Free vs. Fee: Understanding The Value of Your Knowledge as a Service Provider

Man with a question mark on his face, surrounded by question words.

… one of the biggest issues that always comes up in our discussions is the question of what to do when a potential client asks if they can receive their services at a discount, or, for free.

I am an American who has been living in Germany for the past 11 years. For 9 of those years, I worked as a Business English Teacher and Coach. During that time, saying that I was always primed to offer a free grammar correction or vocabulary help would be an understatement. I saw my help as a public service. Without thinking about it, I would provide someone with precisely the language tool they needed, just when they needed it in order to get a job done for themselves – all without asking for a thing in return. Until, one day, at a restaurant where I was having lunch, a waiter struck up a conversation with me. He wanted to practice his English, so I complied. It was normal for me to be the sounding board, so I corrected his English as he spoke and offered explanations for different word choices, and at the end of our conversation he said to me, “Thanks! And all of that for free!”.

Exactly.

That was a moment that changed me forever.

Now, I work as a Personal Development Coach for Self-Employed Professionals, and I talk to a lot of people who are in business for themselves, just like I, myself, have been for most of my career. And one of the biggest issues that always comes up in our discussions is the question of what to do when a potential client asks if they can receive their services at a discount, or, for free.

My clients are torn. They admit that they have too often given away services for free, hoping that that would convert a lead into a paid client, but it didn’t. They admitted that they felt used and worse, cheated out of well-deserved income. They felt that they had lost the potential client’s respect in the transaction and they wanted to stop what they, themselves, admitted as being self-sabotaging behavior.

We’ve all been there. As I mentioned before, I myself, had allowed myself to get into the habit of just giving my intellectual property away, as if it were nothing. It took the sight of a waiter happily skipping away with my knowledge to wake me up to the fact that I was in the self-sabotaging habit of giving away my power. Since then, I’ve made adjustments and have successfully learned how to create a balance between sharing knowledge for free and charging a fee.

Here are the conclusions that I came to for ending my self-sabotaging behavior and reclaiming my power over my expertise…

The question of giving away expertise for free versus always charging a fee is an eternal one. On the one hand, we want to be seen as the expert, but on the other hand, we want to protect our intellectual property and be treated with respect.

Well, it took me a few years, but after that episode at the restaurant that I mentioned at the beginning of this post, I swore that I was never going to let that happen to me again.

Here are the conclusions that I came to for ending my self-sabotaging behavior and reclaiming my power over my expertise that I want to share with you:

1) Be self-aware. Acknowledge who you are revealing your professional side to and in what settings. Are you always on and selling your services, even in settings that should be strictly casual? Ask yourself, “Am I trying to prove something about my skill levels to others?” If so, what might that be costing me? If in a professional setting, ask yourself, “Am I presenting myself in way that commands respect, or does my pitch come across as unrehearsed and unclear?”.

Corrective measure: Think twice about jumping up to offer your services in casual settings that favor friendships over business relationships. Sure, business can be done in such settings, but those moments are the exceptions, rather than the rule. The use of good judgement is needed, here.

Result: Fewer instances where people have a chance to solicit your knowledge for free, relieving you of the stress of “having to make the call” – more than likely, to your own detriment.

Take Away: Come more from a place of aspiration than desperation.

2) Be self-confident. Always be armed with self-confidence and knowing your worth. Gut-check the level of confidence you have within yourself about the fees that you have set for your services. Do you feel that they are in alignment with the value that you believe your services provide? How do you justify that feeling? Are you so assertive in the presentation of your fees in professional settings that the potential client has the feeling that asking for a discount or paying zero would be an insult to you? Do you fully expect to receive the full amount that you demand for your services?

Corrective measure: Take time to conduct a personal inventory about your level of confidence in the fees that you are charging, and make notes about why you deserve to charge what you do and why you expect to receive full payment for your work – every time.

Result: Conducting this personal inventory grounds you in your fee structure and ups your game. People will sense this in you and will interact with you accordingly. Model the behavior of the people who you admire in business.

Take Away: The value of your services begins inside of you, not the other way around.

3) Trust yourself. Allow yourself to consider the thought of reaching an internal compromise over the issue of free vs. fee within your business strategy. Prepare yourself for when it does come up. We know that it’s common practice for businesses to offer a “14 day trial”, or a “try it for 30 days, no obligation to buy” offer these days. Put on your consumer hat for a minute…people have come to expect “free”. It’s a way for potential clients to become familiar with our work without the risk that comes with parting with money.

Corrective measure: Despite this fact, it’s our job as service providers to put a fence around the thing. Do a deep-dive into your work. Think about how your services might be broken down into levels. For example, “Free, Standard, Advanced, Professional”, and priced and prepared for accordingly – in advance, so you’re never caught off-guard again. If you have people asking you to provide your services for free, it might be worth your time to develop a (small) system of delivery for such a request.

Result: This method ensures good customer relations with potential clients and gives you a ready-made, well-honed pool of resources (manuals, blogs, tips and tricks) that you can use to market your skills to a wider audience. Preparing something in advance in this way also gives you the confidence and peace of mind needed to run a profitable business, otherwise. Make it a one-time deal with “this” potential client, and stick with that.

Take Away: This phenomenon could be turned to your advantage.

If you absolutely do not want to give away any of your services for free, I hear you. I value my intellectual property highly as well. When someone asks you to provide them a service for free and you want to say, “no”, there’s a way that you can be diplomatic with them, while being honest with and respecting yourself. For myself, I’ve said, “I can understand your situation, but, I’m not in the habit of giving my services away for free. If you would like to set up a contract with me to help you address your problem, I would be happy to help.”

If you enjoyed this article, please give it a like and share!

Check out my other blog articles:

Time Management Hacks For A Smoother 2019

The Art of Managing Change and Forming New Habits For Success

Confidence: Your Superpower

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