|"Bill, how do you know what's going to
sell and what's not going to sell on TV?"(Consumer
advocates John Stossel interviewing me for an episode
of ABC's 20/20.)
"John, if I knew that, I'd be in Monte Carlo and
you'd be Robin Leach," was my answer.
Originally, producers of direct response advertising,
especially long-form commercials, skewed their product
selection toward off brand gadgets, get rich schemes,
motivational products and diet programs. Shop-at-home
was closeout goods programming. This is changing
as highly recognizable manufacturers of better goods
are finding their position in the market. Saks Fifth
Avenue has jumped in as has Kodak, Volvo, Pontiac,
Bently, and soon, IBM.
It was thought that the appearance heavy price
discounting was required to sell on TV. Savings
of 50% or more off suggested retail was not uncommon.
To cover the overhead, mark-ups of 10:1 were sought.
Nothing ever below 3:1. This meant that prices and
mark-up on products in the retail market place dictated
its access to television.
Today television is selling products costing many
thousands of dollars. Recently we completed an infomercial
for a company selling prefabricated and panelized
houses, each costing $50,000 and more.
An infomercial need not make an immediate sale.
It can drive a retail market, create new leads,
and introduce new ideas. Ross Perot has proved that
much. It is suggested that the next President of
the United States will be elected using an infomercial.
Scary? Well it's here. After his bid for the presidency
in 1992, Mr. Perot called me commenting on how much
help "Inside Infomercials" had been to him. He garnered
nearly 20% of the popular vote spending 1/10th of
the projected Madison Avenue budget!
The recent studies on the psychographies of television
shoppers combined with the records of accomplishment
of other products show clearly that each stands
on its own with regard to sales but both enjoy the
Please understand the definition of an Infomercial.
According to the FTC, it is any commercial program
that has a running time of 14 minutes and 30 seconds
or longer. A commercial program (infomercial) is
one in which the producer and the sponsor are one
and the same.
Now things get exciting. Regardless of your business,
your products or your services, an infomercial will
work for you! An infomercial need not be a 30 minute
program-length commercial. The History Channel had
a one-hour 'program' on the "History of the Jaguar"
automobile. Whom do you think underwrote that program?
Hmmmm. "Pirates of the Caribbean" with Leonardo
DiCaprio was an "Info-tainment" motion picture.
Let's see.. There's a 'ride' at Disney called "Pirates
of the Caribbean". The movie was underwritten by
Buena Vista, a division of Disney. Hmmmm. The entire
movie was an infomercial. Many 'Quiz Shows' are
infomercials. Bottom line: don't limit your creative
senses when you wonder just how you can put the
impact of long-form advertising to work for your
company. Every business whether it be B2B or B2C,
every 'cause-marketing' campaign (not-for-profit
organizations), every political agenda can benefit
from an infomercial, if you have access to the creativity.
Pontiac gave away about 100 of their new cars to
everyone in an Oprah Winfrey audience. Hard cost
to Pontiac? About $1MM. Now call the syndication
company and ask what it would cost to get one-hour
of 'Oprah' time. Call your PR firm and ask what
it would cost to have a specific model of one of
your products featured internationally for a month.
I wonder how many Pontiac sales were generated by
this brilliant effort.
When DMB&B (the advertising agency in New York
City) asked for ideas on how to get their client's
Bose Wave Radio off the shelves, I recommended that
they take it out of retail and use a direct response
program. A $295 clock radio that wouldn't sell at
retail now sells like crazy using DR.
Abdominizer - was not successful in retail at first.
However, after a successful DR TV campaign, those
who did not and would not buy from TV bought it
in the retail store.
Alpine Supreme Bee Pollen: selling for 10 times
the competitors' retail and print DR rates, this
company established that sales to TV audiences are
clearly as separate as the men's and lady's washrooms.
Retail sales of Alpine Supreme and bee pollen products
in general grew exponentially.
One "Steam Iron" infomercial featuring the product
at $29.95 was run at a loss for months. That's because
the producer had it in retail at $9.95. He could
care less about TV. He was driving his retail business
through the roof! And his advertising cost was underwritten
by his infomercial sales. Free Advertising!!!
Others such as Blue Blocker Sun Glasses, Auri Car
Wax, Richard Clayterman's Recording (piano soloists
of whom no one had ever heard before his infomercial),
and the various "juicing" infomercials show that
people will buy from TV even though the same or
similar product is in the retail market place for
One day it's going to occur to an industry that
infomercials are required. The recent infomercials
featuring juicing machines have been successful
on TV and in the retail marketplace. Juice machines
of every brand are selling faster. Moreover, no
retail advertising was done. NONE!! A product line
went from lack-luster sales to top performers and
not one retailer or manufacturer spent a dime. Even
those that made the infomercials spent nothing since
the advertising was a predicted and quantified expense
costing no more or no less that, the tooling costs.
All were part of a profit center.
One day it will occur to an industry what has happened.
