The hidden cost of free

Times are lean but even when they aren't, in the non-profit world 'free' is the gold standard.  Free trumps everything.  But free has a price tag.  Ever heard the phrase, "as free as kittens"?  Earlier this summer I blogged about the cost of being cheap. Here's what's can be even more expensive:  free. If your office space is free but you have no parking for clients or donors and your staff are crammed in one room where they have to wear ear mufflers to hear themselves think, is your space really free?  Not when you calculate your lost productivity, lost revenue from would be clients or would be donors who can't engage in your services or in supporting your mission.  How about that "volunteer webmaster" that is supposed to be building your new site or managing your existing one but hasn't responded to your emails or calls for the past 6 months?  How much is it costing you to unsuccessfully track them down and hobble along with a subpar online presence with dated information, graphics and content that doesn't engage your constituents?  Now add to the cost of your time  what you could be raising if you had a top notch site that did engage your visitors with compelling opportunities to give.  Who knew cheap could be so pricey?  Let's talk about that social media intern who is supposedly building your Facebook page, tweeting for you and setting up your blog?  Really?  Would you hand that intern over the mic at your annual gala in font of hundreds of your key stakeholders?  Because you might as well be.  Are they qualified to serve as the spokesperson for your agency?    What would it cost you if they weren't?  In a word: everything.

Every non-profit is stretched thin.  So, how can you not break?   Here are three things you can't afford to be "free":

1) Your technology

Your database shouldn't be managed by anyone but you.  Whether its a donor database or software tools you need, you can afford a reliable, cost effective solution and these solutions are all around you.  With so many affordable solutions, there's no excuse for not investing in your infrastructure.

2) Your brand

You get what you pay for, plain and simple.  Brands don't come free.  if you need a new identify system, shop around.  You may find many generous vendors who will donate a portion of their services but PAY SOMETHING because when you pay nothing you often get one opinion and your identity is too important to take the first logo you get.

3) Your social media

Social media is one of the only things that is free but it is a time investment.  There are plenty of examples of non-profits and companies who do  this right and do this well.  follow them to learn!  Don't delegate this to someone on the fringe of your agency, your messaging is too important for that.

Everyone is stretched thin but by prioritizing and spending your dollars wisely, you'll stay ahead of the curve and ensure that you take your agency to the next level.

Stay classy,

Rachel

Cheap Always Loses

The other day I was talking to my friend Vicki Flaugher, founder of Smart Woman Guides about one of many Fortune 500 companies whose go to market strategy is price leadership.  That doesn't leave many options. You see it all around.  99 cent burgers.  79 cent tacos.  In reality its price prohibitive to make a burger for 99 cents, so those companies take a loss on each one sold in the hopes they'll up sell you on a non-loss item, perhaps a super size drink.

In my opinion cheap always loses, because you can only go one direction: cheaper.  One of my favorite Fast Company articles was written back in 2006, The Man Who Said No to Walmart.  He walked in to make his pitch and the VP's office was furnished with plastic folding chairs left behind by another vendor as a demo.  I read that article 4 years ago and I still have this crystal clear image of what he must have looked like awkwardly sitting in a crappy lawnchair in his suit, briefcase resting on his knees, knees positioned somewhere near his ears.  Like a giant in a kids chair.   What kind of an executive of a Fortune 500 company seats guests on plastic folding chairs?  What does that say?  "Dear God we're cheap.  We are so cheap it literally hurts.  Try it, sit down.  Ouch.  This chair sucks."

The Man Who Said No to Wal-mart said no because his company (Snapper) stands not for volume, but for quality, reliability, and durability.  His product wasn't cheap.  It was built to last.  Their value proposition isn't price, it's performance and longevity.  Even though he successfully ran his manufacturing operations much like Walmart ran its stores, with fastidious detail on each element of precision and productivity, he wasn't willing to sacrifice quality for price.

Business is about what you stand for:  Value.  Quality.  Convenience.  A fanatical obsession with customer service.  It's also about where you are headed.  Short term gains around pricing today can have huge long term consequences.  How do you differentiate yourself in a noisy marketplace?  Where do you want to be in 10 years?  What are you going to doing today to get there?  Who will you say no to?  What will you do to preserve the values you hold dear?  Will you turn down clients?  Will you turn down money?  Most likely you will.  And if you lead your business with a strong moral compass, unwavering commitment to your core values, selfless dedication to your clients, customers, and stakeholders, and complete transparency your difficult decision will be rewarded with great success.

Stay classy,

Rachel