HOW DRTV CAN WORK FOR YOU
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Some Frequently Asked Questions about Direct Response TV marketing.
Familiarize yourself with the following information and you will be able to evaluate your product's likelihood of success in a direct response TV campaign.
- What is Direct Response TV?
- Are there different types of DRTV commercials?
- Why Is TV a good medium for advertising products?
- What are the benefits of a DRTV campaign?
- What kinds of products do best with DRTV and infomercials?
- Does my product need to have mass appeal to be appropriate for DRTV?
- Is there a particular price point for successful infomercial "As Seen on TV" products?
- Will my product do better selling over the Internet, through DRTV, or in retail stores?
- Is there an optimal markup ratio for successful products?
- Who watches infomercials and who buys the products they promote?
- What is the single most important reason people buy products through a DRTV spot or infomercial?
- How important are add-on products (called "upsells" in DRTV parlance) for DRTV?
- What other factors do I need to consider in evaluating my product's chances on DRTV?
- What is the cost of a DRTV campaign?
- Describe the marketing arrangement between a DRTV producer and the entrepreneur.
- Is there a quick evaluation to see if my product might be right for DRTV?
1. What is Direct Response TV?
Direct Response TV (DRTV) refers to commercials made for TV in which viewers are asked to place an order during the advertisement through a toll-free number. This contrasts with commercials where the objective is to increase only the visibility of the brand name.
2. Are there different types of DRTV commercials?
There are two forms of DRTV: the short form which is 1-2 minutes in duration and the long form which is 30 minutes long. The long form is commonly referred to as an "infomercial."
3. Why Is TV a good medium for advertising products?
TV is by far the most powerful medium available to advertisers. DRTV uses this unrivaled power of TV to create the "impulse to buy" and drive sales to retail, Internet and other distribution channels.
4. What are the benefits of a DRTV campaign?
DRTV has created overnight sensations and tremendous demand for products. Both the long and short form of DRTV provide companies with immediate information about the effectiveness of their ads. This instantaneous feedback is available only through DRTV. If it's not working, you can change the ad immediately to get an improved response. And with a successful DRTV campaign you are building a loyal customer base of people who will continue to buy your products and add-ons long after their initial purchase.
5. What kinds of products do best with DRTV infomercials?
DRTV is the best advertising format for new and innovative products that can be demonstrated and shown to make life easier and better. Health and fitness products; cosmetics; skin, hair and other personal care; nutritional supplements; house wares and appliances have been among the most successful products marketed through DRTV. Financial and business opportunities and some educational and personal improvement products have also done well.
6. Does my product need to have mass appeal to be appropriate for DRTV?
Yes. The larger the potential market for your product, the better your product will do. TV reaches a very large and varied audience. That's the benefit of a DRTV campaign. The more specialized or targeted the market is for your product, the better it would do with a targeted Direct Mail campaign rather than Direct Response TV.
7. Is there a particular price point for successful infomercial products?
Traditionally, price points below $30 have done the best in the short format and products priced between $40 and $300 have done well in the infomercial (long) format.
8. Will my product do better selling over the Internet, through DRTV, or in retail stores?
"As seen on TV" success provides shoppers with the reason to find you, the desire to find you and the way to find you.
Many successful products are available in two or three venues. Because of the unique power of TV to create consumer desire, your DRTV campaign will result in immediate sales as well as drive buyers to your Internet site and to retail outlets. 65% of DRTV buyers are also Internet buyers.
DRTV can be the driving force behind all your sales -- in whatever venue.
And a successful DRTV campaign means great placement in retail stores.
9. Is there an optimal markup ratio for successful products?
The larger your markup ratio, the better your chance of success. Divide your retail price by cost of goods. A markup ratio of 5-to-1 offers your product the best chance or being successful in a DRTV campaign. A ratio of less than 3-to-1 is most likely too low for success in this medium.
10. Who watches infomercials and who buys the products they promote?
Females represent about 75% of DRTV buyers. Homeowners represent about 73%. Higher income and ethnically diverse buyers are on the increase.
11. What is the single most important reason people buy products through a DRTV infomercial?
TV is without question the most effective avenue for reaching and persuading vast numbers of people. TV creates the emotional impulse that leads to a purchase. No medium delivers sales like DRTV does!
12. How important are add-on products (called "upsells" in DRTV parlance) for DRTV?
In 1998, "upsells" added 15% to orders; in 1999, 20%; and in 2000 they added 29% to DRTV orders.
It is critical that your product has consumables or add-on's; or will spawn new, related products that can be sold to your loyal following. These "back end" sales will continue to justify the costs of a DRTV campaign.
13. What other factors do I need to consider in evaluating my product's chances on DRTV?
One of the greatest potentials of DRTV is its ability to create loyal, lifetime customers. Your product must have a way to capitalize on this potential through "back-end" or "aftermarket" products that can be offered at the point-of-sale and after the sale is made.
Other important factors are:
- Can your product be reliably and easily demonstrated on TV?
- Does your product have proven retail or direct sales?
- Does your product solve a real problem?
- Does your product make life easier and better?
14. What is the cost of a DRTV campaign?
For the short form (1 minute): InfoWorx's charges are in the neighborhood of $35K plus royalties. This includes:
- TV Production
- TV Airtime
- Telemarketing and Fulfillment
- Total Project Management
- Distribution
- The Worx
For the long form (30 minutes): $150K plus royalties. This includes:
- TV Production
- TV Airtime
- Telemarketing and Fulfillment
- Total Project Management
- Distribution
- The Worx
15. Describe the marketing arrangement between a DRTV producer and the entrepreneur.
These can vary in the industry. In some arrangements, the product owner gives up all rights for a small royalty and no investment. With InfoWorx, the client maintains control, funds the project up until media rollout, and pays InfoWorx a small royalty.
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