Episode 34: When Should You Charge And When Should You Offer Your Expertise For Free?
Paid versus free offers. What's your stance on them? Do you have realistic expectations for each? Are you aware that a free offer can lead into a high-ticket paid offer, sometimes better than a low-priced offer will lead to it? Do you know what to take into consideration before you charge for something? In this episode we'll discuss:
- Paid versus free offers
- How to know when to charge for something others are giving away for free
- How to monetize a free offer by using it as a stepping stone into your high-ticket paid offer
Episode Transcript:
[01:01] Deirdre Harter: Oftentimes, we watch women struggle with offering value for free, and it seems like a waste of time in that it devalues our services, doesn't it? Why would you spend the time and effort providing something for free when you could charge for it? In today's episode, we're going to discuss monetization, and there are many different ways to monetize. We believe that oftentimes there are unrealistic expectations in general that we want to address.
[01:39] Carmen Reed-Gilkison: And this came top of mind—we do see this happen, and we hear questions about this a lot—but recently, I attended a networking event where someone was lamenting that he wasn't getting paid speaking gigs, and that his business was in jeopardy because of it. He was saying stuff like, I'm getting speaking gigs, but I'm not getting paid ones, and I can't run my business for free. And this illustrated a lack of understanding of business strategy. And it's something that we see come up often. And we thought, well, this would be the perfect platform to help create realistic expectations or just to let you know that there's more than one way to monetize.
[02:22] Deirdre Harter: That's right. Now, a lot of times, we see extremes here. Like we see extremes of thought. We see people who want to charge for everything, and then we see people who want to give everything away for free. Both of these can be attributed to a lack of understanding about monetization, but it can also be a mindset issue. And so we want to talk about both of these things, both the lack of understanding, and we want to provide you with some strategy guidance here and also talk about the mindset so you can see where you fall in the spectrum.
[02:56] Carmen Reed-Gilkison: And so we're going to talk about mindset first. And there are two opposite mindset issues that result in two extremes, and both of them can derail your success. So the first we're going to talk about is the ego-based mindset. These people have a solid understanding of the value they provide, and they want to make sure that everyone else does too. And there is absolutely nothing wrong with being proud of your products or services, the value you provide, and charging for that. We're absolutely not saying that you should give away things for free.
We're talking about; we're bringing strategy into your decision here. When you're in the ego-based mindset, you wouldn't consider giving away anything of value for free because you feel like, well, I'm worth it. I should be paid what I'm worth, and I'm worth it. And so on the surface, it doesn't seem so bad. But most of the time, people most concerned about this are new business owners. Occasionally we will see seasoned business owners that fall into this trap as well. But most of the time, it's new business owners. And it's kind of understandable when you're talking about the new business owners. They want to start out, and they want to make some money, right? They're eager to make the money. They're eager to make a name for themselves. And so they want to charge for everything that they do. But as a new business owner, they don't have a proven track record for delivering on their promise yet, nor do they typically have a big enough audience. And a lot of them, we hear this a lot, “I'm going to start a membership.” and it's someone who's been doing whatever they're doing for a very short time. If you think about that, you have to think about how many people do you need to get into a membership for it to actually be a money-making endeavor for you? And those are the kind of things we're going to have you think about today. A lot of times, these people want to start memberships, or they want to charge for their workshops, and they want to sell products, not give anything away for free. But without that huge audience, again, the strategies don't have much chance for success.
[05:01] Deirdre Harter: And another thought comes to mind when we're talking about this particular way of thinking of charging for everything. And I think this especially is hard for anyone who has a higher ticket service-based business. If you're charging high-ticket for the services that you're providing to your clients, a lot of times, that can mess with our heads, right? Like if we start thinking about, okay, well, when I'm working with clients, my rate is $300 an hour. And then we start thinking about, and if I go spend 2 hours this week giving stuff away for free, that's like $600 I gave away. But there's a lot of things we do in our business that are it's like a few it's like getting a return on investment in the future. We're doing things today that build up assets; it's building up rapport, building up other things for our audience. And we're putting the work in to get that audience put together. And that's just the way you build an audience. You have to show the value of what you have to offer. You have to build this following of people, and they're not going to follow you blindly before they know anything about you. And they're certainly not going to pay just to be following you and to be learning about you.
