When Should You Charge And When Should You Give It Away?

By: Darcy Juarez on: May 2nd, 2013 7 Comments

With Mother’s Day approaching, I saw an unusual, but clever gift designed specifically for the stay-at-home mom…

Knowing that many stay-at-home moms feel undervalued, salary.com lets you generate a “paycheck” for moms based on the number and age of children, duties, etc.

Although the check isn’t real, it’s designed to elevate the mom’s worth.

Like moms, business owners often have a hard time evaluating their true worth. As a result, sometimes they give things away when they shouldn’t and are hesitant to give things away when it makes sense.

Today, I’m going to address something that every business must consider at some point…and that is when to give things away for free.

It’s a tricky tightrope.  You don’t want to undervalue your work and portray your product or service as having little worth. And, of course, an item that’s given away for free is sometimes viewed by the recipient as having zero value. Another problem is that by giving it away, you might only attract those who want the cheapest thing that might solve their problem. Additionally, you might attract people who take advantage of you.

So the question is when is it okay to give it away and when should you charge?

When it’s okay:

When it helps you build a relationship:You have a product or service that you know will help your clients, customers or patients…if you could only get them to buy it.  If you are trying to get people in the door and start building a relationship with them, and you have backend products and services, you might consider making “an offer they can’t refuse.”

Do this by offering free products or services attached to what you are selling.  For example, let’s say you own a car repair shop and someone comes in for  some repair work or an oil change. You want to keep him as a customer, so you offer a service plan for $59.00 that gives him one free oil change, free refills on fluids such as windshield wiper fluid, priority service when he needs a repair, free shuttle service when he needs a repair, and free beverages and snacks while waiting.

The value of the free incentives can help make this a “no-brainer offer” for someone who is on the fence.  You know that because he has your service plan, he will return to you to get service versus taking his car somewhere else. Plus, your service plan will allow you time to build a relationship, market to him (because now you’ve captured his contact info and gotten “permission”) and prove that you provide great service.

When you want clients to demonstrate you can deliver: Unfortunately, our society is more and more distrusting. It is easy for anyone to slap up a website or a blog and say they are in business. That means when they come across your business, they may be skeptical and wondering if your solution will really work.

Creating a free solution that will demonstrate your value and deliver a successful outcome can build that trust.  For example, we currently give away our Fast Implementation Bootcamp to GKIC Members. This allows members a way to test a live event, our systems and coaching all at once. Once attendees experience success from something they learned at Bootcamp that encourages them to try our other resources, attend events and participate in our coaching programs.

When you want to give back: While not everyone will agree, many believe there is a social obligation to give back. Most likely you’ve had mentors or had people help you out with free advice on your way up in your business.  Giving free advice to young people or people on their way up is a great way to give back and will often come back to you ten-fold.

Most people are genuinely looking for advice and not a hand-out, however that said, I do recommend you listen very carefully when someone is asking you for free advice. Do they want you to do the work for them or are they just asking for guidance? For example, someone that says something like, “Could you do this for me just this once since you have so much experience…”  Or “If you have an overflow of clients you could refer me…” are telltale signs that the person probably isn’t willing to do the work or the marketing for themselves.

When it’s not okay:

When you’re offering professional services: If you offer a professional service such as copywriting, financial advisor, etc. then you should charge accordingly. If your plumber, doctor, or auto-repair shop wouldn’t give it away than neither should you. Think of it this way. You might bake some cookies and give them to your kid’s school for a PTA fundraiser, but you wouldn’t bake dozens of cookies, package them up and give them away free to your local grocery store so they could make a profit on them.

When it diminishes your valued customers: You must be careful to not train your customers to wait for free offers.  Here at GKIC, when we have events, the people who sign up first get the best deal. Period. Not only do they pay the least expensive price, they get the most bonuses. What I mean by that is that if we offer a free bonus as an incentive at a later date, the people who initially sign up, get that bonus too—even though they’ve already registered. This helps to encourage people to sign up early to get the best deal.

While these are just some guidelines and don’t address every situation, following them should help you feel better about when you should and shouldn’t give things away for free.

What are some of the “rules” you follow about when it’s okay to give something away and when you should charge?

See you next time…unless I figure out how to automate that too,

Darcy Juarez

Automation Expert GKIC

NOTE: Want more insider information on how to leverage marketing and sales to improve your business?  Click here to claim your special free bonus of $633.91 worth of marketing materials.

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    Darcy Juarez has created marketing systems in the direct response and information marketing world that have gained national attention. As the Director of Marketing for GKIC , Darcy has taught thousands of business owners her step-by-step strategies for creating their own success and obtaining more time and more profits. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    7 Responses

    1. .Susan Leger says:

      Great post Darcy. It seems similar to the difference between a compliment and flattery. A compliment is given freely without expectation of anything in return where flattery is a manipulation used to gain something. Learn to know the difference.

    2. Thank you, Darcy. As the author of eight books, I got clarity from your article about why it would be appropriate to offer a future one at no charge. In fact, this article confirmed my inclination to make my next Kindle eBook, now in the works, free.

    3. Fabi says:

      Great content Darcy.

      Thank you

    4. Hmm…perhaps it’s the perfect time for a Mother’s Day promotion on my website.

      Thank you!


    5. M Hopkins says:

      Thanks. So can you suggest what ‘professionals’ should use as a free incentive, lead generator or relationship builder if they’re not to give their services away?

      • Mike Stodola Mike Stodola says:

        You should use reports, interviews, videos, tools etc..that give great value to the consumer. Just remember the hierarchy of information. Information is free and of little value. Interpretation of information is of value to people. Specific application of information is of the highest value to people. I.E. Home prices are rising (free info…little value). Home prices are rising in your neighborhood so that means that you may have more equity (interpretation…good value.) Home prices are rising in your neighborhood so you could use possible reduce expenses by refinancing to get a lower interest rate, get rid of mortgage insurance or a second mortgage. You could pull out equity to pay off high interest debt. Or you now have positive equity in your home so you can afford to move and have a down payment for you next home (specific application…highest value.) The report can be “5 Things You Can Do To Reduce Monthly Mortgage Expenses By $143 In As Home Values Rise.” Hope that helps.

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