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Why Free is Too Expensive

A while back, I outsourced a small project to a new small business to try and help them out.  I had been communicating with this individual on Twitter and I wanted to try and help them in their new business.

Unfortunately, the project did not go well. In fact it kind of went sideways.Free! But it's going to cost you

I decided to email the individual and asked them to send me an invoice for the work they had done. I politely let them know that I didn’t think I would be using them for that type of work again – no hard feelings. About a month later, I received a reply from them. They emailed, apologized for what went wrong and told me they were not going to invoice me for the work they did. The value of the project was not huge in any case, less than $100.

Later, I learned that this person quit their job to focus on their business full time. Knowing that this can make a huge difference in quality and timeliness of work, I wanted to try and help them out again. I referred a couple people that might be able to use their services in an area I am pretty sure they are quite skilled at.

That’s when things went south…They told the person I referred to them that I never paid them for the work they did.

Yes, you read that right. They told this person that they did work for me, and that I never paid!

I had a similar situation occur with another company as well. I approached them about a project I needed done. They insisted on doing the project for free, because they wanted the exposure that working with me would bring them. Then, when it came to deadlines… you got it, they told me they needed to prioritize paying clients. I never asked them to do it for free. I was always more than happy to pay!

These two situations have served as big lessons to me and I share them with you so that you can learn too.

Free implies no value.

Let me explain. Someone I know who referred me to a very big client asked me one day if she could “pick my brain” for a couple hours because she wanted to do what I do in her industry. The warning sounds went off, but I said yes anyway – after all, she referred me to someone. It would be a good thing to give her a bit of my time for free right?

I blocked out a couple hours in the middle of a very busy week and, guess what happened? Less than an hour before the meeting she canceled. She was having a crazy day.

I am not sharing these experiences as a negative. Rather, I want you to learn two very important lessons:

1. When you give away your service for free, you diminish your own power. You give your power, the power you have created in your business, away and allow someone to devalue what you are willing to contribute.

2. When you allow someone to offer their services to you for free, you do the same thing to them. You devalue what they are worth.

3. When your time is free – the other person’s time will always be more important and more valuable than your time.

Now don’t get me wrong. I am not saying don’t ever do something for someone out of the kindness of your heart.  Just know that there is a right way and a wrong way. What I want you to do is set up guidelines and boundaries in how you do it.

Recently I offered to help someone out and these were the conditions – I told them I would give them some of my time and they could pay me when they got their business up and running.  I did NOT say I would do it for free.  I also told them that I had expectations around how they needed to perform and that if they did not take our work seriously, and do what they needed to, that I would pull out of our agreement.

By setting up a structure like this, the individual took things seriously. There is a desire to do well and be successful because they want to be able to pay their debt. They also understand that I am taking their progress seriously and I am investing in them.  This empowers them to be great.

If you want to give back to the community follow these tips:

1. Do it without expecting anything back in return.

2. Do it with a finite amount of time – eg: block a certain number of hours a month to give back.

3. Create a program around giving back and offer to schedule people through this program on a certain day of each month.

4. Set expectations and guidelines around what you will and won’t do as part of the program.

5. Be clear with respect to how much access they have to you and your time. Creating structure in the beginning makes it work for both parties in the end.

I am not advocating that you should NOT charge for your services. I think you should and I think you should charge what you are worth.  What I am advocating is, if giving back is part of your business – structure it, take it seriously so others take it seriously too.

And, when you are charging for your services, don’t sell yourself short. Charge what you’re worth AND, be sure and perform to the same standard by which you determine that worth.

PS. If you enjoyed this article, pls join our community on Facebook, I’d love to see you there too.


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Comments (59)
  • Avatar

    Tanya Feb 10 2011 - 5:45 pm Reply

    Lisa,
    Thank you for this. We do do quite a bit of community work and this has been a difficulty in the past. I will take your suggestions and move forward with putting together a structure for our “pro bono” work. I’ll be sure to let you know how it goes.
    Cheers!

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    Peter Feb 10 2011 - 6:38 pm Reply

    I am an accountant and we do several jobs either with no charge or deeply discounted for various community organizations. We have an office policy that this work gets billed out at its true value and a discount be shown on the bill. This helps the client understand the true value of what we are doing for them. Also if we are discounting on a one-time only basis, then it establishes the price for the next time when it will be “payable” work

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    Jack Feb 10 2011 - 7:41 pm Reply

    Great advice as always, Lisa.