[06:22] Carmen Reed-Gilkison: Yeah, it's kind of like having a runway. It's exactly what you just said. They're not going to follow you blindly, and they don't know who you are, right? I mean, they don't know until you've created an audience of people who do know. So there's a runway, and sometimes a free offering is the perfect thing to get them in your world.
[06:43] Deirdre Harter: And one other thing I want to touch on here, Carmen, is this does happen a lot to new business owners, but it happens a lot of times to seasoned business owners, too. Because we get to a point in our business where we do have clients, and we are making sales, and we're trying to grow. So we get to this point of thinking, well, I'm just going to charge for everything because I've built my audience. We've got people coming in with all the different marketing aspects of what we're doing, so I'm just going to start charging. And you and I have actually talked about this in our own strategy discussions. And there was this debate over do we keep doing a free workshop or do we have people pay? Because I think a lot of times we think, well, the only people who will get free stuff are the people who won't pay for stuff. And I think that can be true in some instances, but then there's a whole lot of other instances that we think about. People are spending their time with you. And from my perspective, I have more money than time. Generally, I have less time. It's a resource that I can't make more of. I only have a certain amount, and there's no way to make more of it. We can always make more money. So I think that's something that we need to think about as well when we're trying to decide, should we do something for free or should we have something be paid?
[08:03] Carmen Reed-Gilkison: Yeah, very good point.
[08:05] Deirdre Harter: Let's look at the other side of this, the other mindset. And again, these are like two extreme sides of the spectrum, and this is what we call the fear-based mindset. And this is when you get to where maybe you believe you don't have much value to offer. Like, you haven't really owned the value that you provide, and it can lead you to want to give everything away for free and to just be getting the kudos right, like, oh, my gosh, this is so great. This is so great. But we still aren't allowing that to give us the confidence that we need to then charge for the expertise that we have. And so it becomes this pattern. And then we're wondering, why aren't we reaching our revenue goals that people should?
It's almost like we think that people should see what we give away for free and then say, hey, I just want to pay you because all that free stuff. Here, let me just write you a check. In fact, I think I heard some other business coach in the industry that was a story I heard her tell, is that she was giving away all this stuff for free. And then someone said, I've gotten so much value from what you've given to me, I'm just going to write you a check. Well, that's great and all, but that is an outlier. Like our audience is not going to be like, hey, I'm just going to mail you a check. What's your address, right?
[09:28] Carmen Reed-Gilkison: And what I think about when we're talking about this is two, and again, these are extremes. So what we want to have people understand is you've got to be open-minded. I think when mindset issues come up, it's because you're locked in on something. And both of these things that we're talking about, the people who only want to get paid and then the other people who want to give everything away because they want the accolades and the kudos, those are different dopamine hits, right?
The person who's getting paid gets the dopamine hit every time she hears cha-ching in her bank account, and the other person is getting the dopamine hit every time someone tells them how great they are, and both of them can be true at the same time. And I think that's what we're really trying to get at here. Free does have value, and there is a happy medium, right?
[10:23] Deirdre Harter: Exactly. And this is where that other piece of this comes in, where a lot of times it's just a lack of understanding of the ins and outs of monetization. And even if you understand the basic concept of monetization, a lot of times, we just don't have a strategy for it. And strategy in this particular area is absolutely critical because this particular topic, has a lot of components inside of it. A lot of times, it's our programs, it's our pricing, it's knowing your audience. There are a lot of factors that go into figuring out what kind of monetization strategy should I have? And when you understand the strategy that you're going to be following, that's when this question of do I do something for free or do I charge for it, that's when it becomes really clear because there's a time and a place for all of it.
Now, obviously, ultimately, we want to earn the revenue that we're worth. We want to grow our businesses. And it's really about the impact. Sometimes we get really stuck on the money side of things, and we think, well, if I'm not making a lot of money, I'm not successful. But the impact is really what we're going for here. It's about impacting the lives of others. It's about serving others. That's what a service-based business is about, right? It's about bringing the highest value you have to those who need what you have. But again, we have to be in the middle here. We have to be able to earn the revenue that makes the whole business work and grow. Because if we aren't growing, then we are not impacting.
