Over the last six months or so, Pepsi has been running a PepsiStuff promotion on many of their products. They had codes printed inside bottle caps, packaging, etc, that you could enter at their PepsiStuff.com website. Each code was worth a point or two and you could trade in your points for various things like caps, shirts, and MP3s. There were larger prizes, but I never got close to those.

Typically I’d buy a Diet Pepsi instead of a Diet Coke to get the code, I’d save them and enter them in the site and use them to download Amazon MP3s. They had a great link with the Amazon site and for 5 points I could get an MP3. That worked out great for my son as he got a bunch of songs for his Zune that he wanted and I got a few here and there that I’ve wanted.

Just after the new year I took a few caps that I’d gotten while skiing and went to enter them into the site. I got the notice that the promotion had ended and I could send away by mail (mail!?!?!?!) for coupons. I wasn’t overly concerned about the caps in my hand, but I was a little annoyed as I had 12 or 13 points at Amazon already and could have gotten a couple more songs. I immediately went to Amazon, but sure enough I couldn’t “buy” songs with my points.

The $1.60 worth of songs isn’t much, but it creates a bit of bad-will between myself and Pepsi. Their product isn’t different enough from Coke’s and now they’ve annoyed me. I know the promotion has to end, but they could have easily let my points exist for a month or a week beyond the end of the redemption. What’s more annoying is stores are still full of products with the Pepsi stuff labels. They manufactured too much.

What should they do?

First, I’m not sure this hurts Pepsi a lot. It annoys people, but only until the next contest and we’re used to it. I see this stuff all the time with local businesses.

But they’re missing an opportunity here. They could easily generate a lot of goodwill in a few ways.

1. Extend the promotion. Get another splash and base the new date on the amount of product in the store.
2. Ping people with points in their accounts a week before it ends. They could get a boost in sales here.
3. Let people have an extra few weeks to redeem and/or spend.

None of the these would break the bank for Pepsi and they might give them a boost.

Running a contest is always a tricky thing. You cut into margins to try and boost your visibility and hopefully gain more market share and profit in the end. But the contest has to produce goodwill to be effective. There will always be a percentage of people that want something for free and then will never come back, but you can get a good percentage of people interested and if they’re happy, then they might continue to use your service/site.

I think Pepsi made a mistake here.