    I have sold houses and done consulting for free before and will always send an invoice for the work with a credit for the full amount also shown. that way they know the value of what was provided.

    Thanks again,

    • Avatar

      Lisa Feb 10 2011 - 8:23 pm Reply

      Jack, I love the voucher you give to people to redeem time with you as part of your book, another nice way to show the value of your service.

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    Jerome Pulcine Feb 10 2011 - 7:58 pm Reply

    Hi Lisa, we learned the ‘free” lesson early on with our company. When we started 13 years ago with CPI Interiors we offered some free consultations trying to “kick” start our company. Big mistake, no body took it seriously. Many clients wouldn’t be on time, keep you longer than the hour you were giving, wouldn’t stay focused, etc, etc. So I agree with you 100%. The charity work we do and there is lots, is done in a calendar like any appointment so our time is well planned.

    Great advice you are giving, thanks for sharing.

    Jerome

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      Lisa Feb 10 2011 - 8:25 pm Reply

      Tough lesson to learn, and one that often leaves you frustrated with the client – even though it started off with the best of intentions. Thanks Jerome! Appreciate all your comments.

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    John Feb 10 2011 - 8:07 pm Reply

    Right on Lisa!

    I have learned that undervaluing one’s own service or worse, giving it away free is more disrespectful to yourself than to the customer. I think how you run/value your business is a reflection of how you run/value yourself.

    When I quadrupled my counseling fees in 1998 out of frustration, prospective clients immediately assumed I was the best! No more deal seekers and tire kickers… only committed clients.

    • Avatar

      Lisa Feb 10 2011 - 8:27 pm Reply

      I agree, someone (Angela Sutcliffe from Ottawa http://angelasutcliffe.com/) gave me a swift kick in the pants a few years ago and asked me to consider how other people could charge for services and continue to grow their business if others (me at the time) were giving it away for free. Her comments has stayed with me, the disservice goes further than you and your clients, you potentially take the business away from someone who really needs it. Thanks for your comment!

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    StevenLeconte.com Feb 10 2011 - 10:24 pm Reply

    This post made me think a lot because a few of the things that you mentioned in your post happen to me.

    I often feel like helping people out when they get started but I know that my time and my knowledge is worth a lot.

    Giving back for me is important because I learned from people that freely give. I guess the key point is the be smart about it and to include it in a system so that it doesn’t interfere with other things and doesn’t hinder my reputation.

    Thanks for sharing that post, it was worth reading.

    • Avatar

      Lisa Feb 10 2011 - 10:52 pm Reply

      thank you for commenting and sharing – I am glad to hear I am not the only one who struggles with this challenge!

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      Brian Jambor Apr 30 2012 - 6:45 pm Reply

      I have clients that will offer a “Free Consultation”, but they phrase it as follows: We don’t offer free consultations. Our consultations cost $250/hour, but what we’ll do is give you a consultation, then we want you to take the value you received from the consultation and donate it to the following charity we support: Link to Charity Website.

      Once you’ve donated to the charity we support, please email us back and let us know.

      (Even better if you create a page with a cart where you capture their donation, then you send the money to the charity yourself)

      It’s another way to give back without devaluing the actual cost of your services.

  • Avatar

    Gile Beaudoin Feb 11 2011 - 12:42 am Reply

    Absolutely true! Lisa Larter hits the nail on the head AGAIN! (Ever consider carpentry, Lisa??)

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    Jill Hutchison Feb 11 2011 - 4:45 am Reply

    Thanks for this Lisa. Totally agree with you! When I first started my coaching business I was doing several pro-bono or cheap programs – which attracted people partially committed, and got mediocre results.
    Now I am only running high-value programs – and I am getting the most phenomenally committed clients who (you guessed it) are now getting amazing results!

    @Peter: Great idea to show the full price and show the discount on the invoice for special deals.

