Responding to a request to negotiate a lower public speaking fee, a U.S. Senator reportedly snapped: "I wouldn't cross the street for less than $10,000!" The former Presidential candidate had his limits, below which he simply would not dicker.
Call it positional negotiating, which has its detractors, but sometimes I admire and advocate using it. I believe being able to assert and to justify your prices is in keeping with another piece of sage advice: Never work for free, or give away your stock and trade.
That doesn't mean I'm against volunteering for noble causes that are genuinely in need of assistance. Nor does it mean saying no to educational or community service agencies that don't have deep enough pockets to pay private sector wages.
I mean we should resist the growing temptation to prove ourselves to prospects and clients by enabling them to "sample" that for which they can and should pay.
For instance, I am emailed to with frequency by consultants who want me to attend free webinars. Their purpose is to generate paying customers, but they make it all too easy to gorge on their free appetizers and to never order a pricey entrée.
The quite obvious, but never dated aphorism of industrial psychologist Frederick Herzberg comes to mind: "A satisfied need is not a motivator."
Stuff me with enough free facts and what will be the incremental value to me of yet another morsel, whether I'm paying for it or not?
I have always been suspicious of vendors that offer "Free, Introductory Lessons," because I realize most of what I'll be treated to is an infomercial. You'll have much more credibility with me if you charge me SOMETHING, even if it is nominal.
A fee, however modest, signifies value is being tendered, and therefore, value must be paid. It's a compact that has a history as long as humanity, itself. We trade value for value, and by exchanging money, we're able to calibrate with some precision our respective contributions to each other's betterment.
Instead of generating admiration and appreciation, giving away that which is valuable very often boomerangs. As a general rule, in business, respect flows to where money goes.
Where did this idea come from that information in general, or training, or labor of any kind, is free?
I believe the Great Destroyer of Perceived Value and the promoter of an accelerating unwillingness to pay, has been the Internet. It's a matter of "Why pay for the cow when the milk is free?"
And there is free milk, everywhere, on the web, oozing out of every blog, every web site, every search engine, and every online newspaper and magazine.
Recently, I was steered to a book by a friend, who told me I simply must read it. Before I could purchase a copy, which I did, I pieced together what turned out to be about 95% of the book, completely for free.
Amazon.com allowed me to scan the table of contents and to read a chapter or two. Search engines enabled me to source various reviewers and commentators who almost word for word "rewrote" the remainder of the original author's text.
What didn't I glean from my process? A few stories the author told about driving through the countryside. Nice reading, by the way, but was it worth the price of the book?
I don't subscribe to a daily newspaper. Why should I? I read many of the finest publications in the world, online, for free.
How do I feel about the fact that these same newspapers are now in or facing insolvency and bankruptcy? I blame them for pursuing such an obviously disabling business model where they reward customers for NOT paying!
Let's see if I comprehend their business proposition: If I subscribe, I'll be sent a smudgy paper that I'll have to retrieve from the often mushy mouth of my driveway. Then, I'll have to dispose of the paper, either through recycling or through conventional means. And I'll have to pay a subscription price, which they'll bother me to no end about renewing.
Or, I can read their publication online, instantaneously, cleanly, and completely without obligation, for free. As a bonus, they'll enable me to express myself, log my comments and read the feedback of others about the articles that really matter the most.
Given that choice, what proportion of rational beings will continue to subscribe?
What are you donating now, in the way of valuable information, goods or services, for which you should be charging?
I'll bet it's a lot more than you used to give away, a few years ago, before "Visit our web site!" became such a self-defeating mantra. Simply because more companies and small businesses are spinning off countless freebies, doesn't make it right, and it certainly doesn't necessarily lead to profits, as the major newspapers are demonstrating.
I should point out that there are a few winners who are earning significant money by posting online. One fellow produces a humorous show at YOUTUBE that has generated more than one hundred million visitors, according to CNBC and The New York Times.
He doesn't charge a viewing fee. He makes his bucks through Google ads that accompany his online performances.
As the economy tightens and becomes increasingly competitive, it only makes sense to reconsider our costly practice of offering free samples to those that can and should pay.
Perhaps it will help to summon the sobering motto once used by Dun & Bradstreet Collections:
"A deal isn't made until the money is paid!"
Likewise, you can look at it this way. The fundamental purpose of an enterprise is to produce a customer, according to management guru, Peter F. Drucker.
And they aren't genuine customers, until they pay!
I was reminded of these notions a few months ago when a quite successful inventor and technologist wanted to retain me to help him to market some innovations. Though he had some initial funding, and a stream of income, he seemed curiously unwilling to pay value for what I was going to tender.
Acting a little miffed and definitely surprised that I had adopted a strict "pay-to-play" model of doing business, he implied that there are plenty of eager fools (and don't-know-any-better-interns) that will work for free.
My advice to you: Don't be one of them.
Negotiate to receive value for the value you deliver.
Dr. Gary S. Goodman is a top speaker, sales, customer service and negotiation trainer, best-selling author, and TV and radio commentator. He conducts seminars and convention presentations around the world and can be reached at: gary@customersatisfaction.com. His profile can be read at: http://www.linkedin.com/pub/0/a91/833.
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