Although your business model makes you charge clients for your services, you might consider giving away free service. This concept isn’t about dissatisfied customers. If you’re strategic about what you give away, you’ll find it’s a valuable marketing opportunity.
When I give service away, I consider it a marketing opportunity and budget it as such. I could spend money on Google Adwords or newspaper ads. Those could bring in business, but have initial upfront costs that I may not recover. My hope is the money I spend on advertising pays for the advertising costs and the time of placing the ad. Things like designing the ad and monitoring your account are costs you need to consider with any advertising.
When you give away free computer repair service, you have a fixed and measurable cost for your marketing efforts. You know how much your company’s time is worth. Unlike paid advertising, you’re more likely to know the return on investment (ROI) of your efforts. The sales you recover are traceable.
The best time to give away service is when business is slow. You have more time than money and people aren’t buying your time. Placing ads when revenue is down hurts your bottom line even more. Giving away service is an ideal compromise in those situations. Some computer repair business owners decide in advance how many hours they’ll give away a year. They’ll base the free service on either a percentage of revenue or a flat number. Don’t give away service without a set plan. Failure to budget your complimentary service could result in cannibalizing paid service.
Non-profits often work on a shoestring budget. They rely on donations and the kindness of others to get the job done. Many people are passionate about these causes and give large sums of money. Clients who make large donations to charities aren’t price-conscious customers. These are ideal customers for any computer repair business.
Whether it’s a house of worship, a private social service agency, or your local humane society, many of these groups need computer repair support. They may need break-fix or managed services depending on their size and equipment.
I suggest finding a cause you believe in and volunteering your time. Agree to a set number of hours per month you’ll give to that organization for free so you can budget your time. In exchange for your service, you might ask for some recognition. Some organizations have newsletters, so you might ask for a thank you in the newsletters. Others have weekly bulletins that accept free and paid ads. Make sure others in the community know you gave away your service. When they’re deciding on who to contact for computer repair, they’re more likely to contact you. The name is familiar and you give to a cause they believe in.
When you do the service, give the organization an invoice as if they were a full paying client. The paperwork helps them understand the value of your service. You then either put a discount on the invoice equal to the amount of service you gave or write it off in your accounting system. This also helps the nonprofit track donations, especially if they get matching grants.
To raise money, charities often have silent auctions. Sometimes they’ll have gift baskets and combine your services with other donations. Other times they’ll just give away your service as a prize. These events are your big opportunity to get in front of clients who aren’t price conscious. Let those groups you believe in know that you can give away your services. Trust me, they’ll be delighted to hear from you.
I have a few tips I’ve learned from doing this over the years. You’ll need a gift certificate of some kind. Your services aren’t something tangible. Don’t stress over this. If you don’t already have one, find a template online or in your word processor. I usually buy a pack of fancy paper so it looks nice. Companies like Square will create gift cards for you. Along with the gift certificate include your company advertising premiums like pens and post-it notes. I then put it in a nice pocket folder. Feel free to be creative, but make sure it looks attractive. Many of these organizations display the items on a table, so you want to stand out a bit. Whenever and wherever possible, make sure the value of the donation is listed.
Ideally, they’ll list you as a sponsor in the auction catalog or online. Like donating your time at a non-profit, supporters will recognize your name and want to do business with you. If it’s an auction, the buyer is someone who needs your services. That buyer could turn into a long-term client. They’ll tell others in the organization about the great job you did. That means more business for you.
Contests are a fun way of creating buzz for your business. Give some free computer service to the winner. You need to check with your state about the rules and check on the difference between a contest and a sweepstakes. Facebook also has its own set of rules regarding this.
If you do an unqualified giveaway, you’ll get unqualified customers. These will be people who just want something for free. I suggest you avoid people who just want free stuff. They’ll outnumber the the quality customers and will push them out of the contest. Try to figure out what your goal is to generate business. Use a small survey form to qualify the participants. The more questions you have, the fewer entries you’ll get, but the better the quality of the entry.
