Winning new business: How to avoid the giving trap

There’s you in pursuit of winning new business, all excited by the prospect landing a star client. You’ve spent months, even years, perfecting your policies and procedures and as quick as a flash you shoot yourself in the foot by giving stuff away.

In the normal course of events, there’s nothing wrong with giving stuff away. Quite the reverse. Being generous is extremely good for winning new business, but it needs to be part of a strategy. Knee-jerk giving is not a strategy.

In business, the giving trap can manifest in a number of ways, many of them seemingly harmless.

Time generosity is the most common giving trap for independent professionals. If you charge for your expertise by the hour, it follows that every hour has a value. Your potential client or customer needs to be under no illusion that this is how you work.

Dedicating time to the pursuit of winning new business is, of course, fine and often very necessary. But you need to keep a handle on it. Your clients must know what you’re doing, why you’re doing it and how far you’ll go.

From time to time you’ll be pushed or gently nudged to go further and it’s your response to this that can see you enter the trap. The moment you go further - without at least clearly flagging it - you risk devaluing your services.

Good, strategic giving is when you add value without being asked. The giving trap is when you discount your services or weaken the perception of your value by going too far.

Here are two scenarios to consider:

Scenario 1:

You give a free one-hour consultation as part of your new business development strategy. You’re so keen to hook a client that you let one-hour turn into 90 minutes. You say nothing.

Scenario 2:

You give a free one-hour consultation as part of your new business development strategy. At around 50 minutes you realise it’s likely to run over the hour. Assuming you’ve decided it’s beneficial to continue, you pause, make clear you are about to complete the hour and then offer your client an extension of 30 minutes. You take the opportunity to fully explain your motivation for this action.

Spot the difference? In the first scenario you’re signaling a lack of respect for your time AND creating a potentially damaging precedent in the eyes of a potential client.

In the second scenario, you’re highlighting the value of your time AND adding value by giving more of it.

From which position would you most like to begin a new business relationship?

Robert Gerrish is Flying Solo’s managing director and founder and works as a business coach, professional speaker, business commentator and consultant. He’s the co-author of Flying Solo – How to go it alone in business.

11 comments | Add your own 1 2 | Next» View all»

Your example, Robert, is so close to home for most coaches/advisers that it's scary. I've found that if you don't clearly state your terms before the meeting, then you're setting yourself up for disappointment - and if you blame the prospect, then your well off-track! Grant Hyman from Sydney | Read my articles
Actually, it's just as close to home for me as well as a designer. I found this article excellent help. Karen from Springwood NSW
This is the best piece of advise young businesses need. I have myself made this mistake far too often.
The freebie hunters never become good clients. Giving freebies infact shows weak sales. I recollect that once I was looking for a Life Coach and I came across this person who said 'I can solve your problem....but its not free!). His confidence made me pay for his services. Always build your value proposition...never discount the value of your time.
Anup from www.searchenginerankings.com.au from Melbourne, Australia
Thanks for the reminder, Robert - it's certainly the easiest trap for me to fall into...I am charging by the hour now - and writing in my diary what I do every hour, so I'm seeing where my time is going. My next challenge is to stick to my guns and not buckle when it comes to invoicing! I know some soloists who give away to those clients who are genuinely doing it tough - then charge more to their wealthier clients. Do you have a comment on this practice? Megan Hills from Brisbane | Read my articles
Hmmm, some interesting commentary, thank you. Regarding Megan's point, I see no harm in having a policy whereby a business accepts a certain number of reduced fee clients...if it's what you really want to do. A friend of mine in the US takes on what he describes as a 'limited number of scholarship clients' who pay a reduced fee. BUT this is not at the cost of his other clients. Also he reviews each scholarship client on a client-by-client basis. The main thing is to develop an offering that suits you and that has you 'giving back' in a way that is meaningful and right for YOU. Robert Gerrish from Flying Solo | Read my articles
Thanks, Robert - a very helpful reply. Megan Hills from Brisbane | Read my articles

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