AN ESSAY ABOUT RECESSION-PROOFING YOUR BUSINESS - by Gary Fong
(I didn't write this. It was written and first published by Gary Fong, on his blog, yesterday -- there is a link at he end of the article)
I've been in business through two recessions. Business proceeded in a healthy way and my numbers continued to grow. I had to do some adaptation and what really saved me was getting prepared before the pullback arrived. Here's what I did:
1) Photography-related services - relationships are recession-proof. In fact, in hard times the referral base became even more loyal and devoted. Rocky Gunn gave me the simplest, best advice I have ever gotten in a single sentence... "nobody needs another salesman knocking on their door, but everybody could use a good friend". In rough economic times, good friends are even more valuable. My transcriptionist is really good. And I just wrote her an email and it said, "you're so good, I'm going to use you FOREVER!" Customer supersatisfaction is recession-proof.
Family is even more valuable. It is SO easy for a photographer to make a huge increase in revenue by simply adding new revenue streams to an existing business. Here's a great example:
I have a friend who is an amazingly successful photographer here in Los Angeles. His name is Joey Ikemoto. His business does close to a million a year. He has an unbelievably loyal clientele among the Japanese American community. He has been in business for probably 25 years and went through the same recessions I did.
One day I was visiting him at his former little studio in a strip mall, about 23 years ago. He had a huge staff of photographers, and he was doing something like 200 weddings a year with a healthy average. He shot many of these himself, and his business was all referral. While all this was going on, he actually had a full-time job as an x-ray lab technician at the local hospital! He was making something like $30,000 a year working this job, while his business was grossing in the many hundreds of thousands. I asked him why he had the job, and he said, "security". So I got out a calculator and said - OK, let's just assume you sell one additional parent album to each of your weddings. Say you had a $195 special for parent albums, and include some of the unused proofs in your orders. There's $40 grand right there.
It was wild, but that suggestion really registered with him. He quit his job, focused his energy full time on his studio instead and expanded it greatly with intensely higher profits. He now has one of the largest, and most beautiful studios in California.
If I were a photographer today, I would simply add new relationship-sensitive low-initial-cost portrait sessions to my offerings. If you have a loyal clientele anyway, who love you as a person as well as a photographer, then it is a super easy thing to collect them in front of your camera again. Missy brings her Canon with the L lenses to horse shows, and a lot of people come up to her asking to see the images online, which result in sales, completely out of nowhere.
I remember when I did children's portraiture. I did it differently, we would just go to a park with the mom, and I would make it a point to not shoot right away, and just talk to the mom. Ignoring the child at a playground is a guarantee that this kid is going to be a performer. The more I acted disinterested, the more they would go, "Hey Mom! Look at me go down this slide!" Then they would try harder and harder to show me how awesome they were. This is when I would start shooting, and I would get the most awesome photos of the kids.
While at the playground, I'd show the LCD of the image to the kids, who would go wow, and the mom would go wow, and the next thing that would happen is another parent would come up to me at the playground and ask for my card. I would give them my website address, and a link to today's session on Pictage. This would turn into another session - so long as the shoot fee was low. Then I would let the prints sell themselves.
In a recessionary economy - remember that people become very negative and careful with their wallets. So having a large up-front fee is most likely going to result in an empty calendar. I would much rather shoot on spec than with a large upfront fee. While that may work with the ultra high-end customer with a lot of discretionary dough, it's still risky. I remember that I used to do engagement sessions for $15. That's right, fifteen bucks. And I always sold nearly $300, and it took me not even half an hour to do. Same with weddings. Having a low up-front fee and selling a large volume of images once I 'owned' the right to sell them exclusively was my ticket to prosperity. Later, I would do high-end stuff, but that took years to earn that clientele. I had it great from the very beginning by starting with a low fee, predesigning albums, and selling reorders. My calendar was completely full, and my average sale was multiple what other studios were getting.
Another thing I want to add, I never paid to advertise my studio. I never did ads or bridal shows. Those are so expensive and what they do is bring you a skeptical prospective customer. They're skeptical because they found you through advertising. So not only are you spending money on attracting the wrong kind of client (the client you REALLY want is the one who heard that you are the best friend they never had, with a camera and a smile!) Who would you rather meet with? The awesome person who shot your best man's wedding, or someone who you saw in an ad in a magazine? Exactly!
When things got hard for me, I put extra effort into improving customer satisfaction. If every client who uses you drags two people by the ear into your business and insist that their friend use you, your business will grow regardless of the economy. Think about it - we all know a business or service that we swear by- tell all of our friends about, right? BE THAT BUSINESS! And you will have a clientele that will remain solidly, stable and growing.
I know how to play a recession, even a deep one. The first thing I did in my products business was start to develop lower-cost products like the $19 Puffer or $29 Origami. Sales were up 194% YOY for GFI because of this. I knew that there would be a risk with higher-end pro lighting attachments like the Whaletail or Lightsphere, so I started preparing to market smaller trinkets.
I would do the same with photography. I'm not saying lower your prices in response to a recession, I'm saying buffer up the consumer fanaticism (loyalty) by endearing yourself to your clients. Foster that referral, and then have products which have a low-cost entry point. Once you produce beautiful images, sell the images and not the session. Increase the volume, diversify your offerings into more types of portraiture, and you will be fine. In fact, overall I would say you could prosper in hard times.
With all sincerity,