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?