Increase Perceived Value By Trading Off
A student of mine, Jeff, recently graduated from my web development class. He’s new to the industry and trying to build his own business. He once asked me the following question, which I thought was interesting:
“Mike, my friends have a very small business, and they have asked me to do a website for them. They say they can’t really pay me that much. I have told them I will do it for free as long as I get rights to the site and can use it for a reference and in my portfolio. I think this is a wonderful opportunity to get more experience, but my wife wants to see some money on the table. I value your opinion. Can you help?”
Here was my answer…
I believe the trade-off is good in principle, but meager. I would consider some money — and here’s why. Doing a website completely for free is not good. What you should be looking for is a return on your “investment,” for two reasons:
To stop potential nibbling, grinding away your time and resources;
And to add value to your services (doing something for free paints a low perceived value and makes you, or the services you provide and especially the final product you create, look cheap).
In short, you want to take away the focus from a trade-off based on a free website to one based on a concession: Value for value in other words, not final product for value. The idea is that, once the service is rendered, a couple of problems could crop up. For one, the person can ask you for more, and more, and then more, and … Nibbling away. I know this from personal experience. I’ve designed websites for clients who kept asking for small tweaks, here and there, all the time. And I never got paid. These are “time-munchers.”
Even when there’s a signed contract, they could still find a way around it and ask for more (or limit your use of the site, even revoking it, in different ways or for different reasons, thus putting you at a disadvantage and, of course, out of money). They could say things like: “Our contract says that we get this and that (not that you have to do this and that), and I’m not abiding by our contract until you do ” Trust me. I’ve been in these situations too many times.
It’s not because the site development is free but because it is free *and* what you’re asking in return is meager when compared to the concession you are making — the concession being a finished, completely design website. Psychologically, you did not add enough value to your concession. Therefore, the perception is that the website will be of low value too.
(At any rate, asking for tradeoffs is good and you’re doing well in asking for one. It adds value to any concession by always asking for something in return. Remember, in class, I told you that this is taught by most of the master negotiators out there, like Roger Dawson at http://www.rdawson.com/, Herb Cohen at http://www.washspkrs.com/speakers/h_cohen/h_cofr.htm and Chester Karrass at http://www.karrass.com/.)
Nevertheless, even if they’re friends of yours, remember that the perceived value of the service depreciates immediately after the service is rendered. If you design the website and, since you didn’t ask for a penny (or if you don’t have a signed contract), this could open up a whole new can of worms. If you only have full rights to the website, would you ever consider taking the site away from friends? It’s something to think about.
Also, it depends on the complexity of, and the amount of work involved in, the site. If you have to design a fairly complex site (I would say either 5 pages or more, or even just a single page but with a robust backend), then in my opinion it’s not worth the mere portfolio benefit. Ask yourself: “Am I prepared to work like crazy and deal with problems for a mere addition to my resum?”
On the other hand, doing a site for a large enough discount and, as a tradeoff, asking for full rights to the site (like adding it to your portfolio), is better. The idea is that the tradeoff is not based on the site but on the *discount*.
Ask for some money upfront, even if it’s little. Say: “I understand that this isn’t in your budget range, Mr(s) Prospect. In exchange for a special consideration (a discount, in other words), may I suggest … ” You then add weight to your tradeoff. Stated differently, they’re giving you the rights in exchange for a discount, NOT for a free site. The site therefore has — and keeps its — value.
Here’s another option. I would consider doing a site for free if (and only if) I get residual value (i.e., royalties) from the site, such as a percentage of sales the site produces for a predetermined period of time after the site is launched). Or ask for a deposit to be applied against future royalties, which is safer.
You can even ask for half as deposit to be applied against other things. Here’s a scenario. Get half as a deposit. Finish the website. Have them sign off on it (a statement saying they’re very happy). Have them write a testimonial letter about you. Ask them to add a link at the bottom of each page of their website stating “Design by Jeff,” linking to your own site or email address. Have them sign a release that they give you rights to the site for you to use as you please. (Most of the above are preferably done before work begins.) Then cash the deposit. If they don’t comply with their end, then ask for the balance.
Again, having all this written down in an agreement prior to commencing any work is essential. Don’t get burned like I did. And remember, it’s better to negotiate on a consideration (a discount) then the actual site itself. If you negotiate on the site itself you lose the value of the services you offer once rendered, and it could cause you more problems.
Michel Fortin is a direct response copywriter and consultant dedicated to turning sales messages into powerful magnets. Get a free copy of his book, “The 10 Commandments of Power Positioning,” when you subscribe to his free monthly ezine, “The Profit Pill.” See http://SuccessDoctor.com/ now!