Hi everyone, someone in another internet forum described a cross promotion she does. She gives out 10$ gift cards to pet shelters who in turn hand them to adopters. When adopters redeem the coupons in her shop, she then sends $5 to the shelter ($5 per coupon redeemed). She told me that she calculates that the program costs her $7 to gain a new customer. I've asked her to spell out that math for me because it's not adding up, but she's super swamped at the moment and won't be able to reply for some time. Meanwhile, I was hoping someone else who does similar marketing/promotions can perhaps explain it to me.
It sounds to me like she's spending (or losing, depending on your point of view) $15 on each gift card redeemer. Of course if the customer returns then it may be worth it. But can anyone figure out why I'm wrong about the math and how she comes up with $7?