No More Freebies: Negotiate with leads and customers to pay for something!

In response to a request to negotiate a lower fee for public speaking, a US senator snapped, “I wouldn’t walk across the street for less than $10,000!” The former presidential candidate had his limits, below which he simply did not haggle.

Call it positional negotiation, which has its detractors, but I sometimes admire and defend its use. I think being able to affirm and justify your prices is in keeping with another sage advice: never work for free, or give away your stocks and trade.

That doesn’t mean I’m against volunteering for worthy causes that really need help. It also doesn’t mean saying no to educational or community service agencies that don’t have pockets deep enough to pay private sector wages.

I mean, we must resist the growing temptation to prove ourselves to prospects and customers by allowing them to “prove” what they can and should pay for.

For example, I frequently receive emails from consultants who want me to attend free webinars. Their purpose is to generate paying customers, but they make it all too easy to gorge on their free appetizers and never order an expensive entree.

The rather obvious, but never dated, aphorism of industrial psychologist Frederick Herzberg comes to mind: “A satisfied need is not a motivator.”

Fill me with enough free data and what will be the incremental value to me of another bite, whether I pay for it or not?

I have always been suspicious of providers who offer “Free Introductory Lessons”, because I realize that most of what I will receive is an infomercial. You will have much more credibility with me if you charge me SOMETHING, even nominal.

A fee, however modest, means that value is being offered and therefore value must be paid. It is a pact that has a history as long as humanity itself. We exchange value for value, and by exchanging money, we can gauge with some precision our respective contributions to mutual betterment.

Instead of generating admiration and appreciation, giving away what is valuable is too often a boomerang. As a general rule, in business, respect flows where the money goes.

Where does this idea come from that information in general, or training, or work of any kind, is free?

I think the great destroyer of perceived value and the promoter of a growing unwillingness to pay has been the Internet. It’s a question of “Why pay for the cow when the milk is free?”

And there is free milk, everywhere, on the web, pouring out of every blog, every website, every search engine, and every online newspaper and magazine.

I was recently directed to a book by a friend who told me I should just read it. Before I could buy a copy, which I did, I put together what turned out to be about 95% of the book, completely free.

Amazon.com allowed me to scan the table of contents and read a chapter or two. Search engines allowed me to find various reviewers and commenters who almost word for word “rewrote” the rest of the author’s original text.

What did I not learn from my process? Some stories the author told about driving through the country. Good read, by the way, but was the book worth the price?

I am not a newspaper subscriber. Because I should? I read many of the best publications in the world, online, for free.

How do I feel about the fact that these same newspapers are now insolvent or bankrupt? I blame them for following such an obviously disabling business model where they reward customers for NOT paying!

Let’s see if I understand your business proposition: if I subscribe, they’ll send me a stained piece of paper that I’ll have to retrieve from the often soft mouth of my entry. Then I’ll have to dispose of the paper, either through recycling or conventional means. And I’ll have to pay a subscription price, which will bother me the hell to renew.

However, I can read your post online, instantly, cleanly, and completely without obligation, for free. As a bonus, they will allow me to express myself, register my comments, and read the comments of others on the articles that really matter most.

Given that choice, what proportion of rational beings will continue to subscribe?

What are you donating now, in the form of valuable information, goods or services, that you should be charging for?

I bet that’s a lot more than you used to give away, a few years back, before “Visit our website!” it became a self-defeating mantra. Just because more businesses and small businesses are generating countless giveaways doesn’t make it right, and it certainly doesn’t necessarily make a profit, as evidenced by major newspapers.

I should point out that there are some winners who are making a lot of money posting online. A colleague produces a comedy show on YOUTUBE that has generated more than 100 million views, according to CNBC and The New York Times.

He does not charge a viewing fee. He earns money from it through the Google ads that accompany his online performance.

As the economy tightens and it becomes increasingly competitive, it only makes sense to reconsider our expensive practice of offering free samples to those who can and should pay.

It might help to remember the sobering motto once used by Dun & Bradstreet Collections:

“You don’t make a deal until the money is paid!”

Also, you can see it this way. The fundamental purpose of a business is to produce a customer, according to management guru Peter F. Drucker.

And they are not genuine customers, until they pay!

I was reminded of these notions a few months ago when a fairly successful inventor and technologist wanted to hire me to help him commercialize some innovations. Although he had some start-up funds and an income stream, oddly enough he seemed unwilling to pay the value of what he was going to offer.

Acting slightly annoyed and definitely surprised that he’d adopted a strict “pay to play” model of doing business, he hinted that there are plenty of eager fools (and don’t-know-none-better-interns) than working for free.

My advice to you: don’t be one of them.

Trade to receive value for the value you deliver.