This morning I met my neighbour, taking her children to school for the first day of term. She was smiling broadly and I joked that it was her freedom day! Earlier in the year, on the day when all covid related restrictions were lifted, the press labelled it freedom day. Of course, neither label is strictly correct, we are never really free from anything as we continue to have obligations and constraints in our life.
Nothing is ever really provided for free either. There are many examples of free gifts that are given to entice you to buy something but the cost is factored in somewhere. They are added to make it seem like you are getting a bargain. There are frequently free toys given away with children’s magazines. Typically they are cheap plastic rubbish but they are enticing for the children and ensure that they ask their parents to buy the magazine. Neither the toy nor the magazine have a long shelf life and are quickly discarded, with little value attached to either.
Including an additional product in a deal without charging for it may seem like a good idea. However, it seldom works out that way because of the way that the product is then perceived. There are two ways of looking at this.
The client wants the product that is provided for free. In this instance, the client may appreciate the offer to get it for free but may question why it is being given away. In reality, all you are doing is reducing your revenue and profit and getting nothing in return. If it is being provided for free, it should be part of your negotiation and therefore you should be getting something in return. If you are not, then you are giving away value and that makes no sense. The only time this scenario should be considered is for “political” reasons in that a client may have internal reasons that prevent them from paying for this product and so it is labelled as “free” but its value is priced in elsewhere.
The client does not want the product that is provided for free. This makes no sense to either side! The client does not want the product so clearly does not see any value in it. If they do not see value in it, then they will probably never use it. Even if the cost of the product to you is negligible, giving away something that is never used does not make sense. There are a few reasons for this:
1. The client may well talk to other companies and tell them that they have it but never use it – this creates a perception in the mind of the other company that the product has little value.
2. If you ever want to try to sell that product or a similar product to the company in the future, they are unlikely to be interested because they perceive that it has no value.
3. Getting something that you do not want, even if it is free, just because you are interested in buying another product, does not make you more likely to buy that other product. There is no negotiating value in something that has no commercial value.
4. Your customer may get used to getting something for free and ask for more the next time you do a deal when they may want and value the product and you are then in a difficult negotiating position.
If you are selling a product and believe that your product provides value to your customer, have the conviction to charge the appropriate amount for it. If you cannot do that, you have probably failed to convince your customer of the value of the product. Avoid ever giving something for free. It adds no value to the deal and will cause you problems in the future.