More Free Stuff

Having figured out that giving away product is not such a bad thing with their controversial Guns N Roses promotion, Dr. Pepper is at it again with a “stimulus package” for their diet soda (as reported by MediaPost):

At www.freedietdrpepper.com, consumers can be one of the first two million to register to receive a coupon for a free 2-liter or 20-ounce bottle of Diet Dr Pepper. Consumers can take advantage of the giveaway through March 31 or until coupons run out. The coupon can be redeemed wherever Diet Dr Pepper is sold through June 30.

Giving away stuff free may scare marketers who hate the notion of “giving it away” but let’s look at the balance sheet of this promotion.

On the cost side:

  • Building & hosting the website (under $50k unless it was part of deal with Yahoo)
  • Distributing up to 2 million coupons by mail (probably under $4 million)
  • Spreading the word (PR, online ads, tagged TV/radio they would have run anyway = <$2mm)
  • Cost per trial including product under $4 per
  • Cost per name captured assuming 33% opt-in rate of under $12 per

On the gain side:

  • Up to 2 million new customers to try your product at very low trial costs
  • Store traffic for your grateful retailers who probably sell other products during store visit
  • A database of up to 1 million “fans” who opted in and can be activated for future promotions very cheaply

Assuming my math is close, and please let me know if it isn’t, this is the kind of math most marketers will drink up.

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