1) Are there "Infomercial Experts" that
deal only in Direct Response Advertising?
Yes, but very few. There are a lot of "self
proclaimed" experts who have had brushes with direct response
advertising in one capacity or another. But, there are very few
people in the industry who deal on a daily basis with the constantly
changing landscape in DRTV.
2) How do I know if an Infomercial Expert
is really an expert?
Check their references. Look at what they've done
in the direct response field. See where they've worked and what
areas of the Direct Response Industry they actually have expertise
in. Finally, ask to see their DRTV reels. You'll be able to see
if your campaign coincides with their expertise. In my opinion,
this is where most 1st timers fail. They trust the wrong person.
Make sure from the start that this person will be able to give you
the help you need to give you the best possible chance of success.
(That's what my service is all about!)
3) What services do I need
to get started in direct marketing?
To advertise and collect
an order you’ll need to find creative, media buying, telemarketing,
credit card processing, and fulfillment services. Even if you are
generating names, you’ll need to mail brochures and/or video,
to those who have an interest and want something to study before
4) What is the difference
between inbound and outbound telemarketing?
Inbound -- Live operators
who read scripts describing products, prices, etc. to take orders
or collect information in response to consumer calls to toll-free
numbers in advertising. The cost can be charged by the minute or
by the call. Budget for deposits, set-up charges as well as per
call charges of approximately $2.50 each. Set-up charges include
a written telemarketing script and its computer programming as well
as operator training and familiarity with the product/service. Monthly
minimum charges are also common.
Some inbound services offer
more extensively trained operators who are better for more complicated
and/or expensive offers. Extensively trained operators "convert"
or actually close sales more often.
Outbound telemarketing is
used to sell products/services to names who previously purchased
products or were created through advertising. Outbound sales often
take a percentage of the sales and require more extensive training
on the product/services. Many companies have their own internal
telemarketing staff to maximize sales.
Interactive Voice Recognition
provides computerized telemarketing scripting where information
can be captured as consumers respond to prompting. This is best
for offers when the information to be collected can be kept brief.
5) What should I expect in
my telemarketing script?
Concise wording built to
capture the order and its "upsells" (definition available
in glossary) in the shortest time possible. Charges are often broken
out by information to be collected; name, address, phone, credit
card number. Not many companies are doing it yet, but email address
collection gives you the opportunity to communicate with your customers
for free! What could be better for customer service and follow-up
Telemarketing reports show
calls per hour by phone number.
6) What is database profiling
and how can it help me?
The most important process
in direct marketing is building a continuing relationship by providing
value to the consumer. Profiling offers you the best understanding
of the characteristics of a consumer group including psychographic
and geographic details as well as media preferences.
Analysis of your own database
gives you the information to target your ad spending more efficiently
for maximum return. You may notice geographic preferences or the
downscale/upscale preference for your products/services.
With this information you
can select direct mail lists (also profiled) that best match your
perfect consumer. Your media company can select tv programming,
radio and magazine formats to most efficiently target consumers
based on these profiles.
For further details, see
database profiling section.
database profiling section---
Could you be sitting on a gold mine? You might be with your customer
list. At the Center for Direct Marketing, we are big believers in
getting the most use out of your database.
Learn from your consumer database. Gain a better understanding of
the consumers purchasing your product(s)service(s). Don't be surprised
that the consumer profiles don't quite match your concept of the
target. Research could change how and what you market. It can be
invaluable to have a snapshot of the income, occupation, urban/rural,
and general psychographics of your consumers. A sample of your consumer
database of 5000-10,000 names can generate a statistically sound
profile of purchasers for about $3,500.
Database profiling has been around for two decades. In its most
simplest form, it is matching your customers' addresses to demographics
and lifestyle factors.
/ With database profiling you can:
/ Segment consumers by socioeconomic factors
/ Efficiently target top consumers
/ Select markets
/ Compare media
/ Purchase targeted mailing lists
/ Identify growth markets
/ Market your customer list with higher value
7 ) What is the "club" concept and what can it do for me?
The "club" concept
is a profit center for many companies that permit these marketing
companies to add a query to each telemarketing script for travel
or discount buying clubs. Companies often develop special clubs
designed for their particular product line.
For beauty offers, clubs
may offer products on a "continuity" (definition available
in glossary) basis that ship product on a regular basis; newsletters,
samples of new products, as well as discount buying opportunities.
Golf companies may offer travel opportunities in their clubs with
discounts on trips to golf locations as well as golf products and
A club marketing company
may pay an advertiser approximately $4.50 "per read,"
or for each time their script is read to a consumer. If your average
cost per telemarketing call is $2.50, you can see the clear advantage
for this addition.
