It seems to be very common — in the services industry especially — for new business owners to offer their service for free, ostensibly to get started and start building a customer list, getting testimonials.
A life coach, let’s say, will offer to coach her friends, her family, or people she meets in Internet communities for free, for the experience. (More rarely you see this with photographers, graphic designers, writers, and the like — but almost never with makers.)
Lemme say right out of the box that I think this is a bad idea!
People who start out with low fee or no fee and end up being stuck with people who don’t appreciate the value that they’re providing.
The problem — and advantage — of unattachment
When I was first starting out, ten years ago, I think my prices were about half of what they are now. But what I found was when my prices were lower, I was getting a lot more flaky people. And I was getting a lot more people who could potentially afford what I was doing, but they weren’t implementing.
People who are in your tribe who respect your time are willing to pay for it. You get more serious clients when they have some skin in the game. The freebie clients are much less attached to you or the outcomes you want to help them achieve.
On the other hand, if you aren’t attached to whether or not any particular client pays or doesn’t pay, then things happen the way they’re supposed to happen. Freebie clients may not stay with you. They might move on. And that makes room for more paying clients.
If you currently have freebie clients, you can say in a transparent, authentic, and open way, “You know what? It’s been wonderful coaching you. Right now, I’m moving to a coaching package model and here’s the link, and here’s the schedule of what I’m going to start implementing here in the next couple of days. I’d love to continue to work with you so just let me know what’s going to work for you.”
Of course, some people are going to say, “No. There’s no way I can afford that,” and other people are going to say, “Absolutely. I want to continue to have access to you.” And as a business owner, your whole job is to remain unattached to any specific person, but remain in service to all people. The best way you can do that is to expand your reach, and generate traffic, and be really clear about what is the story you’re carrying with any specific freebie client.
The theory of reciprocity
Frankly, I don’t think you actually can turn people who don’t want to pay into people who do want to pay.
Instead, there needs to be some kind of reciprocity from the beginning, no matter what. If there is a client that basically you’re not charging to work with, then the reciprocity or their payment is a review on LinkedIn, or Yelp, or a testimonial for you, so that their experience can attract more paying clients. You might also trade products or services: you design their logo in exchange for 6 hours of chiropractic care.
But you don’t give it away for free.
Your work has value — even if you’re new, or just starting out, or just establishing yourself, or whatever. Maybe that value is less than it will be when you’re more experienced, but it still has value.
Defining and applying that value is key even from the very beginning. I have a free worksheet right here you can download to help you determine the value of your time, product, or services.
Once you’ve determined that value, you can determine how you want to proceed with setting your rates at the earliest stages.
3 alternatives to giving away the milk for free
There’s no doubt that doing the work helps you develop confidence in your practice and confidence in your ability to make changes in people’s lives. That confidence actually translates into the paying clients.
So how do you get to do the work when you’re just starting out if you don’t offer it for free? Three suggestions:
- Work for testimonial.
Make it clear up front that you will be providing the services in exchange for a testimonial, referrals, or to use their situation as a case study. Decide what would have the most impact for your business and ask for that — and spell it out specifically as part of your contract. You also don’t have to work totally for free for this to work; offer a deep discount in exchange for the testimonial instead.
- Work for trade.
If you can come to a mutually beneficial agreement where you both get products or services you need, then trade can be an excellent way to get clients, especially in the beginning. (Just remember that people willing to trade may be beginners themselves.) Again, it’s wise to spell out exactly how the trade will work before you get started. Assign a dollar value to your product or service and request an equal amount of work or product from the other person in exchange.
- Sliding time scale.
I actually don’t recommend people set up a sliding fee scale because I am very clear about, “This is my value and this how I figure out my value,” and I’m not going to negotiate my value. What I would recommend instead is a sliding time scale. Instead of offering them a 3-month package for free or a quarter of what you normally charge, offer them a free 30-minute consult and give them some laser-focused suggestions.
Recently, I had a client who really wanted to work with me, and so I did a free 20 minute consult. And 20 minutes in, I said, “You know what? I don’t actually think now is the time for you to work with me.” Because, guess what? They couldn’t afford it. But I said, “Here are the three things that you need to do for the next 90 days.” And they came back in 90 days and they paid my entire full fee, up front.
If somebody can’t afford to work with me, I’ll give them a free consult because that’s good practice for me, to talk to as many different people as possible and to get as much traffic as possible. But that doesn’t mean that I need to modify my value or my prices because one person can’t afford it. It just means they need to work and be more proactive to get to the point that they can work with me.
Want to get clear on the value of your products and services? Download the free ebook and then watch your inbox for an announcement when I open my Sales Boss workshop in a few weeks. These are exactly the sorts of problem and solution strategies we’ll cover to make you feel like a total boss in your business.