A story.
Pablo Picasso is sitting in a restaurant, when a woman approaches him, gushes over him and his work, and asks him to sketch something on a piece of paper for her.
Picasso takes the paper, and does a quick-but-beautiful sketch. He hands it back to her and says, “that will be $10,000.”
The woman is taken aback. “But it only took you a few minutes to do that. Isn’t $10,000 a lot for just a few minutes work?”
“it may have taken me just a few minutes to draw, but it took me a lifetime to learn,” said Picasso.
I frequently think of Picasso whenever I’m asked to provide free advice and knowledge.
“Can we meet for coffee?” someone will ask me at a networking event. “I want to pick your brain about blogging.” Like my brain is on display, with a lot of other brains.
“Mmmmmmm—that one!”
I’m usually happy to share as much information as I can. I try to be friendly and willing to teach people, as an homage to the people who shared so much information with me when I was first starting out.
This bothers people. Most notably my business partner, Paul, my wife, and any professional consultants.
“You need to charge for your time. You’re giving away information. Information that’s taken you months and years to amass. Even if it takes you an hour to teach them, it took you years to learn it.”
“Cool!” I think. “My time is worth money. I have years of knowledge and experience that people think is valuable.” And I feel really good, and I promise that, this time, I’ll embrace my inner consultant, and say I’m more than happy to teach them everything I know for a pre-determined hourly rate. Like Picasso did.
But then someone asks me again, and I’m afraid of looking like a money-grubbing a-hole, so I compromise.
“Tell you what. I’m supposed to charge $100 an hour for this kind of information,” I say, rolling my eyes as if to say “they” told me to ask for money. “But if you buy my lunch, I’ll be happy to tell you what I can.”
The other person readily agrees, we meet, and I share whatever I can to help them out. Of course, when I get back to the office or come home that night, I feel like Jack did after he told his mom he traded the cow for some magic beans.
I know I’m supposed to make money from my work. I’m a professional who is hired by companies to actually use my knowledge and skill to help them be successful. That is paid consulting. I’ve raised the bar (and my rates) even higher in the last year by co-writing two books and working on a third. (At the very least, I think, I should be getting dessert with lunch, but apparently that’s still not good enough and now I have to watch my cholesterol.)
I don’t know why it’s so hard for me. Pablo Picasso scribbled on a piece of paper between courses, and charged a woman $10,000 for something that took him decades to master. I’m sharing many years of blogging and writing wisdom in 60 minutes, and I should be able to look someone in the eye and ask for $100 an hour without stammering out an apology.
I’ve talked with other friends who face the same conundrum. Some are happy to charge, while some are not. I don’t know who to believe. Even the experts aren’t sure.
On one hand, Seth Godin says if I want to be a Linchpin (affiliate link), I need to participate in the Gift Economy, and give this stuff away for free, because then I’m valuable to a lot of other people, and the benefits (and money) will shower upon me. Chris Anderson says that if I give knowledge away for Free (affiliate link), I’ll show my value to others, and the benefits and money will shower upon me some more.
On the other hand, there are hundreds and thousands of professional consultants who make their living getting paid to share their knowledge and experience, which took years to amass. Why should they get paid obscene amounts of money to share their knowledge, when I’m settling for a damn hamburger? (To be fair, it’s a really good hamburger, and I order bacon on it, which usually costs extra. Because I’m worth it.)
What should I do? Should I embrace my inner capitalist and charge people to give them my knowledge? Or should I continue to believe in puppy dogs and rainbows, and share my knowledge for the good of mankind and the benefit of the planet? What would you do? Leave a comment and let me know. I’ll discuss the answers in a future post.
There’s a lot of good points here. I think a balance is the key. Balance in that you should charge based on the person or group that approaches you. If a person comes to you and want to “pick your brain,” I’d find out his real intentions and whether he’s serious. At that, I’d limit the conversation to a latte or lunch date and then refer that person to your blog, where he can learn more. If the gig is a man or woman of means, a group or company — weigh whether they are serious — and usually that means talking money. If they bulk at a rate, the ain’t serious. Why not have your hamburger and bring home some extra bacon too?
So much thinking! So much writing! What if you treated it not as a business question but as a moral one? Then the answer to the question is (as it is to virtually every moral question): Do unto others as you would have them do unto you.
If you were to ask a professional to share his knowledge with you for free, how would you want him to respond? Not how do you think he SHOULD respond. But how would you WANT him to respond?
Don’t be distracted by trying to figure out what you deserve or what someone else deserves. That’s a time-wasting tangent to living.
