About a year ago, I wrote an article in which I talk about giving away freebies and how much it can actually boost your business. Giving away certain items or services can really show your customers how much you care, which will make them keep coming back for more. But earlier today, I had an intriguing conversation about the dangers of doing exactly that. My companion was right: Why buy the cow when you can get the milk for free?
Giving away too much can be just as detrimental as not giving away enough. When you charge for every small detail of your business, you risk coming off as either desperate or uncaring. However, when you provide free stuff constantly, you become at risk financially. You are still running a business and should always remember that. Because of the large number of businesses that I have seen giving away freebies left and right – to the point of giving away more than they sell – I’ve decided to give you a few thoughts to ponder before you settle of giving away your entire business…Know your company’s value. Each company has a value to it.
Be mindful of ROI. The return on investment (or ROI) is one of the biggest aspects to keep in mind when you’re giving something away. Promotional items can have high ROI, which is why they are great to hand out. But you may want to charge for certain services if the ROI doesn’t match up for something that takes a significant amount of time and energy.
Market your giveaways. If you’re not willing to market the fact that you’re providing a free product or service, then charge for it. Be proud of the way that you run your business. If you are excited to give something out for free, then let people know. You should always let your customers know what you provide and the value or cost of it.
Know your hard limits. Don’t fall into the trap of being pressured to reduce (or remove) your pricing. If a person wants to make a purchase, he will pay. If anything in business – or in life – makes you uncomfortable, don’t do it. You will lose far more actual business by giving away products or services that you’d typically charge for than you will if you turn someone away. There are always other customers out there.