To be sure, I don’t mean “greed” in the popular sense, in which you may be envisioning Ebenezer Scrooge miserly spending his Christmas Eve counting gold coins while his hard-working and loyal employee trudges home through the snow to his meager dinner and his crippled son.
I am directing my advice to “get greedy” to new business owners and freelancers, far too many of whom seem to lack the belief that their product or service has value or that they should demand good money for that value.
WHAT IT MEANS TO GET GREEDY
I hear all the time from new business owners who feel they need to give away their services for free or dirt cheap so that they can build their brand/get exposure/make future sales/gain experience.
If this is you, I am here to tell you something that will save your business: You do not need to give it away for free to be successful.
Never, ever, ever.
Not even if you’re just starting out.
If you just started a business or you have a business that you feel you are working very hard at with little return on investment, I want you to do yourself a favor, right now: Start being greedy.
This doesn’t mean stealing from others. This doesn’t mean undervaluing others. This doesn’t mean providing others with less than what they pay for. And it surely doesn’t mean making Tiny Tim’s dad work on Christmas Day.
Being greedy, in business, means that you make the decision that YOU are just as important as the customer and that you deserve fair pay for your work.
WHY GIVING IT AWAY WILL KILL YOUR SUCCESS
Let’s take a look again at the unfounded reasons that I hear all the time for giving away free work.
1). “I need to give some stuff away to build my brand:” Unless you want to brand yourself as someone who doesn’t value their own work and isn’t worth the money, there is no logic to the belief that free stuff will improve the way people view your business. Ethical business practices, good quality product, attentive customer service and fair (“fair,” not free) prices will improve your brand. Depriving yourself of the living you deserve will do nothing but put you out of business.
2). “Giving away my work will help me gain exposure:” If you think that giving away your work is the best way to build your portfolio or get the word out about your business, then you must never have heard of such formerly-small businesses as Microsoft, Apple, Harley Davidson or Disney. What do these companies have in common? They all attach a very weighty value to their brand, people willingly pay it (even standing in line for hours in the case of Disney and Apple) and none of them are hurting for “exposure.”
Here’s the deal: If someone loves your product or service and had a fantastic customer experience, they are going to tell their friends and family. Giving them free stuff isn’t going to change their opinion of you. It may encourage them to try you out, one time, but it likely won’t result in the type of lucrative, mutually-beneficial business relationship that results in success.
Your goal should be to offer value, not freebies. Value doesn’t mean “free” because “free” is not a fair price. Value means that your customer walked away satisfied that the price was right (whether it’s a high price or a low price) for what they received in exchange. No matter how cheap your prices, it is your deliverables in quality and experience that ultimately make the customer feel happy with your brand.
3). “But, by giving this stuff away, I increase my opportunities to make future sales:” This makes no sense to me. If someone can afford to pay you in the future, they can afford to pay you now, right? Plus, once you give something to someone for free, you train them to devalue your work and they are more likely to try to haggle you when you finally decide to charge them full price.
4). “I need to do free work to gain experience:” O.K., so this has some merit but if you are giving products and services away to people who really should be paying, you are doing this wrong. There are some cases in which giving it away for free is necessary and there is more to come on this shortly.
Hopefully you started your own business because you have a special talent or skill set that you thought was marketable. If this is the case, your product or service has value and you deserve pay for that. You may not deserve the same pay you’ll get when demand increases but you definitely should assess what your real, true value is right now, in this moment, and charge this price.
SEVEN TIMES WHEN IT’S O.K. TO GIVE IT AWAY FOR FREE
1). It’s an industry-accepted norm: If you are a fashion designer and Vogue magazine wants a dress sample for an upcoming issue, then, yes, give them one. This is o.k. because doing so is an industry norm and even Donatella Versace would probably do the same. There is also a very clear and direct investment return to you, in the form of very good publicity, that probably outweighs the cost of whatever frock you supply to them.
2). When it’s a good investment for you: Giving away free samples of your special hummus recipe at a Farmer’s Market, when you know it will draw people to your booth and increase how many containers you sell, is fine. Holding a “buy one, get one” sale to drive traffic during times when business is otherwise dead is also fine if it makes you a profit. Cooking a free gourmet meal for a local culinary magazine writer to promote your new catering company is good publicity if it results in a write-up in the magazine and turns readers of the publication into customers. If you’re approaching an opportunity to give away your product or service with the best interests of your bottom line at heart, you will be able to tell the difference between a good opportunity and a situation in which you’re being taken advantage of.
3). As part of a marketing gimmick: Sprinkles, a chain bakery specializing in cupcakes, is known for using their social media to engage customers and drive traffic to their store. They do this by announcing “secret” words on their Facebook page that, when repeated in-store, result in a free cupcake. Presenters at fairs and events are often able to collect information on potential customers in exchange for opportunities to enter a drawing for a lucrative free gift. These “give-aways” are all examples of greed at work because they actually hold far more sales value for the company than they do the recipient.
4). Nonprofit organizations: If you are really interested in building your portfolio, volunteering your services with a nonprofit organization is an excellent way to create sample pieces of your work, build your experience and keep your dignity at the same time. Plus, talk to your accountant. It may also provide you with a write-off come tax time.
5). As part of an exchange of services: When my hairdresser, who is fantastic but pricey, needed a new website, I jumped at the opportunity to write her content in exchange for her creating some new layers on my head and getting rid of my grays. My website design was courtesy of the editing skills I shared with my website designer and I got the bumper on my car painted for the cost of some marketing materials and social media content. If you can receive something you really, truly need in exchange for giving someone else the same, it’s a win-win.
6). To say “thank you” to a valuable customer: If you must give away something to a customer, the appropriate time to do so is not at the beginning of your relationship, but after they have already proven themselves a valued customer. If you own an automotive repair shop and a customer comes in frequently, refers you to her friends and family and has been a joy to work with then, by all means, throw in a free oil change or tire rotation every now and then with her transmission service. But let your customers earn this sort of treatment first. They’ll appreciate it more.
7). It’s Your Mom: O.K., so greedy is good in a business sense but not always a personal one. Select a few obvious family members and close friends who are genuinely worth the time investment and work for them for free. Keep this list very small and make sure your loved ones don’t take advantage. To date, my list has only included my sister, my father, my fiancé, a good friend I’ve known since childhood and a cousin who was really in need. I have a much larger “second tier” list of friends and more distant family for whom I charge half-price.
Everyone else pays full price.