No Freebies

Unless your media consumption habit is restricted to non-ad supported content, you will probably find the following experiment somewhat intriguing, if not downright disturbing. The next time you want to kill an hour doing non-work (and don’t we all sometimes), turn on any commercial broadcast channel, preferably either in the afternoon or late night and get a pad and pencil.

Over the course of just one hour, write down every time you hear or see the word FREE! Having to deal with some painful back issues recently, I was subjected to this type of content stream for several days and my non-scientific average for a one- hour time, over several ordinary weekdays was 37. Yes, that’s right — 37 times.

FREE shipping, FREE installation, FREE delivery and set-up, FREE haul-away (for old appliances), FREE bonus gift with your purchase if made in the next XX minutes), FREE trial, FREE return shipping, FREE samples (non-FDA approved drugs, magic potions and so forth), FREE estimates, FREE landscaping survey and estimate, FREE roofing inspection, and on and on.

Pavlovian Conditioning at Its Best

Is it any wonder then that your commercial clients have free on the brain, and are totally conditioned to expect something for free from everyone? It must come as a serious shock when they find that in fact there are real-world limits to free.

Anyone know of a plumber, electrician, appliance repair service person, doctor, lawyer or any number of other service economy professionals who offer anything for free? If you do, would you trust them? Doubtful, I suspect, since the ancient adage of “you get what you pay for” applies across the board. If it’s free, does it have any value to either you or the provider? Again — doubtful.

But the relentless pounding of advertisers and marketers on free is unavoidable. Why? Because a century later, P.T. Barnum is still right: “There’s one born every minute.” (A sucker, that is.)

As long as that continues, the susceptibility of the consumer mind to the free pitch will remain successful.

Giving Away Value

This matters in the world of commercial/professional AV/IT because the consumer demand for something for free is infiltrating every aspect of business culture and relationships.

In our world, it’s coming from the top of the budget pyramid. Architects and design firms offer free planning as long as they have a guaranteed contract hanging out there; new or want-to-be integrators or contractors offering free designs in trade for the equipment order. Their rationale (really their prayer) is that that what they gave away will be made up later on the sale of the hardware, etc. Guess what? The unstoppable profit-or-die algorithm eventually puts them out of their misery — but they will wreak havoc until that occurs.

Other trades offer free upgrades or services with their contracts as incentives or to put that word free into the mind of the buyer so they think they’re getting a good deal. (Holy smokes, I’m getting XX for free; the boss will love that.)

Sure, the boss will love that until the stuff that was free breaks and the cost of fixing it exceeds what it would have cost to actually buy well in the first place.

The FREE virus is everywhere and there is no treatment except to hold your ground.

But Can’t You Just Stop By for Free?

I am sure that not a week goes by without your phone ringing, or an incoming email arriving where the person on the other end wants something for free. We probably get five a month and we’re not a big company by any means.

Nothing for Free

I am sure by now you’re at least wondering how to handle this and not irritate potential clients/customer/buyers. The simple and frankly immutable answer is: You don’t.

There will always be a few who if they don’t hear the magical FREE feel as if they got cheated somehow. You can’t win those, don’t try!

What does seems to work most of the time, with the vast majority of the rational and logical clients is simply telling them the whole truth UP FRONT!

Here’s how we and a large number of our colleges all deal with this. You will want to personalize this methodology to your company, your type of projects, and of course your people. but the basics are uncomplicated. Over a long time frame (30+years) we have found that keeping it clean, simple, and completely traceable has rarely failed to work out. It’s only when you try and jump a step or leave something out, that you get into trouble.

Here is the step by step structure:

  1. Taking the call (or email). Whenever someone calls us or emails us with a request for information or an RFP or anything similar, we document the time, date, name, organization name, title, location and at least a one sentence descriptor of what they asked for or about. This becomes a permanent part of their file, even if the job falls through. You never know when they will call back or try again.
  2. Unless it’s a calendar impossibility, we respond by email and/or certified letter (delivery traceable and signature required), usually by UPS or FedEx, plus a follow-up phone call with 24 hours after the dispatch of the letter. Both contain essentially the same message: “Thank you very much for your inquiry (RFP or whatever they sent us). It is our policy to offer you a no-charge 30 minute a phone call to further discuss your requirements and goals. Additionally, if you are located within a two-hour drive from our offices we would be happy to conduct a brief site visit to gather further information prior to any detailed proposal submittal. The more information you can supply the more accurate we can be in our assessment of your needs and in our potential proposal to meet those needs and goals. Again thank you for your inquiry. We look forward to your reply.”
  3. Depending on what happens next, we either have the phone call and or conduct the site visit. If that takes place then a further follow-up contract letter of agreement for proposal submittal will be generated. This document (which we had drawn up for a fee by a contract law professional — we recommend you do the same) specifies what we will provide in the preliminary proposal/design document and the associated fee for such a proposal. The fee is based on the amount of time it takes to create the document/proposal (in hours). This document requires an authorized signature to proceed and a non-refundable 50 percent of the proposal fee deposit upon its return. The balance of the fee is due upon proposal submittal.
  4. If the client is unwilling to execute such an agreement, then there will be no proposal. It is crucial that they understand that our time is valuable just as any other professional services provider and that, to get what they want, they have to invest in their project. Over more than three decades of operating this way, less than 20 percent of inquiries do not agree to the fee structure arrangement. (That ratio of one to five who don’t want to pay for a proposal has been steadily increasing from one to ten about a decade ago to the current one to five due to the factors we outlined above.]
  5. In tracking those jobs later, after we declined the project, more out of curiosity than anything else, we have almost universally found that whomever undertook the no-fee proposition ended up losing money on the project or giving up on the job, or having the project fall out from under them due to lack of funding. I have never seen a project that had the free requirement complete successfully and I don’t expect to. Once the project proposal agreement is in place, then things can proceed in a fairly normal, logical progression, with the client being made fully aware in writing (signature required in acknowledgement) that minor adjustments or changes can be generally be accommodated, but any substantial or major revision(s) will incur additional fees as needed based upon the time required to implement the changes (e.g., essentially a change order fee structure).

If you think this process is overly complex or burdensome, create your own version, but create a procedure and follow it. If you wing it, you will end up paying the price somewhere down the road. Even the most precise Scientific Wild Ass Guesstimate (SWAG) is not close enough to ensure you don’t end up on the negative side of the cost equation.

It pays to remember that the AV/IT interstate is littered with the rusting relics of companies and the failed careers of people who decided to take their best guess on costs and overhead. Close enough is simply not good enough!

Time Is Money — Always!

When all is said and done, there remains but one truth in business: Your time has value. If you set that value at zero by giving away work or services, you not only devalue your own work but also place that burden on your colleagues and the industry at large as well. You can do as you see fit, but carefully consider whether free is really where you want to set the bar. Think about whether it makes more sense to offer some sampling as outlined above and then charge a reasonable amount for your skills, knowledge and expertise. I think the latter makes far more sense and in the long view of things is the only path to growth and survival.