Start Charging These Fees Today

Start Charging These Fees Today

Business

Most of us love being photographers, but let’s face it: we don’t do this for fun. Grabbing the camera and tripod and venturing out to capture a landmark while on vacation is a far different experience than crawling out of bed at 3:30am on Sunday (the only day that week with a clear weather forecast) for a sunrise photo shoot and setting up the shot in near-darkness with an art director peering over your shoulder, all the while being devoured by mosquitoes as you recall an earlier conversation with the client in which they chided you for “billing more per hour than an attorney.” Oh, and the photos are due back that same day because the shoot had already been pushed back due to weather. Don’t get me wrong—I’m grateful to have the opportunity to express myself creatively and earn a living doing something I enjoy. But that second part, the “earn a living” part, comes at the expense of my own sanity if the compensation for the work is not equitable.

One of my favorite stories, taken from Way of the Peaceful Warrior by Dan Millman, tells of a farmer who hired monkeys (who apparently could talk and were familiar with the concept of organized labor) to harvest crops for him. If I recall correctly, their compensation was three figs in the morning and four in the afternoon. The monkeys felt this was fair. One day, the monkeys went on strike, claiming their compensation was unfair. The farmer thought about it and said, “What about four figs in the morning and three in the afternoon?” The monkeys felt this was fair and went back to work.

The total compensation didn’t change, but the timing of that one fig made all the difference in the monkeys’ satisfaction. Line items on an invoice are no different, for both the photographer and the client. An invoice for $2,750 in creative fees sends a different message than an invoice for $2,500 in creative fees and a $250 rush fee, even though the total is the same. The former fails to account for the all-nighter you pulled, the other work you had to turn down, or the fact that you gave up your first day off in two weeks in order to deliver on time. For some clients, it might also cause confusion in the event your rates are later compared to competing quotes or bids they might receive in the future. The latter assigns a tangible exchange of value and reflects the client’s choice to invoke that option, as well as your choice to accept the rush schedule for that fee.

The issue is sustainability. Having a fee structure that adapts to the variables inherent to our line of work allows us to turn unpredictable circumstances into predictable outcomes because we are accounting for our time and other resources spent. An appropriate fee structure allows us to accommodate a client’s request when possible, but ensure that the impact on our business and/or personal life is accounted for in our compensation.

Before we delve into the nuts and bolts of this topic, I’d recommend familiarizing yourself with one of my previous articles on sales. Why? Because the sales process does not conclude when the client signs the contract or pays a retainer. Every interaction with a client has the potential to strengthen or hinder your relationship with them. At its core, sales is about identifying the needs of a client and fulfilling those needs in a way that meets or exceeds the client’s expectations. In order to do that, we must first establish and reinforce those expectations. Otherwise, the client will form their own expectations which, whether or not they are objectively reasonable, will often remain unvoiced until it’s too late. This creates a “moving target” situation for the photographer and is antithetical to the experience we want, both for the client and for ourselves.

Why Additional Fees are Necessary

Setting Healthy Boundaries

When a client’s requests drive us crazy, it’s very easy to simply blame the client. The truth is, except for occasional, truly problematic situations, when we experience frequent friction and stress working with a client, it’s often due to our own failure to manage the relationship. It’s not the client’s fault if we espouse policies and yet do not adhere to them. If we voluntarily breach boundaries set by our terms, how can we expect the client to adhere to them? Failure to set and maintain boundaries hurts the client just as much as it does us.

Effectively managing client relationships means better client service by ensuring we can sustainably and reliably meet or exceed our clients’ expectations. One way to set a respectful boundary is to provide incentive for the client to operate within the standard terms. That typically manifests in the form of additional fees when the assignment deviates from those standard terms.

