Groupon Killing Photography?

Are Groupon and sites like it killing the photography business? Sadly I believe so in a number of ways.

First off, many photographers are not working through the math of a deal. A typical deal seen for photography will be something like:

1 Hour Portrait Session, Two 8x10's, CD of proofs, regular price $400, our special price $99! A savings of 75%.

The discount companies like prices under $100, so they tell the photographer it needs to be this cheap.

The photographer gets 50% minus fees typically. But to keep it simple the photographer gets $50 for each shoot. They sell 200 of them. Sounds great a check comes for about $10,000. Wow! Looks even better at first. $10,000 in sales for one month. Of course the photographer now needs to pay the sales tax as the discount site doesn't collect it. In my location that's 10% off the sale. Still not bad $9,000 left.

Then reality starts to set it. 200 shoots will take at least 600 man-hours between shooting, retouching, printing, scheduling, delivering etc. At 40 hours a week it will take almost 4 months. I've seen these deals say 500+ deals so a photographer could fill their entire year. Of course a larger studio can split the load and do it in less calendar days, but it is still a lot of hours.

I have talked to photographers that have done it and heard some pretty scary stories. One actually gave a deal that without an up-sell, they actually lost money on. Not sure how they are going to make out, as they are still working through the mess they created.

Now some photographers say they will not give a deal like that, but the discount companies will show you that's the deal they have given in the past and it is expected. So many photographers, especially newer photographer feel they should do it too. After all XYZ sold 300 of these deals. That means 300 new customers yippee!

Now the idea is the photographer will up-sell the buyers to make it profitable. This increases the time spent with clients, but payback is good if you can sell. The issue being that these clients are taking this deal because they don't spend or cannot spend a lot for photography. So up-sells will be smaller than your typical client and fewer will ever buy anything more than the deal.

Of course one of ideas used to persuade the photographer that this is good for business is that it gets their name out to huge numbers of potential clients.

This the the bigger reason that these deals sites are bad for photography. The clients on the deals sites are price sensitive. They are always looking for a deal and a way to save money. In today's economy that's easy to understand.

This client shops by price, not by quality. Sure they won't buy total crap, but they will take good enough. And they know that a photography deal will come soon enough by another photographer sucked into the idea, so no need to go back to the company they saw a while back.

But even if they do remember the company. What do they remember? They remember a company that would do their portraits for $99. So in their minds the value of these portraits is now $99. Not only is the company that placed the advertisement devalued by this, but other photographers as well. The clients think if Company A can do it for this $99, Company B should too. Anybody who doesn't is overcharging.

I actually overheard a conversation at lunch the other day which brought this to light. Two woman were discussing gets some photos done and I was about to walk over and introduce myself when the third said. "I'm on Groupon and a bunch of other discount sites and you can get your photos done for $99 by a really good photographer, I see this deal all the time. Don't waste your money paying full price." She then went on to tell her that she would let her know when she see's the next one as they happen all the time and how she got her family portrait done for just $99. She explained how they tried to get her to buy more, but she was smart and just took the print and scanned it to make more. They nodded in agreement. She showed it to them on her iPhone.

So photographers think long and hard about these discount sites and the impact they will have on business long term. First it fills your calendar with low margin clients and second it devalues photography services. Seller beware!

Orcatek Photography - Phoenix, Arizona