Reprinted with permission of GRAPHIC ARTS JOURNAL 801 467 9419
August 1995, Volume 25, Issue 8
© 1996 TeamDigital
One of the knottiest problems facing a photographer, writer, designer, or anyone else in a creative field is figuring out how to charge a client for services. An hourly rate sounds like a reasonable approach, but how do you charge for a brilliant idea that bursts into your head half-way through the initial client conference. Do you charge less for it than the mediocre concept that comes to you after hours of noodling and sweating over an advertising campaign?
It's a question that San Francisco photographer and digital imager John Lund has faced since entering the business 20 years ago. He began as a writer, but switched to photography, in part, because of the economics of the business.
"I was writing a story for Yachting magazine and I thought it would help me sell articles if I could take pictures," he remembered. "It took about a week to write the article and it was very arduous. Then I went out to photograph the yacht. The owner asked if I'd come along on the trial run; that's when they try it for the first time to see if it floats. Then he asked if I'd photograph the yacht from a helicopter and I spent an enjoyable day taking pictures. The magazine paid me $200 for the article and $1,500 for the photography-it was the last article I ever wrote." For the next decade, Lund shot conventional photographs for a variety of business clients. Then, he discovered the computer.
"I don't consider myself a computer person, I'm a photographer who has learned to use this incredible creative tool," he explained. "Any vision that you can dream up, you can make into a photographic reality because of the technology."
From Photographer to Digital Imager
Ascending from conventional photographer to digital imager wasn't a smooth transformation for Lund. From his first digital assignment to his most recent job, the road has been a bit bouncy. He entered the electronic arena about five years ago by talking an art director into letting him do a series of four brochures in Photoshop. After three days of Photoshop lessons and a couple of weeks playing with the computer he was ready to begin.
"I got an advance, so I bought a color card and was able to work in 24 bit color on a 13 inch monitor and a Mac II with 8MB of RAM," he said. "Two art directors ended up on the job. They both came over to the studio and sat down on each side of me. Unfortunately, they had differing opinions of what they wanted. It took us two weeks to produce two of the brochures and it almost killed me. Halfway through the process, they said they were going to take the job away and give it to someone who know what they were doing."
As it turned out the art directors let Lund finish the two brochures, but sent him a letter saying that they would pull the job if he did the second two brochures in Photoshop.
"I had no idea how to do the brochures without Photoshop. But by then those two art directors didn't want to be in my studio anymore-they had wasted too much time watching the progress bar crawl across the screen. So, I went ahead and did the jobs without them," Lund said. "When I was finished, I took the transparencies over to my contact who told me it was great work. I said, 'yeah I did them in Photoshop,' He said, 'Well for God's sake, don't tell anybody.' That was my introduction to computer imaging."
The High Cost of Art Direction
For the next several years, every digital job Lund did included an art director peering over his shoulder. The fussing and fidgeting was understandable to Lund, but it didnŐt make the work any easier. "For art directors, the job is their baby," he explained. "They're willing to sit for 24 hours and work on it. They do it once a month; but I did it every single day and I was turing into a zombie. I finally decided I was going to have to stop working that was. By then I was hysterical; I didn't care-in fact it was better-if I didn't work any more. I was just fed up, so I jumped my scale up to $250 an hour-$350 an hour if someone wants to art direct over my shoulder."
Stopping the Financial Drain
While Lund's new rates did not stop the flow of jobs to his studio, it did deter art directors who didn't want to pay an extra $100 an hour to watch the computer screen refresh. It was a business lesson Lund took to heart and he began to look around for more ways to make his life easier and his business more prosperous.
"I sat down and figured out that we are spending approximately 40% of our time archiving, unarchiving, and transferring files. That was unacceptable, in my opinion, and it was non-billable time. Someone wants me to unarchive something, its $100 and $25 to transfer it to a transportable medium. And that's cheap when you figure what you have to go through to unarchive something. You're tying up $25,000 worth of equipment, you're tying up an operator's time, and often it's not a simple process, a lot of time something goes wrong. We no longer guarantee our archiving. We tell clients, if you want a guarantee that it's going to be archived effectively, give us your media-then it's our responsibility. If they really want to make sure an image is archived, make a transparency. Those don't crash."
