Why give it away? - how to balance showcasing services for free and letting people take advantage - Finance - Tutorial

Home Office Computing, Feb, 1994 by Linda Stern

DAVID LAWRENCE, A.K.A. DOCTOR MAC, CALLS THEM the "hit and runs." He'll be sitting at his desk, minding his own Washington, D.C., radio talk-show and computer-consulting business, and the phone will ring.

"Before they even give me their names, or ask about fees, they ask questions," Lawrence says of this certain breed of caller. "What's the best word processor under $1007 What's the command for bold type in Microsoft Word? Why is my screen showing a question mark even though I inserted a disk?"

In the bad old days, Lawrence used to answer every question, politely and completely. Then he noticed a trend. The people whose rapid-fire questions he answered on the phone were not the ones who became his best clients. He found himself spending a lot of time answering queries on the phone for free.

"My time is my inventory," muses Lawrence. "And if someone takes from inventory, he should pay for it." Call Lawrence out of the blue today, and he'll politely interrupt to take your name and address so he can send you a bill. The chat will cost you $1.50 a minute.

This is not to say that Lawrence is unreasonable or totally mercenary. Larger or existing clients get some slack (three minutes or less on the phone for free), and he trades info with professional colleagues on a case-by-case basis. But Lawrence has already learned what many of the rest of us are still struggling with: You can't make money by giving away what you're supposed to sell.

Don't Give Away the Store The need to donate your services is a problem in many creative fields. Novice writers are often told they must create stories on spec, hoping that the editor will like them. Architects are told their potential clients won't know if they are right for the job until the clients see the design. Advertising agencies may have it the worst; for them, it is the rule, rather than the exception, that you do the work before you get the work.

Even in noncreative endeavors, the first sign that you've really made it to expert status are the number of phone calls and written requests you get for free information. Sometimes, when the information is easy for you to come by and it's a relationship that you want to nurture, it's OK for you to give it away. Other times, you have to just say no. Here are a few tips for learning how and where to draw your own lines in the dust.

Establish procedures. If you always do business in the same way, it's easier to handle impromptu requests. Paul Treseder is an architect who used to give his time away on occasion. Now he has a firm policy: If he visits you, he bills you $75 an hour for an initial consultation. You can drop by his home office, look at his project photo book (and the great home he designed), and chat for half an hour for free. That's it, and it works well for him.

Paint word pictures. Smart Sanders, president of Sanders Consulting Group in Richmond, Virginia, trains advertising agencies in how to get new business. Instead of creating a mock-up of an annual report or brochure, says Sanders, simply tell potential clients what you will create for them. Use descriptive phrases like "a strikingly spare, black-and-gold, glossy cover" or "a soft-focus foldout panel of a country scene." That way, you're still offering ideas but nothing firm enough for the clients to execute without you. And your lack of specificity enables the prospects to imagine and embellish the work the way they want it, much as you can imagine a book hero more handsome than the actor who might play him in the movies.

Be rough. "The world is moving to faster, quicker, sooner," notes Sanders. Sometimes, Treseder's architecture clients aren't sure what they want, so they ask him to do some sketches. He'll come up with some rough ideas, draw them quickly, and bill at his typical hourly rate. The drawings get more detailed as the clients get more settled in what they want. By the time Treseder is drawing builders' blueprints, the client has approved--and paid for--all the preliminary work. Sanders suggests that regular rough work and a steady schedule of client approvals protects you from going too far down the road on a project your client just isn't going to like or pay for.

Protect yourself from theft. Outright theft is a much more unusual problem than the other examples, but it happens. My brother, Ed Stem, runs his own advertising agency in Columbia, Maryland. He once presented an ad concept to a client who didn't hire anybody. A short time later, my brother saw his ads in a newspaper. Now he pastes "Property of the Stem Agency" statements on all of his work. Copyright law holds that if you create something and add a similar statement to it, you probably own the copyright.

Strut your stuff. If a prospect is uncertain about what you produce, show her what you have already done. A booklet of samples, a few references or testimonials from other clients, or even a list of past clients might convince her you know of what you speak. Sanders cautions his clients against showing too many samples: When overwhelmed, potential clients are just as likely to find work they dislike as work they love. Sometimes one or two samples works the best, he suggests.