The bonus of a contest or giveaway is you can increase your marketing database. After the promotion is over, you’ll have an ideal list of leads. You can tell the participant they didn’t win, but you can give them a discount on future service.
Some ideas I’ve seen work in the past are, “show us your dirtiest computer!”, “who has the messiest computer desktop?,” “who has the oldest computer?”
Bartering is a controversial subject and you’ll definitely want to check local rules regarding this. The goal here isn’t to avoid taxes but rather to find someone who has a need complementary to yours. You might need web design help or childcare.
This works for many business owners because they wouldn’t be able to afford some services otherwise. If business is slow, I may not be able to afford a house cleaner. The house cleaner may not be able to afford my services because they are slow as well. By bartering, we exchange services the other wouldn’t have purchased without the arrangement. It’s best to barter with someone who provides a similarly priced service. The greater the disparity, the more likely someone will feel cheated. If I charge $80 an hour for my services and my babysitter charges $20 an hour, then one of us will get behind in equity rather quickly.
Ideally, you’re busy enough that you’ve maximized your billable hours. If so, congratulations. For the rest of us, giving away some of our services is an inexpensive way of marketing our services or getting additional value from them.
Written by Dave Greenbaum
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I agree with the whole giving back concept…But, be careful when picking and choosing a non-profit….There are many ways to be a non-profit and just because the have the word “non-profit” it does not mean they are poor. You will find many of them the actual employees make very good money.
On the “giving them an invoice” and “You then either put a discount on the invoice equal to the amount of service you gave or write it off in your accounting system.”…..
That I don’t agree with….I don’t see a way to write it off in your accounting system. You cannot claim the “free” work you are doing on taxes. You can only claim expenses i.e. mileage etc…
Make sure you know the rules when it comes to this type of thing if you are going to try to claim anything.
You raise a good point about non-profits-pick one you want to work with. The staff salaries though are irrelevant and opinions differ on compensation for non-profit employees. One could argue if they are well-paid, then they can afford your excellent services at home at the standard rate.
I’m not an accountant, but you write it off like any unpaid debt. I do my own books, but my accountant set it up. It goes in the same category as when we don’t charge a customer for a return visit or reduce the bill because I think it took longer than it should. You are correct, the service you donate is not a tax-deduction. Again talk with an accountant, but if you have mileage doing a service call you don’t charge the client, then the mileage rate is the business rate, not the charity rate.
The key is that you record in your system the service you provided, the value, and the fact you didn’t charge the client. This is true regardless of how you give free service.
I donated 9 computers to my local school last year (A small one with limited budget in my village in France) and I also look after them for free. This act alone has raised my profile in the village and I get a lot of chargeable work from the parents and word of mouth. The donation has more than paid for itself in just a year!
Providing services for a charity (and/or seniors & disabled) can pay off in a huge way, especially if the services performed were of excellent quality.
This leads to ‘word of mouth’ advertising, which can make (or break) one’s reputation. It’s the best advertising one can have, and can lead to many future referrals. On the flip side, if one performs sloppy work, this is also traveled by the same route, so it’s important even if working as a volunteer to do the job right, the first time.
It’s important, as noted above, to pick the right charity, those having employees earning large salaries (above the normal for a similar position in a business in the area) may be best to avoid, especially any whom has landed in the news over such issues (or ‘scandals’). Honest non-profits minimizes salaries & relies more on volunteers to perform day to day tasks. These are the ones who will appreciate one’s time more, and will gladly give a positive reference, should a client ask for one & will spread the word about your business w/out asking. This is also an opportunity to hand out business cards.
Word of mouth can have a serious impact on any business, no matter how large or small, so make sure the quality of the services performed is of top priority.
Cat
This is really useful information…and great comments – Guys!
Particularly because it involves adding value for a good cause…Just to add a word here, when giving these free (service) time, do so as though you are being compensated for your time – and it will become a reality in no time.
I gave up on freebies a long time ago. People lose respect for you and expect everything free for life. It’s much like the advice about feeding a stray cat.