If you were to take a cursory glance at the top ten rules for being successful in business, it’s almost guaranteed that “work for free” will not be found among them. We believe it was either the Joker or Warren Buffet who proclaimed, “If you’re good at something, never do it for free”. Both are highly successful in their fields, so it stands to reason that they know a thing or two. But had they taken a crisis situation into account?
During unprecedented situations such as a sudden crash in the economy, the shutters go well and truly down on many businesses and industries, leaving a gap for innovative companies and entrepreneurs to make their mark. But does this mean you should break the golden rule and actually work for no return?
Should Your Agency Work for Free During a Crisis?
Crisis times are hard on the majority of businesses. Unless you’re producing essential items, chances are you’re seeing a downturn. And it’s not just your own business you have to worry about. Governments all over the world tend to borrow money at expedited rates during crises, meaning a nasty recession will likely be in order when the dust finally settles.
Understandably, agencies need to find new revenue streams during these times. So the question becomes: should you offer your services up for free as an incentive for work down the road? Well, the short answer is no. The Joker has a point, you know. You should never offer free work during a recession unless you’re doing a favor for a family member or friend (and even then, a discount should suffice).
Should I Be Working for Free During a Crisis?
The idea behind free work is that you offer up your services as a kind of tripwire for future clients down the road. So, you work for nothing for them now when the chips are down, counting on their goodwill to come back to you with new commissions and cold, hard cash once the economy restabilizes.
Unfortunately, there’s a major flaw in that plan: there’s no guarantee that the client will return to you at all. You can’t force them to agree to that kind of deal; you’re just counting on someone’s sense of morality (never a good idea in business, as a rule).
The problem is that they haven’t invested anything into your services, so they might not feel inclined to continue their relationship with you. It also means you’re going to allocate a lot of time and resources in the interest of impressing them—potentially (and ironically) more than you might with a paying client.
It’s also important to think about how working for free for potential new clients might look to your existing clients. How can you afford to do something for free that cost X amount of money a mere month ago? You might have seen offers for free work or consultations rolling into your own inbox.
Imagine if you were a client who had recently paid full whack for those same services. How would you feel seeing that? That’s the position you’re putting your clients in if you mass-market your services for free. The ultimate result might be that you don’t make any new business, and you lose some you already had. Businesses have to make some tough calls on many fronts during a crisis. Make sure you’ve considered all the outcomes carefully.
Should My Rates Stay the Same During a Recession?
This is a difficult call to make. One way or the other, a recession will affect you, so it makes sense to adjust your rates accordingly. However, offering work for free sets a dangerous precedent.
So, you take on some free assignments during this recession in the hopes of luring in more business—great. But what happens when another recession rolls around (which it most definitely will)? Are you going to work for free again?
The market is cyclical; it always has been. Good times will eventually give way to bad times, and those bad times in turn will, in time, turn good again. Do you only charge for work when the getting’s good? No—that’s no way to run a business.
It would be great if everyone had access to a business crystal ball, but unfortunately, there’s no way to predict these things. Who knows how long the next recession will last? Show confidence in your pricing and your skills and stick to your guns. (Or your knives. Or your bombs. Or whatever else it takes to kill Batman.)
How to Keep Clients During a Crisis
So, how do you hold on to your revenue streams and clients as recession hits? Well, one way of doing this is by offering added value to your services. This is not the same as giving a new service away for nothing. It’s adding a bonus service to a previously advertised package. This has a few advantages: it’s quick to do, relatively resource-free, and also really handy for your client. You can angle this as a sort of “gift” for new or returning customers, on top of the services they’re already purchasing.
You can also offer a deferred payment service, by signing a contract that states that necessary work will be done now, with payment expected either at a later date when the markets restabilize (a little risky, as we can’t avail of that mythical business crystal ball), or in staggered transactions (safer, as you can guarantee a revenue stream from day one, even though it’s more spread out).
Productive can help you keep track of those types of payments with its personalized report system. Keep in mind that you should only offer this kind of service to people or clients that you trust. It’s an easy offer to take advantage of if someone was that way inclined.
Finally, don’t be afraid of validating your business and services to your client. Remind them why you’re valuable, whether it’s during harvest times or recession times. Most people appreciate bold moves in the face of uncertainty; don’t be forceful, but make sure you stay assertive.
Above all, remember what the Joker said: “I hate Batman and I want him dead!”… No, wait, sorry. The other thing: “If you’re good at something, never do it for free.”