Restructuring wedding contracts pricing: What are the pros and cons of Percentage fee vs a fixed booking fee?

So, you are one of those photographers who, like me, charge a percentage of the total established in the contract, as a retainer to save the date. But now you are considering changing it to a fixed fee as a retainer, to sign a contract and save the date.

This is a question that I get asked allot in my wedding photography group on Facebook.

Well, first of all, there is no right or wrong here. I am not here to tell you what to do. Every photographer should run their business as they see fit, as long as it works for them and their clients. So, keep in mind that if you run into a photographer doing things differently from you, it doesn’t mean you or them are wrong. Just different. There are different ways to make things work.

That’s not what this blog is about. This is more a guide to make you understand the pros and cons of such switch.
But enough with this intro. Lets talk shop

Pros.
1- Predictable Income: A fixed booking fee provides you with a predictable income stream, as opposed to a variable percentage fee that may fluctuate depending on the total wedding cost.

2- Financial Stability: Knowing that you have a set amount secured for each booking can contribute to greater financial stability, especially during slower seasons or economic downturns.

3- Simplified Pricing: Fixed booking fees can make your pricing structure simpler and more transparent for clients, reducing confusion and negotiation during the booking process.

4- Reduced Risk: With a fixed booking fee, you mitigate the risk of lower earnings if clients spend less on their wedding than anticipated when you were using a percentage-based model.

5- Perceived Value: A higher fixed booking fee may convey a sense of exclusivity and premium service to potential clients, enhancing the perceived value of your brand.

Cons:
1- Potential Loss of Revenue: If your fixed booking fee is lower than the average percentage fee you used to charge, you might miss out on potential revenue from higher-budget weddings.

2- Client Perception: Some clients may perceive a fixed booking fee as less flexible or negotiable compared to a percentage fee, potentially leading to hesitation or resistance during the booking process.

3- Market Competition: If your competitors continue to offer percentage-based pricing, you may face challenges in positioning your fixed booking fee as competitive within the market.

4- Adaptation Period: Transitioning to a fixed booking fee requires adjustments to your pricing strategy, client communication, and marketing efforts. It may take time to effectively implement and communicate this change to your target audience.

5- Risk of Overpricing: Setting the fixed booking fee too high relative to the perceived value of your services could deter potential clients and limit your booking opportunities.

Before making the switch, carefully consider your target market, competitors' pricing strategies, and the potential impact on your business's financial health and client relationships. It may also be beneficial to test the new pricing structure with a subset of clients or conduct market research to gauge receptiveness before fully implementing the change.

To be honest, I prefer the percentage fee vs the fixed booking fee as its always adjusted to the total value of the contract, especially because many times we upscale which means a contract will ve valued more than initially thought, and therefore the deposit is also higher, while making sure your clients understand this.

Like I mentioned above, there is no right or wrong. I would love to know your thoughts on the comments section below.