Thursday, July 12, 2012
Learning from your Customers...It's still a Business!
As much as many of us would like our photography to only be about artistic vision, technical excellence, and the quality of our images, being a pro also means running a business. And (hopefully) making a profit at it, so we can continue to do what we love to do. One thing that can really help you run a better business is to learn from your customers what you're doing right, what you're doing wrong, and what you could do better.
In running my business, I keep careful records of my work, breaking down every job into categories that I can do statistical analysis of later. That includes breaking down each customer's payment into how much went into sitting fees, print sales (by size and type), etc. It's really not that hard with decent software (I use Microsoft Money Small Business Edition ). With good records, you can start mining those records to learn from your customers how your business is doing.
Since high-school Senior Portrait season is just about to be in full swing, I have been going over my data to evaluate where I'm doing well, and where I need to improve. For example, the chart above (click on it for a larger version) shows my total number of Senior Portrait clients per year since 2005 (when I only had one!) to 2011, along with the average total amount each client spent with me on their Senior Portraits. If you look at the chart, the blue bars show a very nice growth trend, that my total number of Senior Portrait clients has been increasing nicely year by year. However, the maroon bars show some not so good news -- that my clients are spending less as I get more of them.
Now, it would be easy to just ascribe that decrease to the crummy economy, and ignore it...but I decided to do a little more digging. I broke out the various categories of services and products involved in my Senior Portrait business, and looked at what percentage of my clients were buying each one. One such category, "big prints" (anything 11x14" or over), showed where I was getting declining revenues.
This second chart plots number of customers and percentage of those customers buying big prints. Notice how it's going the wrong way -- as my customer base has increased, the percentage of them that buy big prints has gone down. Since much of my profit resides in selling prints to my clients, and the bigger the print the higher the profit margin, this is something I need to know -- and I need to find out why it's happening and how to correct it. All of the other categories of products & services, by the way, had kept their percentages about the same or grown -- so "big prints" was where I was losing profits.
So how do I find out *why* I'm selling fewer big prints per customer? Unfortunately, that's not something I can mine out of my business data. It *is* something I can get at least some information on, though, from my customers themselves. By asking them.
I got into the habit of doing surveys of my customers not long after I started -- largely because I was new at running my own photography business, and I really didn't know the answers to a lot of my own questions. I survey my customers in two main ways: First, most of my customers get a "satisfaction survey" sheet when they do a session; and second, six months or so after their job is all finished and delivered, I send out e-mail surveys. The second method not only serves to let me know what my customers think, it also reminds them that I exist, so it works as a marketing tool as well. I typically get around 45-55% return rate on these surveys (of both types), which isn't bad as surveys go. And far from considering them a bother or intrusive, the ones who reply often comment that they appreciate me following up with them and caring about what they think. And I *am* sincere in wanting to know what they think!
A couple of years ago, after one such survey, I added a standard product to my Senior Portrait packages -- a "Facebook" CD. My Facebook CDs include low-resolution (typically 600x400) digital versions of all of a client's proofs, at no additional charge. The Facebook CD was motivated by my customers commenting that they would like to be able to put their senior portraits up on Facebook easily, and by me noticing that several clients had already done so...they had done horrible quality scans of printed proofs, and put them up, making my photography look bad. The images on the Facebook CD are too small for them to go make any decent sized prints from, they let my customers easily share their photos on Facebook (or e-mail them to Grandma), and they let *me* control how the uploaded images look, showing the quality I want them to. It's a win-win.
So an e-mail survey is going out to last years' customers this week, and I'm putting it together in a way that I hope will get me information on why my big print sales have gone down. Do they consider them too expensive? Would they like to see more samples of how good big prints can look? Did I not offer enough options (like framing, canvas wraps, etc.?) Do people simply not want to buy big prints as much as they used to?
I'll post up the results from my survey when I have them in. In the meantime, if you're not keeping good records, and learning from what your customers like and don't like, buy or don't buy...why not? It's still a business.