Don’t win the race to the bottom.

A few times a month I get that call or email from a client that is ready to book with my photo booth rental company immediately. These customers don’t care what the price is, and they have their credit card in hand ready for me to charge it. These are the inquiries that all of us photo booth business owners would like to receive every day.

Unfortunately, more often I get that inquiry from a potential customer who is looking for a 4 hour photo booth rental for their summer wedding and wants to stay under their “budget” of $400. The other scenario that occurs is I give a potential customer our pricing information and they proceed to inform me that they found a Groupon or Thumbtack deal. They can get 4 hours for $300 with this type of offer; therefore, my prices are “crazy.”

It’s no secret that there is a steady stream of new photo booth rental companies being established, especially as the photo booth continues to grow in popularity and becomes a “staple” at events. Offering discounted prices is a well-known technique that new businesses in any industry use to initially get the attention of potential customers. Some of these businesses, after they get some experience and social proof, will raise their pricing, as sacrificing margins is not a long term strategy. However, many of the new photo booth companies are not taking this business seriously. They see the popularity of the photo booth and an opportunity to make a quick buck on the side. Some of these new companies have decided that they are going to attempt to beat the competition, solely by offering the lowest prices. These are the fly-by-night hobbyists, who want to make a few extra dollars on the weekends and have no vision for the future of their business.

Consequently, there is a race that some photo booth businesses have entered, some unknowingly, and it’s a race to the bottom on pricing. I am not threatened by the companies who are offering a four hour rental for $300, and if you are in this business for the long term, neither should you. To avoid being a part of this race or to get out of it, there must first be a mindset shift.

In any industry, there are products and services for sale, which vary in price, quality, and customer experience. Let’s take one of America’s favorite foods, the cheeseburger. In my town there is a McDonald’s, Burger King, Wendy’s, and Five Guys, and they are all selling the same product, with comparable prices. Yet if I were to take an hour and a half drive to New York City, I could go to a restaurant called Beer and Buns where they feature a burger that sells for $250. People buy it every day while at the same time they could take a walk down the street to McDonalds and order a McDouble from the dollar menu. Beer and Buns offers a superior product and experience. Their burger is made with “Kobe beef, foie grass, truffles, and caviar on a homemade bun.” Beer and Buns is not threatened by McDonald’s selling a cheeseburger for $1 as their target customers are totally different people.

I think about the last time I took a flight to visit my family in Illinois, and even within a single plane, there are varying seat prices. Everyone in the plane is going to the same destination, yet I could fly first class or coach (I flew coach). The folks flying first class have a different experience, which starts before they board the plane. These customers receive access to a lounge area with free food and drinks and privacy. In addition, these customers board and exit first, their seats are wider and have more leg room, they receive “free” food and beverage service, and are able to watch “free” movies.

Similarly, if I was in the market for a new car, there are different brands to consider. I could walk into a Ford or Chevrolet dealership and get an economy car, or I could visit BMW or Mercedes-Benz and buy a luxury car. Either option has four wheels, an engine, and will take me from point A to point B; however, they obviously have very different prices. BMW is not in competition with Ford or Chevrolet and therefore is not swayed by their lower prices. I have never heard of a customer walking into a BMW dealership and trying to negotiate price based on the lower prices at the Ford dealership down the street. There is no possibility that BMW would lower their price by $30,000. The BMW salesman would likely attempt to educate the customer on their product or politely send them to the Ford dealer. There are even pricing disparities within car manufacturers. For example, Toyota Motor Corporation owns Toyota, Scion, and Lexus. These vehicles all use the same engines, transmissions, and mechanical components, yet they have unique finishes, are “packaged” differently, and therefore, are priced differently.

Currently the United States has a population of approximately 319 million people. Most people enjoy using a photo booth; however, these people are not all potential customers for a photo booth rental. Often photo booth business owners make the mistake of trying to appeal to everyone, dilute their business, and end up not appealing to anyone. It is so important to figure out who your target market is. BMW has a specific type of customer that falls within certain demographic, as they understand that not everyone is going to buy one of their cars. BMW will not dilute their prices and just take the best offer they can get. Instead they cause their customers to come up to their level.
I have positioned my photo booth rental company as a luxury brand, and we’re as busy as ever. The customer experience begins when they land on my highly polished and tuned website. When a potential customer calls, the phone is answered, and when they email, they receive a prompt response. I have purposed to be a photo booth company that has superior equipment, technology, and the best props. I have a graphic artist on my team who works with customers and creates beautiful photo strip graphics. My business pays sales tax and has all the proper insurance. When our attendants work events they are friendly, knowledgeable, and professionally dressed. Like most of you photo booth owners, we take this business very seriously and charge accordingly.

With that being said, I’m not interested in serving the client who is set on finding a photo booth rental at a discount. Sometimes these customers can be educated as to the reasons our prices are higher than everyone else and converted, but others cannot. The reality is, the low end customers can be the most difficult to deal with. These are the customers who make constant changes, have tons of questions, and want a confirmation of the confirmation of the confirmation. I’ve found that I need to evaluate the customer as much as they are evaluating my company to make sure we’re going to be a good fit. It’s alright to tell potential customers, “Let’s see if we’re right for each other” or “Our photo booth company is not for everyone” or “I’m sorry, we’re not going to be able to work together.” The key is to exude confidence and avoid sounding desperate.

