• What’s the True Cost of Free?

     
    POSTED April 30, 2013
     

Giving away free products and services is a time-honored technique for building business. In earlier American history, soap guy Benjamin T. Babbitt in the 19th century was one of the first known people - though not the first ever - to market by giving away free samples of his products. Saloons used to give away free sandwiches to entice men to buy more liquor. It worked, even though it undoubtedly led to more alcoholism and, according to some historians, ultimately to Prohibition.

There are many good reasons for giving products or services for free: to build your database, to cement customer loyalty, to help a cause or charity that’s particularly important to you. But there’s a limit and it’s worth considering what the limit is and draw the line between being generous and being taken advantage of.

It seems there’s been an increase in the number of clients or potential clients who want huge discounts up to free services. Sometimes it comes in the form of asking for advice and then taking advantage of my helpfulness by using the information to avoid paying for services. For example, sometimes the potential client will ask for information or even a full proposal and then use your information as a roadmap to create their own event without the information you, as the vendor, have provided, or they require discounts that make it impossible for us to make a reasonable profit.

Don’t misunderstand: being generous with our time and services is a great marketing technique. Give freely to the organizations you support - the ones whose work is close to your heart. But we all need to be smart about how we go about it. For example, when organizations don’t have the funds to pay for what you offer, there are ways they can recognize value. In many cases you have to ask and be specific about what you want in return.

Whenever an organization asks for your help, make your own request for a mention in their printed materials and on their website. Provide them with a high-resolution copy of your logo and arrive at an understanding about how it will be displayed. There’s also nothing wrong with asking for a commitment that the organization will solicit your bid for future business when they are in a position to pay you.

Nothing is more frustrating than being asked by a nonprofit - or even a for-profit - to donate and then when funds are available, they go to the "big guy," your competitors, to do business. If you’re involved with nonprofits - and are doing the asking - remember to be loyal to the vendors who have donated their time and services, or made donations previously, when you or your organization have business to dispense.

The Romans had a saying for it: quid pro quo. Something for something. It’s good business to ask for your something.

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