TV inc
THE NEW MEDIUM FOR THE NEW SHOPPER
“Did you watch the “Civil War” series on PBS or “Baseball” by Ken Burns? Did you know that you were watching an infomercial”?” William M. Thompson

This is a new look. It’s more subtle, yet very effective. Remember the “Civil War” series on PBS by Ken Burns? That was an infomercial. Perhaps Mr. Burns would argue the point: mixing creativity and commercialism often produces an indigestible reality. But the reality is there, nevertheless.

Whenever one combines the producer and sponser to affect a collaborated sale in a program length vehicle, one has, by government regulation, created an infomercial.

The “Civil War” produced over $200,000,000 in sales and in still going strong.

Think about that for a moment. An 8+ hour black and white video montage of old photographs, narrated by people no one’s ever heard of, while spouting facts and anecdotes about American history at $179+ a pop! When you think of those couch potatoes watching Roseanne or The Simpson’s and write them off, think again. They want to learn more about you and your product. If you tell them in a fun an interesting way, they will buy.

Clint Eastwood’s, “The Unforgiven”, was a 1992 feature film that won several Oscars including Best Director and Best Producer. Just before the film was released, a TV special was aired, “The Making of ‘The Unforgiven’”. The TV special was almost as long as the movie. It was an infomercial. The TV program was designed to drive people to movie houses. And it worked. Now we are seeing more and more television programs on ‘the making of ….’.

Oprah Winfrey interviews Michael Jackson “Live”. Great ratings. The two-hour special’s primary objective was to introduce Michael’s new record album. And it worked. The last half hour of the program was one solid commercial for Michael’s new record.

New Year’s Day. Disney World’s and Disneyland’s Parade. Hours of entertainment featuring the floats and balloons from the Macy’s Thanksgiving Day Parade. Excuse me, but I saw these floats and balloons last year. Not one or two but every commercial was a Disney Theme Park commercial or of a supporting companies such as Delta Airlines.

When will major marketers understand the power of infomercials? It seems to me they have already passed judgment.

In my opinion, there’s good reason why most ad agencies don’t support infomercial marketing. Accountability! John Bernbach of DDB (Doyle, Dane Bernbach — America’s largest ad agency) told me, “Bill, before you can sell anything, you have to understand ‘agenda’. The agenda of an ad exec is simply ‘keep his job’. Infomercials are ‘accountable advertising’. The client knows for certain whether or not it worked. With ‘image ads’ no one knows for sure which ads worked and which didn’t work. The last thing an ad exec wants is to be put in the white hot light of accountability.”

John Wanamaker, the founder of Wanamaker’s Department Store in Philadelphia, has a great quote: “About 1/3 of my advertising dollars work. The problem is, know one knows which 1/3 is working.”

These disguised infomercial programs as well as more recognizable infomercials are on the air in every market in the USA and around the world. Consumers, who in the past would never have considered buying a gold chain in a retail store, are allowed to peruse vicariously without having to confront a salesman, without having to feel obliged, without having to suffer the guilt of either rejecting a salesman or being rejected by a salesman, without having to become involved in a “purpose of movement” (driving to a retail store, parking and battling crowds).

This is the psychography that applies to all of us, but especially TV shoppers. A psychography is a definable human characteristic as compared to a demographic, which is a definable human quantity.

Psychography Example: You and I will laugh hysterically sitting ringside at The Comedy Club. We’ve heard the jokes before. But we still laugh. At home in front of the TV we watch the same comedian with the same jokes. Maybe a chuckle or chortle at best. Why? Guilt. At the Comedy Club, participating in an audience response is de rigueur. At home, it isn’t. The same applies to shoppers. Using television, one may decline product guilt free. One may also purchase it risk free. Few retailers understand the significance of this difference.

When a television shopper dials the 800 number to purchase a product, he or she is greeted politely by courteous operators, trained sales people who take the time to treat the caller as a person. Names are always used:

“Hi, my name is Cindy. What is yours?”

“Martha.”

“Hi Martha! How can I help you today?”

Martha will hear her name over and over again. She will talk to Cindy and buy the product. Cindy may have an “add-on sheet” to ’upsell’ other items complementing Martha’s purchase. Cindy is also trained to offer goods in a pleasing way. She never pushes. She allows Martha to decide.

In a short period of time, Martha gets her package. She has had time to think about her purchase and anticipate its arrival. When Martha opens the box, her realization should be greater than her anticipation. Good packaging method aims for this goal. The package should contain everything she ordered. It should be packed properly. She should feel that she is the first person to ever touch the treasures being uncovered. Done properly, it’s a Christmas present.

