I don’t know about you, but I like the occasional adult beverage. And one of the beverages I really enjoy is good ‘ole Kentucky Bourbon.
Actually, my interest in Bourbon is fairly recent. So, I set out to taste as many different kinds as I could to learn who’s who in the bourbon zoo That’s how I discovered Pappy Van Winkle’s Family Reserve Kentucky Straight Bourbon Whiskey.
Now, when I say “discovered,” I mean I heard about a bourbon that is virtually impossible to get. As I have learned, only about 7,000 cases are released each year. Compare that to 11 million cases of the ubiquitous Jack Daniel’s. In fact, Pappy is so hard to get that very few would-be aficionados are lucky enough to get a sip, let alone a bottle. All this piqued my curiosity, which led to a little research into what is making Pappy so incredibly popular.
1. Pappy’s is the real deal.
In the late ‘90s, 20-year-old Pappy received an unheard of 99 rating by the venerable Beverage Tasting Institute. All three Pappy Bourbons (15, 20 and 23 years old) have maintained lofty ratings over the years. All by itself, quality might not be quite enough to catapult a brand to the top of the popularity scale. But getting great reviews certainly can’t hurt.
When you’ve got a top-quality product, the word tends to get around.
2. There is a great story behind the Pappy brand.
One part of the Pappy Van Winkle story is what happens in the secondary market. Last year, the suggested list price of Pappy Van Winkle’s Family Reserve Bourbon ranged from US$79.99 for the 15-year-old, to US$249.99 for the 23-year-old. According to the BOURBONR Blog, secondary market prices for these two ranged from US$500 to US$1,500 or more (in 2013). Wow! Retailers who are lucky enough to get a few bottles often auction them off, hold a raffle, or make them available only to their best customers. Another anecdote in Pappy’s story.
Everyone loves a good story. In fact, storytelling has become a huge deal in the marketing world. And, when the story is a really good one, as in the case of Pappy, it helps create a subliminal connection with the product.
3. Not just anyone can have it.
If you've got a very successful product, there is always the temptation to produce as much as the market will absorb. In the high-end, luxury market, that can cause problems in the longer term as the product becomes too readily available and loses that special something. Plus, faced with a seemingly insatiable demand, how many of us would be tempted to raise our price? Not company president Julian Van Winkle III. Like other Van Winkles before him, his philosophy is unshakeable… make a good product, keep inventories low, and keep demand high.
People want what they can’t have. For Pappy, keeping the quantity low and price increases to a minimum have been conscious strategies. Not only does scarcity add to the brand’s cachet, it protects the business from any drop in demand during hard times.
What about your business?
What separates Pappy from so many other beverages and other products is a rock-solid value proposition. So, the first question to ask yourself is twofold… how relevant is yours and are you doing everything you can to support it?
- Perhaps scarcity is not the right model for your business, or at least your entire business. But might it play a role in some part of it? Have you used the concept of scarcity to make your customers feel privileged to have worked with you, or owned or used what you’re offering?
- Have you got a compelling story that makes your business, products or services more interesting – possibly irresistible?
- Is your quality the stuff of which business legends are made? Are you the real deal? That is, are the claims you make grounded in reality – absolutely supportable?
Big questions. How big are your answers?
Chris Ward is a Principal with StrategicRetreats and founder of Riverhorse Strategic Advisors. Over the past 20 years he has facilitated dozens of meetings, workshops and retreats and conducted more than 1,000 key informant interviews for organizations of all types and sizes. An expert in strategic planning and branding, he helps clients develop very specific plans to achieve corporate goals and own their space.