what others around here are charging. We're talking £6,500 to £350. How did you go about creating a rate card.

My USP at the moment is that I have a wealth of experience in sales and marketing as well as studying in Psychology and we use that knowledge to create a video that is not only creative and engaging but helps to market the customers brand and product.

What niches could you suggest I look into? I would really like to create short 20 sec internet ads for customers. But i'm not sure if there is a market for that?

BTW, my company has been running two years, but I have only been working full time on this for a week!

Kind regards,

Olly Lawer


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Walter Soyka
Re: Tough competition
on Nov 9, 2011 at 5:22:19 pm

[Olly Lawer] "Re rate card, I haven't really worked out one other than about £425 a day, but that doesn't really help much. I've looked at sites on the internet that show their prices, but they are way high compared to what others around here are charging. We're talking £6,500 to £350. How did you go about creating a rate card."

Start with the Freelance Switch Hourly Rate Calculator [link]. It helps you figure out your rate based on your expenses, how much work you can reasonably do, and how much profit you're looking to make.

Walter Soyka
Principal & Designer at Keen Live
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
RenderBreak Blog - What I'm thinking when my workstation's thinking
Creative Cow Forum Host: Live & Stage Events


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Todd Terry
Re: Tough competition
on Nov 9, 2011 at 7:20:59 pm

I'll just add one or two things to the good advice you've already been given...


[Olly Lawer] "One of which is an ex broadcaster who boosts a wealth of experience. I've never seen her work but pressume it's good."

That's a big assumption to make. You need to see this person's actual work to know whether they are really competition to you, quality wise. Some of the worst production people I know are "former broadcasters with a lot of experience."

[Olly Lawer] "Crease payments and the video is deleted from YouTube, thus their site. How do I protect myself from them just using real player downloader and grabbing the video for themselves?"

You can't. Once a video is on YouTube (or any other video hosting website) it can easily be downloaded by someone who knows what they are doing, usually a simple browser plugin will do it with one click.

If your work is good, you can justify your rate.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Olly Lawer
Re: Tough competition
on Nov 9, 2011 at 7:37:24 pm

God is my spelling that bad. I'll blame the iPhone! :)

OK, so just get out there and plug away right?

Being an accomplished ex salesman and selling other people's products with complete ease, I should be right at home selling my services over the competition, but for whatever reason, I am struggling to effectively sell myself at the moment. Maybe I just feel a little overwhelmed having only been made redundant a little over a week ago and needing to get the money in sharp!

What are your key selling points to customers?

BTW - thank you for all the advice. It is very much appreciated and hopefully will stand me in good stead.

Olly Lawer


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Olly Lawer
Re: Tough competition
on Nov 10, 2011 at 9:14:17 am

I've come up with an idea which might help distinguish myself from the competition!

Since my own USP is about being able to effectively market businesses as well as the technical and creative side of video production....

...how about I create a section (maybe even the main focus) called USP Challenge. Local Businessses would be encouraged (through networking events) to input their USP and we'll come back with some ideas as to how we can promote them using video.

What do you think?

Olly Lawer


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Mark Suszko
Re: Tough competition
on Nov 10, 2011 at 3:35:38 pm

I think you're just rephrasing the same business model from before here. And what's the value-added for them in "competing" against another company?


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Olly Lawer
Re: Tough competition
on Nov 10, 2011 at 3:56:59 pm

Hi,

Sorry, not sure what you mean?

Kind regards,

Olly Lawer


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Mark Suszko
Re: Tough competition
on Nov 10, 2011 at 4:27:03 pm

I mean it sounds like a re-hash of the vlog idea. Like a solution in search of a problem.

Pick a local company you would LOVE to do some regular work for. Study the hell out of them, research them as deeply as possible. Figure out their actual goals, not just their stated ones. Find out what charities they donate to or support, find out what causes the CEO supports privately. See if any of those need some promotion. Is the company really old, with a great history that no one has taken the trouble to document? Is the company involved in local government or social concerns? Do they have an agenda they would like to see advanced, such as, more local education for tradesmen like machinists, that would be potential hires? Raising literacy rates in local schools for a better workforce of tomorrow? Teaching tech related things in high schools? Improving some aspect of civic/cultural life, that attracts a higher class of potential employees to move to that town and put down roots? Efforts to be part of a green economy?