Our surveys indicate television shoppers are tuned on by the flow of products being offered politely and enthusiastically by top quality sales people. The views are vicariously running their fingers through mounds of potential possessions. It is catalog shopping come to life; it is intravenous materialism without guilt; it is sales allure without rejection; it is quantitatively improving the quality of one’s life with at least the perception if not the reality of satisfaction.

Katy Halpainy of Salem, NJ, a television shopper interviewed by Business Week, said, “At first, I said: “How corny. Only hillbillies would watch this.” But after a while, it’s sort of addictive.” She said she did most of her Christmas shopping by TV last year.

High price points do not seem to be a problem with home shoppers, provided they perceive value and knowledge about the product. People are buying merchandise, which they may have never considered. In fact, they’re buying more and sharing their new acquisitions on a level never before seen. Purchase may be of little interest to the shopper himself. Gift buying is very prevalent.

- According to QVC, they have sold quite a number of $3,800 fur coats.

- We are selling pre-fab houses costing $50,000+.

- The Shop-At-Home Network sold a baseball trading card for $114,000.

- We recently completed an in-home infomercial for a $10,000 exerciser.

- Teleshop sold 18 $2,900 stereo rack systems at 2:00 a.m.

- HSN frequently offer $275 blue fox furs and $4,500 jewelry.

In the New York/New Jersey market, a cable operator told me that his reports show that subscribers are tuning into commercial programs an average of 1:06 hours per day. He was quick to add that the study indicated that the time period was cumulative. The viewers were watching 1:06 per day but not at one time. His subscribers were “zapping” conventional passive commercials to “peek” at what was being sold on TV infomercials. Infomercials are generating “ratings points” higher than competing programs.

Unlike short form commercials that are often zapped or ignored, an infomercial viewer has made a conscious decision to tune in and watch your product being demonstrated and sold. I like shoppers who are attentive, don’t you?

The message is clear. The television set (and the home computer’s Internet access) has evolved from an appliance and the primary source of entertainment to the household’s link to his environment. It has taken on a completely new personality that will be a source of income for those who learn how to tame it.

This new medium with its varied facets promises to be the most important factor in retailing by the end of the century. Even now, when its many doors have only partially been opened, programmers, cable & broadcast operators and suppliers can reach new markets, develop new merchandising strategies and generate new revenues by combining their various talents.

How many times have you stood in a retail outlet and waited for service?

How many times in business have you been pitched by a poor salesperson that didn’t know how to close? You may have even helped him with the close.

The identical situation faces you.

The infomercial works. People like them. Stations like them. Accountants like them.

What are you going to do about it?

TV REACHES THE MINORITY MARKET BETTER!

Minority and specialty markets are buying forces that cannot be ignored. This is especially true when one turns to television marketing. Studies have shown that these viewers are more likely to take advantage of products and services offered via TV. Specialty products and services directed to a more stratified segment of the population can also be reached by skewing airtime buys at the markets desired.

Minority marketing is specialized and it makes up an important part of television’s viewing audience. This group must be reckoned with. These consumers fall into two categories: the urban under class and the affluent middle class.

The under class have some of the following characteristics:

Limited income

Mobility inhibited

Isolated from the rest of the city

Peer directed

Joblessness

Female-headed households

Welfare dependent

Teenage pregnancy

Limited work ethic

Limited respect for education

High drug usage

The minority middle class has these characteristics:

Strong orientation toward work and achievement

High regard for wisdom

Strong religious orientations

Strong kinship bonds

Fewer children

The black middle class in particular has shown significant increases in the following areas:

Movement to suburbia

Families earning $50,000+

Managers and professional occupations

College graduates

Represent 12.2% of the population

$218 billion in disposable income

Buying power ranks 9th among free world countries

Increasing affluent and educated class

Brand loyal

Represents 20-40% of the brand sales in many categories

Heavily concentrated in major markets

Younger than overall population

Television has a unique impact on sub-minority and ethnic groups. Simply put, television programming and advertising is more likely to be accepted at face value among this group. This distinction’s cause and effect is directly related to the diversity of input rather than a general characteristic profile of the individual or the group at large. Bear in mind that the psychography of the television shop-at-home consumer outlined here applies.

The message should be tailored to suit the market. This is most important when language becomes an added barrier as in the case of the Spanish-speaking consumer.

The difficulty is compounded when one’s native language is not understood. Among English speaking consumers, this problem – illiteracy – is growing. Some 23-27 million Americans are functionally illiterate (defined as unable to read beyond a 5th grade level). A United States Department of Education study eliminates that illiteracy in the U.S. is increasing at the rate of 2.2 million per year.

Fully 10% of the American population and perhaps as much as 15% of the television viewing audience are functionally illiterate.

Since this group tends to rely on television to a greater extent than others do, one’s marketing strategy must take this into consideration.

