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Wednesday, April 10, 2013

Why Offering a Free Service Is Not a Good Idea..


One of the top  words used in marketing to gain your attention is the word "free".  Next time your online watch how  ad's are structured and see how many times you see something offered for "free".  

Good advertisers use "free" as a hook.   Good ad's might say something like this.

Free 30 day trial. This is a great way to have a client  try your product.  You see this type of ad associated  with software.
Free with the purchase of X.  You buy and get something.
Free Appointment.  Lawyers use this one a lot.
Free Download..  Trade contact info for information. 

When "free" is used in the wrong way

Write this down!   Locate a 3 x 5 card and post it where you see and remember.

"CASH is KING"

This may have happened to you.  Your a small business and a potential client ask if you to provide a service for "free" to test your product.  You hopefully will do a short interview and find out what a client needs are however, your answer is going to be "NO".  The same amount of work is required for a "free" service and cuts into your ROI or your ROT ( Return on Time).. 

This does mean we cannot discount. Make sure your discount covers your service, labor and hard materials. Discounts can hook your customer long term.  

Trade outs should be Dollar for Dollar.  I stay away from trade outs for the simple reason "CASH is KING" and trade outs do not pay the bills.  If one chooses to use a trade out.  Make sure both parties are in agreement it is dollar for dollar.  I will do one  if it helps my business.. 

If you offer a "free" service call ( I would not) then make sure you have a means to cover that cost.  Better yet! Let clients know you will charge a fee and will apply it to the service if they chose your company for the work.  If they do not then let client know  the service call is non-refundable.  

I might lose clients if I don't offer something "free".  You might lose some clients.  In the long term your business will prosper and the market ( your market) will know you provide a service for a fair price.  Your marketing material may have strong slogans  like "100% Satisfaction Guaranteed" letting clients know you back up your work.

Hold your ground and make sure you have your "FAB" ( Feature, Benefits) for why a client should do business with you. Lots of business are offering a "free" something.  I recommend learning a word track ( have a answer)  when a client says will x down the street said he would do it for "free".   My answer is this.  I completely understand the temptation to use the free service does the "free " offer include ( list your FAB).   

Sometimes we have to walk away from business and focus on clients who can and are willing to pay for our service. Increase your pipeline and "free" will not be an issue. 

Remember "a free trail " can be a powerful tool for your business if used the right way or "free" can hurt your ROI and ROT  business model.

I will no longer offer a free service to another business who will become successful at my expense.




Give your clients several options when proposing  Services

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