Should You Offer Free Consultations In Your Service business?

July 23, 2021
9 min read
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Guide

Free consultation is one of the best ways to get people interested in your service and encourage them to come in for a free trial. 

However, there are arguments for and against offering free consultations, and you need to consider your own circumstances before deciding whether or not to offer them.

In this article, we are going to discuss more about free consultations for service businesses.

We'll also go into detail on the pros and cons of free consulting as a service provider, whether it's good or bad for your business.

There is no clear answer as to what you should do in this situation - it depends largely on your own circumstances before deciding whether or not to offer them.

The primary reason is that the consultation is the point of sale, and companies want to get paid for this first interaction.

Most service business owners have an objection to their clients seeing them for free.

Let’s examine both sides of this interesting topic.

Why you SHOULD offer free consultations

Free consultations are one way to bring new clients in and you should definitely consider this when assessing the likelihood of bringing new services into your business.

Free consultation has many advantages including increased name recognition, time savings when people need more information quickly, building relationships with future clients, and increased revenue because they will eventually come back for more services which can lead to better conversion rates!

Here are some pros to offering free consultation as a service provider:

  • It builds relationships and expands your customer base

Offering free consultations can be great for expanding and increasing your customer base by reaching out to potential customers who might otherwise never consider using your services because it would cost too much upfront.

Free consultations help establish rapport with prospective customers who might not have otherwise been interested!

  • You might get more referrals if you offer this service, as the client feels like they're getting something back and that will lead to future opportunities.

It’s also good if you have an established practice where new clients come from referrals only. By offering free consultations, other professionals in the field might refer you to their friends.

  • If a customer is happy with your services but not in the budget for it at present, then they are more likely to come back when they are able to afford your services, provided they got a lot of value from your free consultation.
  • It creates a strong first impression.

Offering free consultations is also a great way of creating a strong first impression with potential customers because it can help them feel more confident about trusting your expertise and qualifications without feeling like they have been taken for money upfront or by providing services that are not what they want.

There are many benefits when offering free services such as increasing traffic at your place of work, being able to close deals quickly with customers who might not take you seriously otherwise because they do not want to pay upfront fees before knowing what their needs really are.

What does this mean? It means that there can be an increase in sales which will help grow your business on a consistent basis.


Why you SHOULD NOT offer free consultations

Free consultation for service business may have its upsides but there are also many downsides with it so think about if this is for you or not before offering free consultations in your service business.

The biggest problem with giving away free consultations is that you will get clients who are too picky.

Before considering to offer free consultation, you should consider the cons of free consultation:

  • It can lead to lower profit margins.

You have to make sure your margins are there on each individual product or service you offer in order to remain profitable enough to keep running your business.

  • You might be seen as a freebie, which is not what you want your business to seem like in the first place.

Your customers may regard your free consultation as just another freebie, since a lot of service businesses offer free consultation nowadays.

  • It might lead to more free consultations for many customers

You might be caught up in doing free consultations rather than focusing your time and energy on other parts of your business that truly matters.

  • You'll be giving a service away with no financial incentive, which can make it hard on morale if they're not getting compensated properly.

When your free consultation conversion rate is poor, there will be lack of motivation to keep going as there is no direct financial incentive.

  • Some business owners don't like having their time wasted by answering questions when they could be doing something else with it.

This is especially true in those who have employees helping them or are part of a larger company where people rely on them for other tasks as well.

  • You will have to hire more people.

When free consultation becomes overwhelming for your business, you might need to hire more hands to get things moving smoothly.

  • Offering free services might actually hurt your business by creating an expectation

When free consultations lead to sales, there is always an expectation from your clients to get more value from you than they did in the free consultation. If these expectations are not met, it can hurt your business in the long run as you continue to garner a lot of unsatisfied clients.

  • The free consultation could lead to a long-term project that the customer expects you to do for free, which is not sustainable and would put your business in jeopardy.

