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17.08.14 - Estimating & Negotiating 101

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I have put in bid after bid.  It always ends up with me not getting the job, though the art buyers tell me my numbers are solid.  Is it my numbers?  Is it that I am not established enough?  What is wrong with my estimates?  Is it my negotiating?
ASK ABOUT THEIR BUDGET: By the time clients have asked you for an estimate they more than likely have a budget range in mind, based on their previous experiences and their client’s expectations.  Asking for this range often helps in defining an acceptable starting point for constructing your bid.  If the client does not have a budget for the project, or is not forthcoming about it, provide your ideal figures and express a subtle willingness to negotiate.  Almost every estimate is negotiated before it is awarded.
ANALYZE YOUR CONTACT WITH THE CLIENT AND YOUR COMPETITORS:If you have not been contacted to arrange a conference call with the art director or art buyer, after you have submitted your estimate, it is probable that you are not their first choice for this assignment and your client has a directed mandate to provide three estimates for their client’s cost consultant to review.  However, this does not mean that the lowest bid from a photographer is automatically awarded the assignment, art directors usually have influence in not allowing cost to be the only factor in who is awarded the assignment.  One general caveat though is that your numbers should fall within a comparable range based on your experience level, location, and usage rights requested. If you are fortunate enough to be the client’s first creative choice, but your numbers do not with their prescribed budget parameters, you will often be given the opportunity to come closer to the clients desired final number.  Generally speaking, if you are more than 25% above your competitor’s figures, initially, clients feel the gap is too disparate for them to ask you to compromise.

If you find yourself bidding against the same photographers, repeatedly, which can be especially frustrating if you are not being awarded the jobs, ask your potential client, if there is any particular reason that they went with your competitor, instead of with you.   They may be willing to offer up some feedback.  This constructive criticism will improve your ability to compete, as well as motivate you to freshen up your website, communication skills, and, if necessary,  revise your expected creative and usage fees.

IMPORTANT THINGS TO COMMUNICATE WITH A POTENTIAL CLIENT:1.  Show an openness to feedback and creative suggestions from the art director.  Be a team player.  This doesn’t mean rolling over and giving up all creative control, it simply indicates that you welcome their ideas.  I have seen photographers loose assignments by projecting stubbornness and rigidity, and thinking that this is somehow a virtue or a demonstration of authenticity and commitment. Listening is a highly underrated skill, especially with the multitude of ways to communicate.  It’s better to take the extra time to compose your thoughts than to rush off a hasty reply in order to move on to your next task.   If you are free and in the same city, as your client, offer to come to their office to go over their ideas in person.  It’s always a plus to make a personal connection, and you may find you have things in common that will help solidify a new relationship.

2. Offer multiple solutions, including cost-saving ones on how your client can achieve their vision.  Examples might include hiring local talent and assistants while working on location, as well as, offering to be local yourself.  If you have friends in the city you are shooting in, and travel costs are not prohibitive, this can be a great incentive.

3. Provide a treatment, or mood board, to give your client a clear example of how you envision and plan to execute your shoot.  Swipes from Pinterest are usually acceptable, as you cannot be expected to shoot on spec or have everything in your pre-existing archive.

4. Establish a trust factor with the client, and demonstrate a clear understanding of what needs to happen in order for them to achieve their objectives.

5.  Prepare yourself for a conference call and know a bit about the agency and their client.  Articulate logical, and not theoretical questions in order to put together a proper estimate. Indicate that you have clearly thought about what is required, beyond the obvious. Try to be more informed about your client above what anyone could gather from a basic Google search.  Write your points and questions down on paper to jog your memory on the call, or meeting.  Differentiate yourself by articulating and demonstrating unique knowledge and experience.

6.  Even if you’re having the worst day, or have dozens of emails to return, be engaged on your conference call, show interest and remain focused.  In this effort, try to schedule a time that would be optimal for you, and your daily workflow, where you know you will be at your best.

7.  If this is a large project, that you know cannot be properly executed by you and your assistant/s, arrange for a producer to be on the conference call with you and your client.  They will invariably think of logistical questions and solutions that would not have occurred to you.  It’s their job. They are your ally and support system and should be treated as such.  Don’t compare or contrast your fees to theirs. They are unrelated and inconsequential.  Trust that they know what is necessary to make the project a success.  They do not want to fail or look bad, any more than you do.

8. Demonstrate enthusiasm and excitement about the project and a willingness to do whatever it takes to get the job done, on time and under budget.

THE 10 DO’S AND DONT’S IN PREPARING YOUR ESTIMATE:1. DO have a production checklist in front of of you to remind of pertinent costs.
2.    DON’T ask who you are competing against.
3.    DO ask when do they need an estimate.

4.    DON’T promise to deliver an estimate at that time, to appease them, only to ask for
more time later in the day.
5.    DO offer solutions, even if they may seem unpopular in the moment.

6.    DON’T create anxiety in the client’s mind about potential problems.
7.    DO use a standardized estimate template with relevant T&C to protect you and
your client from any legal problems, in the future.
8.    DON’T use an estimate form that is “homemade” unless it has been double
checked by an attorney.
9.    DO separate creative/day fees and usage fees. This gives you justification
for increasing or decreasing fees in a logical, understandable fashion.
10.  DON’T lump all your costs into one fee.  Every cost should be itemized, right
down to shipping fees.

FOLLOW UP:This may seem obvious but don’t badger your client and inundate them with phone calls and emails requesting the outcome of your estimate.   It is perfectly acceptable to ask your potential client when they believe a decision will be made, but as with anything, allow for breathing room.  Your client usually wants a final decision too, but it is their client, the one spending the money, that is holding up the approval.If you have shown interest, enthusiasm and willingness from the outset, you do not need to send additional emails and make additional phone calls to reiterate that.  Additionally, If you are not awarded the job do not immediately go into a reactive or defensive mode, asking WHY NOT?!  Usually, the reasons are never clearly indicated back to you anyway.  As long as your did your part and were reasonable and professional, just move on to the next project, with quiet confidence. Mask any obvious disappointment with excitement about working with them in the future, and appreciation for their consideration.  Keep them on your radar and update them periodically with new work.
I hope this has been helpful to you in clarifying some of the important things to keep forefront in your mind when creating your estimate, along negotiation tactics and typical agency protocol.   If I can be of any further assistance to you, please feel free to contact me.  I offer an array of services geared exclusively for photographers.  I offer Marketing, SEO and Social Media Support, List Building, Editing, and of course, assistance with Estimating and Negotiating.  I offer various packages to accommodate any budget.  In addition, I am pleased to provide a complimentary 30 minute consultation to new clients. I can be reached at www.focusfacts.com.   Thank you for your time.  I look forward to speaking with you,  John Berthot.Like Estimating & Negotiating - Where am I going wrong? on Facebook      share on Twitter
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