Very interesting post indeed! As a fundraising consultant, I don’t mind giving out “free” advice. Will this advice be an actual fundraising strategy for your organization? Absolutely not. But will I share tidbits of best practice that I’ve learned over the years? Absolutely! And for no other reason than, I like to chit chat with people :) I think that we are always on the look out for how we can make our pockets fat, but I think that being generous will afford fatter pockets over the long run. People will remember how kind you were to them and THAT is priceless. I would rather have my name in people’s mouths as they refer me to others than their cash any day. But, hey, I’m a self-proclaimed believer of puppy dogs and rainbows….
People are always going to want something for free. When I was a professional photographer it was the same situation. Many years of training and experience to hear “hey, could you shoot my kids (whatever)” knowing that there would be no compensation. Just because you have a knowledge of a skill, people think that you will just hand it over.
I agree with Loraine, your time is money. When you place a dollar among on your time and knowledge, your are saying that you are professional. Your information requests will obviously go down but the quality of clients will go up.
Before you switch to the cash for info plan. Will everyone who comments on this post be grandfathered in to two free questions a month?
I agree with Dave Woodson; giving away “something” advice/feedback for free works; isn’t that what a blog is for? A way to share your knowledge with a community of followers? Sometimes giving away something I have already given away isn’t giving it away, it is helping the world.
BUT if you want something tailored/specific/customized/personalized feedback, then you need to charge for that consultation. Because to become an expert, you have paid your dues, you have worked for your experience and education and you need to be compensated and valued for that knowledge.
Well said Lorraine and Dave! I have been a “victim” of giving out too much free advice, which is the reason I now have a consulting group, though I do nothing with it. I have it because I have been burned too many times. I give out tons of free advice and multiple meetings. One day I wised up, and said, “I am going to have to start charing.” The response, “You don’t have an agency, how can you charge me?”
We all know an individual can charge, but I didn’t argue with the person and that is the last advice I gave the individual. I like Dave’s motto: “the first one is free.”
I worked in customer service for a while and this is what I learned: the more you give away for free, the less people are happy. The company I was working for was sometimes letting customers have free support calls, trainings, etc. And when they finally said “hey, you’ve used up your freebies, we’re going to charge now,” people were outraged. They were getting it for free before, so why should they have to pay now?
If you give consulting away for free, you make it harder to ever charge.
Of course, there are notable exceptions. Consulting for free for a non-profit, having a short meeting in order to close business, mentoring a student or doing a trade. I’ve traded content services for business plan review, website design, etc. So, if someone can’t afford you, you can always do something like that and still feel good about yourself.
This topic always gets me going so figured I should finally write on it. I put it here
I think that the meal thing is the best, while people love to put some kind of huge value on their “knowledge” and “experience” how much of that is really used in most of those high level discussions about those topics? Not much really. And comparing to the creation of something of significant value (no matter how long it takes) is significantly different than just words.
Leave it to Lorain to put everything into perspective. I also find it very difficult to “lay down the law” when it comes to offering advice. It wasn’t that big of a deal in the past. Hell, it was flattering that people wanted my opinion. It’s still flattering now, but the glee is tinged with guilt because I know better. It’s just a matter of getting out of this vicious cycle. *sigh*
So many interesting responses. The one thing you have to remember is that right now at least, any and all information anyone wants and needs about blogging and any aspect of the social web is available for free right now. All anyone has to do is take the time, and he or she can get what amounts to a college education just by reading blogs, attending webinars, going to events, watching live streaming, etc. But the fact is that you take the time, you do the research, you test and implement, and do everything else that is involved in being an expert in your field so, you shouldn’t be expected to give away your knowledge for free to someone who hasn’t done the hard work you have. Ever.
However, there are ways to give by “not really” giving much. Find out as much as you can about who you are meeting with beforehand. Try to guess what their goals or stumbling blocks are, and what value you could be to them. When you meet, ask lots of questions. Then, give them just a little taste of what you could do for them, just a little appetizer, and see what happens. You haven’t lost much, your partner will be happier, and you may get some new clients out of it.
Consider this: if you tell prospects that your time is worth $100 and then give them three hours for a $4.00 cup of coffee, clients will take the Starbucks discount plan every time. When you sell consulting, you HAVE TO make the decision “do I want to work with Deckers?” and not “is Deckers worth $300 per hour?”
The key is simple economics: price is determined by scarcity relative to demand. Have the pricing discussion before meeting, and make the subject of any pre-contract meeting simple: determining if the client is a good fit for you and you are a good fit for the client.
