Is Dr. Pepper Missing the Opportunity in the GNR Deal?

Posted By Joe Pulizzi on December 01, 2008

I wrote a month ago about how I thought the Dr. Pepper promise to Guns N’ Roses fans was a good idea. The deal was to give every American a free can of Dr. Pepper if Guns N’ Roses released their album by the end of the year. Of course, Dr. Pepper never thought it would happen, and it built up some good buzz for the soda maker in the process.

GNR Latest CoverThis NY Times article would seem to disagree now that GNR has released Chinese Democracy.  The article states that Axl Rose of GNR had his lawyers send “a harshly worded letter to the soft drink maker complaining of its ‘appalling failure to make good on a promise it made to the American public,’ and demanding a public apology, more time for thirsty fans, and payment for piggybacking on the ‘Chinese Democracy’ publicity.”

The reason…when the album was released, Dr. Pepper gave fans 24 hours to go to the website and get their free can.  Problem was that there was so much traffic and demand that it crashed the site. Since then, Dr. Pepper had extended the offer (as of this blog post, the offer is no longer available anywhere on the site).

Here’s where I think Dr. Pepper is missing the boat.

Millions of Dr. Pepper loyalists are contacting DP directly to get a lousy free can of soda. I have a hunch that these people really like to drink Dr. Pepper. These are people that Dr. Pepper probably has no information on at all.  What an opportunity!  Dr. Pepper can now get the contact information of these loyal fans and add them to their database (which is very hard for business-to-consumer companies to do). Name acquisition is often quite expensive ($2 - $8 per name on average in the magazine business). For Dr. Pepper, it only costs them a can of soda.

Point – Keep the offer up as long as possible, at least through the end of the year, to get as many names as possible.

Let’s say that Dr. Pepper received one million names as part of the promotion at a cost of 20 cents per name.  That would be a $200,000 hard cost.

Let’s also say that, on average, each one of those Dr. Pepper fans spends $20 per year on Dr. Pepper (I’m assuming more, but that is a solid average. Heck, we aren't HUGE fans and we spend at least $40 per year on Diet Dr. Pepper.). So those fans spend $20 million per year on purchasing Dr. Pepper.

Then, what if Dr. Pepper created a content program around the Dr. Pepper brand to those million fans?  If you take the Association of Publishing Agencies content study that states an average 8% sales lift through custom content programs, that’s an additional $1.6 million in Dr. Pepper sales.

That’s an 800% ROI.

What am I missing here? Sounds like Dr. Pepper is focusing more on the costs and less on the opportunity in their cans.

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