Have you ever gotten free samples at Costco or Whole Foods? Come on, you know you have. In fact, I know some people who take their lunch break and nosh on free samples. It is OK I don’t judge. But I do want to ask you a question? How many times did you actually buy the full price item of the thing you sampled? Maybe 25% of the time at best? Most of the time don’t you just take your freebie and run?
How many samples of cosmetics or personal care items have you grabbed that ended up living a sad lonely life in the bottom of a basket or drawer? What is the % of times that the sample actually led to a purchase from you? Is it pretty low right?
I cannot tell you how many clients I have worked with in direct sales who have put time and effort into making, packaging and distributing freebies or had giveaways that rarely resulted in customers.
Are you seeing a pattern here? Free can have a high price tag when you are a small business owner or entrepreneur. I suppose that Costco or Sephora can front the cost of giving things away and the return on their investment is worth it. Not always the case if you are in business for yourself.
I myself am not above the fray. Let me give you a few examples of freebies, that did not work out for me.
- My very first experience with people disregarding something that they did not invest in was early on in my coaching practice. I had a very satisfied client who wanted her employees to also experience the coaching and the life changing experience that she had. This employer purchased my money mindset coaching program for 4 of her employees as a gift. How nice of her right? Anyone would jump at high-level coaching gifted to them, right? Not so true. Of the 4 employees, 1 attended 3 calls then bailed, 1 attended almost all then disappeared before the last call. 1 never cashed in and 1 went all the way through it with a grateful heart and is still a fan.
- Every once in awhile I will get a wild hair and decide to do something crazy. While in New Orleans in September this year, I decided to offer a 3 in 30 to my newsletter list. In this newsletter, I offered to give away 3, 30 min coaching sessions to the first 3 people who responded. 3 people responded right away and grabbed the sessions, only 1 of the 3 actually scheduled and attended.
- I have been in 2 giveaways where a lucky winner whose name was drawn would win a 60-minute coaching session with me. Of those 4 winners, only one person scheduled a call and redeemed their prize.
I guess you can see what I am going for. Right? Most of the time people do not value what they do not invest in. They have to have some skin in the game to take it seriously. If you undercharge for your services, they will not be respected and often times not purchased at all. If you give things away most of the time the people who would take it are not your ideal client and are not going to invest in your products or services.
There are some circumstances where giveaways can be of value but I have not found one yet. I am also not saying that there are not people out there who are not happy that they got your freebie but in my case, they have not ended up being clients.
The cautionary tale here is. Do not give away that which you cannot afford to. You cannot afford to give away your time. I had a client who was a personal trainer who offered a free in-person assessment and people routinely stood her up. That was an hour of her life she could not get back and one she could not afford to give. If you spend hours putting together samples and you see that it is not getting you a high rate of return? Think again.
I am not saying to never give anything away for free. I am giving you free advice right now correct? But it is something I can afford to give away because the time and effort it takes me to write this post are worth it due to a large number of people who will read it and learn from it. Remember this as you are creating pricing and putting a value on your time. What do you want to focus on? Discounts? Or Abundance?
I hope this was helpful to you. I would love to hear back from you about scenarios where a freebie was a flop. Or if you want to learn more about money and mindset and how it relates to your business? Contact me here!
Are you on Facebook? Join us in my private group called Wealth Worth and Wisdom. We would love to have you there.
I have a gift for you! Learn what your Money Mindset Type is by downloading this Guide. In this guide I show the 4 Types of Money Mindset I see the most, and share links to videos I created to teach you more about them!