Amen!! Erik I must say I love the way that you open this post with the story of Picasso. Why is that so often people assume that because you can accomplish a task in a short amount of time, that in some way means that it should cost less. The countless hours that go into developing the skills to be able to accomplish something with ease certainly counts for something.
I agree that I do my best to help whenever I can simply because I have been helped by so many. However, in the end I am in business to make a living and if I give away everything in the end that is not very fair to me. And, ultimately it is not fair to my clients because at some point I will no longer be around to help them.
Thanks for such a great and thought provoking question!!
Don’t forget that you are also interviewing them as a potential client. Getting free lunch and an idea of whether that relationship has further value is pretty sweet… throw bacon into the mix and I don’t see how you could go wrong.
Great post Erik! Recently, a couple people have reached out to meet for an hour or so, where I offer free advice and/or knowledge over coffee. (Maybe I’m too nice, but I normally agree the first time is free.) Next step, I’m asked to give a proposal for work, which I’ll gladly do because, well, it’s just part of the biz development process…and another 2 hours or so of my time. But, what has gotten to me lately is that these potential clients want their entire strategy, in detail, in the proposal…even before they’ve paid a dime. (Um, that’s part of the actual work, people!) In the end, they can just run away with the free advice, detailed proposal (and they have) and do it themselves. This happened to me and I’ve learned my lesson NOT to give it all away for free. I like Lorraine’s comment, “If you don’t value what you do, why should anyone else?”. SO true and I”m going to start living by that rule.
I think Lorraine hit it on the heard! “If you don’t value what you do, why should anyone else?” You’re right you are worth the bacon, hell you are worth the whole PIG! When you stop believing you are worth the money, your product (you) will lose value. I say that, but also struggle with this very issue. I have a big heart for not for profits, and churches. But truth is, they are a business; they are run like a business. It is hard for me to remember this fact. You have put your lifetime (and I bet a significant amount of family time) into acquiring your knowledge. Charge for it…. Can I buy you lunch when you come visit?
I have a inner barometer I use when helping people. If you are a college student starting out, I’ll help you and give you all the advice in the world. If you are a company, probably not so much.
I am where I am now thanks to so many different people helping me without asking for money. It’s my job to pay it forward.
My .02
I’m leaning more and more towards one-on-one being free or the price of meal/coffee, and then charging for anything in front of a group – mostly for the reasons you posted.
I think it really depends on the situation. I think the line needs to be drawn after the first meeting or if the requested advice goes beyond broad generalizations. When you start getting into specific details of the business and what efforts would help them and why I think it needs to be paid for. As far as some friendly advice and banter about some things that work i.e. hey that twitter thing is really cool and has worked for XYZ do you think it might work for me. I think that is fine to discuss free of charge.
Just do what you’re most comfortable doing, morally and financially. If you’re not strapped for cash and you enjoy helping people where you can, then keep doing it. There’s nothing wrong with that regardless of what other people tell you you should or shouldn’t do.
If you feel like people are taking advantage of you…then start charging them.
Worth noting as well is the business value of giving free advice. It’s a great business development strategy isn’t it? When that person is looking for a full time consultant, or someone asks them to recommend a good consultant, you’ll be first in mind.
David
Excellent post! I run into this a lot, both from the perspective of my technical expertise and people wanting a “quick” headshot. I actually recently updated my blog FAQs with inserting the Q of Why are you so expensive and answering it essentially by saying, I can do it fast and do it really well because I’ve been at it for years – you think you’re paying for an hour, but actually, I think I’ve earned getting paid in a way that takes my years of experience and the $$ I’ve spent on training and equipment into consideration. :-)
I do struggle with charging a certain amount or saying “no” to newbie photographers who want to “pick my brain”, but I’m to the point where I really just physically CAN’T give a stranger an hour of my time without any recompense because that’s an hour that not only do I not make any money, it’s an hour that I actually LOSE money because I could be spending it on something profit producing. And it’s an hour I’m taking away from being with my family – it’s kinda nuts to go and give of myself to strangers when my own children & husband see so little of me.
Not to say that I’m not open to working something out with people – I will barter, I will trade, I will give discounts, but freebies? Quite rare these days…and you know what? most people get it. On their end, they figure it can’t hurt to ask, but I think most of them understand when I tell them that I just don’t have the time.
So don’t feel bad charging – my personal experience is that people place more value on things they spend money on. Give it to them for free and they take it for granted. And no one likes that!
Don’t forget that your blog is one place where you give your information away for free. I do give away lots of free information on my blog, and that actually might be enough for someone to learn and end up designing on their own, yielding me no profit. Which is why when I’m approached to consult, I have no problem explaining that this is what I do as a business.