  • Avatar

    Kae S. Roberts Feb 11 2011 - 12:32 pm Reply

    I love this blog. I could see myself in it. My passion to help people see their worth clearly has gotten in the way of me remembering mine. Thanx so much for taking the time to share this.
    And I just sent an email off to someone who did work for me who was insisting on not charging me because of the context for the work. On its surface a nice gesture and it was 90 minutes of their time. That’s a lot of time in my business. I was not comfortable with this and your blog helped me to find the words to insist that she charge me “something” for the work.
    Thanx a bunch again,

    Cheers!
    Kae S. Roberts

  • Avatar

    Kathy Feb 11 2011 - 1:27 pm Reply

    I agree with the idea of setting up parameters and establishing a value of services when money isn’t being exchanged. I learned some very hard lessons when doing trade with other businesses. However, I too was “kicked” in the pants by competing spas over what they considered “bargain” pricing- but I kicked back and told them that I wasn’t competing for their segment of the market. Needless to say, myself and my business was not welcome in several professional organizations. Guess who survived the recession? Now there is a very successful chain using the same formula I use and they happen to be the fastest growing segment in the spa industry. Yes, free can devalue your worth but not if you couple it with something of value in the customers eyes. I built a strong business with free services for corporations and quarterly specials offering free services for my existing customer base. You are right that you must establish guidelines and have it on paper or it is easy for their to be a misunderstanding.

    • Avatar

      Lisa Feb 20 2011 - 3:40 pm Reply

      Kathy I love what you wrote “free can devalue your worth but not if you couple it with something of value in the customer eyes”. This is a different approach than just giving it away in desperation, or without some sort of strategy – that is why others are modeling your success.

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    Sherrilynne Starkie Feb 11 2011 - 2:43 pm Reply

    Good post. I’ve had similar experiences.

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    Dennis Chighisola Feb 11 2011 - 3:48 pm Reply

    As always, Maryse, you’ve provided some great insight, and great ideas! I do quite a bit of free work, but I’ve never considered structuring it in the way you’ve suggested. I shall for now on, however. So thanks for that!

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    Catherine Corey Feb 13 2011 - 3:28 pm Reply

    Thank you, Lisa. It has always been a challenge for me. I have begun to understand where my desire to offer service for free comes from.
    The difference between priceless and valuable.
    You are awesome.
    Catherine

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    • Avatar

      Lisa Feb 20 2011 - 3:38 pm Reply

      Thank you Pastor! I love what you wrote on your site and how you took my post to a whole new level!

  • Avatar

    Danielle Apr 11 2011 - 8:33 am Reply

    Came across this on Twitter today. Amazing advise Lisa! Thanks for sharing your wisdom! ;)

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    Jennifer Gilbert Apr 11 2011 - 1:39 pm Reply

    Fabulous article. Recently I did a casting call that wasn’t free, but was cheaper than my regular fees. People jumped on it, and I had an overwhelming response! Previous casting calls were free, and I had very little response. It was a lesson well learned!

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    Jen Apr 11 2011 - 2:08 pm Reply

    Free doesn’t happen in my world. My time is a limited comodity, and if you want it, you’re paying for it. That being said, paid doesn’t always mean cash. I have friends who are startups who needed sites build and social media training. On occasion I will use the barter system as well. The good thing about that is, they’re in my presence during everything, seeing the amound of time involved, and all the emails, tweets I’m dealing with while I work. Equal work for Equal pay applies here!

    • Avatar

      Lisa Apr 11 2011 - 2:13 pm Reply

      Good for you for having a system. Sometimes the barter system can work great, other times when communication and expectations are not set up in advance feelings can get hurt. Sounds like you have found a way to make it win/win. I respect your placing value on your time – if you don’t who will?

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    Annie May 31 2011 - 9:55 am Reply

    Thanks for the post Lisa and for being gracious in your reply when I indicated that I couldn’t provide my time for free as an attendee of an event you were planning a while back.

    • Avatar

      Lisa Jun 1 2011 - 6:43 am Reply

      Hey Annie, thanks for the comment. No worries, I completely understand, and respect your time. :-)

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    Tracy Sep 16 2011 - 1:41 pm Reply

    Hi Lisa
    I read this a little while ago but wanted to add to it and ask a question.

    As a massage therapist I am by nature a healer, thinking of other peoples well being and because of this I recently had a bit of a dilemma. We sometimes trade off massages between therapists and other times pay for them so as not to owe a massage. We do pay the same as everyone else with no discounts as to be fair to the therapist however.

