As the Media Director at The Brandon Agency, I prefer numbers to words. So for this blog entry, I decided to appeal to the other numerical nerds out there in the world wide web and blog about the 1,2,3’s.
Recently, I became a mom to a healthy baby girl. And like all new moms, I signed up for every email newsletter, “fanned” every Facebook page, and researched every website that had anything to do with babies, baby health, baby products, baby foods, baby needs – you get the point. Suddenly I started receiving the most amazing thing in my mailbox – free samples. I got Enfamil and Similac formulas, Huggies and Pampers diapers, Bordeaux’s and Desitin rash cream.
When it was time for me to come back to work, I needed to start supplementing some formula into her routine. I chose to try the Enfamil because it was a pretty large container and it was right there in my house – I didn’t need to run to the store and pour over all the different kinds. It was easy. And because I started using it, I just decided to stick with it since it was working how I needed it to work.
The package that magically appeared at my doorstep from Enfamil had two 8 oz. containers of powdered formula inside. My guess is that it probably cost them $6 to mail and all the materials including the product inside may have cost them $4. Im estimating here.
Cost to company = $10
When it was time to go and purchase at the grocery store, a 24 oz container of the powdered formula costs $23. I buy two containers every other week since Im just supplementing it and I need one for home and one for her daycare.
Monthly formula cost = $92
Babies typically get formula for the first year of life and we started supplementing when she was 2 months old. A family who solely uses formula would have a decrease in monthly formula cost after 6 months, but we don’t use that much of it so Im keeping the cost the same.
Cost of formula for 2-12 months = $920
Essentially Enfamil made about $900 (give or take) from just my family alone. Now lets say that they send out 5,000 samples to expecting families.
Cost to send 5,000 samples = $50,000
And lets say that 2.5% of expecting families use the formula sample and decide that they like it and go to the store to purchase it.
5,000 samples * 2.5% = 125 families
125 families * $920 for yearly formula (assuming all families are like mine, which realistically they would probably purchase a lot more formula) = $115,000
So for them to actually send the formula it cost about $50,000 and they made about $115,000. This doesn’t take into account the mark up that the grocery store receives, however they made about double what they spent. Not too shabby.
I believe that with a targeted mailing list, and a strategic plan – sampling can really work in a companies benefit. Nevermind the fact that now I am an advocate and endorse the product via word of mouth, I fanned the facebook page and joined their email newsletter. In my opinion, creating trial really adds up.