People Don't CARE About Free Stuff

Have you ever given a friend advice? Sure you have. Did they take it?

No, of course not! They went back to the jerk boyfriend, or they bought the overpriced car or whatever the problem was. People want what they want... but that's a different topic altogether.

For you consultants or business owners out there--particularly service providers--did you ever do someone a solid? You know, a deep discount or even a freebie? How'd it go?

I was talking to a friend the other day. She's a fantastic web designer. She told me when she'd do favors for friends with websites, they'd drag their feet on getting her the necessary materials for her to help them out--photos, text, design specs, etc. Or just flake altogether. Now she gets a non-refundable deposit up front and guess what? These folks suddenly seem to want to get on the ball.

Isn't it a bit illogical that people wouldn't take full advantage of an amazing, free opportunity?

Me and Ernst used to give tickets to the monthly health seminars away for free. When we added a $25 price tag but gave them a promo code, there was a slight uptick in attendance. Not enough in my opinion. I'm thinking we ought to start charging $5 or something just to get these people off their rear ends. We also realized by raising our prices for initial appointments, we got more engaged patients. Not only were they more serious going into the program to begin with, they were more likely to continue on with an extended care plan.

Or here's my favorite. Did you know that 70% of lottery winners are broke within five years? That's just bananas as far as I'm concerned. Imagine what you'd do to hold on to $70 million if you had to work your tail off for it? When it's dropped in your lap, for some reason it's a completely different story. This fact alone is enough to solidify in my mind that PEOPLE DON'T CARE ABOUT FREE STUFF! Yes, they'll take it. Every time. But they don't actually CARE about it. (Don't get me wrong. I'll take a free $70 million. That sounds like it would be an incredibly fun five years...)

What's going on here?

It's fairly simple. People don't value what they don't have to work for. Why do you think dads make their kids do chores rather than just giving them an allowance? This is something inherently understood by fathers and grandmothers throughout history.

Now the implications for the welfare state sort of slap you in the face, don't they? I don't mean to make this a political blog, but sometimes I can't help myself. I think the level to which we ignore human nature in governance and policy is pretty laughable. Anyway...

So what does this mean for you?

Depends. Are you just starting out? If so, then you might have to actually work to give some things away for free, so you can then work for free. What I mean is, you might have to do some free work and just power through the malaise and apathy of those who you are working to benefit. One of the New Age entrepreneurial chestnuts going around these days is something along the lines of, "Add value first, then the people (and money) will come later." I think it's about half hogwash. Don't undersell yourself... ever.

If you're a bit more established, I think it basically means raise your prices. If people want what you're selling, they'll pay for it. And what's more, they'll appreciate it. They'll take advantage of it. It will mean more to them. Also, you make more money.

It's all evidence for the notion that value is relative. Take the value of a house, for example. It's appraised at $150,000, let's say, but you sold it for $175,000. So it's worth $175,000. Whether something is too expensive is a judgement call, and it really means the customer didn't really want it in the first place.

When what your selling is yourself, you get to decide what it's worth. When what your selling is something you created, again, you get to decide what it's worth. And the more you up that price, the more people are going to respect you for it.