Since I’m in Kentucky right now with my family, in the heart of Bourbon country, we decided to take a tour of a distillery. We toured the grounds at Maker’s Mark in Loretto, Kentucky, and it was pretty cool. We got to walk down the bottling assembly line, stand in the room where they cook down the corn at 212 degrees Fahrenheit (not actually very appealing on a day when the ambient temperature was 98 Fahrenheit), and look at the 500-lb barrels of White Dog Liquor aging itself into Bourbon. And best of all? It was all free, even the two servings of bourbon at the end of the tour.
There are other ways to monetize
A lot of people have come up with ways to make value. I mean, there’s always something you’re better at than other people, by talent or training, or both. It’s not that hard to come up with something that other people like.
But then, many times, they insist on charging for it.
Now that’s OK. If you’re providing value, you should be able to get people to pay for it. But it’s not the only way to monetize.
“Free” doesn’t mean you’re not making money
Take the distillery tour. They let me into their factory, gave me an education on bourbon, and let me drink some of their product, for no charge. Suckers, right? Giving away their product for nothing. Providing value for free when they could have charged.
Well, let’s look at the “nothing” they got in return.
The tour, naturally, ended in the gift shop. Where, it happens, you can buy their bourbon. Or any number of other souvenir items, most dipped in red wax (the signature style of Maker’s Mark). Since a single bottle of bourbon probably pays the tour guide’s wages, and there were 15 of us on the tour, they’re certainly not losing money. The probably could have charged $5/person for the tour, for a total of $45 in revenue. But by not charging, they made us feel appreciated, and that we were getting something for free, and like we had money to spare. And at $20 per bottle, with 5 bottles sold (that I saw), they made $100 in revenue.
Educated bourbon drinkers
Bourbon is different from beer, and should be drunk differently. Appreciating the distinctions between bourbons, and recognizing a fine bourbon, is much easier when you know how to appreciate the scent, the taste, and the aftertaste. The tour guide educated us on the correct glassware, where the bourbon should be placed on the tongue, and other notes for proper bourbon appreciation. This education won’t make a difference in dedicated abstainers like me, but it could well make the difference between an indifferent bourbon drinker like my father and an enthusiastic bourbon drinker like my brother, which can in turn make the difference between a bottle every few years and a bottle every few months.
People like familiarity. They like stuff they know about. I now have a relationship with Maker’s Mark: I’ve met their people, walked their grounds, learned about their signature red wax. When I walk into a liquor store, there’s only one bourbon I’ll recognize. Which am I most likely to buy?
As I mentioned, we each got two servings of bourbon at the end of the tour. Glass #1 was the standard, original Maker’s Mark. This glass would be worth giving away just for the benefits mentioned above. But we also received, in Glass #2, the new pre-mixed Maker’s Mark Mint Julep. This product (dipped instead in green wax), is fairly new, and relatively few people are even aware of its existence. By offering it to everyone who goes on tour, they have an effective way of spreading the word about a new product for way less than the cost of a Superbowl Ad.
Think about your monetization
Does this mean you should never charge people for your value? Of course not. Even in the above example, the distillery is charging for their bourbon. The goal is simply to get the proper mix of direct and alternative monetization.
Don’t just slap a price tag on everything you create. Look at everything you do, and ask yourself.
- Is this of value to my customers? Why is it of value to them?
- How much would someone pay for this?
- How else could I monetize this? Sell ads? Advertise my own products? Affiliate marketing? Lead customers towards high-margin products?
- What other benefits could I derive from this? Traffic increases? Education? Buzz in social media?
- What is the best way to derive maximum benefit from this value I’m providing?
Resources for Further Reading
Free: The Future of a Radical New Price
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