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Is free killing your business?

Do any of these resonate with you…

Melinda is a coach and is passionate about empowering women and helping them gain confidence.   She’s struggling to make herself stand out in the crowded coach market, so decides to offer the first session for free with the thinking that once someone has had experience going through a session with her, they will want to sign up for a full course of sessions.

Nancy is a copywriter.  One of her friends, Bob is putting together his newsletter.  He gives Nancy a ring and asks if she will proof read his newsletter.  Hey, we’re friends, of course I will says Nancy.

Jenny is an web designer and is looking for new clients.  Business is a little slow at the moment and Tracey phones her up and says “Hey Jenny, do you think you could build us a small website for our charity”, we have  a lot of high profile business people who support us and it will be good exposure for your business.  Jenny figures, business is slow at the moment, and thinks, why not, so she says yes.  Jenny was me about 4 years ago.   And I got sucked in with the “it will be good exposure for your business” message.

Each of these situations are real, though names have been changed to protect the guilty.  In each case, the business owner is under valuing what they do and are allowing others to take advantage of them.   In the early stages of my web design business, I read a book which gave some great advice: “Don’t give away for free, what people will pay you for” .   As women, we have a natural tendency to want to help.  We also often find it difficult to say no.  Or even worse, we feel uncomfortable asking for money for our time, particularly if it is only a short amount of time.  If you don’t value your time and services, why should anyone else?

But here is the real business killer… If you are always working for free, then you are never going to have time to win paying clients.  It is easy to hide behind free, and kid yourself that you are doing well because you are busy, but if you are not making enough money in your business, then you are much better off spending your time working on YOUR business, rather than someone else’s for free.

Free as a lead generator

Don’t get me wrong, I do think there are times when free is ok and it CAN be an effective marketing strategy – but only if it really is a strategy and the business objective is very clear.  For example, the free webinars that we have been running over the last three weeks have been a great way to build loyalty to Women Unlimited, to add value to our community, but the bottom line value has been the additional 250 people that have been added to our newsletter list.  Join us on our Social Media Marketing webinar on Friday if you can.

Don’t suck the life out of your business

If you are going to offer free, make sure you know what kind of return your are expecting, such as giving away 3 coaching sessions will result in one paid client.  Then you will know whether it is worth doing.  So often people get so caught up in being helpful and supportive that they NEVER make any money out of it.  If this is you, then decide that you are going to stop today.  I know it’s hard.  I know it’s difficult to say no, but the reality is that by offering free without generating a clear income from it, you are sucking the life out of your business.

Does freemium pay?

Another model that uses free is the Freemium model.  This is where you offer part of your product for free and a smaller group of people will pay for a premium service.    Brands that use this really effectively are MailChimp for email and Dropbox for document sharing and storage.  You can find a great article on whether the freemium model makes sense for you here.

When I first launched Women Unlimited in September 2008 I didn’t have much of an income strategy.  I had ideas about where I wanted Women Unlimited to go, but I didn’t have a clear plan of action about how I was going to get there.  Fast forward 6 months and Women Unlimited was floundering.  There was no regular income to speak of, I was supporting the business by earning my income through my web design business and all the minuscule revenue that we were making was going straight back into the business.   And then I got it.  We could give away fantastic information for free through the articles that we run on the site, but our revenue would come from the small business workshops and events that we run.  And we have never looked back.

Free events? No thanks

Since then we have run 3 free events.  But to be honest, I don’t really like them.  Not because the delegates aren’t fantastic, of course they are, but because of the number of people that book on, but don’t show up.  Even though I know it’s going to happen, it still irks me.    I’d much rather hold an event that 35 people book on to and 35 people show up than an event with 70 people book on and 35 people show up.  Because it means that the people that pay and show up really value what we have to offer.   The way that we deal with this now, is asking people to pay a deposit to book their place so that they are much more likely to attend.  It does result in less bookings, but makes planning much easier!

When is free ok

Now, in saying all that, there will be times that you will want to offer your services for free or help someone out.  And that’s ok.  Sometimes people help out Women Unlimited for free and my rule of thumb on this is, if we are making a reasonable profit on something, then it’s only fair that I pay the people that help us out.  If we are doing something that isn’t revenue generating, then some of our friends sometimes will give us a hand (for example at our TEDxSmithfield next week – big thanks to Jez Kay and Felix Macintosh!).  Or if there is a value exchange, for example, I ‘ll do this for you, if you do this for me.  Make sure though, that the value exchange is equal and is something that is going to be really useful to you.  Last note on free… if you are suffering from the free virus, then check out this site http://shouldiworkforfree.com/ , it’s funny, but pretty accurate.

