If Your Clients Want Stuff for Free, You Could Be to Blame

calendar January 10, 2019

Remember the old saying, “You get what you pay for?” Many of today’s clients aren’t buying in. Instead, the current customer motto seems to be more along the lines of “I want it, but I don’t want to pay for it.”

And this just might be our fault.

A sense of entitlement

Many customers have decided they are entitled to certain products and services. They are convinced that they shouldn’t have to pay for these things, no matter how much they cost to produce.

Here are a few quick examples:

  • News and information: We value being up to date, but we refuse to pay for publications, subscriptions, and/or access to online articles.
  • Shipping and delivery: We value being able to get things dropped off on our doorsteps, but we’ll do whatever we can to avoid paying for this convenience.
  • Mobility: We value being able to drive our cars everywhere, but we complain incessantly when the price of fuel creeps up a few cents.

And yet, we are more than willing to spend our hard-earned cash on other things we value. Cell phone plans. Gym memberships. Anything pet related.

So why are we willing to pay a premium for some things while demanding low or no cost pricing for others?

We’ve been told it’s okay

Training dogs to wear dresses may be difficult, but training humans not to pay for things is extremely easy. And businesses do it all the time. By offering their services for free.

Facebook. Skype. Gmail. Pandora.

Tons of people use these services regularly. But if you suggest they should upgrade or pay a fee to access them, they will look at you like you just suggested putting dirt in their coffee. Not because they don’t love the aforementioned products, but because they are already getting them for free.

Let’s look at the Pandora example. Many people balk at the idea of upgrading (i.e. paying for) their Pandora account. And yet some of these very same people willingly pay a monthly fee for Apple Music. And they do it without complaining.

Can you guess why?

Because they were never offered a free option. The expectation that the Apple service has value and is worth paying for was set up from the start.

The same is true for anything else people regularly pay for, including gasoline. Because oil prices fluctuate, so do fuel prices. And once we’ve paid less for something, look out. We do NOT like to go back to paying more. We’ll do it if we have to, but we will also scream about it. And you can forget about brand loyalty. We’ll drive 17 miles to another station just to save 3 cents a gallon.

It’s the same psychology behind discounts and clearance sales. Everybody loves a good sale, right? Customers love them because they can get cool stuff at discounted prices. Retailers love them because they make more money and get tons of new customers.

But do they really?

A great sale might inspire people to buy more product. But depending on the discount, businesses may be drastically reducing their profit margins or even losing money on the deal. Think about it. They don’t call it a “steal” for nothing.

And as for all those happy new customers? Well, they’re happy, all right. They know they paid under market value for what they got, and they have no plans to become part of your loyal, paying clientele. Instead, they will reward your efforts by bragging about their conquests and holding out for the next big sale.

By giving your stuff away, you’ve lost out on profit and trained your potential customers to never to pay full price for your offerings.

Changing expectations

If you’re a for-profit business, it’s time to throw FREE out the window. If you believe in what you offer, set the expectation of value and charge what you're worth.

Train potential customers to recognize that your products and services are worth paying for. Then, train yourself to charge what you’re worth.

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