Who doesn’t love free stuff? Whether it’s a complimentary trial, a BOGO deal, or free samples at a store, the idea of getting something for nothing is always appealing. But when it comes to employee benefits services, “free” often comes with strings attached — and those hidden costs can add up fast.
In the benefits industry, brokers and consultants frequently provide services like COBRA administration, benefits technology, and compliance support at no additional charge to their clients. While this may seem like a generous value-add, the reality is that someone is always paying the price. And more often than not, it’s the broker.
If you find yourself offering free services to win clients, absorbing the cost of those services, and saying yes to every opportunity, you may be facing challenges that are undermining your long-term success. Let’s explore why these red flags should be on your radar — and what you can do instead.
1. Winning business by giving services away
In a competitive market, it’s tempting to differentiate yourself by offering free services. However, positioning yourself as a trusted advisor should not require undervaluing your expertise. If your clients only work with you because of free perks, they’re not truly recognizing the value you bring.
Rather than competing on price alone, focus on what sets you apart. Unlike carrier-sponsored technology or all-in-one payroll solutions, you have the ability to recommend the right-fit benefits technology for each client’s unique needs. That’s a level of expertise worth paying for.
2. Absorbing costs that impact your bottom line
Providing services for free isn’t just a short-term concession — it’s a long-term financial burden. While you may think it strengthens client relationships, absorbing costs without clear boundaries can leave you overworked and undercompensated.
A better approach is to be strategic in how you structure your offerings. Brokers and consultants have two primary options:
Tie technology access to your Broker of Record (BOR) status.
When clients understand that their access to benefits technology is dependent on working with you, they are more likely to maintain a long-term relationship.
Work with a technology partner
Benefits and benefits technology are distinct, and your role as an advisor should be to guide clients toward the best solutions without shouldering the cost yourself. A technology partner can provide tailored solutions at competitive rates, allowing you to offer transparency in pricing without tying your services together.
3. Saying yes to every client
It may feel counterintuitive to turn away business, but not every client is a good fit. Taking on clients who only care about cost can lead to draining relationships that don’t respect your time or expertise.
Instead of trying to accommodate everyone, set clear criteria for who you work with. Clients who value your expertise will be willing to invest in it, and by saying no to those who don’t, you create space for more meaningful and profitable relationships.
The bottom line: free benefits services aren’t really free
At the end of the day, offering services for free isn’t a sustainable strategy. Whether it’s the time, money, or effort you invest, there’s always a hidden cost. By recognizing these red flags and making intentional choices, you can protect your value, improve your profitability, and build stronger client relationships.
Before you offer a service at no charge, ask yourself: Is this helping my business grow, or is it holding me back?
