Groupon Deal Costs Photographer a Year's Free Work 209
Andy Smith writes "One professional photographer in Somerset, UK, thought he was drumming up lots of extra business with a special deal on the Groupon group-buying site. Sadly he has ended up committing himself to nearly a year of unpaid work, plus he has to give out over 3,300 free prints." This analysis seems to be based only on the author's observations (rather than the photographer's experience), but the numbers are interesting. It can't work against everyone, though, or I bet there'd be fewer repeat advertisers on the daily-coupon sites.
42% would not repeat (Score:5, Interesting)
Re:42% would not repeat (Score:5, Interesting)
According to this survey [screenwerk.com], 42% of Groupon SMBs would not repeat. That's quite a lot, and it's from this and cases like this story that I suspect that the Groupon-like business model will not last too long, once the fad has died.
I'd give you mod points if I had any. The article mentions one of the benefits is "getting good exposure". But it works both ways. If you have to rush to get all 300 done and do a bad job, you've just delivered a product for a lower profit margin and provided yourself with bad publicity - worst of all worlds.
Seen it before. Here's what's going to happen. (Score:2, Interesting)
I've seen nearly-identical "deals" for photography packages on Groupon before. To be a successful commercial photographer, you need 1) equipment 2) a measure of skill and talent and 3) enough business smarts to make enough money for your time.
The move to digital has significantly lowered requirement #1, equipment. Until an photographer starts building a portfolio and eliciting feedback from others (preferably experienced photographers), they won't have a clue as to requirement #2, their skill level. That lack of understanding hurts requirement #3, knowing what to charge.
So here's how the scenario above will play out. 300 Groupon users will call and make bookings in the near future. The photographer will accept a handful of them at first, and quickly realize what he/she's gotten him/herself into. The photographer will then try to weasel out of the rest of the coupons; pushing available dates into the distant future, cancellations, attempting to disqualify the coupon, attempting to change the terms, stalling, and finally flat our ignoring them. Groupon users will then complain the Groupon, who will eventually get the money back, and everyone will walk away unhappy.
People will be quick to blame Groupon in this case. But its wholly the photographers fault. If you, as a business owner, overcommit your product, your resources, your services, or yourself, you only have yourself to blame.
Disclosure: I've done some work as a commercial photographer, mostly because I enjoy the occasional change from the usual 9-5 IT work. Feel free to hit up the link in my sig.
Re:Clueless author (Score:5, Interesting)
But... (Score:5, Interesting)
Who says he's going to be run out of business?
The guy who wrote the article doesn't know what he's talking about.
I've talked to a good 40 business owners who have used Groupon. Some things that the author of the article totally ignored:
1) Only about half of the Groupons get redeemed
2) If redeemed after the expiration date, they are only good for the face value paid. I.e., if you buy a £200 Groupon for £29, and you don't redeem it before expiration, then you just get £29 off the price of whatever you buy.
3) Upselling is key. For restaurants, when they sell a $40 Groupon for $20, they're betting you're going to come in with some friends and spend $60 to $100 on dinner. I do a lot of work in the recreational activity sector, and there they often do groupons for 50% off a basic package, then once you are there upsell you to a bigger package at full price. In the case of our photographer, if he does it right he'll be getting people to buy £400 or £600 photography packages - "You already are getting all this for £29, look what I can add to it for only £100 more!"
Now, maybe this groupon won't work out great for this one business, but Groupon can work very well if you set it up right and treat it as what it is supposed to be - an advertising/sales lead channel.
Re:basic business sense (Score:5, Interesting)
No, the author is dead on. Your "reasonable guess" that the photographer was able to do arithmetic is based on the false assumption that the photographer is not an idiot. The thing is, the vast majority of "professional photographers" are idiots, who have no education or experience in either photography or business. I've been a full-time professional photographer for 10 years, and the bulk of the competition is just mind-bogglingly dumb. A photographer in my local market offered a similar groupon and I did the same calculations as the author of this article. The girl wound up selling enough to work for 5 months, 40 hours a week for an $1800 GROSS profit. So that's before paying for equipment, insurance, phones, computers, etc.
The other problem with groupons for luxury services like photography is the kind of clientele they attract. If you're going to offer portrait photography, it has to be done with a high level of quality and service, and therefore a high price tag. You simply cannot compete on price doing button-pusher work because then you're competing with the loss leaders at the Sears portrait studio. So, you have to make something artistic and unique that someone is willing to pay a premium price for or else you're not going to make any money. Groupon customers, however, are by nature deal-seekers. They're people who shop based on price, and are therefore unlikely to come back and pay premium prices for luxury services like portrait photography.
Groupon is just a bad idea for photographers all the way around. You lose a lot of time and money and only really gain exposure to people who make for poor clients.