Over the past 3 or 4 years I came up with a good solution to this situation.
I used to have a similar comeback like the one in the video. But the people who ask for free photography won't instantly change their minds no matter what I say.
Instead, when asked to work for free, I always say is that I want to charge for my time
. I place the value on time instead (which, in theory, time is
the photography said in a different way... a different way that is more quantifiable to the type of person who is asking for free photography). BTW, I just quote my normal rate for 'time'.
I told this theory to a few of my photographer friends and all of them came back saying I was wrong for shifting the focus on time rather than photography, that I should essentially argue with people who ask for free work. I'm not going to argue with anyone, or coach them on why they are wrong. Just because they are asking for 'free' doesn't mean they are bad people, and it doesn't mean they are any less of a customer.
I've never had someone say they didn't want to pay for my "time". So far I have a 100% conversion success rate (which is all of like 6 or 7 times, not a ton). When I don't use the line "I just want to be paid for my time", and I preach about the value of photography, I have a 100% fail rate.
I see this as the psychology of business. Since a photography business actually has more to do with customer service than it does photography, you can satisfy the customers needs with your "time" or with your "photography". Either way the customer wins (and so do I).