There is No Value in Free

When I was growing up there was a little bakery in our neighborhood that sold the best brownies. They were 10 cents each or two for a quarter. They sold lots of brownies 2 at a time.

I wonder to this day how long it took for people to figure out that the “deal” wasn’t such a good deal.

I think the pricing worked because everyone loves a bargain. We love bargains so much that sometimes we don’t stop to even figure out if we’re really getting one.

Salespeople were just people before they began selling so they are just like everyone else, they love a good deal too. They especially love offering them to their customers and prospects. So much so that they often throw around the word “free” as if what they are offering is no better a bargain than 10 cent brownies selling at two for a quarter.

Thoughtful, professional salespeople don’t offer anything for free. They don’t need to because they add value, real value to every transaction.

Salespeople who offer “free” anything are also more likely to attempt to earn business by selling on price. That is a short-term strategy that is not sustainable in the long-term. When you sell on price you eventually lose on price.

So here’s some guidance for salespeople looking to be more professional: Understand that the only things truly free are those that bring no value to anyone. If your offering something of value to your prospect then stop saying it’s free.

Share with your prospects that you’re willing to absorb the cost in order to provide them with additional value, or that you and your company are willing to make the investment on their behalf for some additional product. If something offers real value then it can’t be free, somebody has to pay for it. If that somebody is you or your company then tell that to your prospect, don’t just devalue your offering by being lazy and saying it is “free.”

If you’re a professional salesperson and you, your company, and your product bring real value to customers then say so, repeatedly. To most people, if only subconsciously, “free” means “worth nothing” even if the free thing is something they want.

Always look for ways to ADD value, not subtract it. You will sell more, at higher margins, and you won’t have to offer anything “free” to do it.

Now, go sell something!

15 thoughts on “There is No Value in Free

  1. We all need to understand how we provide value to the world. The value we add should be more than we receive. Leave everyone thinking they got the best end of the deal so they come back for more. When we sell on price we are just in a race to the bottom, but when we add value we can change the equation.

    1. Great point Tom, when we sell on price there can always be someone willing to beat our price. When we create unmatched value we have the opportunity to earn what our product is actually worth.

  2. It’s all about relationships. We say it all the time. We hear it all the time. Though most salespeople aren’t getting the message. I was in the ERP (enterprise software applications) business for many years. Long sales cycle. Sometimes over a year. Transactions ranged from $200K to $1M+. The industry conditioned the customer to ask for substantial discounts, giveaway services, etc. We conditioned the customer to negotiate at the end of the quarter because they knew we needed to make our numbers. Hockey stick effect. This wasn’t relationship selling. It was low price wins. Not a lot of fun nor relationship skills in that approach.

    1. Fun? You make a great point, selling on price is like a rat race, not much fun when we’re running like that.

      On the other hand, using our skills to develop relationships and provide actual value to customers is fun and rewarding. Salespeople who sell on price burn out much faster than those who develop real relationships and offer value.

      And Geez, once those price wars get started they are pretty hard to stop, just ask the wireless companies about that…

  3. Steve, I love your posts and I think it’s worth distinguishing between free and complementary introductory offers to prove value prior to purchasing. Many of the most successful online companies offer a service for “free”. Think Facebook, Twitter in the social network space and think Insightly, Mail chimp in the Sales and Marketing space. They all have outstanding products and followings. They key to some is advertising and the key to many is that you get to see and feel the value before you buy the value. We use complementary advice to show people how good we are. It completely de-risks the initial contact with new prospects – for the prospect. They can then upgrade to our premium service – which they do in the majority of cases. Keep up the great work with your posts and think you for sharing your wisdom. It is very much appreciated.

    1. That is a great distinction, a “free” trial shows the potential value a product or service can provide IF it is purchased.

      I look at the trial, sample, demo, etc, as an example of “evidence” that what I said the product will do is actually true.

      In the case of a Facebook or Twitter I’d say it is not “free” but paid for by those who are hoping we read their ads and sponsored Tweets. The companies who advertise with Facebook pay for our eyeballs hoping to make an impression on us. It’s a lot like the broadcast TV model, not “free” just paid for by someone else.

      Thanks for the thoughtful and insightful comment. Used correctly, a trial or sample can “prove” the value a product or service offers but again, I’d say it wasn’t free, you simply absorbed the cost for the customer… It’s just part of the cost of a good sales process.

  4. Dear Mr. Keating: This subject is a perennial one. Mastering it takes years of practice, discipline and conviction. Offering something for free is a come on that can backfire. To gain trust for offering something for free is like a glue trap telling a mouse that the trap is free to step on. I have 32 years of selling consulting services to know this “free” tactic often backfires on the seller. All of my good clients never expect me to provide my service for free. They expect me to charge and charge in accordance with their perception of my value. James Chan, Ph.D., Philadelphia, Pennsylvania.

    1. You make an excellent point, the conviction that your product or service is “worth it” is a key to getting what you deserve. Your customers expect to pay because people expect to pay for value. You’ve obviously shown the value and proven the value to your customers. We all know that “free” is worth what you pay for it and still we fall into that trap, perhaps it’s human nature.

      1. I recommend a practical method to ward off people who pick our brains for free. Ask for an honorarium or a minimum fee. People who genuinely need or want help pay. The small fee allows both the service provider and the client to open up. The service providers can be honest and and the clients don’t need to hide their problems. They can decide to do more business if they see eye-to-eye with each other. This applies to non-profits asking speakers to speak for free. If they must pay an honorarium, they are more motivated to promote the event than if they have no “skin” in it. James Chan, Ph.D., Philadelphia

      2. I think you’re absolutely right….”free” has no value. Even a little skin in the game can motivate people to follow through on the advice that they have been given. “Free” often results in “no skin off my back” so why bother.

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