Tamgerine
TPF Noob!
- Joined
- Jun 27, 2012
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- 131
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- 71
- Location
- DC
- Website
- www.tammyhineline.com
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- Photos OK to edit
Im kind of a nerd. I like business! I like to sit around and think about business. If photography is my steak, then business is the delicious A-1 sauce I slather it in. So here is a long post about some nerdy business thinking I was going today!
So something came up on my Facebook feed a day or so ago, and it was another of those mini session posts wherein everyone comments how they cant believe anyone could make money charging those prices, and they were surprised to see it was a well established studio with good quality products. Of course, the goal of a mini session is to upsell the customers into a higher priced package. Someone operating entirely on the pricing from the mini session would never succeed.
It got me thinking about my old job at Picture Me! Portrait Studios (owned by CPI Corp). I worked for them for about two years back in 2007-2008 when they were still Wal-Mart Portrait Studios and as a manager I helped several studios through the re-branding into Picture Me! I said to myself today*, Now here is a business built entirely upon the mini session business model! Pull the client in for a loss leading package and upsell them with additional portraits or products. Likewise, Picture People is a similar company.
Basically, how it operated was I took seven photographs. The first photograph was for the cheap package and usually a standard pose with a promotional background like holiday or whatevs. Then I would take six good photos and try and sell them higher priced packages. At any time they could leave with JUST the promotional package or nothing if they so chose.
However, CPI Corp has long since been bankrupt, even when I was working there, and is fraught with problems. Yet Picture People, with almost the same sort of mini session model, has moderate success from what the research I have done shows. At least, theyre not failing like CPI is.
So why is it that when presented with two similar business models, one corporation succeeds and one is in the process of crashing to the ground?
Is it an internal issue? CPI Corp definitely has some serious internal problems including a CEO dismissal, fines for not filing their annual reports, and improper listing standards for the New York Stock Exchange. Maybe, that could definitely be it. But not being internal, I cant really speak for that. So lets not factor that in for now.
MY major complaints while working there was being underappreciated, underpaid, cheap customers, and the fact that the company ONLY cared about the bottom line and my managers just didnt understand that no family was going to drop cash for the 249.00 package of their kid in their Halloween costume when Christmas was right around the corner. But EVERY major company has bad bosses, unhappy employees, and cheap customers. Is that really the cause of an entire companies failure? I dont think it is.
They dont require previous photography experience for their employees, so a better talent pool doesnt really factor into it.
I think the failure of CPI vs. the success of Picture People comes down to key three factors.
1. Outdated technology and service systems. The entire duration I was there we were shooting film, and this is in 2007. You could see your results digitally, but you didnt know what you were really getting because the digital camera and the film were different exposures. So not only did it take at a minimum of three weeks to receive a portrait order, if it was wrong or messed up you had to order a reprint from the laboratory and wait another few weeks. If the shot was wrong? Re-shoot, wait another three weeks. Meanwhile Picture People was handing the portraits to the customer in an hour or less, and could reprint on the spot no problem.
On top of that, any technological updates to the system in place would require a massive overhaul of training, equipment, and sales procedures. I believe that any large scale business should be modular in order to stay competitive that is, you take a piece out and put a different piece in its place, rather than replace the entire system. CPI Corp has since gone digital, but I have no idea how long it took them or to what cost.
2. Disparity between pricing structure, target market, and location. Picture People and CPI have somewhat similar pricing structures. In my day at CPI sheets were 10 each. Right now theyre 20, with Picture People sitting at 18 dollars a sheet, with collections around the same prices. They have similar prices but Picture People has advantages that CPI does not better location, target demographic, and customer experience.
Picture Me! primarily has their locations inside Wal-Mart, targeting Wal-Mart customers. Do I have to say more about that? While Picture People has their locations in upper scale malls and outdoor boutique-like shopping centers. Similar pricing structures, but one corporation has an entirely better position to hit a profit-sustainable target market from.
Experience. While the Picture Me experience is akin to dragging your children to a, well, Wal-Mart, Picture People just offers a better visit overall. I went there once with my husband. The VERY first thing they did after we got our portraits taken was to carry out a wonderful looking framed collage of sepia-toned photographs. I wanted it the second my greedy little eyeballs rested on it no matter what the price. Why? Because not only did I love my portraits, but they were now tied entirely to the special day and memories of the entire experience I shared with my husband.
Who has a special experience going to a Wal-Mart? Friggin nobody. Basically, I believe Picture Me is attempting a pricing structure and branding ideal that it cannot profit from while directed at its current customer demographic and location.
3. Cannibalization. I think this was the biggest factor in the downfall of CPI. Cannibalization is when a company offers a newer or different product or service that takes away from its own other product and services, or when it is location related. Picture People currently has over 170 operating studios in the US. Wow, thats a lot! But compared with the fact that CPI just closed 365 of its under-performing studios in one blow, and has a couple thousand more to maintain? 170 isnt looking like much. CPI took their demographic and stretched it into oblivion by saturating the market with locations, effectively spreading their customers out so thin until every studio was under performing because they were all cannibalizing on each others customers. Instead of one profitable studio having 10 customers a day, 10 under-performing studios got one customer a day.
Wow this is becoming long, almost done here!
So the final question is, can someone profit off of mini sessions, even though everyone wants to hate on them? I say absolutely. As long as you hold true to your branding, target demographic, strong sales techniques, product quality, customer experience, and keep that overhead low!
