DRTV VARIABLES THAT WILL CHEW YOU UP AND SPIT YOU OUT.
March 26, 2021
| DRTV Expert
By: Sean Ryan Expert DRTV
There are many theories out there about the best way to launch a product. A large sector of the buying community is convinced that cable nets with 70,000,000 to 90,000,000 households are the only way to test a product or service. This theory is supported by many in the industry. The theory is that by hitting so many “potential” eyeballs across the whole country you are sure to develop some information. Where your product can succeed and by hitting the masses you’re sure to make a splash if it’s possible with your pitch. This makes sense on many parallels but misses more than it hits.
Example #1 Credit Show
I have a client that has a half hour show that he brought to DRTV. This client initially ran with a well respected DRTV agency for testing this new creative. They bought $40,000 of media on four key national nets one weekend. From this test this client’s call center closed at 40% but established a .40 MER. The times were good the rates were close to accurate but there was something fundamentally wrong with either the show, the offer or ………..the media. We took this client on and flipped the script. We were given no sales history or results other than the core numbers provided above. I liked the close percentage but felt it could improve. RW’s team got their hands on the creative, call center script, product and thoroughly reviewed it all. We made some minor tweaks to the show, the call center script and designed a broadcast only buy. We that same budget and turned a .40 into a 2.15 MER. The close percentage went up a few points but buying half hours at lower risk obviously produced more winners than losers.
Example #2 Lead Gen Show
This was a smash hit a few years back. To the point where they no longer needed to run the show. It was an MLM show that hit the market with the best of the best. They had a big time producer, great talent, they picked three of the biggest agencies in the business for running media and had the top of the phone book call center. They developed a winning “A” team of players but the one thing that was missing was they were consistently hitting a $25-$30 Cost Per Lead. Guess what 80% of their buy was….National Cable. They bounced from one big name agency to the next but could never get to their goal of $15 CPL. The $15 CPL was a profit margin they could live with in growing their business. I don’t remember how we got in contact with this group but I’m sure it was a referral from another satisfied RW customer. They decided to throw us in with another Midwest major player in DR. Long story short we ended up with a $9.60 average CPL. RW was than awarded this campaign exclusively which than ran strong for the next year or so until it got to the point where they didn’t need the show anymore. Their funnel was full and business took them to a top 500 companies. The only thing I can say is we bout several thousand half hours most of which were broadcast.
This isn’t true for every situation and as an agency we buy a lot of national air time. What I can say is there’s a time and place for everything. Creative, call centers, fulfillment, manufacturing, inserts……the list goes on and on. If you’re testing under what a true test is defined as you need to learn and react to what you’ve learned. Taking on huge risk doesn’t always payout. There’s something exciting about logging on to a campaign and seeing 100’s of calls from a national pop however it’s more rewarding to see positive MER’s. We don’t claim to be genius in this business and we’re certainly not considered pioneers in managing media but there are many more case studies that prove this theory. Once you’re short form and/or long form commercials are performing and all the wrinkles in a campaign have been worked out cable has a place however our theory is there’s a shotgun approach and a rifle approach to managing media. The rifle wins the majority of the time.
Why should I consider your firm for taking my product(s) to market?
By Sean Ryan
As a DRTV leader I field a lot of inquiries about taking products to market through DRTV. There are many firms in our industry with awards, long listed resumes, and winning campaigns on air. I’d like to break this out into three parts and walk you through some elements that need to be considered in your decision making process should be calculated.
WHO’S GOING TO HANDLE YOUR ACCOUNT?
Find out from the companies in consideration who will handle the day to day communications with you about your campaign. The larger the groups the farther you’ll be passed down the chains of command when the sale is complete. Since you don’t typically work a 9-5 job expect the same from your team. Find out the availability after hours, on weekends, through good and bad times.
WHAT SERVICES CAN THEY HELP YOU WITH?
This is a very important element to a successful DRTV campaign. You don’t know what your shelf life is so picking a team that can seamlessly or proactively tweak a campaign is key. If they outsource it so be it but make sure this team can react to problems and capitalize on positive feedback to maximize your time spent on TV. Make sure your offers / production can be tweaked throughout a campaign without a losing steam.
WHAT VENDORS DO THEY HAVE IN THEIR BACK POCKET?
When developing a winning solution in DRTV a lot of your success comes from the back end set up. If the team your considering doesn’t have ties to three to four good back end solutions question their over-all credibility in the industry. Experience develops good relationships in all facets of managing a campaign. Your merchant processor, call center, fulfillment, web and so on might need to be changed throughout a campaign. If your team can’t make that happen and put you in the right hands instantly you’re wasting your time with this group.
HISTORY OF SUCCESS!
Every agency in the top 20 has a level of success they can explain. Success is relative for sure but you have certain goals for your launch and you want to make sure you’re teaming up with the right group to make this happen. Success in a single category is nice but most reputable DRTV agencies can take on many categories. Every campaign should have uniqueness to it however there are formulas to success. If you’re looking to go to retail listen to successes from that perspective. If you’re looking for direct to consumer sales listen to success stories bringing products to market that way. The bottom line thing to consider is everything you do is unique to what the other products in your category do. It’s all relative to your situation and goals so don’t confuse one’s success with what your campaign requires or your expectations are.
HOW MUCH SHOULD I PAY TO GET STARTED?
This is probably one of the most important questions to ask. If the people you talk to throw out a price, an investment opportunity, or an overwhelming interest to work with you prior to hearing your story and about your product…RUN. A good campaign requires research, number crunching and a solid thought process to develop not the cheapest or most expensive but more a custom analysis as to what it’ll take. You don’t want to pay too little and compromise your outcome and at the same time you don’t want to just go with most expensive. This all ties back to what the group is capable of doing for you and what they are outsourcing. If they don’t do production they will make money for just setting it up. If they don’t buy media they’ll likely hammer you on production costs since that’s the only way they’ll make money. If they don’t do either in-house you are sure to pay them for setting it up resulting in many pockets being padded before you even sell a product.
Going with your gut in business is always the best way. Listen to the sales pitch and find the group that you feel you can best work with. We all have successes but your gut will tell you who you can stand communicating with on a daily basis about your campaign. If something doesn’t seem right, it’s likely too many sales and not enough backing it up.
Is My Product Right For DRTV?
Could be but probably not. 5to1 minimum ratio…Can you leverage a retail price of 5x the cost of goods sold now or even down the road. The odds are stacked up against you as it is and if you don’t have at least that ratio you really should be considering shopping, ecommerce, etc.
Over the years I’ve fielded thousands of inquiries and have even go as far as to offer these bits of info to people when they’re in the decision making process. The last thing you want to do is make a junk decision. It’s often times the difference between successes and failures.