Exchange of Value

Let’s say a stranger approaches you on a Friday afternoon when you’ve just gotten done working a ten-day stretch and all you’ve been looking forward to is a chance to lounge around the house or go on a hike to clear your head. The stranger says, “How much money would it take for you to give up your weekend?” My guess is that $50 wouldn’t cut it. Whatever number you have in your head, that’s the number you should factor into determining your fee structure for things that reduce your ability to choose how your time is spent. Some fees are comparable to overtime that an employee would receive, and since we are our own boss, we should pay ourselves “overtime” when applicable. The client may ultimately decide the fee is not worth it, in which case they were the one to make that choice, even though you did offer to accommodate them. This turns a “no” into a “yes,” which is a powerful tool in managing client relationships.

Rush Fees

We’ve all worked with clients who are well aware of the promised turnaround time for final images, yet seek to move the timeline up for every shoot, for one reason or another. Particularly if you are just starting out and still building your client list, it may seem daunting to broach the subject of a rush fee. “After all,” you imagine the client thinking, “it’ll take you the same amount of time to edit regardless of when images are delivered, right?”

Presumably, yes, it would take you the same amount of time to edit the images regardless of when that happens. However, in a rush situation, that might mean working until 2:30am to finish on time, which costs you more time in a late start the next day. Or perhaps you have to block off a specific day for editing, which happens to be the only day another client can book you for a shoot. A rush fee secures your time to meet the client’s need for a tighter deadline and helps offset the likelihood that you will lose out on other business because the editing time is set in stone, rather than flexible. If receiving the final images sooner holds sufficient value for the client, they will have no problem paying for that convenience.

With rush requests, I’ve learned the hard way, multiple times, that it is best to be explicit and unmoved in your promised deadline unless you are prepared to fully commit to anything sooner. In the past, when a client would ask for images to be returned sooner than my normal timeline (at no additional charge), my response was usually, “I’ll try.” Somehow “try” tended to be lost in translation, leaving my client waiting by their computer at 10:30pm expecting that I would come through with their request. It’s an impossible situation at that point. If I don’t deliver early, I will have “tried and failed.” If I do get the images to them sooner, this expectation becomes the norm. Ambiguous commitments lead to dissonant expectations. As the infamous saying goes, “Do or do not. There is no ‘try.’”

I’m not saying you should withhold images from your clients until the agreed deadline. On the contrary, I think early delivery is a great way to show your commitment to excellent service,  and it only makes sense to deliver images as soon as they are completed. The difference, however, lies within the commitment. In this case, early delivery is a nice bonus rather than a promise made. The former serves to exceed the client’s expectations; the latter merely meets them.

In addition to charging rush fees, I disclose to clients that rush turnaround is subject to availability and must be requested at the time of booking. If the request comes later and I am able to accommodate it, that’s great. But in the event I am unable to do so, at least this expectation preempted the request.

Late Fees

As a customer, I put late fees in the same category as paying for shipping when ordering something online—it just feels icky. It’s like watching money go down the drain. It’s a known psychological effect that when shopping online, people are more likely to purchase a $30.00 item with “free shipping” than the same item for $25.00 with “$5.00 shipping.” The net cost to the consumer is the same, but the perceived value is greater because getting a $30.00 item for $30.00 sounds better than getting a $25.00 item for $30.00 after shipping. 

However punitive or superfluous they may seem, late fees are necessary to protect the sustainability of your business. When a client is 30 days late on an invoice, you have lost the time-value of that money. Whether you had to float a few expenses on a credit card (and pay interest on that), or you just weren’t able to have as much liquidity in your checking account, the result is the same: late payments take away choices with our money that are rightfully ours to make. Late fees are an incentive to pay on time and they give the client a simple choice: pay on time, no fee. Take more time to pay, they’ll pay more.

If only it were so easy to enforce this, though. As a consumer, I can at times be borderline Karen-esque in my expectations. I have flirted, argued, or otherwise negotiated my way out of many late fees over the years. There’s probably an abandoned Blockbuster Video location that still has my photo taped to the cash register. Customers hate paying late fees and sometimes will flat-out refuse to do so. When a client pays a $5,000 invoice, even if there’s a late fee listed in addition to that amount, it’s unlikely we will take them to court over it. We then have the choice to either become a debt collector or to let it go. There are companies that will be months late with an invoice as a matter of practice and will do so with impunity, noting that they “don’t pay late fees” as though their corporate policy should override agreements made. There is also the issue that many jurisdictions limit the amount you can legally charge as a late fee or interest on past-due balances pursuant to a contract.

