Wednesday, January 7, 2009

How much to give away?

Many years ago I never used to charge when customers called me up with issues that were relatively brief. Normally, I’d be out on site somewhere and actually documenting the time taken was too difficult. I realized over the years that I was missing out on a good deal of revenue and providing many people with a ‘free-ride’ that wasn’t being returned.

 

The situation improved once I started using SharePoint to track these calls. At the end of each month I’d look down a list and see how much in total each client had requested of me. This would allow me to provide them an appropriate invoice for the time and handle an queries about the charges should they arise.

 

Now there are still some things that we all give away for ‘free’ but the question is, should we? It is ok to give something away if eventually it is going to generate you some income I believe. Let’s say that you help someone on the phone, the hope is that they’ll keep coming back or at least tell someone else what a good job you did. I think the secret is that you need to track closely what you do indeed give away for free so you can determine whether it does in fact provide any return down the track. If it doesn’t then you should probably stop doing it.

 

The other issue with giving away free stuff (whether your time or knowledge) is if the receiver doesn’t know what they are getting for free, then any ‘value’ from your side is lost. In this economic climate I think that it is more important than ever to ensure that customers know exactly all the services you provide which they receive. It is important for them to understand that their ability to contact you directly or have their call returned in a very short period of time is why they pay the amount they do. You availability does have a price. If you don’t somehow communicate that benefit they are simply going to take it for granted and in that case you are giving away something for nothing!

 

Now more than ever it is important to examine ALL the products and services you provide, even if you don’t charge for them, because they all have value. The choice you make about what to charge and not charge for needs to be communicated so that everyone understands the value that is being provided.

 

So take some time and document all the benefits you provide customers, including the ‘free’ ones and then use it to communicate with clients and prospects alike. Some things that you give away for ‘free’ may actually bring you more business but won’t if you don’t let people know.