Is It Ever Okay to Work for ‘Free?’ (Part I)

As you build your business, there will be times when you consider providing a free offer to entice prospects to take a sales meeting or sign a contract. Knowing which offers work is important. Knowing which offers might damage the long-term profitability of your business is even more important.

Author: Corey Bloes, channel marketing specialist at AppRiver, a Zix company.

Should you offer prospects free months, a free assessment, or free blocks of hours to “try” your services before they buy? Some people say this generates interest in your business. Others will tell you that if something has value, it should have a price. With conflicting expert opinions, how do you know what is right for your MSP?

Savvy consumers and business owner know that there is no such thing as a free, so just like me, they skip right over offers. They know there is a common trait that all these free offers share: They all have catches. For instance:

  • A free magazine subscription! (When you subscribe to three other magazines the publisher owns.)
  • Three free months of internet! (If you have never been a client before and sign a three-year contract.)

Even when consumers know for certain there is going to be a catch, they still love a bargain. People love to feel like they’re getting just a bit more than they paid for.

Offering an incentive to prospects can be profitable. However, without the support of a full team of analysts like a major corporation, trying to figure out what you should give away (or discount) is going to be challenging.

Let’s take a look at whether giving away a free offer (discount, additional services, etc.) to attract customers is the right strategy for your company.

Evaluating Your Expenses

Your first few months with a new client are the most expensive. They are also the time in which they are most likely to leave. Before offering free anything, consider how you will manage cash and maintain profitability. For example, if you want to use free services to attract clients, offer them the last month of their contract free. The terms and conditions should state that they only receive the free month when they fulfill their entire contract. This provides you with higher retention.

Discuss with Your Team

Any free offer should pave the way for bigger and longer contracts. You should have a plan that identifies the potential outcomes. Run several “what-if” scenarios with your accountant or Finance team. Talk to your Service team about how they will adjust to accommodate increased workflow, too.

Evaluate Your Clients’ Response

Will your current clients become disgruntled when you offer free services to your prospects? If your current clients are reading your content, they’re going to realize you’re giving things away that they were NOT offered. Poorly managed free offers not only fail to win new business, but also cost your current business existing revenue.

Understanding your current business model and clientele is essential if you are seeking to attract new customers and to grow your revenue.

What’s Next: In Part II of this series, we dive into creating free incentives that won’t set your business back. The key is this: A free offer that costs you money isn’t an offer you want to make.


Author Corey Bloes is channel marketing specialist at AppRiver, a Zix company. Read more guest blogs from Zix AppRiver here.

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