Why offering free services is not always a good idea

Knee jerk reactions and blindly following  the marketing sheep herd is never a wise move in the best of times,    In this article I look at why offering free services is not always a good idea in the COVID crises.

Prior to  the COVID  many businesses and industry sectors were already struggling.  Some were doing well and will continue to prevail even with an upswing.  Many have indeed found new channels meeting new market demands.  And there are so many that have been totally thrashed and cut off at the knees.  Crises of any magnitude (incl the recent bushfires) bring diverse experiences, challenges and changes.  Everyone is impacted in some way at present, be it an inconvenient blip or a grave consequence.

For most service businesses the marketing remit pre COVID was to hustle within a sea of wild competition and to position as an expert authorities with high value solutions. In reality, most businesses looked pretty similar with vanilla and tedious communication vs bright differentiation. Similarly content often lent to reproduction vs unique.

Sheep herd mentality 

And that brings me to what is happening on social media and especially LinkedIn at concerning levels. Its the issue of a sheep herd mentality of reproduction!

It seems that every second man and his/her dog is now  offering free stuff – webinars, courses, 1 hour consulting sessions  or pay later offerings. .  Social washing by offering services for free to be seen as kind and compassionate has become the new marketing tool for many SMEs and consultants.  Most are blanket offerings to everyone and anyone. No qualifier just spill and promote.

And here is the rub – generosity & commercial discernment is not mutually exclusive.

Businesses who are dropping their commercial pants and suddenly going all philanthropic in golden halo style are the ones often least able to afford it and shouldn’t.  Unless a charity, a benefactor or a volunteer you are not, you are a business first.  The belief that free now will create paid later is not always the case.

Don’t get me wrong, I am a huge advocate of support, caring, donating and volunteering to charities and those struggling.      But this is not what is at play here. Fear is driving many decisions without critical market analysis of the who, what, when and why of freebies.

Not everyone is in the same boat and people will and do take advantage of others.  Human nature doesn’t do a 360 in a crisis, but true characters and intentions are amplified, negatively or positively. Boundaries and qualification is more important now than ever.

Following the herd of sheep all offering free services in their industry paddock can do your brand a major disservice.  And overly effusive good will hype and blue nose communications can be perceived as distrusting and manipulative.

Unless your business is already in the field of social enterprise or charities et al, why the change of lane?  Further the value placed on free services is aligned to a lack of quality if it’s free, or too cheap. Value is not based on actuality but perception and then the experience.

Take Ups & Reciprocity

 There is evidence that the registration and login  to free services and webinars are rarely high and can indeed be counter-productive, let alone translate to paid clients.

Reciprocity is often the misguided motivator that drives offering free services. Not everyone has a mindset to reciprocate, so it’s risky at the best of times.   In his book ‘The   6 Principles of Persuasion’, Dr. Robert Cialdini  provides a great example of reciprocity as a gift given after an initial paid service.

The big brand response to free

The behemoth tech brands are offering free tools and services to help businesses mitigate and navigate the challenges which is great. But these companies have enough skin already in their customer game and financial cycle to do so and their brands are solid.    There are so many hurting and need help and the big end of town is coming to the fore in many cases as they should.

A better way

 Commercial discernment and generosity are not mutually exclusive and there are fruitful ways to support those who truly need it whilst nourishing your own value and financial sustainability.    Here are a few tips:

1. Give extra bonus products or services to every full priced service.

2. Do discount your service if someone desperately needs it but cannot afford the full price. But remember many people use ‘cost’ as an excuse for not buying so qualify.

3. Offer a buy 1 get one free for a colleague or friend. Again qualify.

4. Create more content for social media and your website which gives actionable tips, value and support. Content which is self-serving is less than desirable now than ever before. Show up and share expertise not fluff.

5. Contra-deals are a great way for two parties to get what they both need.

6. Donate money and/or products if you are able to food banks, crowd funding campaigns, charities, health lines and social enterprises.

7. Volunteer time to those same organisations as above whether from your bag of skill expertise or general help.

Loyalty and commercial success is a tight rope at the best of times and holding onto self-worth and business value is a pathway to both mental, personal brand  and financial well being.