Why I don’t use day rates
Okay so technically I do, but I don’t display them on my website or share them with my customers. Why not? Well I’ve done it, and I’ve not done it, and can say with 100% certainty that I prefer the latter. When it comes to video production, there’s one big reason for me. When I say day rate, that is a rate for one job. Often when I work with a client, we are putting together a project that requires many jobs. Directing, shooting, casting, post production, or more. If you quote your customer for one job without considering all the work required to bring them the desired, it’s not their fault that the project is under budgeted, it’s yours.
Generally, when I’m giving someone a day rate it’s to DP or be a cam op. One job, one role, one hat, one focus. I’m usually giving this rate to a Producer or Director who has clearly outlined the scope of my role and understands the position. However, when I’m looking to bring value to clients of my own, we often decide the scope together. Sometimes that scope may be operating a camera to cover a moment, in which case the pricing is likely very to be similar to my day rate, but quite often I am solving a much larger or more complicated problem. Long story short, flat rates are for roles I fill on crew or project, but if I’m problem solving, I use a value based pricing model.
While value based pricing is whole book on its own, the principle is very simple. Instead of pricing for labor and time, you create a budget that reflects the value of your solution for their problem. Now that’s just a fancy way of saying that million dollar problems often warrant $100,000 solutions. I find this to be a better pricing method for both client and provider when offering creative services. There are so many variables that can affect costs and budgets can vary vastly. This method of pricing is the best way to decide whether you’re looking at a $1,000 problem or a $100,000 one.
Here’s a great video by Chris Do with The Future explaining Value Based Pricing.
If you’d like to hear more about how we use value based pricing at Media Sensei to price our retainers and production budgets, subscribe to our mailing list here to stay up to date on all things Sensei.