I would love to get other peoples opinion on this analysis, and to know if theyve attempted mini sessions that work for them. If you disagree, then all the more interesting the conversation will be!
Also, dont buy stock in CPI Corp.
So something came up on my Facebook feed a day or so ago, and it was another of those mini session posts wherein everyone comments how they cant believe anyone could make money charging those prices, and they were surprised to see it was a well established studio with good quality products. Of course, the goal of a mini session is to upsell the customers into a higher priced package. Someone operating entirely on the pricing from the mini session would never succeed.
It got me thinking about my old job at Picture Me! Portrait Studios (owned by CPI Corp). I worked for them for about two years back in 2007-2008 when they were still Wal-Mart Portrait Studios and as a manager I helped several studios through the re-branding into Picture Me! I said to myself today*, Now here is a business built entirely upon the mini session business model! Pull the client in for a loss leading package and upsell them with additional portraits or products. Likewise, Picture People is a similar company.
Basically, how it operated was I took seven photographs. The first photograph was for the cheap package and usually a standard pose with a promotional background like holiday or whatevs. Then I would take six good photos and try and sell them higher priced packages. At any time they could leave with JUST the promotional package or nothing if they so chose.
However, CPI Corp has long since been bankrupt, even when I was working there, and is fraught with problems. Yet Picture People, with almost the same sort of mini session model, has moderate success from what the research I have done shows. At least, theyre not failing like CPI is.
So why is it that when presented with two similar business models, one corporation succeeds and one is in the process of crashing to the ground?
Is it an internal issue? CPI Corp definitely has some serious internal problems including a CEO dismissal, fines for not filing their annual reports, and improper listing standards for the New York Stock Exchange. Maybe, that could definitely be it. But not being internal, I cant really speak for that. So lets not factor that in for now.
MY major complaints while working there was being underappreciated, underpaid, cheap customers, and the fact that the company ONLY cared about the bottom line and my managers just didnt understand that no family was going to drop cash for the 249.00 package of their kid in their Halloween costume when Christmas was right around the corner. But EVERY major company has bad bosses, unhappy employees, and cheap customers. Is that really the cause of an entire companies failure? I dont think it is.
They dont require previous photography experience for their employees, so a better talent pool doesnt really factor into it.
I think the failure of CPI vs. the success of Picture People comes down to key three factors.
1. Outdated technology and service systems. The entire duration I was there we were shooting film, and this is in 2007. You could see your results digitally, but you didnt know what you were really getting because the digital camera and the film were different exposures. So not only did it take at a minimum of three weeks to receive a portrait order, if it was wrong or messed up you had to order a reprint from the laboratory and wait another few weeks. If the shot was wrong? Re-shoot, wait another three weeks. Meanwhile Picture People was handing the portraits to the customer in an hour or less, and could reprint on the spot no problem.
On top of that, any technological updates to the system in place would require a massive overhaul of training, equipment, and sales procedures. I believe that any large scale business should be modular in order to stay competitive that is, you take a piece out and put a different piece in its place, rather than replace the entire system. CPI Corp has since gone digital, but I have no idea how long it took them or to what cost.
2. Disparity between pricing structure, target market, and location. Picture People and CPI have somewhat similar pricing structures. In my day at CPI sheets were 10 each. Right now theyre 20, with Picture People sitting at 18 dollars a sheet, with collections around the same prices. They have similar prices but Picture People has advantages that CPI does not better location, target demographic, and customer experience.
Picture Me! primarily has their locations inside Wal-Mart, targeting Wal-Mart customers. Do I have to say more about that? While Picture People has their locations in upper scale malls and outdoor boutique-like shopping centers. Similar pricing structures, but one corporation has an entirely better position to hit a profit-sustainable target market from.
Experience. While the Picture Me experience is akin to dragging your children to a, well, Wal-Mart, Picture People just offers a better visit overall. I went there once with my husband. The VERY first thing they did after we got our portraits taken was to carry out a wonderful looking framed collage of sepia-toned photographs. I wanted it the second my greedy little eyeballs rested on it no matter what the price. Why? Because not only did I love my portraits, but they were now tied entirely to the special day and memories of the entire experience I shared with my husband.
Who has a special experience going to a Wal-Mart? Friggin nobody. Basically, I believe Picture Me is attempting a pricing structure and branding ideal that it cannot profit from while directed at its current customer demographic and location.
3. Cannibalization. I think this was the biggest factor in the downfall of CPI. Cannibalization is when a company offers a newer or different product or service that takes away from its own other product and services, or when it is location related. Picture People currently has over 170 operating studios in the US. Wow, thats a lot! But compared with the fact that CPI just closed 365 of its under-performing studios in one blow, and has a couple thousand more to maintain? 170 isnt looking like much. CPI took their demographic and stretched it into oblivion by saturating the market with locations, effectively spreading their customers out so thin until every studio was under performing because they were all cannibalizing on each others customers. Instead of one profitable studio having 10 customers a day, 10 under-performing studios got one customer a day.
Wow this is becoming long, almost done here!
So the final question is, can someone profit off of mini sessions, even though everyone wants to hate on them? I say absolutely. As long as you hold true to your branding, target demographic, strong sales techniques, product quality, customer experience, and keep that overhead low!
I would love to get other peoples opinion on this analysis, and to know if theyve attempted mini sessions that work for them. If you disagree, then all the more interesting the conversation will be!
Also, dont buy stock in CPI Corp.