Why Infomercials Work – Direct Response Marketing

by Gene Weitz on February 1, 2011

SmartScience Laboratories’ goal is to mass merchandise products through direct response marketing strategies.

Direct Media Marketing

Direct Response Marketing

Direct Response (DR) Marketing has proven itself to be a powerful medium in creating and building national brands, introducing successful new products, generating qualified sales leads, and creatively supporting products already in distribution. As an introductory tool, DR is, in effect, A SELF-LIQUIDATING AWARENESS AND DISTRIBUTION GENERATOR.

The benefits include:

  • effective communication of complex or technical stories,
  • accelerated introduction of new product categories,
  • emotional involvement on the part of the consumer that is not often possible with a conventional commercial
  • accountability – results are immediately measurable, and
  • one-on-one back-end marketing as you utilize your list to reach your customers on a predetermined frequency.

SmartScience Laboratories’ DR Strategy

DR Media

SmartScience Laboratories utilizes multiple DR media to launch its products including

  • DR Print – Daily Drop Newspaper Ads
  • DR Print – Magazines Ads
  • DR Internet – Social Media, PPC, SEO, Banner Ads, etc.
  • DR TV – Short Form and Long Form Infomercial
  • DR Radio – 15, 30 and 60 second Ads
  • DR Mail – Single and Multiple Page Pieces

Each media has its unique challenges and opportunities and the exact media mix for each product is based on each product’s unique features, advantages and benefits.

MER (Media Efficiency Ratio)

DR Marketing Campaign’s performance is evaluated by calculating the Media Efficiency Ratio (MER). The MER is a ratio of the sales revenues generated from a specific DR advertisement and the cost of the advertisement. For example, if an advertisement costs $1,000 and it generates $2,000 in sales, the MER is $2,000/$1,000 = 2.0. The MER indicates how successful a specific advertisement or marketing campaign is.

Breakeven MER

A breakeven media efficiency ratio is calculated to determine what ratio must be achieved to cover all variable expenses incurred by the campaign.

Roll Out to Retail

Though most DR campaigns are designed to generate profits and immediate cash flow, some DR campaigns are designed to launch products, establish and build brands, generate leads and build retail traffic utilizing campaigns that are not profitable and not self liquidating. This is acceptable since the direct sales generated from the DR campaign will help offset the cost for the advertising and therefore be considerably less expensive than would be the case without the DR sales.

Twelve to twenty-four months after the start of a DR campaign, suitable products are sold at wholesale prices to major retail distributors such as Wal-Mart, Target, K-Mart, Walgreens, CVS, Rite Aid, Publix, etc. Wholesale sales to retail distribution are typically highly profitable since there are none of the per order DR costs and lower advertising (media) expenses per unit sold. In addition, retail sales volumes are often 5 to 20 times higher than the DR sales volumes.

During the DR marketing campaign and subsequent retail roll out, SmartScience Laboratories will assist marketing further by arranging “Alternate Channel Marketing” (database marketing, direct mail, electronic marketing, print media, outbound telemarketing, package inserts, catalogs, direct sales, radio and credit card syndication). Once the product is firmly established in retail, attention will be turned to whether or not to continue DR marketing strategies or to rely exclusively on traditional retail advertising.

Related posts:

  1. Direct Response Marketing Overview
  2. Direct Response Product Marketing Services
  3. Direct Response Marketing Success Stories (Video)
  4. Direct Response Marketing (Video)
  5. How You Can Leverage The Power Of Direct Response Marketing

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