How, then, can we enforce a late fee policy in a meaningful way? In other articles, I’ve frequently referenced John Harrington and his book, Best Business Practices for Photographers. Harrington has established what I think is a rather elegant solution to this issue. According to his book, he places a notice on his estimates (and invoices) with a 10 percent “administrative fee” added to each total. Whatever the billables on the estimate, he takes that amount, adds 10 percent, and it goes on the estimate as a final line item. Harrington explains to clients that this fee is to offset the cost of chasing down unpaid invoices and spending time going back and forth with accounts payable departments. However, if the invoice is paid by the due date, the client may deduct that fee from the total. So it’s effectively a 10 percent discount for paying on time. In the strictest terms, this also defines the fee as an agreed charge already itemized on the invoice, rather than a penalty assessed after the fact. This can be further strengthened in conjunction with a usage rights clause that states no license exists without payment in full.

Cancellation Fees

This one seems fairly obvious in its essential purpose. If a client cancels a shoot with so little notice (or none at all), that we cannot replace the business or otherwise plan our time, this presents a direct financial loss to us. Without a cancellation fee, not only do we not receive the revenue from the scheduled shoot; we also will have turned down any other business for that time, which may force us to forfeit another time-sensitive client.

In an article on contracts, I mention that we can shield against last-minute cancellations utilizing a “liquidated damages” clause. Because it would be nearly impossible to determine a specific dollar amount of other business we would have been able to accept if not for the client’s cancellation, a liquidated damages clause allows us to agree ahead of time that a specific amount will be owed if the client cancels a shoot without sufficient notice (usually, this amount is 100 percent of the fees to commission the photo shoot). What about licensing fees, though? I would say it’s up to each photographer whether this factors in, but in my personal opinion, licensing fees should absolutely be included in a liquidated damages clause, or at least in part. The photo shoot opportunities you had to turn down because your time was reserved for this now-canceled shoot would have potentially involved even greater licensing fees. That’s all business that you’ve been left unable to earn after holding up your end of the bargain. The cancellation fee serves as a tool to ensure that, if cancellation becomes necessary, the client respects your time enough to notify you of this far enough in advance for you to be able to replace their scheduled photo shoot with other work.

In my view, cancellation fees and last-minute, weekend, or holiday bookings go hand in hand. I do not typically charge additional fees to schedule shoots in those circumstances; however, I typically advise the client that the shoot will be considered a firm booking and not subject to cancellation. While not specifically a fee (unless the shoot is canceled), there is an exchange of value that makes it worth my while to relinquish the opportunity to reserve my weekend or holiday for personal time.

Third-Party Image Licensing Fees

This topic could be an article on its own, but it deserves a mention here because third-party licensing is one of the biggest areas where I’ve observed photographers undervalue themselves, causing them to succumb to faulty reasoning or be unable to assertively communicate their value. 

Let me elaborate by way of example. Cost-sharing photo shoots can hold more value for both the photographer and savings for the clients, but hinges on the principle that you’re either in or you’re out. In other words, parties who expect to save money by cost-sharing must buy into the whole photo shoot, rather than attempting to pick and choose which aspects they want to walk away with or waiting to buy in until they see the final product. The cost difference is significant. Instead of saving 30 or more percent on the photo shoot, third-party licensees down the road should expect to pay much more than the original commissioning client. I used to suffer from the mentality that if the images from a shoot were already taken (and paid for) by the first client, how could I feel justified in charging more to a third party? The answer is simple: the images become more valuable.

