I Tried to Build My Business By Doing Favors, But It Got Me Nowhere
Whether you're new or experienced in business, it's not uncommon to use favors as a way to fast-track you to new heights. In the now iconic book Influence: The Psychology of Persuasion, well-known author Robert Cialdini suggests we use favors as a way to catapult our growth and influence to the next level. Sadly, I learned that Cialdini's wisdom doesn't necessarily work in the straightforward fashion he laid out in his book and in business. In my experience, you can't simply do favors for people and hope they will want to return the kindness.
When I first set out on my business adventure, I armed myself with every business book I could get my hands on. Equipped with Cialdini's words, I set out to work with influencers as my method to fast-track my business. I wrote various very well-known business owners. I offered to give them my services for free -- all in hopes that they'd give me shout outs and help me in return.
Boy, was I wrong. After spending countless hours helping people who had thriving businesses, I figured I could ask for a few favors. While you might think, what a novice, and judge me for how I went about things, it's not uncommon for successful business owners to make these same mistakes. New or experienced, I'd like to help you learn what took me much heartache and frustration to figure out. It's what economist Esther Duflo shared in her 2010 TED talk, and it's what I, too, concluded: People value what they pay for, even when it's a favor, so it's best to create some kind "payment" so they fully it.
If you're thinking about giving your work away or doing deep discounts on your services in hopes to drum up business, I highly recommend you read this first.
1. Have them agree to give a video testimonial.
After my various experiments with giving away my services to influencers, I learned people value what they pay for. Influencers are no different. One way to make people "pay" is by creating some exchange.
A straightforward exchange you can do is trade some services for a social media shout out and video testimonial. Sure, it's a small way to pay you, but it's something. In my case, I first made this kind of exchange with actor and UFC Hall of Famer Bas Rutten. I got him millions of new viewers and fans, and in return, he gave me a testimonial and introductions that helped me earn over $50,000 in sales that year.
While a video is a small thing, it's a big deal to have an influencer tell his fans that your work impacted him. In some cases, it's worth more than what he or she could ever pay you in dollars.
2. Create clear expectations and write them out.
Favors are a form of currency, but if you don't create clear expectations, you could wind up thinking you're giving dollars worth of value when the other person just feels you're giving them pesos.
In my gung-ho attitude, I used to give out favors to anyone I wanted to influence or make friends with. Sometimes it helped me; other times, to my dismay, the person I helped saw it as a small favor when in fact it was a big thing for me.
If you want to be altruistic and do something just because you want to help, go for it. But, if it's to grow your business or to create influence, don't hope that doing favors will result in an excellent karmic loop for you and those you are helping.
Instead of hoping, set up clear expectations up front. If you're doing someone a favor, tell him how much it would normally cost. Or let him know, I want to help you do this, but later I'd like your help and five hours of your time. Then before getting to work, email him your agreement and ask him to respond with, "Yes, I agree to this exchange."
This leaves less chance for murky hopes and two people with differing opinions on what was happening.
3. Get to know them first.
Doing exchanges and favors as a business tool is tricky. Trust me; I've done hundreds of exchanges and thousands of favors. As much as I'd like to report back that entrepreneurs are all great and kind people, I can't say that. What I can say is that they're human. They're good, and they're bad, and entrepreneurs, just like anyone, forget and value things on a subjective basis. What is worth a lot to one entrepreneur might not be worth much to another entrepreneur.
In my effort to master Cialdini's words, I've learned that he could have included a whole chapter on "Getting to Know People" before assuming you can simply influence them with favors. Similarly, exchanges rely on knowing someone and trusting them.
Nowadays, I hardly ever do trades and exchanges, but sometimes they are the best option. In those cases, I take my time, watch the other person for a while, and then once I feel there's a sense of genuine trust I go forward with making a deal or giving away a favor.