[12:08] Carmen Reed-Gilkison: And a lot of it, people don't stop to think. Let's go back to that story that I told about the guy who was lamenting the fact that he couldn't get a paid speaking gig. Well, let's break this down a little bit. And I don't know if he was doing local speaking gigs or virtual or what he was doing, but let's say he is a higher level speaker, and he flies to events, and he does all these speaking gigs. Well, how many speaking gigs will he have to have? If this is his only way of monetizing, which is what it sounded like, how many would he have to have at what price to make a living out of that? Can you see how that's maybe not going to work out?
And same with the people who are brand new and they don't have an audience, and they want to start a membership because they think that, well, if I sell a $37 membership, people will buy it. It's like, well, if you only have an audience of 100 people and only maybe 10% are ready to buy, well, you're not going to be making much, right? So you have to look at it that way. And when we talk about speaking gigs, when we talk about monetization, what some of the people in this networking event were trying to help this guy understand is if you have a powerful presentation and people are just drawn in. They want to know more. Well, first of all, you always need to have a call to action. So what is the call to action to? Is it to download a free resource? Is it to have a discovery session? What is it? And that all gets back to strategy. This is why Deirdre and I love strategy so much. It's because it depends on what your business is and what your goals are, and how are we going to get you there. And it is really your roadmap to success. But when someone listens to you speak, whether they paid for the event, paid the speaker or not, the people listening don't care. What they care about is, did you connect to them on an emotional level, and do they want more of what you gave?
[14:13] Deirdre Harter: As a service-based entrepreneur, are you feeling overwhelmed with all the to do? The women who hire Encore Empire have reached a breaking point in their business where they know that something needs to change, but they don't know what. Maybe you're finding yourself working nights and weekends, and that's not what you signed up for. And despite all the extra hours you're putting in, your income isn't increasing. We help you peel the layers back to uncover the root of the problem and not only correct it, but teach you how to avoid falling into the same trap in the future. We help you step into the role of CEO in your business, where you're working on your business, not just in it. If this sounds all too familiar, we invite you to set up a consult call at encoreempire.com/consult.
[15:14] Carmen Reed-Gilkison: That's part of the strategy we're talking about. It's not the surface strategy of, well, I didn't get paid for that speaking gig, so now I'm not making any money. It's the strategy of, well, how do you take your content, your valuable free content, and turn it into a money-making machine?
[15:32] Deirdre Harter: Right. And when it comes to paid speaking gigs, it sounds like an easy thing, right? Like, oh, I am an expert in my field, and I'm just going to go out, and I'm going to get paid to speak about this. Well, that is a completely different business model than if you are providing your expertise and working with clients in a different capacity. So if you're working with people one-on-one or you're working with a group, it also depends on are you working with consumers or are you business-to-business? And there's so many different ways paid speaking gigs can - they can be corporate, where a corporation pays you to come in and talk to their people. It could be for certain kinds of conventions with different kinds of organizations. So you've got to be really clear. Like, if you want to get paid for your speaking gigs, then those are the people who are your - you've got to make sure you're talking to your ideal clients. Like, if you're getting speaking gigs and they're not paid, and that's like your whole business is based on, then you're not speaking to the right people.
It's no different than a coach who is doing workshops and challenges and providing, putting things out on social and nobody's talking back. It isn't a problem with monetization, and it isn't necessarily a problem with your mindset. That is a problem of you not knowing who your ideal client is. And so that's why we say there are a lot of times that we think we have one problem, but that's usually not the problem. It's usually not what you think, and it's usually more than one thing.
[17:09] Carmen Reed-Gilkison: Yeah. And so, let's talk about how valuable free things can be. So Deirdre and I built Encore Empire by running free workshops every eight weeks. And we will continue to do so because we're able to sell our high-ticket coaching programs after people have spent time with us over five days. And they're able to walk away with a big valuable marketing plan for the next twelve months. And they're like, wow, if we could do this in five days, imagine what we could do when we work with them.
