Building Value in "Free"

Avoiding a race to the bottom.

Like all parents, we tried to instill the value of money in our twin boys when they were growing up by having them save and pay for some of the things that they wanted: high-end headphones, Xbox games, and even clothes. I recall being amazed to see how differently they treated the merchandise that they paid for as opposed to things we purchased for them:

• The headphones would be carefully tucked away in their protective cases.

• The games were cherished.

• The Vineyard Vines shirts hung in their closets with care.

Meanwhile, most items we purchased for them were misplaced, treated carelessly, or, in some cases, outright lost.

Why did they seem to treat the things we purchased for them with relative indifference while they treated the goods they bought for themselves with such reverence?

The answer is value and emotion. The vast majority of people simply do not have an emotional attachment to products or services they receive at no charge. It’s just human nature. Think about it: When you get a product for free, do you value and take care of it the same way you paid for it?

In the branded merchandise space, I see many companies eager to give costly merchandise and significant resources away in an effort to protect their current client relationships or establish new ones. When you freely give services away, clients will neither value nor have an emotional attachment to the relationship. Even worse, they will continue to expect more from you while insisting on paying less. As Seth Godin would say, it’s a race to the bottom, and that’s a race you don’t want to win.

However, there are times when it makes sense to give something away: samples, a small convenience order, or even an online store. When you are going to give away something for free, it is critical that you show and, more importantly, share value. For example, if you are giving a client an eCommerce site for free – even though you will incur real costs in terms of dollars and resource allocation – have them sign a statement of work that details the following:

• The work to be done

• The cost (value) of that work

• The charge ($0.00) to the client

The client still gets a website at no charge, but now you can build value into the conversation. Not only will they treat the website as if they paid for it themselves, but they will be far less likely to ask for countless time-killing changes because you have shown them the value of the “free” service.

When you ensure the client sees real value in everything you do – especially “freebies” – they will begin to form that emotional attachment, which will lead to long-term relationships.