Free Has No Value

by Paul Cherry, author of “The Ultimate Sales Pro“

When I was starting out in my business, I thought free was a good way to get off on the right foot with prospects: “I’ll give your team a free workshop so you can experience firsthand what we can do for you.” “I’ll fly out to meet you and your team at my own expense to give you a presentation.” I’d contact a trade association and be told, “Well, we don’t pay speakers or cover expenses. But if you want to build your network, we’ll let you come in and we won’t even charge you for the conference.” My attitude was, “Why not?”

I was new in the business and needed the visibility. And what did I have to lose? Just some money and time – but hey, it was a cost of doing business.

Well, after a few of these experiences, I figured out that giving stuff away did not get me more business. In fact, I’m convinced that it cost me business – because it devalued the very thing I was trying to get people to pay for.

When you give without getting anything in return, you actively undermine your value. Remember, we all keep a mental balance sheet. And if we get something for free, one way to balance the books is by discounting the value of whatever it is we received.

You’ve experienced it yourself. A telemarketer calls you with a “free” offer: two nights in a luxury hotel if you’ll listen to our time-share pitch. In the mail, you get a “free” discount card that saves you money on your prescriptions. Or you get an email offering a free trial subscription to a magazine. Because they’re free, you immediately start discounting them: Oh, the rooms are free because the hotel is empty that time of year. The prescription discounts probably don’t apply to the medicines I use. The magazines will sit there because I’m too busy to read them. So thanks but no thanks.

Don’t consult for free.

Bordertown Retail Systems manufactures and sells metal racks for retail displays. One day the sales manager, Ian Symington, called me up and said he had a big prospect who’d agreed to let him come in and do a free lunch and learn – a session where a vendor goes into a company, educates the staff and feeds them lunch. He wanted me to coach him on how to deliver an effective program.

Lots of vendors do lunch-and-learns. As part of a broader marketing strategy, they can be effective – especially if you have a new or unfamiliar product that people really don’t understand. But I always have to ask: Are people there because they really feel the need to get educated on this product? Or are they there for the free lunch?

In most cases, you’re discounting your own expertise. You’re giving away free advice to too many people who are not qualified or interested in what you have to offer. And the costs are not insignificant. A dozen or two lunches. Travel expenses. And that’s the least of it. The real expense is the opportunity cost. Ian spent a week preparing his 45-minute presentation, meaning he had to postpone other sales calls. There was probably $20,000 worth of business he did not close that week because he was getting ready for the lunch and learn.

But the biggest cost was to his perceived value. When Ian got there, half the folks who were supposed to be there didn’t show up — especially the key decision makers, who were all suddenly too busy to attend. Mostly he got low-level employees who had nothing better to do than listen to his spiel, and other hangers on who had no business being there at all. As Ian tried to get through his slides, the audience was munching away, looking at their phones, chatting with each other.

Did he get positive feedback afterwards? Sure. People said they got some great ideas about how to design retail displays for maximum effectiveness. But what message did Ian’s efforts send to the real decision makers at the company? Did it position Ian as a heavy hitter – an expert on retail displays who could boost their bottom line? Or as a guy chasing their business, who happened to have some interesting ideas?

It really was a lunch and learn – for Ian. He learned that he should demand more in exchange for his hard-won knowledge and expertise.

When his client offered him the “opportunity” to do a lunch-and-learn, he might have said something like this: “Thanks for the opportunity, but I have to be forthright: Our experience is that lunch and learns are often distracting and a little unruly.

“Here’s what we can offer instead: We’ve recently worked with several clients to redesign their retail displays, resulting in a 25% acceleration in inventory turns. Help me set up a meeting with the right person in your organization, and we’ll see if we can make it happen for you.”

In other words, giving and getting. You’re willing to give the buyer the value of your expertise – if you can get a meeting with a real decision maker.

USPs are willing to say no to low-value situations and propose something better. They will invest their time – but only as long as the buyer will reciprocate with equal value – for example, the time and attention of high-level decision makers.

 

Paul Cherry is the author of “The Ultimate Sales Pro: What the Best Salespeople Do Differently“. He is also the founder of the sales and sales leadership training firm, Performance Based Results.

from Young Upstarts https://ift.tt/2OLRrKM via website design phoenix