What should I be charging for my video production services?

Introduction

If you own a video production company or you're a videographer or filmmaker, you've probably wondered at some point what you should be charging. It's natural – you want to be competitive, especially in tough economic times when budgets are being slashed.

It's a fine balance between charging what a client is willing to pay versus charging what you're worth and actually making profit. In this Q&A, we tackle this common question head-on and reveal the process that allows you to charge what you deserve.

What You'll Learn

• Why price isn't the deciding factor – If you give your client enough confidence that the video content will drive results, the price of the project doesn't matter.
• How to calculate conversion value – Understanding what a single conversion is worth to your client in monetary terms.
• The power of forecasting results – Using industry-standard KPIs to predict the impact of your content.
• Selling on value, not cost – The exact process that enables video professionals to convert over 90% of their opportunities.

The Key Insight

Here's something learned from 16 years of experience in the video world: if you give your client enough confidence that the video content you're going to create is actually going to drive results, the price of the project does not matter. If you're willing to do a little bit of research in the pitch, proposal, or quote stage, and you show your client how this content is going to help them achieve their goal – the price becomes secondary.

The Process: Selling on Value

First, you need to know what your costs are and ensure what you're delivering is profitable. Develop your rate card for what you feel your work is worth. If it seems high, that's fine. If it seems low, up it. You deserve to be paid what you are worth.

Your client is paying you money to achieve results – they may have a problem to fix or an opportunity to take. Your first step is to understand exactly what they're setting out to achieve. Ask them: "If we were sat down together in six months time looking back at this project, what would have to have happened for you to view this as a success?"

Next, understand what the value of one single conversion to that goal would mean from a monetary point of view. Divide their annual revenue by the amount of inquiries generated – this gives you the value per conversion. When you can forecast the results using industry-standard metrics, you fill the client with confidence. And when you put the cost of your service next to a predicted return on investment, price objections disappear.

Transcript

00:00:00:00 - 00:00:29:00
If you own a video production company or you're a videographer or filmmaker, you've probably at some point wondered what you should be charging and that's natural because you want to be competitive. We're living in tough economic times and we see or feel budgets being slashed. It's a fine balance to strike between charging what a client is willing to pay and can afford versus charging what you are worth and actually making some profit. So, in today's Q&A, we're going to look at this subject. What should I be charging for my video production services?

00:00:32:00 - 00:01:17:00
So, we've all been there. We've all second-guessed ourselves when it comes to pricing up a project or responding to a quote. We price it up according to our rate card. Then, we'll look down at the total and think they aren't going to pay that. So, we start to make adjustments and we've all wondered what others charge or are charging. Maybe we've even performed a bit of sneaky research and tried to get hold of a competitor's quote or proposal, maybe. But as I said in the intro, this is natural because we're so conformed to think that this is a numbers game. It's so easy to think that the price of a project is the deciding factor when it comes to who gets the project or even if you're not pitching against anyone else, whether the client is willing to release that budget for the concept that you've put forward. You know what I'm going to say? This just isn't the case.

00:01:17:00 - 00:02:04:00
Let me tell you something that I have learned from my 16 years experience within the video world. If you give your client enough confidence that the video content that you are going to create is actually going to drive results, the price of the project does not matter. If you're willing to do a little bit of research in the pitch, proposal, or quote stage, and you show your client how this content is going to help them to achieve their goal, the price of the project does not matter. If you spend a little bit of time showing the value of what you are going to create and using some industry standard key performance indicators, the price of the project does not matter. Okay. Yeah. Sell on value. Everyone talks about that. All right. Well, yeah, they do. But nobody tells you how to do it.

00:02:04:00 - 00:02:58:00
So, let's look at this. So, let's look at how you do this now. And I'm going to provide you with some resources that will help you to do this straight away. You can download those via the link below this video. And by the way, they're free and they come from the lessons that I teach within my course, Conversion 90, which helps video production company owners, freelancers, videographers, filmmakers to convert over 90% of their opportunities to paid and profitable projects. Again, that's all for free via the link below. So, let's look at the steps that you need to take. First up, you need to know what your costs are. You need to know that what you're delivering is profitable. You need to know what fees will motivate you to get out of bed on set or in that edit suite. And you need to stick to them. And don't worry about anyone else here. Develop your rate card for what you feel your work is worth. If it seems high, that's fine. If it seems low, up it. You deserve to be paid what you are worth.

00:02:58:00 - 00:03:45:00
Okay? So, assuming that you know your value or what you want to be charging, this is how we show value to the client. Your client will be paying you money in order to achieve results. They may have a problem to fix or an opportunity to take. They're not creating video for the fun of it. So your first step is to understand exactly what they are setting out to achieve. So for a small business owner, this could be to generate inquiries into their business. For a bigger brand, this could be to break into a new market. But you need to get very specific on this. If you or your client is unsure as to what they are setting out to achieve, ask them this simple question. If we were sat down together in six months time looking back at this project, what would have to have happened for you to view this as a success? The answer to that question is their ultimate goal for the campaign.

