Over the last few months, we’ve spent a great deal of time at SnapKnot connecting with our network of wedding photographers. We’ve been lucky to gain some really valuable insights and feedback, some of which has led to important new features such as the launch of the SnapKnot iPhone app, the creation of two new lower-priced subscription plans, and the ability for brides to search for wedding photographers within a certain mile-radius rather than needing to select from a long list of local cities.
Another interesting result of these conversations, and the foundation for this 3-part blog series on photography marketing, has been a common comment made by many wedding photographers when considering their SnapKnot subscription plan:
“I’m going to try the Free plan and then I’ll probably upgrade if it works.”
Today we’re going to challenge this perspective with some important questions that are not meant to simply sell you on the value of higher level SnapKnot plans, but are truly meant for you to broadly consider when you think about the overall investment strategy for your wedding photography business. We hope that this discussion will be valuable as you consider your long-term plan for growth and success.
Consider these questions:
1) By choosing to start with a basic Free SnapKnot plan, how might this be severely reducing your ability to capture the all-important bridal leads and giving your business a real chance to grow?
2) How might the incomplete set of data that may emerge as a result cause you to draw incorrect conclusions about the forward likelihood of success on SnapKnot and in turn translate into an infinite amount of future financial loss?
3) Are you in it to win it, or are you just dipping your toes in the water?
So while we’re admittedly biased, today we challenge you with a new premise to consider:
“I’m going to try a paid plan and then downgrade if it doesn’t work.”
Free vs Paid
From the very beginning, SnapKnot was designed to be user friendly and flexible – we knew that one of the main things wedding photographers disliked about many other online advertising options out there were inflexible and expensive long-term contracts, hence our easy monthly plans with both Free and paid options. Our intention was to allow wedding photographers the flexibility to easily migrate between plans, especially during slow seasons or after trying a higher level plan.
But consider this:
While it may seem counter intuitive, starting with a Free plan actually exposes wedding photographers to an infinite amount of financial loss, as represented by the amount of future potential revenue never realized. To be clear, the argument is not that there’s no place for a Free option, but rather that it might be more beneficial to begin with a paid option and then scale down from there if the results are not in line with expectations. Why might this be a better approach?
Let’s think about this.
While it is of course true that there is $0 in initial realized expense when choosing a Free account, the more important question to answer is how much potential future revenue may be lost by choosing a $0 initial investment vs. a small upfront investment that stands a far better chance at gaining a larger amount of future revenue. By investing a known amount up front, you are in fact in complete control of the exact amount of your potential financial loss (the amount of the monthly subscription) while also maximizing the potential of your future financial gain. This is in contrast to investing $0 up front and never realizing the maximum potential of your future financial gain.
How might you begin to make this financial calculation?
Let’s say you are considering our $24.95/month Platinum plan, and you are committed to testing it for 1 year. Let’s also assume that you very conservatively ascribe only a 40% chance of obtaining a booking as a result. Let’s also assume your average booking price is $2,500. Your expected return on the investment is as follows:
Investment = $24.95 * 12 = $299.40
Expected Return = $2,500 * 40% chance = $1,000
Net Expected Return = $1,000 – $299.40 = $700.60
So as you can see, even with only one expected annual booking at a very low 40% likelihood from a paid plan, you would still stand to have a net expected return of $700.60 on a $299.40 investment – that’s a 234% return on your investment from a single booking over the course of 12 months. Far better than you’ll find in Vegas or Wall Street…
But what about the net expected return with a Free listing?
It’s easy to falsely assume that you’d have a higher expected financial return due to the $0 initial investment, but it’s critically important to take into consideration the lower likelihood of obtaining a booking when making this calculation. We’ll use the same time and average booking price assumptions as above, however we’ll assume only a 15% chance of obtaining a booking (vs 40%) as a Free member:
Investment = $0 * 12 = $0
Expected Return = $2,500 * 15% chance = $375
Net Expected Return = $300 – $0 = $370
Which outcome would you prefer, $700 in your pocket or $370?
If you’ve found this discussion valuable, please consider continuing on to Part 2, where we introduce the concept of Confirmation Bias.
Still unsure? Read what current paying members have to say: reviews and testimonials.1 comment