What are your free stories?  Do you offer free products and services?  Does it work for you?

 

Share this article if you found it useful! And leave a comment in the box below. We hope to connect with you soon.

About Julie Hall

Hi, I'm Julie Hall, the founder of Women Unlimited. Which is my 4th business. I've had a business as a headhunter, a consultant, a new media agency and now finally Women Unlimited. I've learned lots of lessons - many of which could have been avoided. I hope you find the articles and stories on this website useful, and feel free to get in touch, I'd love to hear from you.

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16 comments

  1. This article is extremely timely for me, I saw a discussion on linkedin about free versus paying networking sessions. I was thinking about replying when I got caught up in my own experiences. I have always helped people around me in their personal and professional lives for free. Now that I want to develop some of the skills and intetersts I have into a business I am surrounded by people who expect free and are unwilling or unable to be of any help or support. The consequence is that I have to build networks from scratch, which is how I came across Women Unlimited in the first place. I will be saving this article as a reminder of the pitfalls of too quickly offering to do things for free and as a reminder to look at the value of my own contribution. But as a good friend keeps reminding me…no good deed goes unpunished.

    • That can be really frustrating Sylvia, but I’m glad you found the article useful… I have no doubt that the networks that you are joining now will be much better for your business. If you think of every minute spent as a £1, you stop dishing it out quite so freely 🙂

      • Hi Julie,
        This article is fabulous and yet so true. People’s expectations for receiving something for nothing is amazing.

        As a coach I resonate with the coaching example. As it’s an intangible service people can often find it difficult to see the value it brings. I have done free coaching sessions, even delivered free workshops. It didn’t bring be bundles of customers. I’m now six months down the line and currently developing my niche, working ON my business to make it a more valuable proposition to those who want to pay for results.

        I like your comment too in looking at each minute of the day as £1 and you soon realise how valuable your time is and one should not devalue it.

        Thank you so much.

  2. This can be true with products as well. In the wedding industry so many brides-to-be ask for free samples, particularly for items like stationery. One way round this is to charge for samples (or introductory sessions for a service like coaching) but make the cost refundable against a full purchase.

    • Hmmm, I feel your pain Alison. One of the things I used to get in my web design business was can you do a mockup of the design for us to help us make our decision. I did it once, but after spending 8 hours on it and losing the business to an inferior design (I would say that though) I decided, never again.

  3. I love this post Julie, it is a subject very close to my heart and my new phrase is when asked to do anything for free or exchange my time in return, is that “it is not commercially viable” to do that for free. How do people actually earn a living?

    The “Should I Work for Free” poster has been printed and stuck on my wall, just in case I am tempted!

    • Melanie, your comment made me laugh out loud… It’s weird but true that offering free can be tempting – just because it’s easier. I like the phrase it’s not commercially viable and which can be used when people want cheap services as well (but that’s another blog post…)

  4. Julie what a great article, every single word resonates with me & I couldn’t agree more.

    My old business coach once asked me how I would feel if I saw a truck parked up with the sign ‘Free Meat’. The feeling it conjured up has never left me! I always think twice now before using the word ‘free’ on anything!

  5. Hello Julie,

    I am new to your website, this is my first time! I have also only literally just started my Image Consulting business. I found this article so relevant – and I thought I would share a story that happened to me just last week.

    Feeling really anxious about where and when I would find work the ‘doing things for free because it will bring me lots of work’ idea really kicked in, and I offered to do a session with two contacts that I sort of knew for free – so they ‘could see what I do’. The plan was for them to come over and I was going to do a full image consultation, we would have some wine and a laugh and they would then go and tell everyone they knew to come to me. Lots of very excited and very grateful emails later they agreed they would come over at 3pm. At 5.30pm the one lady arrived. At 7.30pm, the other one arrived. Have you ever heard of anything so rude!?

    I wanted to cry just a little bit, because I realised that not only had I completely wasted a whole afternoon and an evening… but they were probably not be going to tell all their friends and contacts to come to me. They just saw it as a fun free thing that just sort of happened to them. Not something they valued, or invested in (time or energy).

    That experience made me remember that while I might be new at having the business, I am not new at what I do… I completely agree that offering things for free is just undervaluing what I do, but also myself and my time. I am most definitely worth more then that, and so is the service I offer!

