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 buying.

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 sales?

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 clothing.

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 at retail.

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.

11) 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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