How to lose customers: Why you shouldn’t offer free services during COVID-19

Sue Parker

DARE Group Australia founder Sue Parker. Source: supplied.

Prior to COVID-19, many businesses and industry sectors were already struggling. Yes, some were doing well and will continue to prevail. But there are so many businesses that have been totally thrashed and cut off at the knees.

Crises of any magnitude (including the recent bushfires) bring diverse experiences, challenges and changes. Everyone is impacted in some way at present, be it an inconvenient blip or a grave consequence.

For most service businesses, the marketing remit pre-COVID-19 was to hustle within a sea of wild competition and to position themselves as expert authorities with high-value solutions.

In reality, most businesses looked pretty similar, and therefore, often produced content that was more reproduction than unique.

The herd mentality of freebies

And that brings me to what is happening on social media, and especially LinkedIn, at concerning levels: reproduction.

It seems that every second person is now offering free stuff: webinars, courses, our-hour consulting sessions or pay-later offerings. Social washing by offering services for free to be seen as kind and compassionate has become the new marketing tool for many SMEs and consultants. Most are blanket offerings to everyone and anyone. No qualifier, just spill and promote.

And here is the rub: generosity and commercial discernment are not mutually exclusive.

Businesses who are dropping their commercial pants and suddenly going all philanthropic in golden-halo style are the ones often least able to afford it and shouldn’t.  Unless you’re a charity, a benefactor or a volunteer, then don’t. You are a business owner first. The belief that ‘free now’ will create ‘paid later’ is not always the case.  

Don’t get me wrong, I am a huge advocate of support, caring, donating and volunteering to charities and those struggling. But this is not what is at play here. Fear is driving many decisions without critical market analysis of the who, what, when and why of freebies.

Not everyone is in the same boat and people will and do take advantage of others.  Human nature doesn’t do a 360 in a crisis, instead, true characters and intentions are amplified, negatively or positively. Boundaries and qualification are more important now than ever.

Following the herd of sheep by offering free services can do your brand a major disservice. And overly effusive goodwill hype and blue nose communications can be perceived as distrusting and manipulative. 

Unless your business is already in the field of social enterprise or charities, why the change of lane?

Further, free services are aligned with a lack of quality. Value is not based on actuality but perception and then the experience.

Take-ups and reciprocity

There is evidence that the use of free services and webinars is often low, and can indeed be counter-productive, let alone translate to paid clients.

Reciprocity is often the misguided motivator that drives offering free services. Not everyone has a mindset to reciprocate, so it’s risky at the best of times.

In his book The 6 Principles of Persuasion, Dr Robert Cialdini provides a great example of reciprocity as a gift given after an initial paid service. 

The big brand response to free

The behemoth tech brands are offering free tools and services to help businesses mitigate and navigate COVID-19-related challenges, which is great. But these companies have enough skin already in their customer game and financial cycle to do so and their brands are solid.

There are so many hurting and need help, and the big end of town is coming to the fore in many cases, as they should.  

A better way 

Commercial discernment and generosity are not mutually exclusive and there are fruitful ways to support those who truly need it while nourishing your business’ own value and financial sustainability.

Here are a few tips.

1. Give extra bonus products or services to every full-priced service.

2. Only discount your service if someone desperately needs it but cannot afford the full price. But remember, many people use ‘cost’ as an excuse for not buying, so qualify. 

3. Offer a buy-one-get-one-free deal for a colleague or friend. Again, qualify.

4. Create more content for social media and your website which gives actionable tips, value and support. Content that is self-serving is less than desirable now than ever before. Show up and share expertise not fluff.

5. Contra deals are a great way for two parties to get what they both need. 

6. If you’re able, donate money or products to food banks, crowdfunding campaigns, charities, health lines and social enterprises.  

7. Volunteer time to those same organisations as above whether from your bag of skill expertise or general help.  

Loyalty and commercial success is a tightrope at the best of times, and holding onto self-worth and business value is a pathway to both mental, personal brand and financial wellbeing.    

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