There’s No Such Thing as “Free”

Posted by Dave Cooke on November 23, 2011

2 comments | 825 reads

“How do I respond to a client’s request for free services on his account?”

First of all, there is no such thing as “free.” It may look free, appear free, be advertised as free, or conceded as free — if it a service is being offered by a business, they are making money on that service somewhere, somehow. Anyone who is honest about their business relationships and business experiences are only kidding themselves when they it is “free.” It is never free. If it was free, they would be out of business.

If it is such a good deal, why are they asking you? Instead of getting sucked into the expectation that they want something for free, ask them why they are coming to you if they can get the same service from someone else for free. They are coming to you for a reason — likely, they know that “free” comes at a hidden cost, a different type of risk, or that their “free” isn’t worth it. Until you know why they want you, there is no need to talk with them about “free.”
What are they looking for in the relationship with you besides “cost” or “free”? If you want to start out your business relationship with a client who only buys on price, enjoy. Not me. Now that they have unsuccessfully sucked me into talking about price, I am going to find out what types of business relationships they value and what type of relationship they expect or need in me. If they are merely price shopping–there is not much to discuss. If they are looking for a trusted and valued business relationship, they will be able to engage in a very productive, informative conversation.
How long is this relationship going to last? If the conditions of this business relationship are founded on the premise of “something for nothing” how well does this prospective client understand, discern, or appreciate value. If you land them offering free, how long will it take before they ask for something else at a discount or free.

There is no such thing as free. Your products and services all have a cost associated with them. They also have a value or a benefit to them. If they don’t, then you have nothing to offer your customers anyway.

There is no such thing as free. Clients know that you are in the business to offer programs that serve their needs, solve their problems, or provide improvements and efficiency in their life or business. They know that the key to your business thriving and growing is your ability to be compensated for what you do best. Anything you offer as free, demonstrates it has no value and wasn’t worth paying for in the first place.

There is no such thing as free. When you do not have a clear understanding of the needs, interests, challenges, or expectations of you clients all you can offer is a discounted product. There is a cost associated with that failing in terms of relationship, profits, and loyalty. It is best to help our prospective client discover the path to paying for the services they need or keep shopping for that “free” program that will cost them something soon.

There is no such thing a free. Somebody pays eventually.

Republished with author's permission from original post by Dave Cooke.

Dave Cooke

I leverage my 25 years experience in sales and marketing to create and implement strategic initiatives and develop educational programs that increase both revenues and profits. I take great pride in my experience in turbulent, chaotic, and transitional work environments. It is from these experiences that I have developed my commitment to collaborative teams, strong internal and external relationships, effective communication, decisive leadership, and a cohesive, collaborative strategy as keys to sustainable revenue growth.

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2 comments »

Stan Phelps

November 24, 2011

Free is a FOUR Letter Word

Dave,

You are correct. The consumer isn't gullible. They know somebody eventually pays.

Three quick points before you totally discount the idea of adding value:

1. Doing little extras can increase sales. There is an ROI to gifting. Here is a recent study featured in the International Journal of Marketing Study which demonstrated purchase increases of 46%. http://www.marketinglagniappe.com/blog/2011/11/20/the-power-of-marketing...

2. Doing little extras can help improve customer satisfaction and reduce churn. It's proven that a 5% decrease in attrition can increase profits by 25%.

3. Doing little extras can differentiate your business and help promote 'word of mouth'. It's a form of marketing that's focused on your customers as opposed to your prospects.

There is real power in the concept of G.L.U.E., but few companies have the courage to harness it. Here are 12 different ways to add value: http://www.customerthink.com/blog/customer_experience_12_little_things_t...

Best,
Stan
@9INCHmarketing
'The average distance between the brain and the heart is nine inches'

Jonathan Becher

November 24, 2011

Free lunch?

From an economics point of view, there is no such thing as free demonstrates opportunity cost. While something might not have an explicit cost, hidden or explicit costs must be considered to understand the full picture. Because implicit costs are usually not obvious, the concept of 'free' is an extremely powerful marketing tool.

If you're interested in where the phrase "there's no such thing as a free lunch" came from, you can read more here: http://alignment.wordpress.com/2011/06/26/no-such-thing-as-a-free-lunch

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