Avoid The 10 Biggest
Direct Response TV
By Peter Koeppel
dream of making millions by marketing your product through
infomercials, you’re not alone. Direct response television (DRTV)
provides an excellent platform for marketing innovative products
directly to consumers, eliciting impulse responses that lead to
to the Electronic Retailing Association (ERA), 63% of Americans watch
some form of DRTV advertising. That’s 136.2 million viewers, nearly
30% of whom have purchased something they saw advertised in an
jump into a DRTV campaign to sell your
product, however, understand the do’s and don’ts. By avoiding
these ten common DRTV marketing mistakes, you have a better chance of
making a mint in infomercials without your dream becoming a nightmare.
Common Mistake #1: Not Working With Experienced DRTV Vendors: Only a
small percentage of DRTV products are a hit; those that do make it big
usually have seasoned experts in all areas of the DRTV marketing
process behind them. Make sure your vendors have worked on a wide
range of DRTV campaigns, and ask them for case histories so you can
evaluate their performance and capabilities. Consider the following:
Review the TV
company’s commercial reel to assess the quality of their
buyers will know when and where to purchase optimum airtime to
reach your target audience. They should have the leverage to
access low media rates for the test and rollout of your
product/service and software that lets them link up with the
telemarketing firms to track and evaluate media performance.
The best DRTV
firm can effectively sell, handle large call spikes, provide
real-time access to results, and record all calls so you can
listen to them and evaluate performance.
partner should be able to quickly fulfill orders from the
telemarketing firm and through the web, but they should also have
a call center to answer customer service calls, provide
warehousing, inventory control, tracking, and more.
processors work specifically with the DRTV industry, so find
and hire one of these companies to process credit card orders in
large numbers. The merchant processor should be connected with
your fulfillment house.
Common Mistake #2: Charging Too Little Markup: In order to cover the
many costs of a DRTV campaign, such as media, telemarketing, and card
processing costs, you need to have a 5:1 or better product-to-cost of
goods markup. If you don’t have sufficient markup, your infomercial
is less likely to be profitable.
Common Mistake #3: Not Understanding the Breakeven MER and CPO:
If you don’t know the breakeven Media Efficiency Ratio (MER)
and Cost Per Order (CPO) for your DRTV program, you will have a
difficult time evaluating its success. Prior to launching your media
test, you must understand how much return on investment (ROI) you’ll
need in order to attain breakeven performance. Your DRTV media buying
agency should provide you with worksheets to calculate MER and CPO.
Common Mistake #4: Selling a Product Without Mass Appeal or DRTV Success:
The most successful products sold through DRTV have mass appeal.
Because TV targets a wide audience, products that appeal to broader
demographics do better on DRTV. Also, bear in mind that certain types
of goods traditionally work best on DRTV: health and beauty, fitness,
household, hardware, lead generation, consumer electronics, and
business opportunity materials. If your product doesn’t fit into one
of these categories, you have less chance of it becoming a mega-hit
Common Mistake #5: Failing to Utilize Upsells and Continuity Programs:
You can generate additional revenue from your DRTV campaign with
upsells such as a buy-one-get-one-free deal or by offering customers
an additional, related item when they call in to order. With
continuity programs, you’ll ship product to the consumer
automatically each month, with their permission, so you establish an
ongoing revenue stream. If your DRTV program has a continuity
component, then your campaign can be less profitable on the front end,
since you have ensured an ongoing income stream once the consumer
enrolls in the continuity plan. In general, expect 30-40% of consumers
to enroll in a continuity program for an average of 3-6 months,
depending on the product.
Common Mistake #6: Not Developing Competitive Pricing and a Compelling
Make sure you price competitively and feature an
attention-grabbing offer. If your product costs $29.95 or less, you
can generally sell it through a short-form commercial of one to two
minutes. Merchandise priced over $29.95 sells most effectively through
an infomercial lasting about a half hour. Develop and test several
offers to determine which will generate the best results. Giving
consumers an incentive to call now,
so they can get a discount or a free, related item, will generate more
calls and additional revenue.
Common Mistake #7: Not Demonstrating Problem-Solving Products: If
you can actually show viewers that your product can solve their
problems, DRTV is an excellent marketing format, as you’ll have
ample time to demonstrate why it’s worth purchasing. A single ladder
that can turn into 25 different ladders right before consumers’
eyes, for example, makes for a perfect infomercial; it’s difficult
to resist purchasing products when you can see how they make your life
easier, right before your eyes.
Common Mistake #8: Not Understanding a DRTV Media Test: DRTV media
tests provide marketers with daily and weekly reports on the viability
of successfully selling their product on TV.
The test usually runs over one to two weeks and typically cost
$10-$20,000. By analyzing test results, your media company can buy
more of what’s working and drop the networks, stations, and time
slots that are not working, in order to optimize performance.
Common Mistake #9: Not Utilizing the Internet: The Internet has
become a key component of DRTV campaigns with 15-50% of DRTV purchases
now occurring online. Fifty percent of people surfing the Internet
watch TV at the same time, so it’s easy for them to log onto your
website. And approximately 50% of U.S. homes now have a high-speed broadband connection, enabling consumers
to easily view videos on the web. Therefore, run your commercial on
your professionally-designed website to educate consumers about your
product and its benefits and to let them watch it again if they missed
part of it on TV.
Common Mistake #10: Failing to Take a DRTV Product to Retail:
Only a small percentage of the DRTV audience will actually
purchase your product from the infomercial. Use a DRTV campaign to
also drive retail sales and build product awareness. When you have a
hit DRTV product, retailers will be anxious to stock it, due to strong
consumer demand. Typically, successful DRTV products go to retail 6-12
months after the TV campaign begins or when TV sales begin to drop
off. Retail sales can be 5-10 times TV sales, so definitely plan to
take the product to mass retail as part of your DRTV campaign.
Infomercial sales may begin to drop off once you do, so timing of the
transition to retail is critical. Often DRTV marketers take their
product to smaller retailers before Wal-Mart, since Wal-Mart will want
the lowest price, which will affect profitability.
Operators are standing by to take your order…: Memorable,
successful DRTV campaigns require a great deal of research, planning,
and hard work. Certainty that your product is right for DRTV and an
understanding of all aspects of the process are critical. Hire an
experienced team of DRTV professionals, and let them know that
you’re as educated about what you don’t
want to do as you are about what you do
want to do. By avoiding these ten common DRTV marketing mistakes, you
exponentially increase your chances of developing the next hit
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