So you have to remember that free, just because you're giving something away for free doesn't mean that that ends there. It's part of that runway. And that we're building up reciprocity, right? So the reciprocity comes in, and you may have heard this before in marketing and other things. When we give something, human nature is that the person who was given to wants to reciprocate. And so that reciprocity from a free workshop or a free speaking gig or whatever can take many forms. Someone could be a raving fan who talks about you and shouts about how great you are from the rooftops. We need those people in our lives, even if they don't end up ever buying from us, because they're expanding our reach, right? We don't know all the people they know.
So when you provide value for free, people are just blown away, and they're like, oh, my gosh. And so they might reciprocate by referring people to you. But they also, like I mentioned in the example if they got a ton of value and they're in the market for what your workshop or your talk or your event is about if they need help with that and you have just proven to them that you're the person who has the answer they need. Well, you can bet that they're going to purchase from you, right? There's all kinds of ways that these events can help garner money.
[19:08] Deirdre Harter: That's right. And in anything, we have to try something out, right? But you have to have a good reason for it. And so when we're talking about these free conversion events, like a workshop, there could come a point in time where the seats are full to where you have too many people coming after you've spent a good amount of time building your audience. There could come a point in time when you've got too many people coming to your free event. And in that case, that's when you look at, well, now we should charge for this because you want to limit the seats. That's the reason for charging. It's not a revenue stream. It's not an income stream. It's a way to bring that crowd down to where you can work with them.
So, anybody who's if you want to be paid for your workshops and you want to be paid for speaking gigs and things like that, in order for you, like Carmen said earlier, in order for you to earn enough for it to actually move the needle in your business and then in the revenue line, you've got to have massive amounts of people. You also have to have a very strong and well-known brand position because you need to get a large volume of people to come because until you have got the same reputation as Tony Robbins, you're not going to be charging $1,000 a seat. You're limited on how much. So I think people get this idea that, oh, I need to be paid because this is revenue coming into my business, but let's think about what difference is it really going to make?
[20:45] Carmen Reed-Gilkison: Yeah.
[20:47] Deirdre Harter: Another thing we have to think about is building the know, like, and trust factor. And if you've been around in the entrepreneurial space for more than five minutes, I'm sure you've heard this. But you have to ask yourself, how am I doing this? How am I building the know, like, and trust factor? And that is a strategy in and of itself. And we do it multiple ways. And there's email marketing. This is all on how we're doing our marketing. But how much are you building?
What amount of know, like, and trust does that one email really provide? And if it's somebody who's brand new to you, they've never heard you before. Is that one email going to be a game-changer for them? Is that one social post going to be like, where the heavens open up, and they hear the angels singing and like, where have you been all my life? Probably not going to happen off of one single thing. And that's why we have to think about what can you do? What kind of value can you provide that will build that know, like, and trust factor, and how long do you need to be providing that in order for those people to get to know you?
[21:57] Carmen Reed-Gilkison: Another thing I wanted to touch back on what you just said, Deirdre, about when it's time to charge, and it's when your workshop, using workshop as an example, gets to be too many people attending. Well, that is exactly right. Charging at that point creates exclusivity, and it means that you've already built up the fan base where people are like, oh, I've got to go to that workshop. And so then when you charge the people who pay, those are your highest warmest leads.
I think the big thing that happens when we talk about free versus paid is people think only the freebie seekers are going to go to the free things, and you're going to always have an element of that. But it doesn't mean that you just start charging, and then that totally eliminates it. Because what happens is if you didn't do the whole piece in between of building this audience and the know, like, and trust factor and the reciprocity and all this other stuff, then you're going to be, you can put all you want as many offers out there for a paid workshop, but you're not going to get that many opting in.
And something that people don't think about is that a lot of times, people need to do research before they're going to buy anything. So by making sure you know your audience like Deirdre talked about before, it's not just the fact of putting a sales page up and saying, I'm going to do this thing, and it's going to cost you $47. That's not it. The thing that you're doing has to speak to your ideal client on an emotional level so that they're drawn to it. It's got to be something that matters to them, not something that matters to you. And so you have to make sure that you're doing that. And when you do that, and you've got the topic, and it is what matters to your audience, then it's something that they've been either struggling with, or they're already looking into how to solve this. So they've already been turning the wheels and researching and trying to figure this out.
