A steady stream of nutraceutical product companies has been using Direct Response TV (DRTV) with great success. For March, 2012, the top two category products on the Infomercial Monitoring Service rankings of national cable and satellite were Lipozene and Super Beta Prostate. Other similar companies/products that have used or are using DRTV include Zetox, Healthy Control, Nopalea, Supple and Alertil, among many.
Companies selling supplements that have used DRTV include Fein Energy Crystals, Coral Calcium, Alka Slim, Venacura, Greek Island Labs and Purity Products. So there is plenty of evidence that DRTV is viable for marketers of supplements and related products.
DRTV includes 28.5 minute infomercials, 1- and 2-minute “short-forms” and DRTV’s “cousin” Direct Response Radio. For the purpose of this article, I’ll refer to them all as “DRTV.”
DRTV commercials look deceptively easy to produce, and when you hear about the wild success stories like Snuggies and Schticky, it’s easy to want to plunge right in. Many agencies produce quality commercials, and many plan and buy media well. Despite the collective expertise in this industry, it’s still a “high-risk, high-reward” opportunity.
On the plus side, DRTV can generate huge direct-to-consumer sales, dramatically drive retail, build your brand and positively impact other advertising tactics you do, particularly search engine marketing. On the minus side, if you don’t make all the right decisions, DRTV can be a losing proposition.
DRTV in the Digital Age
Over the last decade, DRTV has become much more complex, due mostly to the popularity of the Internet. With consumers researching products online, ordering via desktops, laptops, tablets and smart phones, and comparing prices and ratings at the click of a mouse, DRTV marketers need to look a much more than producing a commercial and buying media.
Factors to Consider for DRTV
The first step in determining if you have a viable product is to examine these key factors about your product and your company:
- Size of market: DRTV works best for products with a wide consumer appeal. Products that appeal to all adults, most adults, most men, or most women are all ideal. At the other end, niche products aimed at narrow slivers of the market almost always don’t work. Products in the middle are worth exploring to determine if the market is sufficiently large.
- Product uniqueness: products that are similar to others don’t often succeed, unless there is a tremendous compelling offer. Your product needs to be very different and superior to others, and you need to be able to back up claims to this effect with hard data.
- Retail distribution: for DRTV to work best, you need to have extensive retail presence. The reason is simple: for every direct-to-consumer sale, expect 5 to 10 sales in the stores. Without being in thousands of doors, the real impact of DRTV is wasted.
- Profit margins: this is probably a non-issue for most nutraceutical manufacturers, but the higher your margins, the better. Typically you need a minimum 7:1 (retail selling price : cost of goods) ratio. The higher the ratio, the better the chances for success.
- Compelling offer: the offer is one of the most critical components of DRTV success. You need to make an offer that is truly outstanding, one that will result in the consumer picking up the phone or clicking to your site. Ho-hum offers don’t work.
- The right mindset: creating an infomercial or short-form is a big project, requiring resources, staying power and a determination to make this channel work. Key stakeholders in your company must buy in and support this effort, and the company you choose to manage the process needs unfettered access to those in your company in many functional areas.
Digital Age Requirements
Today, there are three major requirements that go hand-in-hand with the actual DRTV production. Each of these is a key link because consumers today react and responds via many different channels. Time and resources need to be put behind each of these, whether they are accomplished in-house or via an agency.
- Ecommerce website: best-practices dictate that you create a unique web site for each product, and have it focused on conversion. The only links should be those that aid in the conversion process. This is not a place for extraneous links that will only distract the consumer. The site also should have the same look and feel as the DRTV production, and the offer and pricing must be consistent.
- Paid search engine marketing program: this is a critical aspect, since consumers today often type in product names, company name, models and buzzwords that they heard or saw on TV. If you have little or no visibility in search, you will lose consumers to competitors who are present, even though you paid to drive them to search in the first place! Sound preposterous? It happens every hour of every day.
- Social presence: with the astounding popularity of Facebook, Twitter, Pinterest, Tumblr and dozens of other social networks, being present on some or all of these networks is prudent. While not as critical as search, a social presence will reinforce credibility in the consumer’s mind, especially if you have many positive reviews and testimonials that you post on these sites.
It’s easy to get caught up in the excitement of deciding to test DRTV. The savvy marketer will pay attention to these key watchouts:
- The FTC: surely you know that the FTC scrutinizes products sold via DRTV, especially the claims made. This is particularly important to the nutraceuticals industry as opposed to vacuum cleaners and food processors. An agency worth its salt will work with you to navigate these waters, but you need to be prepared that all claims must be backed up with viable evidence.
- Time: it takes about 2-3 months to complete all aspects of the DRTV program, including the production, media, website, search program, etc. There will be a lot of back and forth during that period, so allocating enough time for a project of this magnitude is necessary.
- Investment: your investment for the production, test and services will likely be several hundred thousand dollars, and you will need a lot more for rollout if the test is successful. Request from the agency you talk with for a cash flow timeline, so you know how much money is needed at various points in time. It would be a shame not to have the financial resources to support a rollout coming out of successful testing.
While DRTV has been wildly successful for some, it’s not for every company. If you have a product that meets the six key factors outlined above, it’s worth taking the next step – learning more (resources below) and having an initial exploratory conversation with an agency with experience in your product category. Who knows? Maybe we’ll all see your product on air this year or next!
- How Hoover took cleaning to the “extreme” (cover story in Response Magazine)
- “How DRTV Raises All Boats”
- “5 Reasons Why DRTV is, and always will be, the most dominant DR medium”
Irv Brechner, EVP, Corporate Communications, writes about a wide range of DRT-driven customer acquisition tactics, trends and issues. He developed acquirgy’s IntelCenter (http://acquirgy.com/intel), with 100+ best practices papers, infographics, briefs and more. He writes regularly for Response Magazine, Electronic Retailer, MediaBizBloggers.com, Agency Post and other leading trade publications. You can reach him with ideas and comments (firstname.lastname@example.org, 732-321-1924).