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To Charge or Not to Charge? What’s Right for Your Next Branded Experience?

Did you know that 2.1 million people visited Scotch whisky distilleries in 2019?

And that was before Diageo, a leading multinational alcoholic beverage company, invested £185 million in Scotch whisky tourism, including its launch of Johnnie Walker Princes Street in September 2021. Given that Scotch whisky tourism is a relatively new thing, figures like these are impressive to say the least.

Back in the 1960s, tourists and locals alike started showing up at distilleries eager to learn about the whisky production process. Fast forward 60 years and they’re not only still coming, they’re doing so in droves and paying upwards of £20 a piece for the experience. To be clear, tours and tastings didn’t always have a cost associated with them. As recently as 10 or 15 years ago, they were often still free. Back then, distilleries offered them in the hopes of covering their costs by selling a few bottles or unloading some merchandise from the gift shop. Most were run as cost centers and had the shoestring budgets and stingy samples to prove it. 

At the time, most distillers didn’t fully appreciate that their tours would one day become a powerful tool for building their brand and attracting new customers.

What the Data Says About Charging for Branded Events

While there’s no doubt that every brand would like to charge for the experiences they offer their customers, the reality is that many don’t. Beyond the potential for creating a new revenue stream, there are other factors to consider when deciding whether or not fees make sense. AnyRoad data comparing no-show rates, pre- and post-visit net promoter scores, and brand conversion for free versus paid experiences can help shine a light on the issue. For example, just consider that:

When experiences are free, the no-show rate is 48% versus just 14% when they are paid.  

If people don’t have to pay for an experience or event upfront, there’s no penalty for not showing up. On the other hand, they’re often compelled to use something they’ve already paid for so that they don’t wind up feeling like they’ve wasted their money. Ultimately, if you decide not to charge for your experiences, you can expect that close to half of your bookings won’t show up. The fact that those no-shows won’t have the same opportunity to spend money or become brand fans is a pretty compelling reason to charge for experiences whenever possible.

Pre-event net promoter scores are higher when the event is free (55) versus paid (38), while post-event they’re almost the same (79 free versus 77 paid).

Lower pre-visit net promoter scores for paid experiences may be attributed to guest uncertainty at the time of booking about whether or not the experience is worth the money. It could also be due to brands trying too hard to justify the price by listing everything you’ll get. To avoid this, ensure that your online booking messaging is emotive rather than just a list of features and benefits. For example, most paid alcohol experiences focus on how many drinks the consumer will get rather than trying to build excitement and anticipation for the tour. While it’s important to convey the facts, they should be secondary to trying to build some enthusiasm.  

Paid experiences have a higher brand conversion (83%) than free experiences (70%).

Brand conversion measures the change in brand perception over time while isolating the impact of the experience. Paid experiences result in 13 percent more brand conversion than free ones, meaning that they are greater catalysts for positively impacting how consumers view your brand.

The Bottom Line

The growth in Scotch whisky tourism is giving rise to a new generation of distilleries — one that puts the visitor experience first. Facilities across Scotland are building or renovating their visitor centers thanks to higher ticket prices and premium offers. While charging higher prices create higher expectations, in the long run, paid experiences have been proven to have a greater impact on brands than free ones. 

The take away? If you’re not charging for your experiences, maybe you should be.

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