So then when they come to your free event, and you nail it, well, right there, you just helped them with their research. And if you've done a good job or if they're a good fit, I don't want to make it seem like, well, you didn't do good enough because sometimes we can run workshops and not have anyone join. But in general, if you keep it up and you have hit the nail on the head, then they're like, that's all I needed to know, and now I'm ready to take the next step.
The other aspect we haven't talked about, Deirdre, is the strategy of what is the call to action and what are you leaning into? And I know we can't go too deep into this, but that's another important aspect. It's not just that you put together a great talk or a great workshop, but it's what is it leading to?
[24:46] Deirdre Harter: Yes, that's exactly right. And a lot of times that when you are providing something for free, and it's going to lead to your, we call it the one big thing, your main offer, then think about it this way. The time you put into the free event, look at the yield on the end of it. If you can enroll four or five clients, how much was that whole event now worth to you and worth the time that you spent on it? So that's another way to look at this. But if you are doing a paid event, then that call to action looks different because the reciprocity factor either goes way down or is nonexistent because the person who attended says, well, I paid for this.
[25:37] Carmen Reed-Gilkison: Yeah.
[25:38] Deirdre Harter: And so, therefore, there is no reciprocity because they paid, and they got what they paid for. And so then it kind of stops you. How are you going to lead them to the next thing? Or to say, okay, you paid for this, and you got the value from this. Now I want you to buy this other thing, right?
[25:56] Carmen Reed-Gilkison: Yeah. People just don't think about that.
So then, let's say you put in the same amount of work. Let's talk about a workshop or whatever it is, a 90 minutes webinar. I don't care what it is. Whether you give it away for free or you charge for it, you put in the same amount of work and let's say you charge $47 for it, and you get ten people. So you earned four hundred and seventy dollars. And then, like Deirdre said, well, now the reciprocity factor has been extinguished because they already paid. So now you're on even footing. According to the laws of reciprocity, they paid something; you gave them what they paid for, so now they're done.
Then let's look at it. The same workshop, the same amount of time. You give it away for free, and you're not giving everything away for free. I think that's another aspect, is we're not giving everything away for free, but we're giving enough that they can walk away with a result, a transformation that is valuable. And then they're like, man, that was so good. I am ready to join their program. And if your program is a higher ticket than $470, well, just with one person, you've outearned the person who thought charging was a better idea.
[27:06] Deirdre Harter: There's a time and a place for all of this. Again, it's about strategy. And it depends on what stage of your business you are, what your revenue goals are, what your bandwidth is, and what do you want to be known for?
This is another important piece I don't think people think about is that if you are just doing all different kinds of things all the time, it really confuses your audience. If you're offering this kind of a class, and then you're offering that webinar, and then you're offering this workshop, there has to be some cohesion to,o and we have to be taking everyone down a journey. And so we have to think about that journey, whether it's paid or whether it's free. But we have to know what that is, and then we're deciding. And maybe there is a place for a paid Masterclass. For example, you can be doing free workshops, but then you can have a paid masterclass. That marketing is marketing to a different segment of your audience. That's marketing to the people who already know, like, and trust you. They are already familiar; they've already gotten value from you. Then you have an opportunity. And so you can have a paid event for those people who already know. Like yes, no-brainer, she's giving this webinar, she's giving this Masterclass, and I know it is going to be amazing because I went to her free workshop, and that was amazing. So this has got to be even better.
[28:28] Carmen Reed-Gilkison: That's right. Or the paid Mastermind or Masterclass could be a down-sell to your offer. I mean, there are so many ways we could just go on and on. And that's why Deirdre and I do what we do because it is so much fun to put this stuff together for our clients and see them earn double and triple and even quadruple their revenue by implementing the things that we're talking about today. So we really want you to understand that you can give away your expertise for free, and you can charge for it. You can do it one way or the other or a combination of all of them. But we really wanted to try to clear up some of the expectations that are out there that are unrealistic. Where people think that they should automatically be charging for things or earning for things just because they don't understand this whole value first. And it's kind of like a value ladder, right? Or a runway. You're putting all of this stuff out so people have the opportunity to know, like, and trust you to tap into that reciprocity and for them to do their research. So don't discount free things. No pun intended. 😉
