Is everyone familiar with the term ‘mates rates’? Its the idea that you give your friends a special deal on whatever you are selling/service you are providing because they are your mate (colloquial for friend).
I think that on the surface there is a lot of positive feeling behind this concept, the idea that you will give someone a really good deal because of your friendship – because you always want to help out your friends right? and thats a good thing.
I’d like to take a little bit of a deeper look at this idea though and how it fits in with the Give Freely Receive Freely Concept.
Who is my friend?
How do we decide who our friends are, or who to be friendly to? Personally I prefer to be friends and friendly with everyone. If I truly am friends with everyone, how then do I choose who to give a ‘mates rates’ deal to? Shouldn’t I be giving mates rates, or a great deal to everyone?
This reminds me of something that happened to me awhile ago. I went to a friends shop (where I had visited him a number of times before), I chatted for a bit and then told him I had come to check out one of his products I was interested in buying. There was an instant subtle change to our interaction. It was obvious to me that in that moment in his eyes I went from being a friend to being a customer and he changed into a salesman. He was trying to make a sale and get money from me. I did end up buying something from him, but the whole thing made me feel a bit uncomfortable and our relationship has always seemed a bit different since then.
I don’t hold it against him, he was just trying to run his business the best way he knew how and this included him introducing an element of distance and coldness between him and a customer so that he can make the money he needs. But isn’t there a better way, a way that would allow him to interact with friends and customers in the same warm way? (and have his friends as customers and customers as friends).
Business Owners Are Always Wealthy
I think part of the problem is entrenched in the idea that the business owner is always in a position to discount, and a true friend should get a deal that means the business owner is making no or very little money from them.
Anyone who has owned a business will tell you that they are not always able to discount. There are many costs in running a business that are not obvious to an outsider or someone who has not run a similar business. You can only run a business at break even or a loss for so long before you are no longer able to operate. And if you were to give everyone such a deep discount that you don’t make money off them how would you pay your expenses? how would you be able to feed yourself and your family?
I think this is one reason why business people feel the need to create distance between themselves and customers. They feel uncomfortable profiting from friends, so they create a distinction between friends and customers so that they can profit and have the money they need to run their business and live. In fact I think this affects all of us to some extent in our dealings with money, even with friends and family (theres even research to back this up, I mentioned it in a previous blog post here).
The Less Expressed Side of Mates Rates
I think the solution comes in the other less expressed side of the mates rates equations. I had never heard this other side of the equation until a few years ago. It was after I had written and published my first book (you can see it here 🙂 ). A friend said that he would like to buy a copy, and during that conversation he told me that “you don’t support a brother by asking for a discount, you support a brother by paying full price”. He did buy a copy of my book, and he did pay full price – which I appreciated, but I think I appreciated even more this new idea he gave me in that conversation. The idea that it is not always about getting a cheaper price because you are a friend, but sometimes the effect of the friendship flows the other way in paying full price because the buyer wants to support a friend.
Give Freely Receive Freely
I think that GFRF elegantly combines both sides of the ‘mates rates’ equation. If a friend does not have a lot of money or other resources, the business owner gives it to them at a rate they can afford (decided by them). On the other hand if the friend has plenty of money or other resources they can pay the business owner what would be “full price” or even more if they choose to support them in their efforts. Price ceases to be a barrier and there is no need to create emotional distance between you and your customers. Everyone becomes your ‘mate’, as you are treating each other the way a true friend would.
I know that for me, the relationship I have with customers and clients that pay on a GFRF basis feels different than the relationship I have with customers and clients that pay on a fixed price basis. It is a closer and friendlier relationship. I like this way of dealing with people better. As I’ve mentioned before in this blog, I would like to have all my business dealings with people on this basis, I’m just figuring out how to do it as the idea is unusual for most people. I am trying to figure out how to do it in step by step way so people can get used to it and so that my business will not collapse due to unfamiliarity or other reasons – as that wouldn’t help anyone.
Already I offer quite a lot of what I do on this basis, but I have quite a way to go before offering everything this way. Its been an interesting process so far. I have learned a lot, and I know that there is still a huge amount to learn yet. I hope you’ll continue to follow this blog as I write about my experiences along the way.
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On a side note related to this, I recently went to a vegetarian food outlet (the term restaurant would probably be a bit of a stretch in this case) and really enjoyed the food, so much so that I am already planning on going back there. Well this morning in my email was a deal for meals at this place at less than half price.
My first instinct was to buy several of these deals to use with my friends. But as I thought about it more, I didn’t really feel good about that. I know how these deal sites work – the food outlet would end up receiving even less than the already extremely cheap deal. Even at half price it would still be too cheap, they would probably be giving me my meal at a loss to them.
I was already planning on going back there… and after thinking about it, I would rather pay full price. I don’t know them personally as a ‘friend’ but I like what they are doing and would rather support that by paying a fair amount for my meal. I would like even more to be able to pay on a Give Freely Receive Freely basis… but theres not that many of us operating this way yet. I’m not sure how much I would pay when left to figure out the value for myself, but I would try to make sure it was fair and reflected my appreciation of what they are doing.