Written by Sean Boyle
Welcome to another Momentum Monday! If this is your first time checking out one of our blogs, we’re glad you’re here!!! If you’re a returning subscriber, we value your loyalty.
As Kevin Durant would say, “You da real MVP!”
But in all seriousness, you’re here to understand how much you should charge for your virtual tours. You’re either starting off a virtual tour company, or you’re a photographer who is just looking to collect a little extra dough on the side. Whatever situation you’re in, grab a snack or beverage, kick back, and learn how much to charge for a virtual tour.
Before we start, if you haven’t yet subscribed to our content, you can do so here! We post weekly blogs and videos to help provide value and educate our audience. Momentum’s content philosophy is simple…value..value…and more value. The more we inform our audience, the more that we’ll grow. And we’re not just talking about our company, we want to bring along our audience with us! The more the merrier.
Starting Your Own Virtual Tour Company
Like I said in the beginning, you’re either a photographer or entrepreneur looking to take advantage of the virtual tour trend. Congrats, you’re still early to the party. With over 500+ tours shot in the United States alone, and numerous mentions in Philly Mag, Inquirer, and other publications, we’d like to think we know what we’re talking about.
In this article, you’re going to learn about:
- How to create your own custom packages and bundle services together
- How to add value where your competitors fall short
- Give insightful knowledge about your industry to your clients
- Starting Fee
- Create a base rate so you can at profit at least 50% of each project
- Entice early opt-ins with low rate
- Square Footage
- Build custom quotes from one key metric
- Generate large projects
- Hosting Fee
- Learn if you should charge a hosting fee or not
- Learn the pros and cons of doing so
There’s a lot of value in this article. If you’re going to create a virtual tour company, this is a step in the right direction. There’s a lot of misinformation out on the internet, but this blog will help you get on the right track to making your first deal in the virtual tour game.
Let’s talk about packages for a few minutes. You’re probably wondering how to bundle these services together. If you’re servicing virtual tours, you’re probably also servicing photography, videography, maybe even drone footage.
The question thus becomes, how do you package these together? A la carte? Bundle them?
The answer? It really depends on your business model. If you’re a photography company that is just starting out…I would recommend the a la carte option. Meaning, you have a set price on individual services. This way, you can accommodate all projects. You’re making sure that you’re getting 100% of the revenue. If you have bundle packages to start off…some people might not need those services. Thus, your customers don’t want to pay for services they can’t use.
Now, if you’re a business that has been around for a few years, I would recommend getting into the bundle packages. You know your business model works, you have a lot of people calling you, so to automate the process and make it easier to scale, you should implement bundles. If you wanted to, you could still tell your account managers to only give the potential customers exactly what they need.
Momentum 360 uses this pricing model now. We have the a la carte option, but we also have certain bundle packages that accomodate all of our clients.
The biggest takeaway is that you want to make it as easy as possible for your clients to buy from you. If you’re getting inbound calls and aren’t closing the majority of them due to the fact that your sales system is hard to buy from …you have a problem.
Remember KISS. Keep It Simple Stupid. This acronym will save you time and money.
So now you have your packages set up. But specifically, how much should you charge for the virtual tour?
Momentum uses a base rate of $300. This covers our nut so we can at least make a profit. It’s different for every agency, but for Momentum it costs us about $100 to shoot a virtual tour from the processing, membership, equipment, photographer payment, and so on.
If you’re just starting out with a basic Matterport package, it will probably cost you roughly the same to shoot. That’s because you have to factor in the costs for setting up. I would recommend charging a base rate. This way, you don’t get hit on the backend when you do your profit margin calculations and find that you barely made any profit.
So when you’re thinking about setting up prices for your tours, understand that your business need profits to scale. Without profit, your business won’t survive. In fact, 50% of businesses fail in the first five years. So don’t feel guilty for trying to get profits.
Ah yes, square footage. This is where the money is. This is how we were able to grow our revenue ten fold. Simply charging the shootable square footage has allowed us to grow and scale at an unbelievable rate. For many virtual tour companies, they just use a basic fee that is consistent every time. It doesn’t matter if the property is 1,000 sq ft or 10,000 sq ft.
To us, that doesn’t make sense. If you’re shooting different size properties, you need to charge people accordingly. This way, you’re making the money you should be making, instead of giving it away and playing Mr. Nice Guy.
I’ve seen too many business owners try to play the nice card, but end up getting screwed in the end. Bottom line, if you have a quality product or service, why would you feel the need to discount it? There’s a million reasons to discount your services, but it all stems from this cold hard truth: your product/service isn’t valuable enough.
Once you wrap your head around this, it’s a pretty simple methodology.
You should charge 10% of the total square footage, or $0.10 per square foot.
So for example, if we had a client that had a 2,500 sq ft property, we would charge them based off of the starting fee + square footage. So it would be $300 + $250 = $550 in total. Remember, they’re also getting a Google optimized tour that specifically helps them rank higher on Google. If they rank higher on Google, they’ll get more inquiries. More inquiries means more bidding and more action. More action means more money and a faster sales timeline!
This is the end goal here. For real estate, we help people sell their houses faster, and for more money.
Take our formula here and use it…best part? This is free!
As you see from our pricing section, I didn’t talk about a hosting fee. A hosting fee is the fee some virtual tour companies charge to host your virtual tour on their Matterport account. You’re going to be hosting your client’s matterport on your server nonetheless, so charging them for pretty much nothing doesn’t really make sense in Momentum’s book.
Because we don’t believe in it. We love residual revenue, but not at the expense of nickeling and diming our clients. The revenue we generate are from projects, not from charging an irrelevant hosting fee.
Now, go forth, and create a pricing system based off this blog! We here at Momentum 360 have a FB Group that will help you elevate your business with virtual tours!
Here at Momentum 360, we want to make growing your business easier than ever. Investing in a virtual tour is without a doubt an imperative step in making that happen. Our society is prioritizing digital content now more than ever, and we likely will not see a decline in this mindset in the future years.
If you are interested in learning more about Momentum 360 Virtual Tours or would like to have one made for your business, feel free to email us or schedule a call with Sean or Mac. For more information, visit our website website! Mac Frederick and Sean Boyle, owners of Momentum, have over twenty years of experience in the digital marketing field and have a passion for helping businesses reach their fullest potential.
We post our Momentum Monday and Small Business Saturday blog every week, so feel free to subscribe and make sure you are up to date on the latest trends in the industry. If you have any questions or concerns, leave them in the comments below! From everyone at Momentum 360, thanks for the love, stay healthy, and until next time, build Momentum!