Our commercial programming experience has shown that those who use television to buy goods and services tend to be skewed toward this group.

The conclusion we discovered is startling. These people are overlooked and badly treated in the conventional retail market.

Over 55% of “Hooked-on-Phonics”, the reading-aid product, is purchased by adults for themselves or an adult family member. They want to learn. They want the same respect the more affluent receive. Our marketing values these people and their loyalty and our bottom line reflects it.

With Alpine Supreme Bee Pollen Products, we commonly ship product to the economically disadvantaged on open account, even if they’ve never ordered before. And we are paid within 30 days over 96% of the time. That’s a better rate than most credit card processors charge us with their discounted rates.

Selling technical or upscale products to this audience has proven successful repeatedly. Why? Because these people feel alienated in the conventional retail marketplace. Retailers who show respect to and consideration for these people win new customers. Direct response marketers have found this group to be a loyal and profitable customer who wants to improve his life and his family’s life.

THE PSYCHOGRAPHY
To make it all work, the psychography of the television shopper must be understood. Shopping is a learned behavior. The plethora of goods conventionally advertised on TV and all the other mediums stimulates the natural acquisitive juices. While consumers are interested in enhancing their image with their merchandise selection, more and more consumers are uncomfortable in the adversary-shopping environment.

With new products vying for shelf space, it is difficult for even the best-educated shoppers to keep abreast of all the different types and styles of merchandise available, let alone to be properly informed enough to determine which represents the best value.

The next time you are in a department store, wander into an area with which you are not familiar. Look at all the choices, features and prices. How do you make an educated choice? Read the ‘Feature Card’ attached to the product? Ask a ‘clerk’? (There are very, very few ‘sales people’ working in the retail marketplace.) Without doing some extensive research, you can’t make an intelligent decision.

Television interactive marketing, on or off the Internet, will evolve into the ultimate merchandising vehicle. It will change shopping forever.

Through television (and the Internet), shopping will become a science. Its differing formats will be directed to every age group. Demographic and psychographic markets will be accessible and understood by all.

Shopping will no longer be a secretive art practiced to varying degrees of efficiency by the few.

Manufacturers are missing out on sales because many potential customers:

are uncomfortable with conventional retail shopping environment;

perceive their limited knowledge of a product makes them appear ignorant and, therefore, they feel too embarrassed to shop in conventional retail stores;

simply are uncomfortable in the shopping environment;

are turned off by the adversarial sales clerk – customer confrontation;

don’t get out for reasons as simple as time, physical limitations and inaccessibility come into play;

are unaware of the fun and enjoyment a product offers.

Interactive television retailing will be successful because it is the most effective and the most economical retailing vehicle ever conceived. Its potential in introducing, educating, demonstrating and selling merchandise is boundless.

Those pioneers who recognize these facts and manage them productively will be the new marketing giants of the 1990’s and the 21st century.

WHO BUYS THROUGH TELEVISION?
We developed the following profile of a home shopper:

According to the A.C. Nielsen Company, there are over 87,000,000

households with at least one TV.

Approximately 55% of these 87,000,000 households are cable subscribers.

This represents a 4% rate of growth from 1985 and this rate of growth that is expected to continue.

At least 6% of these more than 47,850,000 cable households and 1.2% of the non-cable households (which translates to over 3.3MM households) regularly buy from a television commercial program or channel.

Of these more than 3,000,000 households:

64% buy once a month or more;

66% watch commercial programs more than one hour a day;

65% watch during the week after 11 p.m.;

17% spent 10 hours or more per week watching home shopping;

44% watch over 2 hours per day;

58% have household incomes of $35,000 or more;

48% are in the 35-64 age group;

71% spend more than $30 per purchase;

24% spent more than $71 per purchase;

$61 is the average shopper’s monthly purchase;

48% have purchased from mail order houses in the past 6 months;

84% own their own homes;

95% are aware of long form “infomercials”;

the television shopper is an acquisitive buyer;

they have a minimum of two nationally recognized credit cards;

more often than not, the shopper is a private person who is uncomfortable in face-to-face sales presentation.

The Home Shopping Network reported that their network’s average sale per person has risen to $45; that the average buyer is a female who is 35 to 55 years old; 60% with college educations; 54% are home owners; and, 84% are repeat buyers.

QVC reported their average sale per person has risen to $80. They also reported that 43% of their revenues came from consumer electronics while only 29% came from jewelry.

TV, Inc.’s average sale is $66.35, per month, per customer.

It is important to note that during any 24-hour period 3,577,200 households in the U.S. (2,281,200 cable and 1,296,000 broadcast & satellite) are tuned into a program length commercial for a minimum of 30 minutes. Viewers who tune into commercial programming are not passive.