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Free = No Commitment: The #1 Reason Why You Shouldn’t Offer Any Free Services

by | Business

It’s common for business owners who are just starting out to think they must free services in an effort to bring in new business.

I’ve been guilty of this, too.

The fact is that offering free services often accomplishes the very opposite effect.

To be clear, there is nothing wrong with doing pro bono work or donating your skills to your favorite local charity. These are noble endeavors and should be encouraged.

However, there is no shortage of clients looking for a free ride.

Around every corner, there lurks someone waiting to take advantage of your skills. Perhaps they saw on Facebook that you are opening up a new business, and they offer to let you “practice” on them. Of course, in return, they expect you will do these services for free.

No worries—they promise, they’ll advertise for you!

These promises are empty. The fact is you very likely will see little-to-no return for your efforts if you offer free services like this.

Here are three reasons why you should never offer free services.

1. Free Services Devalue Your Business

One struggle most business owners face is imposter syndrome. It never goes away, by the way.

Because of this, they may not even realize they are business owners! Especially in the beginning!

This is why we see so many offering to perform free services and/or low-cost services when they first put out their shingle.

What they don’t realize is how detrimental this can be. Immediately, it creates an impression of your business that says, “My services are not all that valuable.”

And that’s being generous.

Likely, you will never see a return on investment from this client. Imagine trying to charge someone the rates you’re really worth (just look up the average for businesses like yours in your area) after you have given them free services.

At the very least there will be an expectation that you will work for free; worse, you will have to convince them that what they got for free before will now cost them much more.

This can be a serious uphill climb—one I would not recommend.

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2. Free Services Distance Your Brand

Another problem with offering free services is that it creates unwanted distance between your business and other business in a similar area and/or niche.

While the idea of standing out amidst others who do similar work is sound, you definitely do not want to stand out for the wrong reasons.

For example, let’s say you operate a small local restaurant. You could stand out from the others because you have the dirtiest bathrooms in town. Or, you could stand out because your service is unparalleled.

Free services negatively distance your brand from the others. This is because businesses who charge more (within reason) for service automatically create the perception that their services are worth more.

If that’s even remotely true, imagine what image you give off when your business works for free!

Again, there are right and wrong ways to do this. Offering a small free service to go and above and beyond in a project is not the same as offering the core service for free.

A construction company that offers free estimates is looked highly upon; a construction company that builds a deck for free smells fishy, at best.

3. Free Services Demand Less Commitment

Finally—and I think this is the most important—free services offer much less value to the customer.

Now, this is admittedly counterintuitive.

With your “consumer” hat on this sounds strange. I mean, we all love and want free stuff, right?

That’s true; what’s also true (and much less obvious) is that we tend not to value those things as much (if at all).

It has to do with the idea of ownership. When we feel the exchange of money for a service, we tend to give it more effort. We tend to spend the time necessary to make the most use of the product or service.

This seems to be a fact of human psychology. I know it’s true in my life. Those things that I hand my hard-earned cash over for I tend to give higher place and priority.

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I receive countless newsletter for free each month. I also pay $100/month right now for one, and others are paying $200/month for the exact same thing.

Guess which one I pay attention to and get the most value from.

So you see, it’s not much a question of whether or not the product or service is useful or even objectively valuable; it’s a question of whether it is valuable to the consumer.

Experience and research suggest that free services miss the mark.

An Exception, Kind Of…

It’s a bit beyond the scope of this blog post, but I do want to underscore that there are a time and place for free services.

Perhaps you want to do work for a charity that is near and dear to your heart or would like to do pro bono work for a friend or family member.

There are right ways and wrong ways to go about this. We won’t go into detail, but there is at least one important thing to remember: You must communicate the value of your services, even when offering them for free.

For example, maybe you still create and send an invoice for services, and then apply a percentage discount to the bottom line (even if it is 100%). Or, you could create an invoice and charge the organization, then make a personal donation in that amount.

Regardless, you should make every effort to demonstrate the value of your services to others. Don’t let others take advantage of you by falling for their empty promises.

And, do don’t do them the disservice of providing great value for them that they don’t take advantage of, because they don’t fully understand it.

If you are not sure if you’re presenting your services in the best way, feel free to book a call with me! I’d be delighted to look over your current services suite and see if we can make some helpful adjustments.

To your success!

— Steve

Avoid These Mistakes!

2 Comments

  1. Clarence C Ragland

    Clubs demonize anyone who charges for instruction, even though the paid instructors have to provide excellent customer service. Club instructors who teach for free have no such obligation. The hobby industry has been losing millions as a result of this we-teach-for-free system.
    I have a way to literally instantly teach people to fly and there are 2200 AMA club’s whose members have been working against me even though I don’t charge for instruction. Much to the chagrin of the industry. The industry put the unpaid instructor in charge of hands-on promotion. What could go wrong?

    Reply
  2. Clarence C Ragland

    RC aeromodelling is a multi-billion dollar industry that very few people are aware of. It is also in a very unique position that there is no way possible for it to stem its downward trajectory. There is not enough money in the world to change that. There is no consulting firm in the world that could solve this problem. None. Why? Because of the way it’s set up, a profit-making-oriented industry has no choice but to depend solely on anti-profit-making oriented volunteer hands-on salesman, a.k.a. club members. The industry, therefore, fears getting on the wrong side of club members. In a heartbeat, club instructors, who have no obligation to do anything can quit teaching in a heartbeat. There are no consequences for not doing their job. Teaching is a very stressful job that anyone, with no amount of teaching skill can do. The best pilot may not have any teaching skills whatsoever. He likes the job because he can show off to the beginner (ego) and fly someone else’s plane.

    These club members dogmatically adhere to not taking pay for flight instruction. They also strongly look down upon anyone who does charge for instruction. It doesn’t help that the flight training system has never been improved for many decades.

    You can’t pay club members who teach and as volunteers, you cannot fire them. The industry has lost many large distributors and manufacturers over the decade. The modeling organizations are losing millions on an annual basis. The only solution would be for someone to come up with a much more efficient hands-on marketing system. Ironically, that system is available and has been for 20 years.

    My point is, although AMA spent hundreds of thousands on consulting fees, there is no logical way to solve this problem. This is not unique in the US, it’s happening all over the globe. As they say, stick a fork in it, it’s done, done, done.

    If you would like more information, don’t hesitate to ask. 99.99% of those I’ve contacted never bothered to reply

    Reply

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