Infomercials sell to a specific audience AND they
generate retail sales, ALL WITHOUT INCREASING AN
ADVERTISING BUDGET. It's a dream come true.
If a direct sale infomercial is inappropriate,
use lead generation or a two-step technique, and
high mark-up requirements are overcome. Sales are
closed subsequently, but still a direct sale is
achieved. Creative marketing has allowed the entrance
of highly recognized brand names into millions of
Will every product work in direct response vehicle?
With the right people behind it, yes! Television
(and Internet) retailing has the versatility to
sell any product.
If a product is best sold when thoroughly demonstrated,
infomercials and 'documercials' must be selected.
Moreover, these are only two of the five distinctly
different merchandising formats from which manufacturers
may choose. While each of these formats have the
capacity to demonstrate products far more efficiently
than is done in conventional retail outlets, each
should be studied carefully and their individual
Before TV retailing, suppliers had to depend on
sales clerks to deliver their product's story. Have
you visited a discount department store recently
or a buying club or warehouse outlet? Go! Try to
find someone to help you. If you can, ask the simplest
question and watch the blank stare of the salesperson's
face. It's neither the retailer's fault nor his
employee's. The overhead must be kept low to meet
decreasing margins. The salary demanded by quality
personnel is not in the cards. The money isn't there
to pay them.
Then there's the inventory. In today's fiercely
competitive market, suppliers are forced to cut
profits to the bone and wait months to be paid.
Don't like it? Go elsewhere. What percentage of
your inventory is written off to bad debt every
Then there's your customer. Where can the shopper
turn for accurate information on the product he's
buying? Point of purchase video consoles offering
a teletext catalog description of the product? Limited
at best. The reason is clear. Although shoppers
want to learn more about the items of interest to
them, they want personal service too. The dilemma
has put the retailer between the proverbial rock
and a hard place. Personnel costs are too high.
Training is too expensive. Mark-ups do not allow
for professional sales people. In addition, consumers
are distrustful of and put off by clerks and their
poor attitudes and lack of product knowledge. Consumers
are relegated to point-of-purchase counter cards.
Is there another choice for manufacturers who need
to tell their product's story more effectively to
Television's massive audiences, in conjunction
with its newly developing retailing ability using
trained professionals to explain and sell merchandise,
will become the single most effective sales vehicle
Because of the newness of the industry, most suppliers
are unaware of the assorted entry-level vehicles
available to them. Too often this ignorance of television
marketing means they are missing a very important
new sales tool. Some remain on the sidelines unaware
of the creative options available. With others there's
a fear that their participation in television commercial
programming may be disruptive or perceived as competitive
to their existing retailers. It is a false concern.
This is not my opinion. The results cited above
and the history of the industry proves it to be
true. Properly done, television commercial programs
Once again, The Juicing Machines. In the Fall of
1991 through the Spring of 1992, electric juicing
machines were popular on television infomercials.
They sold hundreds of thousands. Guess what happened
at the retail counter? They sold out of the advertised
branch. And when stocks ran out, the other brands
went. No one ran an ad except the infomercial. Some
companies are scratching their heads. Enlightened
executives are reexamining their marketing strategies.
Impressed? There's more. The cost to produce and
air the infomercial was not an expense! It was a
revenue-generating vehicle. For the fist time advertising
became a definable profit center.
Times are changing. It is incumbent upon manufacturers
to become more aware of the potentional of television
retailing. Until then, they are constrained to old-fashioned
passive and institutional television advertising
techniques. Think of any product or service. Academically,
think about how much it will cost to bring it to
market. Not the whole USA market, just a small market.
You pick the territory. Let's suggest that the product
performs well. It's competitively priced, and it
has a reasonably wide appeal. What we don't know
is how well it will sell.
In the past we would budget enough money to build
sufficient product or, in the case of a service
oriented product, to support our service staff.
After the inventory commitments are made and budgeted,
our sales staff meets with our distributors, wholesalers,
retailers, or professionals, those who will sell
the product to the consumer.
These distributors are easy to please. They want
extended terms, free floor planning, cooperative
advertising, guaranteed sales, help in moving old
inventory, after-market support and service, return
guarantees, and lastly, they want you to sell your
product to them at pennies over your cost. In return,
they will devote time and shelf space at their discretion,
use sales people who often know less about the product
than the consumer knows, and push their own in-house
An infomercial can be produced for less than the
cost of a one-page ad in a local newspaper. The
sales staff featured in the infomercial is the finest
one can afford. The media cost is not part of the
formula because it is directly attached to the price
of each product. Inventory supplies can be minimal
because with TV, one can halt the airing of the
commercial if supplies run thin or increase it if
supplies are sufficient.
Imagine, for the cost of a focus group, one can
test your product in the real world using an infomercial.
Imagine having at hand and on call one's very best
sales person 24/7/365 and paying that person the
cost of a single day's work. Imagine having a retail
outlet that is open when stocks are available and
closed without overhead or layoffs when stocks run
short; and all this without a single consumer complaining.
Sounds good to me.
Why isn't everyone doing it? Many, many are. Read