Always Get Paid For Your Time

If there’s one constant in business these days, it’s that everyone always wants something for free. Whether you run a professional service business or a traditional brick-and-mortar, someone will always be looking to get something for nothing.

We’re all conditioned to want to save money wherever possible so the idea of asking for a discount or trying to get something for little-to-no-cost is just human nature these days. But as a business owner, this is a delicate bridge to cross and needs careful consideration. How do you balance the need to make a profit with a customer’s desire to get a ‘deal’?

Every situation and business is different, but there are some ways to handle this so it becomes a win for you and your customer.

Negotiation vs. exploitation

The origin of this mindset can likely be traced back through centuries of trade — and the idea of price negotiation or deal making has a well-documented history. However, there’s a very fine line between negotiating and taking advantage of someone. Where you draw the line in your own business is up to you and can be a difficult and uncomfortable choice to make.

This situation is most common in professional service businesses where your product is your own time. In my own agency, I see this regularly in the form of ‘can’t you just update this…or change that?’ Many clients don’t ask this in a way intending to exploit, but rather from a place of expectation they’ve become accustomed.

The blame for this lies completely at the hands of agencies themselves, because they created this climate of expectation.

For decades in the creative field, agencies have participated in the process of the ‘pitch’ — or more accurately described as work on speculation. This is essentially the competition for new clients and pitching your work in an effort to gain new business. To this day, the agency pitch remains the default new-business model and countless global agencies invest millions of dollars each year in this process.

How it works

The process usually begins with a company issuing an RFP (request for proposal) to a list of agencies detailing a general scope of needs and requirements. (This process itself has its own set of issues that I’ve discussed in this post.)

From there, agencies start to create their response and how they would solve the client’s challenges — going as far as creating full-blown campaigns and creative executions to sell their ideas.

All of this at their own expense.

After submitting the RFP response AND providing their work, they hope to make the short-list and get an in-person presentation. If they manage to achieve this, they then have to present and sell their ideas to some internal committee or series of decision makers. None of this is a guarantee, and all of this effort is completely on faith.

This hurts everyone

I could go on and on about the countless ways this business model hurts everyone in the creative or professional service fields, but instead I’ll focus on the main reasons.

First, it sets a precedent across the board that companies should expect vendors to compete for their business by providing something for free that they would ordinarily charge for.

Second, decision makers can award their business based solely on subjective decisions and personal taste rather than any strategic relevance with the actual needs of the client. In other words, the driving factor to awarding business is based entirely on a positive or negative visceral reaction to the creative.

Third, and most important, it creates a trickle down expectation for the client to expect ‘freebies’ because you’ve lowered the value of the creative product by giving it away for free in the beginning.

While these issues may be focused on agencies like my own, this behavior extends to other professional services and has created almost a standard for anyone whose billable time is their own creativity.

How to say no

No one likes to walk away from a potential new client, especially in challenging economic times, and many businesses (and freelancers) seem more willing to give away their work in an attempt to sign new business. It’s also difficult to say no because many people want to avoid conflict or simply feel uncomfortable doing so.

When faced with a scenario where I’m asked to ‘show some ideas upfront’, here’s how I respond:

“We appreciate the opportunity to be included in your project but unfortunately we can’t provide any concepts for free. As a creative business all we have to sell are our ideas and it takes a considerable amount of time to come back to you with relevant ideas that solve your challenges. Therefore, we can’t invest that time without being able to recover those hours.”

But the conversation doesn’t need to end there. Sometimes there’s a middle ground that can be reached:

“We understand the risk of working with a new agency and we’re wondering if there’s a small stipend that we could agree on that would allow us to cover our time but limit your investment? Other clients have been open to this idea and it’s proven to be a win-win for everyone.”

The point here is there’s a lot of ways to address this scenario while remaining firm — yet professional. In my experience, most clients completely understand this position when it’s explained in this way.

Your time has value

The point to all of this is simple; you need to get paid for your time. We all want to think we have the best ideas and that clients should love our work, so we’re willing to give it away for free to prove it. Unfortunately the reality of selling subjective work can lead to unexpected reactions, and this disappointment feels much worse when you’re not getting paid.

As I said, it’s not easy to walk away, but if you stand behind the value of your time and work you may find more clients willing to build a relationship with you and avoid those who are simply looking to get something for free.