The High Cost of Freebies

There’s nothing wrong with the occasional freebie.

For example, if you’re just starting out as a consultant or web designer, doing a freebie for someone is a good way to build your portfolio and get some testimonials for your work. Or, say you’re launching a membership site (like I am with Real Estate Blog Topics), giving someone a free membership is a good way to elicit feedback.

Don’t do it too often though, eventually, you have to run a business. And still, some people will continue to ask for the freebie. Some are passionate fans so the exchange is a win-win while others are just looking for what’s in their own self-interest and they’ll take advantage if you give them the opportunity to.

Here’s how to avoid a losing scenario…

1. Set clear expectations up-front. 

Let the person know that you this isn’t typical of your services. Something like, “we don’t normally do this, but I’m going to make an exception just this once. In the future, you’ll have to ________________________.” 

Say you’re a designer, if you don’t set clear expectations up-front they’ll think it’s ok to ask you to design something else for free the next time around. And they’ll keep doing it over and over and over again.

2. Don’t let them take advantage. 

Often times, when you’ve offered to help someone they continue to demand more and more outside of the scope of what you’ve agreed to help them with. This is one of the pitfalls of not setting clear expectations to begin with (see #1).

If you become a “yes man” and let them take advantage the first time, they’ll do it time and time again until you put your foot down and say enough is enough.

3. Learn to say “No.” 

Sometimes, the best thing to do is to simply say “No.” When you decline to give in, they’ll attempt to make you feel bad. They’ll say things like:

“How could you say no to this great opportunity?” 

“If you do this for me for free, I’ll refer so much business to you…”

Remember, at the end of the day, you’re running a business. That means putting your interests before others in order to achieve your goals.

***

When you’re starting a new business, there’s a point at which you’ll do almost anything to win a client over. That includes discounting your prices and/or offering freebies to build your portfolio. But I can tell you from experience that 9 times out of 10, those tend to be the problem clients. Not always of course, but it’s often the case.

The best way to avoid this, is to commit to set a certain set of rules and standards for yourself. What are your goals? And what do you need to achieve to hit those goals? Under what specific circumstances would you offer someone a discount or comp them on your product/service?

Other than that, remember to stick to the rules and standards that you’ve set for yourself. Set clear expectations with clients up-front and learn to say “No” often. You’re business will be better off for it. Don’t you think?

Under what circumstances have you offered someone a freebie on your product/service?

[Photo Credit: Gapingvoid]