    I made an appointment for myself to receive treatment as I too have back and neck issues which I need therapy for.

    On a couple of occasions my appointments were canceled or asked to be given up to a client which I did because I was thinking of the client and the business. Now this is the third time I have been called to give up my appointment to make room for an existing or new client. Of course I gave up my appointment and this leaves me with my original back pain which I can’t seem to get treatment for.

    I am thinking the trading off or even making an appointment where I am not treated as a paying client is not beneficial for me and therefore too expensive because if I don’t get treatment myself I can’t work and as a result lose money.

    What do you think? Good business practice? Should I continue to have my appointments be canceled?

    • Avatar

      Lisa Sep 16 2011 - 2:50 pm Reply

      Tracy thank you for sharing this. You describe what is probably a common practice for many people in the service industry.

      In a situation like this it appears to be a person’s original intention (fair exchange of service) is not in alignment with their integrity. They have placed money or the paying customer ahead of you and your time.

      I prefer to pay for services so that this does not happen. When we keep business – business, our feelings do not get hurt when the other person does not hold up their end of the bargain.

      It is unfortunate that people do not place the same value on their commitments and relationships and they do on cold hard cash.

      In the future I would pay for the service – that way you get what you want when you need it and you will be modeling the right behavior for others to follow.

  • Avatar

    Tracy Sep 17 2011 - 2:20 pm Reply

    Well put Lisa. Even when I do an exchange I treat the therapist as I would a client because they are trusting me with their care and the way I figure it, it is like the exchange is payment. Although it wasn’t the therapist canceling my appointments but the clinic we are working at that cancels them. The last appointment I made after the first two were canceled I said that I was paying for it, thinking they can’t cancel it if im paying and the clinic still asked me to give up my appointment for someone else.

    I learnt my lesson though. I will never make an appointment at that clinic again and will take my business where I am treated with respect. The clinic lost my respect that’s for sure.

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    Patrick Gant Jan 13 2012 - 6:38 pm Reply

    I’ve been following your blog for a bit, but missed this piece until today. Glad you shared this! You can often tell if someone is a salaried employee or self-employed simply by the way that they respect your time. The hard fact about being in the service business is that time is our non-renewable resource. It’s the only measure by which we can charge for what we do.

    I, too, donate my time generously to a a variety of associations. If it’s business-related and pro-bono, there’s always a clear understanding of what I usually charge for what I am doing. That’s important. Because there always has to be a sense of value for the service they’re receiving and the time that’s being spent. Especially if I choose to give it away.

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    Angela Apr 27 2012 - 2:21 am Reply

    Hi Lisa!

    Thanks for digging this one up. Loved what you wrote in your email today. You know, so MANY entrepreneurs give away too much for free. But what they don’t realize is that if they’re giving it away, they are a charity, not an entrepreneur. So even with my clients, I simply ask them to make the choice, either choice is fine. Do you want to be a charity, or an entrepreneur, because you will get VERY different results based on what you choose :-)

  • Avatar

    Justyna Apr 30 2012 - 4:55 pm Reply

    Fantastic article! The “free” debate ALWAYS comes up in the creative arts – whether people expect freebies from graphic designers, photographers, stylists, make up artists, you name it! Eloquent and well written!

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    Kate Gardner Oct 17 2012 - 1:47 pm Reply

    Excellent advice Lisa thank you. I will keep all this in mind.. Your advice is the best !!!
    :) xxx <3

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    Patricia Jan 29 2013 - 10:31 am Reply

    Lisa, I cannot tell you how much I despise the phrase “pick your brain”. To pick something is to take it with some degree of force, whether you are picking a fruit from a tree limb or picking someone’s pocket. When a person wants to “pick my brain” they are basically saying that they want to take my ideas, experience, knowledge, insights, skills, etc. Take, but not necessarily pay.
    My problem was I let too many people “pick” at me and on me. And they picked my business to death.

    • Avatar

      Lisa Jan 29 2013 - 10:39 am Reply

      :-( unfortunately when we start our businesses we think we need to do this and then it turns from what we thought was an opportunity to a not so nice experience. My mentor Sandra Yancey says it well “I love to give but I don’t like to be taken.” I couldn’t agree more!