If free consultations were to lead to a short project, it would be better for you as the customer will have more understanding of your limitations and expectations.

Offering a free consultation is not always a good idea. It's better to offer it if you think it will produce business in the long run or lead to something that both of your parties will like.

  • If someone says they want free consulting but are really on the fence about what service or product they need and don't actually buy anything from you because of it, then you've lost out financially without even knowing if this person is someone who might eventually become a client later down the line.

These are just some pros and cons with free consultations! Whether you offer them or not is ultimately up to each individual company owner as there isn't an easy answer here when it comes down to making such decisions based off



When to offer free consultations

If you are thinking about offering free consultation for your service based business,

Here are some factors to consider.

  • Do you provide professional services or are you doing It as a skill?
  • You need to look at whether your services can really help someone or if your business offers services as a “one-off fee for a consultation.”
  • It's great to offer free consultations when you have something really different and unique that no other service providers are doing the same thing for their customers.
  • If you have a service that just takes one meeting and there isn't much to discuss, then free consultation is an option.


When NOT to offer free consultations

Some businesses offer free consultations, which can be a great way to generate interest without risking any financial loss.

 However, there are some circumstances when this strategy may not work so well.

Here are some scenarios in which a free consultation will not work for your service business:

  • The free consultation might not work well for a salesperson that works on commission because there is no incentive to provide free consultations.
  • It would also be difficult in professions where it's hard to tell how long an appointment will take, such as architecture or law.
  • This approach might backfire if you're trying to get someone out of your hair and they end up wanting more service after the free consultation!
  • Don’t Offer Free Consultations If Your business model relies on contracts – many clients will try out free consultation and find ways to get out of paying if there is no contract involved. This means you’ll be tied up in court all day long dealing with legal issues rather than focusing on building your business.

Industries best suited for free consultations:

If your free consultation business is in the service industry, you may want to offer free consultations as a way for people to sample what they have on offer.

  • If you're a freelance writer, lawyer or accountant then free consultation could help grow your business by reaching out and attracting new potential clients that may have been hesitant due to pricing concerns.
  • Free consultations are also perfect if your service is typically provided as part of a job interview process such as with HR consultants who provide advice before hiring someone on staff.

This strategy does require a little more time on your part because free consultations are usually done by phone, but the payoff could be worth it.

  • Another great industry for a free consultation is in education which can help students determine what they may need to take and pay attention to before applying for certain courses or entrance into a college.

Generally, Free Consultations will never work in industries where competition is too heavy because there is always someone who has more experience than you do with your industry knowledge; they may also know better ways to structure things so as not to take up too much time from a consultant - which means less income for them.


Industries least suited for free consultations

Free consultations might not work in industries where the customer expects to be served for free.

The key is to find a way that free consultations can help customers, like introducing them to new products or services.

For example, free consultations might not be a good idea at restaurants or in the retail industry.

Especially for small businesses that are trying to build up their customer base and get more customers coming through the door on a regular basis, free consultation services could do more harm than good if you're not careful with timing and communication about what's included.

In these cases, it might make more sense to offer free trials of your service (like haircutting) instead of providing free consultancy information before they come into seeing you.


What next?

More and more businesses are trying to add value to their services through consultative sales approaches.

In other words, offer free consultations to your customers.

What is wrong with that?

Nothing, it can’t be bad!

However, should you offer free consultations?

In my opinion, there are some significant advantages and disadvantages to doing so.

While this is definitely a bonus, you should keep in mind that it is definitely not enough.

While some industries where you are selling something tangible like retail might work well with offering free consultations before someone comes into seeing you (maybe so that they can make sure it's what they really need), other service providers who rely on word-of-mouth advertising would be hard-pressed to find success if nobody was willing to talk about their experience first hand.

Especially for small businesses that are trying to build up their customer base and get more customers coming through the door on a regular basis.

This should give you an idea of whether it's worth offering free consultation as part of your business strategy. 

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