Discount your service and you devalue yourself
Today Bernadette Chapman talks with us about how discounting your service is one of the worst things you can do for your business and the entire wedding industry. We also cover how to make sure you are pricing for profitability and how working with wedding planners could be a great way of getting repeat business without the need for a divorce.
When asked about discounting Bernadette's first response is 'Don't do it!' and I have to agree I've never felt discounting was a word that belonged in the wedding industry. It reminds me of high street sales and DFS. The wedding industry is heart-led and is about providing the best service we can for a price that allows us to be in business, discounting often feels dishonest as well as a lot of discounts aren't actually discounts as the price was inflated in the first place. So, Bernadette's next comment really shed light on this.
'If you discount it devalues the work of everyone around you, they start to discount to ensure they get work, then you discount further it's not a viable business strategy,'
Bernadette says we all come into the wedding industry because we want to give and create the best possible day for our couples but that doesn't mean giving it all away. You must charge fairly for your services or you won't be able to sustain a business.
Offering discounts can create a race to the bottom and that should be avoided at all costs. The wedding industry has taken a huge knock over the past 14 months and offering heavy discounts to get money in quick might seem like a good idea but it can seriously damage your business and that of businesses around you.
Discount vs profitability
I asked Bernadette how do we make sure we are profitable in our business?
- Firstly decide, what do you want to earn in a year?
- Next, add on 20-25% (this will cover your tax and running the business
- Then Bernadette adds 10% as a profit fund
Then that's the figure you're aiming for, how are you going to earn that? How many weddings do you want to work in a year?
Break down your service or product?
- How many meetings?
- How long does it take to provide the service?
- Is there an actual cost to the service or product?
- Are you there on the wedding day how many hours are you there for?
- How much will it cost in terms of materials, staff, rent, transport etc.?
put a cost or hours to the side of each. How much does all this cost? You have to add this to the amount in step one and this is the amount you need to bring in to make that profit.
example for wedding planners: if you offer full planning start to finish including on the day. Divide what you want to charge by 150 hours. What does that make your hourly rate?
So often we see people pricing themselves as an employee rather than a business owner and when they do this simple division sum they end up with a less than minimum wage answer. on which they still have to pay taxes.
You are worth being paid well for what you do, for the experience you have and the knowledge you have gained. You should have money left over when taxes and costs are paid and that is your profit. Charge your worth and don't discount.
What are the advantages of working with a wedding planner!
Firstly wedding planners are incredibly loyal. When they find vendors that will go above and beyond and provide an excellent service they will use them again and again.
This means repeat business, something that is unusual in the wedding industry. With couples getting married you are marketing to new people again and again, but when you add wedding planners into your marketing strategy you are opening up that repeat business revenue stream.
There is a saying that it costs 5 times as much to gain a new client as it does to keep an old one you can check out an article that discusses the validity of that HERE. So by having several wedding planners on your client list you might not need to do any marketing for new business depending on the number of weddings you want to do a year and how many weddings those planners can suggest you for.
Here is an example: If it costs you £100 to gain a new client and it cost £1500 for your service
You have a wedding planner on your books who puts you forward for 10 weddings in the first year and you book 5 of them.
£100 cost of acquiring the wedding planner, £7500 your service charge for those 5 weddings.
£100 cost of acquiring a couple £1500 your service charge for that wedding to get the same £7500 you'd have to spend £500 to acquire them.
Now the fact is wedding clients aren't repeat clients not for that service at any rate. They might come in for a family shoot or a birthday cake but they aren't liking to be spending the £1500 again. So your couples we will take as one offs there Client lifetime value is £1500.
A wedding planner as Bernadette stated can be fiercely loyal if you look after the relationship. Do your job, do it well, don't let them down those are the basic requirements. Now, you might also send a thank you card when they send a couple your way, send them a small gift when a client of theirs books you, send them a bunch of flowers for their birthday. You don't have to but it pays to nurture the relationship.
Take the example above, you spend £100 to acquire the planner, you get £7500 in the first year. The second year they send you another 10 potential clients and again you book 5. You do your job do it well and are reliable, you send 10 thank you cards at £20. for the bookings you send 5 bars of chocolate £7.50 then a bunch of flowers for their birthday £30. That costs £57.50 to keep that wedding planner. Now, the most important part is the first part and that costs you nothing the rest is polite and the icing on top of the cake but still, it will have cost you around half of what acquiring a new client costs you and you booked 5 weddings.
Wedding planners are also great at social media and particularly good at tagging vendors who had a part to play in the images they are sharing. So you'll get a wider reach by working with a planner.
Generally speaking, the value of the clients will be higher and planners are the ones doing all the chasing, producing schedules and giving you all that information. You just have to turn up and do your job, planners take a lot of the admin away from you so you can focus on what you do best.
How do I get on a wedding planners books?
What doesn't work:
- Calling they are really busy so a phone call as the first contact isn't the way to go
- Sending a blanket email that says, Dear sir, won't go down well
- Blindly offering commission, a lot of wedding planners don't take commissions so offering might insult the planner you're trying to work with.
- Targeting all wedding planners
What you want to do:
- Focus on nurturing the relationship
- Follow them on social and engage with them there
- Send voice notes, it creates a more personal connection
- Bribery (by which she means, stand out from the crowd do something extra)
- Send samples it's little cost for a potentially huge payoff.
- Target planners who work weddings that fit with your style
So rather than bribing what Bernadette shares is a story of a band who hoped to work with her. They sent her their info and examples of their work but also a bar of chocolate. It's a simple thank you for taking the time to consider them but it encouraged her to actually consider them and it worked.
To hear where Bernadette feels the industry is going to be in the next year and beyond head to 31:00 on the podcast.
Connect with Bernadette
Make sure to follow both her accounts as the profit bundle that she speaks of in the episode is being recorded and finalised right now so it will be available soon but it means I don't have a link to give you so her followers will be the first to know.
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