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    Marie May 5 2013 - 8:31 pm Reply

    This is the first time I’ve seen this post, but not the first time seeing something on this subject. I love your tips along the way.

    Through the last half of the article, I couldn’t help but think about how I give away my best stuff during my initial consultations (which were free up until January of this year, and I’ve been in this business for over 10 years). Some of the comments gave me more ideas – since my clients are realtors, and most start off in business with some financial limits, I can offer to run their invoice and have it paid via their first commission cheque through a special arrangement with their office. There are a few cases where that wouldn’t work, but it’s a good thought.

    Thank you for the great post!

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    Toni Jun 12 2013 - 11:14 am Reply

    This is so true! As a web designer, we don’t expect to get paid just to talk to a client, but I have talked to clients for almost two hours before about their website, given them ideas as to how I’d complete the project, only to have them take my ideas and have another designer complete the job. I learned two things from this: 1) Consultations are only 30 minutes and 2) Ideas aren’t free. My portfolio speaks for itself so instead of telling them what I’d do for them I direct them to comparable work I’ve already done. Great post! I’m going to share this my Facebook wall!

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    Damien Coakeley Jul 10 2013 - 12:52 pm Reply

    Hi there Lisa:

    As you know, my wife is one of your biggest fans and cherishes the work that you continue to perform together. As such, she has pushed me onto your blogs which I am starting to view and read with great interest.

    As I am starting to become more business minded and in order to start my own business on the right foot, your advice has alerted me to incidents where I have already made the mistake of devaluing myself by giving away my intellectual property for nothing. In trying to be both “the nice guy” and trying to jump start opportunitiesf, I have met people or done things for nothing. Knowing that I have done so, they have come back for more, which resulted in a big fat zero for me. I have recently advised them all that, in the future, there would be an invoice sent for my time, as I could no longer afford to give my time away for nothing.

    Curiously, I have not heard back from any of them, other than to say, well, I won’t get you to do it this time, thanks. So, I now understand that obviously, they care about me if I can give them something for nothing, but that care does not extend to paying anything for it.

    Thanks so much for the valuable advice that I will use well in the future.

    Damien Coakeley

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    julie Oct 23 2013 - 12:15 am Reply

    Lisa,
    I had to laugh when I read that the lady was “having a crazy day”. A friend of mine had that same thing happen. Free advice is often not appreciated and is devalued. I look at it this way. I spent many years and hundreds of thousands of dollars learning the hard way through millions of mistakes what I’m charging someone a couple of hundred dollars for, so they don’t go through the same heartbreak and struggle I went through. Is it worth that? You bet!!

  • Avatar

    Laurel Anderson Oct 24 2013 - 8:28 am Reply

    Morning Lisa
    I saw this title and said to myself, “Well,for once I am going to disagree with Lisa.” BUT I couldn’t and didn’t once I watched the video as you touched on key points. I have bartered and sometimes it has worked and sometimes not so much. Now I charge and build partnerships with other complimentary businesses so we can work together and refer each other and find it working wonderfully. Before doing this, I would “help” others out and not charge some for all of the work I did but it never ended well. Now, I know my worth and if someone doesn’t want to pay it then they aren’t worth it:)

  • Avatar

    Vatsala Shukla Oct 31 2013 - 6:27 am Reply

    Hi Lisa

    It’s my first visit to your blog and I am so glad I am here! I have a few war stories of my own from the days when I started my financial consulting practice and even when I moved into coaching. It made me introspect as to why I sometimes fell into the free services trap and realized that, like yourself, it was in my nature to be helpful and kindhearted.

    Now I couldn’t change that part of my personality since it is part of me, but I did set up well-defined boundaries. Even now, when I offer a free consult or product, I make sure I state the value in very clear terms. Interestingly, when I come from a place of empowerment, my potential and current clients become empowered too. Free should mean win-win, not let us take the generosity for granted.

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    Chimezie Gabriel Nwatarali Mar 25 2014 - 7:14 am Reply

    Hello Lisa

    This is a great article. A friend of mine, recommended this read. I am a generous soul and always give more. However I ensure that there is a cost in every thing related to business. I used to try and cave sometimes but lately I have been persistent for my worth. Sometimes, it doesn’t have to be money but something that keeps us in line with mutual benefit. Great stuff here, thank you

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