When “Giving It Away For Free” Becomes “You Will Never Get Paid”
I know that a popular lead generation technique is to give away services for free in exchange for potential paying business in the future. If you’re going to do that then provide zero-based invoicing to establish your value.
Unfortunately “free” is very intoxicating to prospects; know when to say “last call”.
Today, I cut off a large prospective customer. This lady had been calling me on a quarterly basis to chat and ask my advice. She’s a millionairess. She worked with me several years ago when I partnered up with her adviser on a temporary project. After the project was over, she stayed in touch. At first, it was to thank me for saving her about $30,000 in a tax mistake that her CPA made. Then it became an ongoing review of the advice her CPA and financial adviser were providing. She would hint that she wanted to transfer her account to me and then would proceed to give me details of what her advisers proposed and asked my opinions about their recommendations.
I happen to like her a lot as a person. She’s a nice elderly lady and I would not want to see her be hurt financially. However, the reality is that she is not a client. I am not being paid to handle her finances. By asking me to advise her, she’s making me bear the risks without being compensated.
I finally said no to helping her out any further in order to protect my business.
This is not fair to me nor to my existing clients. I have finite resources. There are only so many hours in a day and there are things that my staff cannot handle. Basically, she is asking my clients to subsidize her problems.
I drew the line when she asked me to give her an opinion on a comprehensive Roth IRA conversion for her and her family. Both her CPA and financial adviser were unable to explain to her why they thought she should convert or how they would be affected by taxes. She’s not happy with their services but she’s more afraid of change.
To be fair to her, the fault in this relationship and why I don’t have her account is mine. She offered me her business several years back after I finished the project. At that time, I declined because of my personal code of ethics. I did not feel that it was appropriate for me to take business from a colleague even if it was unsolicited. I called the financial adviser and informed him about his client’s wish to defect so that he could save the account.
Unfortunately, I did accept subsequent phone calls from this woman and answered her questions. This set up a precedent that she took advantage of. In her mind, she knows that she’s in the wrong because she’s now hinting about her account but when I ask her directly for the business, she has an excuse. Why change your life when it’s working well.
My time is valuable because I am the person who brings in business for my firm. We need to focus on making profits with so that people stay employed and to cover unexpected emergency. I’m all right with a random answer here and there that takes me seconds to answer with no need for thinking. Anything else past that is determined to be “work” and must be paid for.
I think one of the best business advices comes from Kenny Rogers’ The Gambler:
You got to know when to walk away and know when to run… The secret to surviving is to know what to throw away and knowing what to keep. Cause every hand’s a winner and every hand’s a loser.
In business, sometimes the best way to make money is to say no and walk away so that you have time and resources for paying customers. The worst that can happen is that you’ll have more time for a personal life.
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