Tech Talk for Photographers

Tech Talk for Photographers — 14 Comments
1
Aug 10

Breakdown of a Photographer’s Groupon Deal; $65,000 Moneymaker or Madness?

“$59 for a one-hour location photo session including a disc of low-res images and five 8×10 prints”

Photographers, or those wanting to be photographers, post offers like this everyday on every city’s Craigslist. What happens when a professional photography studio makes an offer like this and scales it up to a site with the viral selling power of Groupon.com? Is there a gold mine of sales and referrals waiting for photographers on Groupon or is it a quick path to making your photography a commodity?

Read on to find out how one local photography studio made over $65,000 in sales in two days.

If you’re not familiar with Groupon, it is a social shopping site where local businesses offer heavily discounted products or services to Groupon’s web readers in exchange for a guaranteed minimum number of clients. Say you’re a restaurant and you want to bring in a load of new customers; Groupon allows you to offer a $40 gift card for $20 but only if a certain number of people buy in. You’re guaranteed a steady stream of new faces which may or may not turn into repeat business. Groupon already has millions of unique visitors per month and their daily deals spread virally as people alert family and friends to get them to buy in so that the deal reaches “the tipping point” and becomes active. Here is the Groupon FAQ if you’d like more information on how it works.

Can social shopping like this translate into effective marketing for an artistic business like a photography studio? Could a single studio even handle the buying power of Groupon? I don’t have any inside information on the deal used as an example here, but I’m going to do my best to piece together a breakdown of how Groupon might work for a photographer based on a recent offer in my own city.

$59 for a one-hour location session including prints was not a joke. That was the Groupon deal of the day for Vancouver on July 30th, 2010. Take a moment to look at that page and digest the statistics. Then remember the limitations of running a small photography business — this one in particular consists of two photographers — and the Groupon offers are generally good for one year from the date of purchase. Right now, the deal has sold over 1,200 units and still has 12 hours left to go. Let’s round the total sold down to 1,100 to accommodate those that want refunds or simply don’t book.

$59 x 1,100 sessions = $64,900 in sales in two days

Is it possible for a small studio to even do 1,100 sessions in a year? Considering the facts, I find it tough to believe it can happen. We live in Vancouver where it rains consistently for six months of the year and the studio bills itself as doing on-location shoots with natural light. That alone has limited you to, including weekends, maybe 180 days to do the sessions. If you don’t like days off, that is. This studio also shoots weddings; during our season when the weather is nice you cannot schedule portrait sessions on those same Saturdays, making your available time even less.

In the Groupon discussion for this deal, it was noted that the year long deadline might be extended. Say it is 18 or 24 months; that may make it easier to accomplish but are people really going to be excited to book a session two years after they paid for it? Is the photographer still going to be producing thoughtful, original work after completing 1,000 of those sessions?

Now let’s consider the expense in producing the deal. From TechCrunch, it is reported that Groupon takes 30 to 50% of the deal immediately off of the top before you see anything. Groupon provides the web traffic and they also run a value-added service as they only want to offer quality merchants on their site. They work closely with the business both before and during the offer to make sure that the business is up to their standards and that their customer’s questions get answered quickly.

$69,400 x 60% = $38,940 gross income for 1,100 sessions

Not sounding so hot now, is it? Consider that this may take 18+ months to complete, takes two photographers to book, shoot, and process, and leaves little time for anything else. And there are still more expenses; assuming a very low cost for the products included in the package ($1 per print and $1.50 per CD with postage):

$38,940 – $7,150 = $31,790 after material expenses

How many shutters and hard drives will you go through doing 1,100 sessions? Even assuming a low total of 200 frames per session, that will require at least one new shutter and likely a trip or two in for maintenance for your camera and lenses. You’ll need another external drive or two to store them on. Here’s hoping you don’t need to replace a body due to additional wear.

$31,790 – $1,000 = $30,790 after incidentals (and I think that is a very low estimate)

Now as this studio works on location, they’ll need gas to get there as the deal was offered for “Metro Vancouver”. Assuming you can book a few shoots in the same location on the same day (which may be tough), let’s have a low estimate of $3 per session for travel.

$30,790 – $3,300 = $27,490 after travel

Take away taxes and consider that this a heck of a lot of work to do for that money, any way you slice it. Being optimistic and saying that each hour long session might take three hours in total including booking, driving, shooting, editing, and fulfilment and you’re making $8.33 per hour. Of course there can be a huge upside. After-shoot sales of more prints or the high-resolution files can be very profitable if the shoots are successful. They can be easy if you automate it with an online gallery like SmugMug that allows your customers to purchase hi-res downloads and prints without your intervention. But consider that you’re targeting bargain hunters that may or may not want to spend more money after getting such a good deal. I also think that five 8x10s and low-res files for Facebook and email are enough to satisfy a good majority of the customers.

After product sales, you have the substantial upside of improved name recognition and possible referrals. If the photographer is able to create the Facebook galleries on their own and have the subjects tagged, they gain the advantage of having each of those person’s friends see immediately who took the photos. Word-of-mouth referrals would also be substantial if the photographers can keep up the quality of their work.

You could also consider this as a springboard to expanding a studio. After all, you’re probably going to want an office manager to coordinate all of the phone calls and session arrangements… or maybe a third photographer to make the workload manageable.

