So what should you cut from your budget?
We got a great question this week about photography, but it’s bigger than just photography. This time of year, the nice folks in the big offices, make budgets for the coming year and look for things to cut. It’s a great practice, and keeping things lean keeps things profitable. But creative is a bit of a conundrum. What should you spend? What makes a difference? What do customers notice? What matters?
First, consider that there are two types of expenses you need to pay for. Things that cost you money, and things that make you money. Things that cost you money are things like postage and printing. Yes, there are differences between printers and co-mails but you can usually put a number on them. If you go from a really nice white coated paper stock to something super cheap then customers will notice. As long as you can put your catalog on a table with your competitors and not see a difference in paper or printing quality, your customers won’t notice your printing or paper. Choose a brand appropriate paper and size, get a great price, from a printer you trust, and pay attention to the details like co-mail postal savings and paper storage charges.
Then there are the things that make you money. Great merchandise makes you money. Great marketing makes you money. Great creative makes you money. So if things are tight, what do you cut?
First, look at what’s working and what isn’t. Merchandise is the big kahuna and always will be. If you have great merchandise you can overcome a multitude of sins. If you don’t have great merchandise, start there.
Marketing and Creative are equal pillars of success. It’s usually easier to quantify marketing, so I’ll assume you marketers are on the job and not suffering from the creative interpretation of imaginary results.
That leaves Creative, which can be broken down into three buckets, Design, Photography, and Copy. Because few people in the big offices can tell the difference between good design and bad design, or good copy and bad copy, (Cat-U has classes on both) that leaves Photography holding the bag. Hence the great questions this all started with.
Photography is an investment, so always start with your best sellers. The rest is a numbers game. If you spend $400 (There are too many variables to put a real number to this so it’s a WAG or wild ass guess.) for a studio shot or $2000 for a model shot (Again, WAG), how many additional units do you need to sell to make that back? If you don’t have high product turnover, and can use a shot for several years, or seasons, factor that in.
Set it up as: if you spend $2000, over the course of the season, what increase of units will be needed to pay for that investment? If the price of the item is low and the units sold is low, the numbers probably won’t work. If you are selling a high priced item, and it’s a best seller, the numbers will probably make a reshoot profitable, even with a high priced model shot. Catalogs with large mailings will find it easier to justify spending more than smaller catalogs. For companies like L.L. Bean or Lands’ End the photo budget pales in comparison to the postage and printing costs.
Here’s the thing that most Creative Departments don’t do—work with Marketing. See if they can quantify what a good reshoot brings in using past efforts as a benchmark. The folks in charge of budgets usually respond to real numbers, they often don’t get creative execution discussions. Learn to speak their language.
Great creative makes you money, don’t skimp on something that can bring in real ROI. But don’t throw money at something that isn’t working.
If you’re thinking, “Gosh a group chat with some really smart people would help me a lot.” Subscribe to Cat-U and ask the Deans. They live for this stuff!
All the best,
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