| If your product hasn't made it much beyond the
idea/prototype stage and your overall funding isn't
sufficient to carry the entire project, you might consider
partnering with a direct response marketing company.
Working with concepts and ideas is how these companies
have become successful. They know what it takes to create
a top-notch infomercial program.
Licensing your product and turning the ball over to
someone else may reduce or eliminate most of your risk,
but it also greatly limits your upside profits as well.
The bottom line is that you have to have an understanding
of your products' upside potential as well as what you'd
be giving up by licensing the marketing rights. Infomercial
marketing companies are usually more than willing to
help with this assessment if they have an opportunity
of providing services down the line.
In the case though where you've done your homework
and have the funding necessary to pull it off, the profits
will be yours. Let's see what it takes to put all of
the necessary pieces together.
Program and Product Development
Before your show airs and you begin taking calls, you'll
need to have your product ready to ship, and know what
your selling price can be. Commonly called, "The
Offer", this is a combination of product components
(instructions, materials, premiums, packaging, etc.),
and what your customers will pay. The general rule of
thumb is that you'll want at least a 4:1 mark up between
the cost of goods, and the selling price.
You should develop several offers in terms of product,
pricing, number of payments and premiums. Remember,
the better your product looks and the more value it
has to consumers, the better your chances of success.
Testing will be the only way to find out which offer
works the best.
The program development phase is also a good time
to understand and qualify your product benefits, unique
features, and points of differentiation to other similar
products on the market. These are the things that make
your product stand out and will be critical when the
times comes to begin producing your infomercial.
TV Production and Media Buying
The creative process involved in producing your infomercial
combined with the power of the media driving it, is
what makes the 800 number ring and drives people to
your website. There are literally hundreds of television
production companies and media buying agencies across
America, but very few specialize in the world of the
infomercial. Knowing what sells and how to make someone
get out their credit card is as much of an art form
as producing a box office hit. You'll want to hire an
infomercial producer who's established and has a string
of successes to offer.
Once hired, your producer will get to know your product
inside and out. Your understanding of the product and
close involvement here will make their job easier and
help to produce a winner. They will plan and write the
show, set up your testimonials, help find an appropriate
host, shoot it, put it together, and get your final
master ready to be dubbed and sent out to television
stations and networks. This process normally takes around
90 days from start to finish.
The beginning of production is also a good time to
find an infomercial media buying company
Many of these companies have been around since the
Pocket Fisherman and will really put your media dollars
to work. Your media buying company will build a buying
strategy that takes your product, audience and overall
marketing objectives into play. When your show is completed,
they will develop a media test designed to find out
how your show and offer(s) covert buyers.
Depending on how the test results are, you may decide
to roll out your show, or possibly re-edit, tweak the
offer and test again. It's important to realize that
your show may not be a winner right out of the gate.
The George Foreman Grill, one of the most successful
infomercial products of all time, had to be tested several
times before it was a knockout.
Your media buyer may also perform many services beyond
simply buying time on TV. They understand the industry
as well as anybody and can help you with many pieces
of the puzzle. They handle all tape dubbing and distribution
of your infomercial to TV stations and networks. Since
they work closely with telemarketing companies, they
may also play a big role in helping you manage this
process. Because of this, it's importing to find the
media buying company you feel most comfortable with
early in the process.
Operational Support
The big four of operations are merchant banking, telemarketing,
the web and fulfillment. The merchant bank processes
your credit card orders and deposits money in your bank
account, the telemarketing company takes calls off of
your 800 numbers, and your website sells product and
acts as a valuable information resource. The fulfillment
company processes your orders, sends them to your customers,
and in most cases, provides your customer service.
The operational component of your infomercial program
is extremely critical to its overall success. You can
have a great show converting orders but miscues in any
area of operations can put you in the red. Like production
companies and media buyers, there are hundreds of businesses
out there providing these services, but unless they
specialize in direct response television, they probably
won't cut it.
Because of Visa and MasterCard regulations, not every
bank accepting credit cards can process orders taken
from an infomercial or short form spot. The merchant
processor needs to be able to handle large volumes of
orders and be linked to your fulfillment company for
batch processing of orders. Your telemarketing company
is where the rubber meets the road. That's where customers
get their first exposure to your company and product.
A good website will increase your overall number of
orders and greatly reduce your other operational expenses.
It provides answers to questions from people not quite
ready to order, validates your business and works as
an incredibly profitable aftermarket tool. Your Internet
presence should be designed as a direct adjunct to the
TV creative and link you to customers who can supply
more feedback about your product than a dozen focus
groups.
Product fulfillment companies play a pivotal role in
the sense they provide multiple functions. They receive
orders from your telemarketing company and website,
they interface with your merchant bank to settle your
sales, ship products and process returns. Because of
this, they possess the most information about your customer
and their order. It's natural then that they also provide
your customer service. Since order status and return
information make up the majority of customer service
activity, your fulfillment company is in the best position
to service your customer. It becomes clear the importance
of choosing a good one who is experienced in the industry.
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