There’s also that grey area of a 5 minute conversation about general topics vs. a conversation that is passing 60 minutes and obviously has business implications. I’m not going to nickel and dime anyone with a single question. I asked a similar question to Chris Brogan and he suggested you address it as early as possible. When you get the first inkling that one question may turn into many, explain what you do and tell them you’d love to get them on your schedule (at an hourly rate) so you can devote the proper amount of time to help them with their problems/questions/concerns/challenges.
Jon Thomas
Presentation Advisors
You must find your balance. You can’t keep giving stuff away forever. (You can if you have another job) Build your personal brand and gain the confidence you need to tell them how much.. because you’re worth it.
Erik, I’m with you. It’s often a difficult line to draw. I love taking my knowledge & enabling others to benefit from it. But having business expenses (like a lease & insurance) on top of your personal financial obligations (a mortgage, car, food for the rest of the family, etc, etc, etc), you must draw that line somewhere (unless you’re one of the lucky few who are independently wealthy). But as you know, that’s easier said than done sometimes.
Hi Erik,
Apparently we’re on the same page on this topic… http://bit.ly/9Xe4UR
That is a great question, and one I’ve been asking myself of late. My conclusion is this: In the long run, it’s better PR and business to give away the free information up front, as it gives me a competitive advantage over someone else who may be charging for the same information. Especially since people do business with those they know, like, and trust, I’ve just gained a giant foothold of credibility by my actions. However, after a business relationship has been established and someone becomes a client, I will charge them for the information that they request.
Erik,
I’ve had the same problem for years and have traded a lot of advice for cheeseburgers. My pants expanded but my bank account hasn’t. Since consulting isn’t my day job, I seem to justify it. However, if I do go out on my own someday, will it be a hard habit to break? Look forward to listening as you explore this in future posts.
Jeff
That is a conundrum, and I am right where you are. When experts I admire disagree so dramatically, I always feel a little stuck. Right now, I am “giving it away” because I love what I am doing and it’s just so darn fun, I can’t stop myself from saying “yes” to everything. But I know (regardless of what Seth says) that can’t be a sustainable business model. Perhaps I can forgo lunch and point people to my Amazon wish list? I do like your “I normally charge X” statement. Gonna try that one out, but just think of something more interesting than lunch to trade for. Great post, Thanks. : D
Its certainly a good conundrum and one many have. Good people want to help people and know they benefit from help given to them also in a generous nature.
So is there a freemium type model? You get the basic help for free but if you what the extra advice ‘features’ it costs.
This is not unlike many free webinars which are half pitch and half free help.
This is a really great post. I often run into this same conundrum.
My approach is, I usually help people for free (initially) because I like talking about my field and it doesn’t feel like work to me. Then if they want me to continue helping them I charge. From helping people for free I’ve gotten lots of referrals this way.
Many people have told me “You need to charge for your time! Blah Blah…” but I don’t mind reaching out initially and helping. Especially since it’s fun. :)
hate to say it this way, I tend to follow the drug dealer business model., “the first one is free”. I know a lot more lately, I am asked for my opinion on websites, twitter, facebook etc etc. I just give a nice simple pat answer to get them interested and then when they ask for more. I try to work something out for them. If not, they were not all that serious anyway.
I’ve got a friend, I know hard to believe, he is asked all the time to do spec work in hope the other person can sell it. He’s been there done that, he gets done, it is never to their liking and they have moved on in many cases.
I know of another instance that a local marketing company brought in a friend, tried to pick her brain and when she told them what her services cost. The meeting ended soon after and that marketing company is still struggling to capture an online presence.
great post as always.
If you want to run a business, you have to run it like a business. There is a balance, I give away free forms, free seminars, free links, but my time is not free. It is a limited resources, and an hour to pick my brain takes me away from finishing a project for which I get paid. That just isn’t fair… How many accountants will review your taxes for a hamburger? How many lawyers will draw up a contract for a latte?
If you don’t value what you do, why should anyone else?
Ah yes. Every social media consultant gets to this point because we seem to be the only ones out there built on the premise of giving it away. Everyone else charges. We should, too.
I put together my thoughts this summer when someone asked me if consultants like me should do incentive based pricing. In the end, I said “no.” I have to pay my bills now, not six months from now when your website shows a return. Asshole or not, my kids gotta eat.
Here’s the link: http://www.socialmediaexplorer.com/2010/08/04/could-consultants-offer-incentive-based-pricing/