[JerBear]

Sounds like you were victim of gorilla shopping; this tactic of contracting for services and then coming back and demanding more or they will cancel is not uncommon. Chances are, that you would have lost this one anyway, you were caught off guard and did not have a good counter offer ready.

Setting your business up for paying clients:
The first thing you want to do in setting your pricing is to eliminate all of the people who weren't going to pay you to begin with.
When it comes to a consumer's perception of pricing, it's not always the actual amount that scares people. It's whether or not they have to pay at all. Pricing is more or less are they going to pay or they won't. The actual price is incidental.
There's something that goes off in a customer's head when he or she must pull out their wallet. Up until that point, the value you were providing may have gone relatively unnoticed. But when the customer has to break out the credit card, a second thought about the value of a product is given.
Instead of developing your pricing to lure the group of people unwilling to pay for your product, focus on maximizing the yield of those who will. It's a lot easier to get someone to pay 10 percent more for your product than it is to reduce the price with hopes more people will buy it.
You'll want to figure out how to separate the paying customers from the non-paying customers, without alienating either.
One way that works is to give a portion of your product away for free in order to attract interest, then charging the most passionate customers for premium benefits. This lets you test two pricing strategies simultaneously. You get to see how many customers would be interested in your product for nothing at all and learn what about the product people are most interested in paying for.
Offer a promotion in your studio for 1 week. Consider this as part of building your business, not a give away! Offer a 30min shoot and 1 8x10 for free. Take a few poses, maybe individuals as well. They select the one free and will pay for anything else.
What does this freebie do? It gives you a mailing list of all that took part as well as told you who is willing to pay for more and who is looking for a handout in your area. If you were smart, you collected the info on the family such as birthdays, anniversaries, etc so you can contact them for future promotions.
Take the list of those that paid for extras and aim your marketing towards them. For those that got the freebie, you might want to send them an offer the next year, maybe they will be a better position to buy your products.
Once you've separated the paying customers from the non-paying customers, you still need to settle on the right price to charge.
Even when clients begin forking over their hard earned cash for your product, you still don't know if you've optimized for the best possible price to generate the greatest number of sales. Try shopping your competition to see were they are at. Are they a thriving business or are they struggling?
Is there a quick and easy answer? NO
Good luck!