When a client commissions you for a photographs, you are both taking a risk. The client is risking money, time, and any deadlines they might be depending on fulfilling using your photography (along with a potentially limited opportunity to bring a photographer into the space to begin with). You are risking your time, reputation, and the opportunity for other assignments. Maybe the client paid for props or spent all day arranging flowers in preparation for the shoot. Perils such as weather, logistical issues, technical problems, and many other variables could manifest at any time. But, if all goes well, you’ll have wonderful images for your client. Then along comes Third-Party Guy who doesn’t understand why, when all you have to do is send them a download link, you expect them to pay three or more times the amount the original client paid. However, that’s exactly the point: all you have to do is send a download link, and Third-Party Guy will be able to instantly make use of images he has had the chance to approve in advance of committing any time, money, or other resources to the process. What took you and your client potentially weeks or longer to produce is available to Third-Party Guy in a matter of minutes. There is a significant value to this convenience. 

Scout Fees

As Mike Kelley reminds us in “Why I Don’t Scout Without a Deposit (and You Shouldn’t, Either),” the scout for a photo shoot is not an interview. The time and creative influence you put into scouting are both part of the value you bring to the project and should be compensated—not speculatively offered up. All else aside, you’ll have to turn down opportunities for other business for the time you’ll be scouting. That on its own should necessitate billing for the scout.

Mike’s approach to this issue is both assertive and collaborative. He doesn’t scout without a deposit, but the deposit applies toward the total invoice. For example, if the deposit is $500 and the total fees are $4,000, the final invoice is $3,500. To me, this serves a dual purpose. Not only does it ensure you are paid something for your time if the shoot falls through; it also demonstrates that the scout and the shoot are intrinsically connected and cannot be broken apart. Scouting is one fee I actually prefer to be built into the total creative fee, lest any budget-conscious client see it as an optional aspect of the shoot because it’s listed separately.

Enforcement is Key

Having clearly defined terms does nothing for you if you are not prepared to enforce them. I find that the most common requests I get for rush delivery or free “extras” are from first-time clients. It’s usually a combination of the client not yet being familiar with my policies and fee schedule, and also a bit of testing the boundary. It’s often largely subconscious and therefore perfectly innocent, but particularly for a new client who has not yet been held accountable to your terms, lack of enforcement sends the message that the boundary is only theoretical and does not apply to them. Then, when you actually do attempt to hold them to your policies, even ones they’ve signed, you will be seen as the one suddenly changing the terms.

My biggest fear in the past—one that held me back quite a bit, actually—was that if I enforced my policies unilaterally, particularly those relative to additional fees, clients would get mad and leave me to work with someone else. At the same time, I’d be frustrated that all my gestures of leniency or accommodation were not viewed as such; the clients still seemed dissatisfied no matter how far I would bend (there’s that moving target I mentioned). I’d have shoots rescheduled at the last minute, even when booking myself on weekends and holidays, and rush delivery was always indicated as an imperative.

When I began enforcing my policies, I did receive some initial pushback, but I also began receiving more respect for my time and expertise. Suddenly, the issues I’d previously experienced virtually disappeared. Those same clients didn’t go elsewhere. Instead, the relationships improved dramatically. Last-minute cancellations stopped occurring. Weekends were no longer the “only” time the client could schedule a shoot. And on the occasion that rush delivery was necessary, that was requested in advance, with the understanding that a rush fee would apply. I then realized that the prior issues were not with my client. Because I’d previously failed to enforce reasonable policies, the boundaries were essentially nonexistent, leaving the client to their own devices in forming expectations. Unilaterally enforcing agreed terms means a more predictable and therefore more sustainable experience for the client. If you do occasionally decide to waive an applicable fee for a  client, at a minimum I suggest making sure to list it on the invoice and then apply an equal “one-time courtesy discount.” This makes it clear that the fee is not discretionary and will not be waived again.

Lead with Service in Mind

Design and execute your fee structure with the goal of better and more sustainable relationships with your clients. Naturally, the fees we charge compensate us for inconvenience, time, and lost opportunities, but the more long-term effect is to mutually align expectations in service of meeting, and hopefully exceeding, the client’s expectations.

What other fees do you charge in your workflow? Let me know in the comments below.