Be aware that sometimes the perceived “low end” customer is not actually one. These customers will say that they’ve just spoken to another photo booth company who gave them a better price. My thought has always been, “then why are you calling me.” There are three possible reasons. One, the lead could be lying, as people will say anything to try and save some money. Two, the other company is not available on the date of their event. Lastly, deep down the customer is wondering why this other photo booth company is so inexpensive; they have the “this is too good to be true” feeling and become weary and cautious. As such, these potential customers will begin to wonder if the photo booth is going to show up when and where it is supposed to.

Keep in mind that customers can change their mind and opinion about pricing. For instance, let’s consider a potential wedding lead. An initial, “that’s too expensive” or “that’s not in our budget” has many times changed to a “yes, we want your photo booth.” I have had customers initially say they can’t afford it, only to come back months later and book because their financial situation changed. Sometimes a family member or friend decides they’d like to give the photo booth as a gift, or the couple decides to cut out something else to pay for the photo booth.
Customers can be successfully educated on photo booths and the reality that not all photo booth companies are created equal. Recently a bride to be requested our pricing and availability for a wedding in July of 2016. I replied with our initial email, providing her with all of the information she requested. She then replied saying this,
“We are trying to stay under $700 for 4 hours, so unfortunately this is out of our budget, but thanks for the info!”  Here is my reply back to her:

“We certainly understand budgets, and our photo booth is not for everyone. While you continue your search for a photo booth company, here are some questions you should ask prospective companies. Hope you find it helpful.”

I sent her a link to a blog post on my website that outlines “5 Questions You Should Ask Before You Book a Photo Booth Company.” It is a valuable article that educates potential customers on photo booth rentals and positions my company as an authority.

Exactly two weeks later she reached out with this email:
“After some thought, we do think it’s worth the cost to get a good photo booth for our wedding, and yours is exactly what we’re looking for. Is it still available for 7/30?”

Some customers are initially ignorant of the photo booth business, and the only thing they really know to ask about is price. By remaining confident in my business, providing the leads with valuable, free information and appearing to be the local authority on photo booths, some of the initial “No’s” can be converted to “Yes.”

That customer who calls me with their credit card in hand, ready to book, are the leads I’m looking for. These are the clients who are “price insensitive.” I’ve studied who these customers are. I’ve figured out where they live, where they work, venues they book, event dates they prefer, who their event planners are, who are the other vendors they hire, etc. Look back through your records and study the demographics of those customers who never had an issue with your prices. A pattern will emerge, and these are the people to focus your marketing efforts towards.

I’m a firm believer in the concept of sowing and reaping. If I plant tomato seeds in the spring, with the right care and maintenance, I will reap a harvest of tomatoes in the summer and fall. Seed produces after its own kind; tomato seeds will only yield tomatoes. This concept is also true to the photo booth business. If I try to beat the competition by lowering my price, I will reap a harvest of low end clients with all the issues they present, as well as low profit margins. These low end clients will refer business to other low end clients, and I’d become known as the company who advertises a high price but will come off it. However the opposite is also true. If I remain confident in my business and pricing, offer all potential customers valuable information, regardless if they book or not, I will reap a harvest of the best clients and increased profits. Wealthy clients are friends with other wealthy people, and they will become a great source of referrals.
As photo booth business owners we sometimes forget the less frequent expenses associated with the business. The web hosting, email auto-responders, bookkeeping, insurance, credit card processing fees, prop replenishment, vehicle maintenance and fuel, etc. Then of course there is the value of all the time spent on the business. The time spent on marketing, writing ad copy, researching new technology, fixing software bugs, and sometimes staying out until 1 AM or 2 AM, away from family. All of these add up considerably, and we deserve to be well compensated for it.

There are circumstances where it is appropriate to negotiate on the basis of price. I have made price accommodations for schools, churches, and non-profit organizations, while still making a profit. These are the events that are usually annual, and these customers will come back year after year. Additionally, the guests at these events often become future customers at full price. There is also the situation where there is a date that several people have inquired about but it just hasn’t booked. As the date approaches, I will reach out to the leads and ask for their best offer. I’d rather have the photo booth out working with a percentage of something, rather than 100% of nothing.

We have to remember to sell the experience of the photo booth and make sure that there is an experience worthy of the prices we charge. Be the photo booth company that stays on the cutting edge of the newest technology, has the most unique and high-quality props, offers custom scrapbooks and USB drives, designs the best photo strip graphics, sends a thank you card after the event, etc. I rarely have anyone ask any questions about the technical details of the photo booth, like the specifications of the printer, camera, lighting, etc. Instead, clients want us to “wow” them with communication, to provide punctual arrival and set up for their event, and to insure their guests have the time of their life. They want the photos that we take to be of the highest quality, because they will be looked at for years to come.

In the end, many of these new photo booth companies businesses who race to the bottom on price will self-destruct and chase another new business idea. The ones that remain will serve the low end clients. Like most of you, I live and breathe the photo booth business and am in this for the long haul. Let’s continue to provide an incredible and valuable photo booth experience, make lots of money and let someone else win the race to the bottom.

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