what clients pay for?

2. What do you tell your customers when they want to compare to lets say Sears pricing?

Don't waste your time. If they can't see the difference between you and Sears then you need to either work on your portfolio and style, or move on to clients who can spot the difference. That's just the facts. You cannot compete with big box/mall econo-studios; you have to offer something different.

3. Or what do you say when they ask about other photos (that may have not turned out?)

All my wedding and portrait (non-commercial) contracts state that I will not deliver every exposure I make, and that the client agrees to abide by my editing decisions.

Beyond that I explain to them that I will make mistakes while shooting, they will make mistakes while we are shooting, other folks and the world itself will occasionally not cooperate as we wish, etc... Those are misfires, and they are discarded as I process.

Also for me the creation of a photograph is not just pushing the button once. Sure I'm going to use tried and true techniques, poses, and ideas that have worked for me before, but I'm also going to experiment and try new things. The very nature of experimentation results in more failures than successes. Some of my exposures are sketches and studies for the finished photograph. Painters, sculptors, etc... don't usually deliver their sketchbooks along with the finished piece. Writers don't include their notes and drafts in finished novels.
 

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