It used to be relatively easy to test, tweak, retest and rollout DRTV short-forms and infomercials. Costs, such as TV time, production, were all much, much lower than they are today (in 1990, a half hour on a major cable network on Saturday morning was less than $5,000). And you didn’t have the Internet to both enhance your DRTV efforts and frustrate them at the same time. Plus, more and more companies are using DRTV, including mainstream Fortune 1000 firms, so clearances are not what they used to be.
Yet there are winners out there, rolling out to big numbers, crossing the finish line, if you will. So to be successful in this day and age, what kind of resources will you need? That’s the question at hand.
When we factor in the increased costs, the difficulty of tracking web orders driven by DRTV and consumers tuning out ad messages, we see fewer examples of winners right out of the gate. Certainly there are still some $19.95 kitchen gadgets that are successful, but not nearly as many in the past. In fact, sometimes it takes offers in the $9.95 to $14.95 range for two items — not one –just to break through the clutter and overcome consumer apathy.
Consequently, what you see more of are 2-step programs and higher priced products, so that there is more margin to work with to justify the higher costs of using DRTV advertising. We’re also seeing a lot more emphasis on upsells and the backend. In short, us DRTV marketers have adapted to market conditions by changing the product mix, margins and how we market via this medium. And you also see a lot more testing, tweaking, re-testing in order to find the winning formulas. A few examples:
· An appliance company tried to sell their product and upsell a related service. It did not work. We then recommended that they give the product away free and sell the service. After changing the offer, revising the creative and updating the Web site, the new formula worked. It’s now in rollout.
· Another client tried to sell a $100 product in one step. It did not work. We recommended converting to a two-step process with financing, not just a multi-pay offer. It’s now rolling out.
So it is very possible and likely that you can be very successful in DRTV these days. It just takes a different mindset, and the resources to go through one or more rounds of engineering and testing in order to “crack the code.” Basically, you need to budget more, recognizing that it’s going to take a lot more money to get to rollout than before. But since the rewards are there, it’s usually worth the investment. Specially, the “tweaking and re-testing” will include testing:
· Multiple offers – test three, four, five or even more offers.
· Different marketing communication messages – for each offer.
· Different in-bound and/or out-bound telemarketing centers and scripts
· Different online landing pages, including design and copy
· Sufficient media across a wide range of networks and broadcast stations
· Measure the lift on other channels that is driven by DRTV
· Selling processes like out-bound to convert leads to sales
· Adding more upsells, both on the telemarketing side and the Web
There are a few more “fine points” that you also need to consider:
· When you move from a simple product sale to a 2-step or more complicated purchase, you’ll need to make sure your in-bound and out-bound telemarketers can handle it. It’s one thing to simply take a simple order, and another to deal with a product that requires specialized knowledge and selling. Once you find the right people or vendor, another issue needs to be dealt with: having enough of those trained people available during peak periods when the bursting effect takes hold.
· You will need to set up a system that tracks and accounts for web orders and leads that were driven by your DRTV program. The last thing you want to do is cancel profitable TV spots because you can’t allocate Web activity to them.
· You will also need to coordinate your media buying with your in-house staff or SEM vendor that is handling your paid search engine marketing. If you don’t understand the effect DRTV has on search, you will make wrong media buying (or canceling) decisions.
So here’s the bottom line: Allocate an additional 25 percent to your production budget, and double or even triple your media budget, to account for the extra time and resources it will take to get to the finish line.
Immediate profitability is no longer the goal in most cases. It’s time to allow for the lifetime value of a customer, and what products you can continue to sell over time.