8) Can I use direct marketing
to drive retail?
Direct response broadcast
advertising has been the hot area for manufacturers and retailers
in recent years. The fear was in defeating the retail environment.
But with case studies coming out from juicers to videos selling
12 units at retail for every one sold through broadcast, the movement
really exploded.Often advertisers configure the offer differently
for television, offering more of a package of products for a higher
price, while the product and accessories are available separately
Escalating advertising rates
have been another reason for the significant growth in direct marketing
advertising dollars. The trade-off in using the lower direct response
advertising costs is "pre-emption", but that is easily
overcome.The sales results expectations must be lowered, however,
when driving retail through direct response. Obviously, if a consumer
understands the product is available at Sears and they can go examine
it personally, they often postpone the decision. That is why many
companies take advantage of first making the product available through
direct marketing advertising venues (the preliminary marketing strategy)
and then often moving into retail in six months or so.Every
company has its own competitive
environment and marketing objectives that push a variety of strategic
scenarios. While a sales to media cost ratio of 2:1 is a worthy
direct response campaign, often a retail driving campaign can only
expect a 1:1. With retail sales of 10+ units for each in direct
response, the advertising has not only paid for itself, but also
driven the additional sales volume.The media costs in direct response
are often half of those of traditional advertising, so each ad dollar
goes further. Traditional broadcast buying may be coupled with direct
response for the best return. For instance, a golf product may need
the presence in golf tournaments where direct response rates may
not be available. Also, marketing objectives may call for specific
buying in news and prime time, two areas not frequently available
with d.r. rates. Direct response provides immediacy of consumer
sales which can be analyzed to continually refine the media purchases
weekly, thus improving the media efficiencies and adding great value
to the traditional campaign.
9) What are my financing options?
Banks are reluctant to help
direct marketers/inventors unless they have a going business concern
of substance with some collateral. Our experience is that many inventors
spend every dollar on developing their product and have little left
when ready to go to market.
Many companies will step
up to finance a project once it has proven worthy. This involves
some sort of marketing and some cost. The time frame may be from
one week to one month depending upon the choice.
The costs for financing vary
from a factoring percentage of about 5% to a substantial percentage
of the campaign’s profit. The greater the success and volume
of total dollars, the smaller the factoring percentage, down to
as low as 1.5%.
The common rule of thumb
for success and interest by financing parties is a 2:1. That means
for every dollar you spend on media, $2 comes back in revenues.
While there are many ways
to bootstrap your business, such as building a web site, or going
to a shopping network first, you can start small by going to catalogs,
direct mail and/or direct print. Or you may feel that tv and/or
radio are one of the ways to go. Even though these areas may seem
more expensive, testing to determine the success of the offer and
creative is relatively inexpensive.
Any of these methods involve
some costs. Shopping networks require a minimal level of inventory.
You determine the strength of your creative with as little as one
week to one month of advertising. You will need to have materials
created. Even a web site will require some printed material to mail
to those who inquire about a product as well as reorder forms to
be shipped, etc.
The advertising costs to
test can vary from $5000 to $50,000 or more depending upon the objectives
and creative choices. Some offers test several price points, offer
configurations, and commercial lengths. National advertising and
market size will also have an impact on the cost of testing.
And, of course, any advertising
will require the ability to have inventory available, handle calls
from consumers, collect and process orders, as well as ship product.
10) Why is compelling creative
so important in direct marketing?
Consumer time spent with
the message is usually fleeting. Direct marketing generally not
only makes an impression, but requests action, such as making a
toll free call which in turn additionally requires recognition,
and the writing down of a number.
Getting the consumer’s
interest, securing the decision to act, and getting that action
is the key to success in direct marketing. No advertiser can afford
the luxury of a big build-up to wait to tell you what the product
is at the end. That’s why "hard-sell" commercials
are often used in direct marketing. "Softer" creative
has tested with poorer results.
Describing benefits quickly
is key next to the product name and action requested. Improving
direct marketing results requires constant attention to every detail
and creative is the first point of consumer sales contact.
I’m just too busy with my business to deal with the building
of a web site. Can’t I just put it off?
There is no excuse not to
have a web presence, now that is it inexpensive and relatively easy
with recent software advancements. Even a minimal site helps to
stretch the value of every dollar in advertising you spend.
Consumers go to the site
for further details. They are exposed to additional product/service
offerings and can leisurely review your site when it is convenient
for them. Having a toll-free number at the site offers consumers
the opportunity to order or ask more questions, giving that personal
touch. Securing transactions online adds a little cost, but ease
of ordering will increase overall results.
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