A LESSON IN WHAT NOT TO DO
Every marketing professional wants their campaign to be memorable. They want consumers to take notice — or take the bait — and make their company a big profit. But sometimes, things don’t go exactly as planned. The campaigns below certainly won the attention of consumers, but in each case, what started out as a marketing dream quickly turned into a nightmare. FIAT’S DIRECT MAIL DISASTER In 1992, women across Spain received anonymous letters inviting them to go on a “little adventure.” The letters stated, “We met again on the street yesterday, and I noticed how you glanced interestedly in my direction.” Fearing a stalker, many women locked themselves in their homes. A few days later, another letter arrived, revealing the identity of the “secret admirer” as the new Fiat Cinquecento. Yes, the creepy letters were part of a marketing campaign by the Italian car company. Fiat apologized and ended the campaign after criticism from consumer protection groups, Social Minister Cristina Alberdi, and the 50,000 women who received the letters. KFC AND HOOVER CAN’T DO MATH A shocking number of companies hold giveaway promotions without calculating exactly how much they will cost. Here are a few examples.
THE ECONOMICS OF GIVING DISTILLED INSIGHTS
On the cover, Dave talks about how gifting products to your members on special occasions can be a powerful gesture and smart business. In case any of you were unconvinced, let’s game out two scenarios, using O2 as an example, to illustrate how profitable giving away free cans and offering sales can be. Put on your math hats — it’s time to crunch some numbers. FREEBIES To keep things simple, let’s say you have 100 new members join your gym in one year. Taking Dave’s advice, you give each of these newbies a can of O2 as a welcome gift. Since O2 costs you $2.09 per can, you’re out $209. Or are you? Most folks who try O2 love it. But let’s be extremely conservative and say that out of all of your new members, just 10 of them become regular buyers, drinking two cans a week. The numbers add up quickly. If you have 10 members buying two cans a week at $3 a can spread across 52 weeks, that’s $3120 in retail sales from these members alone. Whoa. SALES You know we’re big fans of affiliates like CrossFit Unstoppable that have done “$2 Tuesday” sales of O2 in the past. The rules were simple: Members could buy one can of O2 that day for $2. Not only was this a great way to introduce our new caffeine free flavors to longtime members, it’s also a sound business decision.
Here’s the breakdown:
Let’s say that on the day of the sale, Unstoppable sold 48 cans. Since these sold at $.09 below cost, they’re down $4.32 for the day. But look at the big picture — 48 people bought O2. Assuming only half of them have ever tried our natural recovery drink before, that’s 24 new members exposed to the brand! Now, if just 18 of these newcomers like what they tasted, and became regular O2 drinkers (two cans a week), Unstoppable is looking at $32.76 dollars in profit per week, or $1,703.52 in profit per year. Suddenly that $4.32 investment doesn’t seem so bad after all.
Whether through freebies or sales, this sort of generosity pays off tenfold. Not only are you increasing your retail figures in the long run, you’re giving your members something they can feel good about!
O2 | PAGE 2 | DRINKO2.COM
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