Transfer media also proved to be a slow financial drain. Lund had been buying transportable hard drives, opticals, and tapes to shuttle files from the studio to clients. He found that many of them were never returned, so he began a rental program to cover his costs. When a disk or tape goes out, it's logged on a board with the date and client name. Lund charges a $25 weekly rental for three weeks. After the third week, the studio bills the client for the purchase price plus a mark-up.
"To get a disk or tape, we have to buy or order it-it takes not only money, but our time too," explained Lund. "We found very little resistance to our policy. If a disk doesn't come back, we call the client, and virtually everybody we call, tells us to bill for it."
Most people who work on computers have horror stories of mysterious crashes, incomprehensible messages on the screen, and generally bizarre behavior. But what happens when a computer decides to have a nervous breakdown during an important job? What about those crashes that send an hour's worth of work into electronic limbo? Who pays for them? The client, according to Lund.
"I was working on a job and the computer crashed. The designer said, 'I don't get charged for that do I?' I said, 'Yes you do, crashes are an inherent part of digital imaging.'"
"We build this into our estimates. We estimate how long a job will take and multiply it by three which takes into account crashes, experimenting, drives not mounting, and things like that," he continued. "If we give a client a product that comes in at price-maybe we did it very efficiently or we didn't have any crashes that day-I make some money. That means I can still do business on the jobs that don't go smoothly and I have to eat a lot of time."
As Lund points out, clients are not actually buying an hour of time, they're paying for experience and expertise. He has found that many clients understand the value of a creative product and are willing to pay for it, but they must be asked. To help out in the asking department, Lund hired a rep, Linda de Moreta, about eight months ago.
"She's really turned my business around," he commented. "Before a client would call me up and say, "John, we really need this job and we've only got $3,000." Historically, I'd groan and say OK. Now, I'll call Linda up and tell her we've got a job, but they only have $3,000. She'll call them, then call me back and say, 'We've got $4,500.' It happens time and time again. I don't know how she does it."
Working for unrealistic budgets not only hurts financially, it can also damage reputations. "You're going to be judged by the lowest quality work you do, and when you're working on an unrealistic budget, sometimes no matter what you do, you can't produce a good job." Lund said.
Contracts are another area, Lund has examined carefully to shore up financial leaks. "Several months ago, we worked on an image with various workstations, light bulbs and question marks running around. When we finished the job, we had somewhere in the neighborhood of 200 elements. Now, if you stop and think that I estimated the job on between 16 and 22 elements, and I did the job with 200, something's not right. But one at a time, those little extra things get added in. That's why you have to work from a tight comp and when you deviate from the comp, you've got to say, 'Hey, I don't mind deviating from this comp, but it's not what I estimated on, and we need to have this approved in writing because everybody will forget.'"
Lund agrees that writing things down can be a pain in the neck, but if forces everyone to communicate effectively and it can avoid a lot of wasted time and money, and equally important, bad feelings.
What's in a Name
After working for years as John Lund Photo Digital Imaging, Lund recently changed the company name to TeamDigital. The change was prompted by the evolving market, the high quality of the studio's personnel, and Lund's own desire to focus on areas that interest him. "With the name TeamDigital, people are not going to come to the studio thinking that John Lund is going to do the work, because I don't have time to service everybody and quite frankly, I don't want to. I've put in five years of 80 to 100 hour work weeks, and I'm ready to back off a bit," he pointed out. "The new name also means we can showcase the talents of our other people. It also allows us to move in any direction."
One of the new directions includes animation. The studio maintains a large stock photo library and plans to expand that to a stock animation library. Lund's reputation for producing highly effective conceptual business images will help the studio migrate to conceptual animated photographic images for business and multimedia. Whatever new directions Lund takes, one thing will remain constant.
"We're a photographic studio that takes advantage of all the digital tools available to us. We'll continue to do that while staying in the areas we know best."
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