Is there a communications need in there that you can fill?


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Roy Schneider
Re: Tough competition
on Nov 14, 2011 at 6:25:12 pm

Olly:
A client of mine once told me that the only way he buys is if you convince him he can't do without it. Sounds simple enough, but can a small business do without video?
Roy Schneider

Roy Schneider
Long Live Da Cow!


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Tom Sefton
Re: Tough competition
on Nov 11, 2011 at 3:12:18 pm

Hang in there.

The one skill that you can't go on a course for, buy some equipment to help you with or pay marketing costs towards is the skill of the hustler. You're going to have to learn how to hustle work in, create jobs and projects from nothing, surprise your clients with what you know and how it can help them and much much more. You need to help them for free occasionally, knowing that it will pay off.

Unfortunately for you, in this economic situation there is no quick fix or dead cert for bringing in business and money immediately. Your clients either have the money to pay for video work now, or they don't until 2012. If you offer deals that are as cheap as you mentioned, how are you ever going to get your prices back up? As Walter has pointed out - figure out your rate card and stick to it. Either that, or price your work on a unique cost each time and use this as an excuse to speak to the client as much as possible throughout the quoting period.

I really respect your decision to go it alone. At the moment, this is the hardest possible time to be doing what we are doing, but you can make it work. As has been mentioned before - don't be scared by someone who has some sort of broadcasting background. This means nothing - you are only as good as your last job. We have received 2 projects recently as a direct result of someone with broadcast pedigree making a royal hash of the work.


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Mick Haensler
Re: Tough competition
on Nov 11, 2011 at 3:44:18 pm

[Tom Sefton] "At the moment, this is the hardest possible time to be doing what we are doing, but you can make it work. "

Indeed. One other thing that has kept me afloat the last 2 years is EXTREMELY low overhead. I am fortunate to live in a large old Victorian with plenty of room plus separate business entrance. I've slashed everything I can to the bone. No unnecessary equipment purchases, no upgrades I don't have to have etc.

Mick Haensler
Higher Ground Media


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Nick Griffin
Re: Tough competition
on Nov 12, 2011 at 4:30:31 pm

[Todd Terry] "Some of the worst production people I know are "former broadcasters with a lot of experience.""

Late to the thread, but I've seen this same thing several times. One of the more ridiculous was being pitched to sub-out work to a former National Public RADIO announcer who had gone into the video for web business. This "pro's" stuff was quite literally (as Mark Susko has termed it in the past) Radio with Pictures, actually in this particular case more like Radio with a slide show of stills.

Now, with all of the above said, there are no doubt many of our fellow bovines who've left broadcast to form production companies, and several probably do excellent work. Analyzing the competition has to be on a case by case basis. We also have to make sure that our prospective clients also do this and not be overly impressed by someone just because they used to work for a TV station or a network.

The ones to look out for, especially in this age of extremely low cost NLEs, are the people who moonlight their productions on nights and weekends using equipment from their regular, daytime jobs with a broadcast or other production facility. They can have access to high end cameras, etc. without having to invest little to any of their own money.


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Olly Lawer
Re: Tough competition
on Nov 15, 2011 at 2:32:47 pm

Hi.

Thanks for all your responses. It can be a lonely game. thank you for the link regarding the ratecard. I think once I get my ratecard sorted out and not worry so much about what the competition are doing I will be in a better place to be able to attack the market. so to speak.

I suppose it's just a little bewildering because there's so much to think about. At the moment I'm working every hour and I think I need to concentrate on working out how best to complete editing in then the quickest amount of time and give me more time to be out there marketing.

Just as a matter of interest. My MacBook is 2006 and is running really slowly when rendering out things from Final Cut Pro and after-effects. I'm thinking of using some of my redundancy money to invest in a new MacBook Pro. However, I know how important cash flow is in this business. Is the benefit of having a faster MacBook going to be more important?

Olly Lawer


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