Wedding Pricing – How Much Should You Be Charging?
This is a big question- and a very big well kept secret amongst wedding professionals. Unlike other professions and the retail sector- there aren’t any standard markups or profit margins for the wedding and event industry.
So- this leads you to ask- how much should you charge for your services? And how much money should I be making from each client or job?
There are several factors that will influence these questions:
1. How much your client is willing to pay– or their budget ( this will be different depending on the type of client you attract through your marketing.)
2. Your clients perceived value- of the product and service your are selling
3. What your competitors are offering in the marketplace- and your difference to them
4. The volume of events you do
5. The Profit Margin per event you do.
All of the above factors have major influence over what price you should charge.
Start with a Sales Target- or More Importantly- Take Home Target.
Firstly- you are in business to make money- and support yourself financially. So- you need to be clear as to how much you need / or want to make per year to make running your business worthwhile for you.
So firstly set a target of how much you would like to earn personally- or take home as a salary from your business. ( this can be a weekly, monthly or yearly target.)
Once you have this target- you can work out your pricing strategy.
Let me give you an example:
If your take home target was $50,000k per year- this could be achieved in several different ways…
EXAMPLE A:
If you were a Wedding Planner, who focused on affordable on the day wedding planning service to the client for an affordable price of $1,000 per wedding-
– you would have to do 50 weddings at an average of $1,000 per wedding to achieve your sales target- or take home pay target.
(assuming that $1,000 is your profit per wedding- after any costs involved in doing that wedding.)
EXAMPLE B:
If you Positioned your business in the Luxury wedding market- and you only did high end wedding planning- and your average invoice per wedding was $5,000-
– you would have to do 10 weddings per year to meet your sales target of $50,000.
Either example above- will get you to your sales goal. They are just different strategies. There is nothing wring with going for a lower cost client, and being at the bargain end of the industry- you just need more weddings to make your target. If you position yourself at the high end of the market- you will do fewer weddings- however the workload per wedding may be more involved, and more labour intensive.
Either way- your sales strategy should be in line with your ‘Marketing and Branding’.
Pricing Should Reflect Your Branding and Marketing Message
If you choose to price yourself in the high end of your market and competitors- you should make sure that all your marketing and branding is LUXURY.
You should not use any words relating to ‘bargain’ ‘value for money’ or ‘DIY hire ‘ or ‘Cost Effective’. ( as this is not want a luxury client is looking for.) Your marketing and products should all be of the highest quality, and reflect ‘ Quality’, ‘Luxury’, ‘Exclusivity’ and ‘Celebrity’ and ‘Desire’. This comes down to your unique selling proposition- what is it about your company that makes you different? Are you positioning yourself in the low end, mid range or high end of the market? Your price should reflect where you want to be.
Competitor Pricing
Whilst what our competitors are charging shouldn’t effect what you charge- you need to know what other companies are charging for the same service you offer. If the service is exactly the same- it will be easy for your client to shop around and choose the best price.
The Secret to Charging What Ever You Like For Your Service- and Having a Line up of Customers Who Will Pay It
This is the secret sauce to the most successful wedding companies in the country- are you ready for it?
The secret is- they do not offer the exact same service as their competitors. The easiest way to charge what you want for your service is to:
– Offer something different
– Create extreme desirability
– Have something that no one else has
– Be unique
– Have exceptional customer service
These all play major factors in getting a higher price for your product then your competitors, and being able to charge what you want. If you offer the exact same wedding planning service – or wedding supply to your competitor- you will be limited to what you can charge for it. If you undercut your competitor- you are just cutting down on your profit margins, and making it harder for yourself to achieve your sales goals.
The wedding industry isn’t how cheap you can offer your service or product- its how unique and different can you be- what amazing product can you offer a Bride- and how well can you service that client. If you have amazing customer service but are more expensive then your competitor- 90% of the time your client will go with the higher price product or service- just to get the customer service. ( as the client values someone that treats them well, makes them excited, is easy to deal with, is someone they can trust, is reliable, communicates well and delivers on time. )
Competitors Pricing Vs Yours
Competitor analysis is great to do- to know whats out there in the market- and the pricing that will be given to your potential clients.
Shop around and get pricing for similar products or services to your own, and know the cheap end pricing, and the high end pricing.
If there are wedding planners in your city that are offering wedding planning from $500, and Wedding Planners who are offering services for $2,000, then you have your scope. You can then choose where you would like to position yourself, and what you can offer that your competitors don’t.
In the next eclass we will be talking about event margins and profit margins…. in the meantime complete the exercises below:
Activity:
1. Do a competitor analysis of other wedding companies in your city that offer similar products/services to you. FInd out their pricing.
2. Look back on your Branding and Marketing – and consider where in the marketplace you want to be placed. Is it at the low end? Is it mid range? Is it High end?
3. Think about how you can make your product or service different to your competitors product/service. What can you do differently? How can you make your product/brand /service more desirable? What can you do better? What extra services can you offer? How can you be unique? How can you trump their customer service?