Making Money by Giving Something Away

Posted On: 2006-11-22

Is it something you could do?

Yesterday we had to make a run down to Brisbane. Steve needed some time out of the office, the shop needed some parts urgently and we needed to do some Christmas shopping so off we went.

Of course, we live a very sad life so whenever we go anywhere we're always looking at things from a marketing and business point of view. On long trips we often look at signs; the business signs that you see as you drive through a town or a village. They can be a great source of inspiration because some of them are very creative, not only from a marketing point of view but also from a graphical point of view too.

The sign that really caught our eye yesterday wasn't graphical at all, in fact it was very plain but it was very cunning and certainly appealed to anyone who saw it.

This particular sign was at a gas station on the highway. This gas station is situated quite some distance from any major centre and right about the point most people who had left Brisbane might be thinking about stopping for a break.

All the sign said was 'Buy two cups of coffee and get 4 cents a litre discount'. People around here would immediately know that the discount was referring to gas purchases and four cents a litre is quite a reasonable discount.

To get that discount all they had to buy was just two cups of coffee and that would sound like a real bargain to just about everyone. But was it really such a bargain? Bear with me while I do a little maths here.

Most people would think it really was a bargain but when you do the maths it's quite possible that the gas station is actually making more money rather than losing money. You see, a cup of coffee here costs around $3.00 so for two you would be paying $6.00.

No car in Australia has a fuel tank with enough capacity to turn those figures into a genuine bargain for the motorist even at 4 cents a litre but what about the owner of the gas station? Isn't he losing money by offering a discount on the gas?

My head's a little fuzzy at the moment after a day on the road but it seems to me that he's actually making even more money on the deal. While he might be charging $6.00 for two cups of coffee the actual cost of making that coffee - ingredients, labor and the hidden costs - don't even reach $2.00 a cup (that's a figure based on what I know of the café industry here).

So he's got $4.00 to play with and someone would have to buy 100 litres of fuel before the gas station's profit on the coffee was totally expended in the gas discount. No regular family sedan here in Australia has a gas tank that holds 100 litres and by the point in the journey where the gas station is most motorists would only need around 30 litres to fill their tank.

By my reckoning that means that he's making even more money by giving something away.

Now before you rush into giving something away for free in the expectation that you will make money I think you might need to take a cold shower. Obviously the gas station owner has spent some time doing his sums and making sure that he really will make money out of the deal. And that's what we have to do if we want to make money and not go bust.

But those sorts of deals are there if only we care to look for them and to think that we can't offer something like that here in adult may be short-sighted. It's certainly something worth thinking about because it's the people who think outside of the box who are the ones who make the genuine money here.

On a totally different topic but one that still has application to webmasters, yesterday we had a rather interesting non-meeting with a Dell employee. The computer shop that I'm involved with doesn't have a lot to do with laptops so while we were in Brisbane we wandered into a Dell retail outlet to look at laptops.

We displayed all the interest we could in the product but the sales person took one look at us and dismissed us as not being worth their time. Perhaps we didn't look like people who might be interested in laptops - perhaps she thought we were too old to be computer literate. Whatever the reason was she wasn't interested in serving us so we left without a laptop.

I wonder how often we look at some of the surfers who come to our sites and think that they aren't worth dealing with because they don't look like they would really want the product we're selling.

And if you don't think that webmasters ever do that just stop and consider all those sites that are out there that are only geared towards broadband. Don't dial up users have money to spend on adult products these days?