Free equals nothing in the Services Industry

15 July 2014 | By John Merryman

The last time I was genuinely excited about ‘free’ was when Google sent me 100 bucks of free advertising on Adwords. The time before that was when EMC hooked me up with a nice little USB stick at the EBC.. Thanks again Joe, I still use it constantly. Free gadgets are one thing (more!), but free services is another.

Through the course of the global financial crisis, there’s been a vapid shift in the IT infrastructure consulting market to provide ‘free consulting’. The loss leader approach to winning business has been around forever, but the more the ‘free consulting practice’ proliferates in IT infrastructure the more you have to wonder what is really being provided. Various books and management articles expound the brilliance of free, and possibly the absolute requirement for free to compete in our new global supersonic economy.

Makes sense if the bench is warm, pipeline is light, yet you don’t want to see 10 years of talent vanish due to P&L pressures for short-term gains and long-term painful rebuilding. For hardware vendors, you have a magic pool of ‘marketing development funds’, which are applied feudal style to strong upside product win opportunities (competitive accounts, account salvage ops, etc.). But for pure consultancy, you might have bench cycles to apply, or you might take an opportunity loss to deliver ‘free’ services.

A couple challenges with free consulting services:

  • Free means no budgeting approval, therefore no real effort on the part of the buyer
  • Free results in little to no emotional commitment from the buyer or the business
  • Free diminishes stakeholder involvement (often related directly to issues that need the most attention)
  • This sets an ugly stage, since the underlings then have zero interest in playing-ball
  • Free devalues the work being done and casts a cheap light on the deliverables, no matter how well crafted

Any way you cut it, Free Equals Nothing in the services industry. You must have skin in the game at some point, some time, somewhere, with somebody in the food-chain. Otherwise, free is nothing more than a LOST leader, a waste of time and talent.

For more information, feel free to contact the GlassHouse Technologies team.