“Time is at once the most valuable and the most perishable of all our possessions.” – John Randolph
Years ago, I called PF – a well-known guru in her industry – to ask a quick question. “I charge $200 an hour for my time,” PF said without missing a beat, “but I will give you five minutes free starting now.”
PF accomplished two things by telling me that before answering my question. First, she limited our talk to five minutes, preventing me from wasting a lot of her valuable time. Second, she let me know in no uncertain terms that her time IS valuable… and that, by answering my question without charge, she was giving me a valuable gift.
The math is easy to figure: If PF got $200 an hour, the five minutes she gave me was a free gift with a value of $16.67.
Although she may not have realized it, PF taught me an important lesson: Whenever you give something away in your business – a product, a sample, a service, knowledge, time – assign a dollar value to it. And be sure to communicate that dollar value to the recipient.
In this way, the folks you are helping get a clear picture of the value of your time, advice, or whatever you give them for free.
If they are prospects, the gift creates a sense of reciprocity that increases their willingness to consider becoming paying customers. If they are customers, this sense of reciprocity builds loyalty, goodwill, and the inclination to favor you with more of their business. If they are vendors… business partners… subscribers… website visitors… reporters… or shareholders, the favor you grant them gives them a lasting and favorable impression of you and your company. The impression is heightened when you gently inform them that your gift has value – and you communicate that precise value to them.
For instance, in my small Internet marketing business, CTC Publishing, we give away free 50-page bonus reports as premiums with many of our products. To communicate the value of these bonus gifts, we print a cover price of $29 in the upper-right corner of the front cover.
To prove that this $29 value is genuine, we also sell the reports individually for $29 each on my website (bly.com)… and we tell our customers: “$29 isn’t a made-up figure… we actually do sell these reports at that price on my site.”
For decades, in my freelance copywriting business, I have given away 60-minute audiocassettes of my speeches as premiums to potential clients. A $15 price was printed on each cassette label. And we did, in fact, sell them at that price – originally through a print catalog and then online.
I have coached many independent consultants over the years, helping them to get more business. Nearly all of them had been marketing their services by initially meeting with their potential clients at no charge – to answer questions, explain their methodology, determine whether there was a good fit, and so on. The potential clients viewed these meetings as sales calls, and, as a result, placed little or no value on them.
I told the consultants: “If the meeting takes two hours and your consulting fee is $250 an hour, don’t say you want to come in for a sales meeting. Instead, offer them a ‘free initial consultation worth $500.'”
This approach – not original to me, by any means – invariably generated more appointments and consulting assignments.
Let’s say you are working with a client who asks you for a professional favor, which you know he wants for free. To build goodwill, you render the favor for free. But you should also send him an invoice in the mail – an invoice that shows your normal fee for the service rendered, and indicates you are giving him a 100 percent “courtesy discount,” with a balance due of $0.
Why? Because it is a gentle reminder that you gave him a gift, and that the gift – of your time, skill, or knowledge – has a high value in the marketplace.
There are only two exceptions to my rule of placing a value on a gift or freebie and showing the recipient what its dollar value is.
Don’t do it when giving people free white papers or free e-zines. Reason: the free nature of e-zines and white papers is too well established. Therefore, to say that your IT white paper or marketing e-zine has a dollar value causes the recipient to disbelieve you – and therefore to distrust you.
And don’t do it when giving business gifts to important customers, prospects, employees, and vendors. To leave the price tag on a briefcase or a fountain pen is so tacky, it would negate the goodwill you are trying to build with the gift. And if it’s a leather briefcase or Mont Blanc pen, believe me… the recipient knows it’s expensive. And he both appreciates and values the gift.[Ed. Note: Master copywriter and best-selling author Bob Bly is the editor of ETR’s ETR’s Direct Marketing Masters Edition. a program to help you start your own successful direct-mail business. Sign up for Bob’s free monthly e-zine, The Direct Response Letter, and get more than $100 in free bonuses.]