Typical Groupon businesses.

When compared to the other businesses that typically offer Groupons — restaurants, tour groups, exercise studios — it is hard to imagine someone producing art should try the same marketing tactics. If you’re a restaurant or a tour provider, you take reservations and expect to be busy doing the same thing day in and day out. I don’t know of any small photography business doing location shoots that can handle the type of volume that Groupon shoves at you.

So what do you think? Is Groupon a viable marketing option for photographers?

Update: interesting statistics from this blog just posted this morning.

  • Gross Margin is 50%
  • Repeat Rate: 97% of businesses we feature want to be featured again.
  • Breakage Rate is around 10% (e.g. 10% of Groupon users do NOT redeem their coupons).

Tech Talk for Photographers — 7 Comments
1
Jan 08

Five steps to stopping image loss

No one ever wants to face the possibility of losing their images before getting them into the processing workflow. Professionals losing irreplaceable images due to card corruption does happen, but by implementing ‘best practices’ to combat data loss you can minimize the possibility that it happens to you. I’ve been working professionally with computers for over 15 years and I’m a fanatic about data security. Follow along for a few minutes though some light reading and if your livelihood depends on your images, I hope I can convince you to implement these practices.

cfcards

I’m not going to discuss choice of card brands as there is no magazine or blog doing memory reliability testing, but there are always the same considerations aside from the brand you choose. The first major choice that most of us make is the size of card we’re going to pack. Now, for some, I’m sure that consideration comes down to price and whatever is on sale that day at Costco. If price is your first consideration, the rest of this article probably isn’t for you as data security isn’t something you can skimp on if your images must come back each and every time. Most photographers likely choose their card size based on the size of their camera files, how long they typically shoot, and how often they want to change cards. The right reason to choose is based on failure rate.

Rule #1: Plan out your storage solutions with data integrity in mind.

I am a LARGE card advocate. As large as you can afford. I don’t suggest sitting on the bleeding edge of card size (currently 128 gigabytes in CF format). I’d say sit one or two below, so right now the sweet spot would be 32 or 64GB. Why do I say to go with such large cards? Isn’t that keeping “all of your eggs in one basket”? For a long wedding day and with today’s file sizes, some shooters will still fill up a few of those, but many are still using 8 GB cards. All this is doing is spreading around the risk of data loss and increasing your failure rate! If you use smaller cards, statistically you are more likely to have a failure at some point in time and you will lose data. You may not lose the entire day but you have a greater chance of losing something.

If you use 8 GB cards instead of 64 GB, you have 7 more cards that can fail on you! And also 7 more chances to misplace, drop, or damage them. Relate it to hard drives, something most of us have more experience with and have always had notoriously bad failure rates. We’ve probably all had a hard drive fail at one time — so do you now keep your images on lots of small hard drives to reduce the risk of losing things? Or do use the largest backup drives available because you have a proper data security routine in place?

Rule #2: BACKUP, BACKUP, BACKUP.

And I mean backup immediately. On an important shoot, if you have 15 minutes for a break, take that time to backup your card and stash it away. The best backup in the field is a portable storage device like this:

P6000

They are available in a wide range of sizes and some brands sell them empty so you can add your own hard drive. One tip is to pick up an older model that can be upgraded. I often see them for sale on places like the Fred Miranda sales forum; I think hobbyists must pick them up for big holidays and then sell them afterwards.

Actually, the best backup in the field is dual card slots; recording the image simultaneously while in the camera. Unfortunately Canon has decided to leave that feature on only the 1-series so the wildly popular wedding camera, the 5D Mark II, only has one place to save your images. Good job, Nikon, on giving your D700/D300 cameras two slots. With dual card slots and careful card management, you’ve almost eliminated the possibility of coming back empty-handed.

Rule #3: Handle your media like your life depends on it.

And this goes back to Rule #1 of using large media — if you use smaller cards, the more you handle them, the more chance you have of loss. Have a system in place for card storage using secure holders like these:

GPCSE4N

Use one colour for blank cards and another colour for used cards. While Compact Flash cards are certainly more durable than Secure Digital, the less you handle them, the better, and giving them proper protection is important. Never chuck a card in your bag or jacket pocket. Never format a card in the field to free up space even if you’ve backed it up. Never delete an image, either. It might be tempting to delete some obvious junk and save import time later but don’t do it.

Rule #4: Stress-test your cards before you trust them.

This simple procedure will take a few minutes of computer time but would likely prevent a lot of failed cards in the field. Before you put any newly purchased cards in your camera, put them in your computer’s reader. Copy a full load of images from your computer to the card and then back again. Check through the images to make sure they’re uncorrupted. That is it. This basic test won’t stop a future physical failure in the memory card but now you’ve tested that it initially works as required. I’d bet most professionals skip this and go straight from package to camera without knowing that lurking on that card might be a bad chip just waiting for data to trash.

Rule #5: Follow your best practices every time.

Simple steps, really, but unless you’ve been burned by image loss already, you probably skip on a few or all of them. If you depend on your images, take a few extra minutes to give them the security required. If you like this article, please feel free to share it on twitter – http://tr.im/stoploss or your blog.

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