00:03:45:00 - 00:04:44:00
The next step is to understand what the value of one single conversion to that goal would mean to them from a monetary point of view. So say you are talking to a small business owner and their ultimate goal is to generate 100 new inquiries for their business. You need to understand how much a single inquiry is worth. To do this, you can simply ask them how many inquiries they have generated over the past 12 months. A very crude way of getting to the figure that we need is to divide their annual revenue or turnover by the amount of inquiries that they generated in this time period. So, if they have generated 500 inquiries over the past 12 months, and their annual revenue is $1 million, we divide $1 million by 500, which gives us a figure of $2,000 per inquiry. These are just random numbers in this example, but I'm just showing you the process.

00:04:44:00 - 00:05:27:00
So, with that very quick bit of math, we know that for every person that engages with the video content that we are creating for the client and converts to an inquiry, well, we added $2,000 to the client's bottom line. And in this example, they want 100 new inquiries, which equates to $200,000. Time to give them some confidence that we're going to achieve this for them. Because if we do, if we fill them with confidence, they probably won't be worrying about another couple of grand production budget. So the next step is to fill them with confidence. We look at their audience, their target market and understand them intensely. We understand their pain points and what they respond to.

00:05:27:00 - 00:06:15:00
Now I have other videos that go into this in more detail and how to perform this top level research. And the book obviously covers it in a huge amount of detail. So I'm not going to go through that in this video. But we build our concept around their audience knowing and here's the big part. We let them know that we've done the research. That is what is going to fill them with confidence. So assuming that you've understood their audience and you understand how video marketing works, and if you don't, I'd highly recommend watching my video, the buyer's journey, you would have landed on a concept that is very likely to drive the results for your client. But here's the big part. Here's what stands you out from the crowd. Here's what ensures that you do indeed charge what you are worth. The next step is to forecast the results. What? How? Well, it's actually very simple. Because of the work that you have done in understanding their audience intensely, you use some industry standard metrics, some key performance indicators that if achieved, and they will be achieved because of the research that you've done, will lead to the content that you're being paid to create achieving the project goals.

00:06:15:00 - 00:07:09:00
Let's break this down. Say your video content is going to be used online, and say your client is willing to put a little bit of advertising spend into promoting it. You can very easily forecast what will happen with that content by using some very basic arithmetic. Let's go through an example and within the resources you also have access to a resource called the metric calculator and ROI forecaster which does all of the calculations for you. So let's say for example your client's audience spend a lot of time on Facebook. They're Gen X so born between 1965 and 1980. They love sharing photos of their kids and telling the world how proud they are of little Jimmy who came forth in his karate competition. And say you've got a very basic video strategy in place where you're going to use awareness stage content to drive awareness and then decision stage content to generate those inquiries. A safe CPM, so that's cost for 1,000 placements of our video content would be $10.

00:07:09:00 - 00:08:13:00
Say we have a view rate of 25%. Again, nice and safe, especially with all the research that we've done. So 250 out of each 1,000 placements gets viewed. And of that 250, we have 10% that are engaged with that awareness stage content. So for every $10 we spend in promoting that content, we have 25 engaged views. So people that have watched over 50% of that video that are served our decision stage content. So that might be an about us video that has a nice strong call to action or inquire. Now, let's say that the decision stage content again has a 25% view rate, which gives us over six engaged views and of those six engaged views, 10% adhere to the call to action and inquire. This means that for every $10 of advertising spend, we're generating 0.6 inquiries. So, if your client spends $1,000 promoting that content, they generate 60 inquiries. We now know that each inquiry in this fictional example are valued at $2,000. and $2,000 multiplied by 60 is $120,000.

00:08:13:00 - 00:09:04:00
Again, this is purely fictional and I'm just showing you the process. But by showing the client the process and outlining some simple, easy to hit metrics, you can forecast the impact that your content is going to have on them or their business or their cause. And this allows you to forecast the results. And let me tell you this, when you do this and you put the cost of your service next to a predicted return on investment, you can see why people that apply the conversion 90 framework to their video businesses convert over 90% of their opportunities to paid and profitable projects. So I understand that this all sounds a little complex, but it's really not when you know what you are doing. And I go into detail on every single step that you need to take within the conversion 90 book, video course, and audio book, which again you can get for free by signing up for my free courses via the links below.

00:09:04:00 - 00:09:52:00
But this is how you charge what you are worth. And I know the question in hand today was what should I be charging for my video production services? But this is the process that answers that. You can charge what you want when you're selling on value. And that's how you sell on value. Obviously, it's going to be different for each and every client that you pitch, propose, or quote to. But this is how you beat the competition. This is how you charge what you are worth, and this is how you build profits into your video business. And as I've said a couple of times now, you can hit the link below and get the whole process outlined step by step and join over 3,000 other video production professionals in winning over 90% of your opportunities when you implement the conversion 90 framework. And that's all completely free. So, I hope that's been helpful. Have a fantastic day.