    I look forward to meeting you at one of your networking events in the future!
    Jodi

  6. What a timely reminder this is – especially when you are starting out in business. Thank you Julie. I think you’re so right. As women, we want to help – it’s kinda natural. However when you’re hiding behind your free clients being busy, what sort of business are you really creating? And is it sustainable? At yoga last night a mantra came to me….”I choose to earn money every single day”….and I am one of those lovely ladies who gives things away for free or for a lower cost to help my clients. It’s all coming to a stop however as I’m not really valuing me so thank you for the reminder that I’m on the right path.

  7. Hi Julie, great article which really resonates with me. I’ve given free coaching to women who’ve said they couldn’t afford it but really needed to solve their problem. And the outcome? Lack of commitment; failure to value what I offered (i.e.forgetting to show up for sessions & notify me; forgetting to do homework tasks). I therefore stopped giving freebie sessions, figuring that if you really need it and are really committed you’ll find the money to invest in yourself, just as you do when you buy each pack of cigarettes, or pay your weekly visit to the movies.

  8. What a great post and really useful to hear people’s thoughts on the ‘free’ or ‘complimentary’ work.

    I think whether you chose to do free work often depends on the context. I do think that people put more value on things they pay for, and often don’t turn up or are not respectful of things which they have no investment in.

    As a Coach, I offer a complimentary session, and that’s not only for the benefit of my client, it’s for me, too. I don’t take on every client who wants me as their coach, nor am I a therapist. So, the complimentary call is twofold – not only does it give the client the opportunity to experience coaching, it also gives me the chance to decide if I can offer value to a particular client and if I think we have rapport. And, I can get a feeling for whether the client may have issues beyond my scope of practice and would be better working with a counsellor or therapist, in which case I will refer them on. When I first started a few years ago on a casual/part time basis, I think I did get taken for a ride a few times because I was too eager to please and gave too much for free, but now I’m wiser and maybe a small charge, redeemable against a coaching programme, might be worth considering but that does have to be assessed against other coaches in a similar niche who offer a free session.

    Sometimes I think it is appropriate to do something for free, for a connection or cause that you feel passionate about. I did some free training work for a new social enterprise charity for young people a couple of years ago. I did it because I felt it was worthwhile, not as a ‘calling card’, however, some paid work did follow and it was nice to be appreciated and not thought of as a ‘free’ resource.

    I love Anne’s mantra of “I chose to earn money every single day” and I’m going to say it to myself several times a day and think all of us ladies with moxie should do this! Thank you, Anne!

    To conclude, I don’t think there’s a definite answer in the ‘free’ or ‘not free’ debate and it does depend on you, your business and the context. However, if you’re being taken advantage of, then it’s definitely time to think again.

  9. They say ‘THE BEST THINGS IN LIFE ARE FREE’ my father taught me ‘NOTHING IN LIFE IS FREE’ someone somewhere will be paying.

    In my opinion putting a value on ourselves and our services is part of the process a small business goes through whilst putting best laid plans into action. My tip is to factor in a trial period and focus groups during the planning stage of your business which saves time and money in the longterm. This process develops confidence, values and ethos. I have come across people who open shops to find they cannot sell !!!

    To trial my idea, I sold my products in independent shops of potential clients in return for mentoring and visual merchandising services. Using these experiences as ‘case studies’ positive and negative and part of my ‘apprenticeship’ I now know what I can deliver and put a price-tag on my services. I have also trialled workshops for not for profit organisations (who appreciate help and pay a small fee) which have always had a positive outcome.

    Thanks for interesting post Julie
    Zoe

  10. Hi Julie,

    Interesting timing.

    I am working on creating a new website that will be linked to social media, blog and local networking. I came across a really interesting and inspirational marketing goddess, Elizabeth Purvis at http://www.marketinggoddessblog.com/

    The reason I thought you and Women-united readers might find this interesting is that her sales technique is about creating amazing programmes, then selling them during a short free session with carefully targeted potential clients.

    I certainly will be using some of her wise pointers in my new marketing strategy.

    All the best,
    Derby

  11. I must agree – free is killing my business – people don’t value it and it’s much harder for a client to deliver promises rather than just write a cheque. On a global economic view, free depresses the market for those that need to charge, producing a ‘rise to the bottom’. Our kids are being expected to work for nothing as interns and it is morally bankrupt as an idea.

    That said, we all need some ‘try it and see’ strategies, so my rule is one hour is free, the rest is charged.

    There are some exceptions – I blog for free because I enjoy it and am just about to release an e-book to create interest for my other writing – I see this as OK – Punk Rock People Management is available for free at http://www.academy-of-rock.co.uk/Punk-Rock-HR

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