Everyone is looking for some sort of a deal. It's an unfortunate fact of running a small business that you will inevitably be put in the position by a customer or prospect to give away your service or product for free. As a CEO, founder, or sole proprietor you are in the unenviable position of being the one who calls the shots, so you are also the one who is most likely to have to deal with it.
This is an especially nasty situation if you have a services business that does not have an obvious cost of goods sold, such as materials, inventory, perhaps even machinery and office space.
I know the challenge all too well. When I started by first software business over thirty hears ago the prevailing attitude around the software business was that it was basically a license to print money. After all, what you were selling was just rearranged digital bits. The industry was still nascent and few people outside of the IT priesthood understood either the value of software or the effort needed to develop it. My second business was primarily a services business. There was no inventory or hard goods. So, I had to develop a keen skill set to handle the "but it should be free" mentality very early on.
Here's what I've learned.
It's never about you.
First, if you are the one being asked to give something away, always put yourself in the position of advocating for your company and never yourself. In other words if you're a one or two-person operation always talk about your company as though, you were representing an organization rather than your own interests. For example, use phrases such as, "The company," rather than "I" or "we." Also, stay away from ever putting yourself out as the product, even if you are. For example, never say "the value of my services," instead it's always, "the value of "the company's services."
It's about value not cost.
Second, always focus on the value being created by whatever is being asked for instead of the cost to produce it. The cost is only relevant to owners or stakeholders, not clients. If you focus on costs you'll get sucked into a rat hole. Of course, the caveat here is that you had better be able to make a good case for value delivered. So, make sure you have a solid and crisp value proposition ready to go.
Don't embarrass the client.
Third, don't embarrass the person who is asking. A lot of times people haven't been in your position and the last thing you want to do is to tell them how ridiculous their request is, embarrass them, and have them back away from doing business with you as a result. So, try an approach that starts off with, "I understand why you're asking and I respect the position you're in. Here's my position..."
Focus on the relationship.
Fourth, it's OK to give a client a break, especially in the case of longer-term relationships. If you've got a solid customer that has worked with you for a while and has been dependable it makes good business sense to make accommodations. However, even in these cases be sure to spell out the value you are delivering. Don't dilute that value by just giving it away.
Value your people.
Lastly, whatever you do don't let your people, those who are committed to you and who are loyal to your business ever get the sense that their efforts are worth nothing by giving them away. You and they have created something of value. That's why you're in business. Treat that value with respect, protect it, and leverage it, and never, ever, give it away for free.