Top 10 Reasons Infomercials Fail

Top 10 Reasons Infomercials Fail

Written By Elisabeth Pritchett, CEO and Founder of IntelliVision, Inc.


Let me start by saying there are more than 10 reasons infomercials and short form spots fail. However, I wanted to outline some of the clearly avoidable (and- not-always-so-obvious) pitfalls where we see many product owners and companies stumble through this processes. So, even if you’re already a savvy marketer, this article will serve to reinforce your genius or surprise even you.

# 10 Dentists Performing Brain Surgery
Mistake: Not hiring infomercial expert & underestimating the need and value of a specialist.

Now that sounds ridiculous! Who in their right mind would let a dentist perform brain surgery? But, they’re both doctors. They both went to medical school. They both have some of the same equipment. And even though you might save a little money if you let the dentist do it… it’s just not worth it. Why? Because they have totally different specialties! And the same goes for the company that creates your infomercial.

Don’t let some video production company that makes all sorts of other kinds of videos make your infomercial. Because unless they specialize in direct response marketing there is no way they understand all of the nuances, and critical decisions that go into a production that is designed to sell. From the scripting to offer development, product positioning, and backend such as call centers, and so much more. Every element makes a difference, a big difference.

Now maybe this isn’t brain surgery but there certainly many aspects of the project that require a specialist. So do yourself a favor and hire a company that makes infomercials and ONLY infomercials to handle your project. Other companies may have the equipment to make you a video, but if all of the time and money and effort is wasted on something that is destined to fail what’s the point.

#9 Mops and Mattresses
Mistake: Trying to sell a niche product through mass media

I like to use this example because every home has a mop and a mattress. Whether it’s a million dollar mansion and they have a ten thousand dollar mattress and their live in maid uses the mop or it’s a middle class family. Everyone needs it.

You have to ask yourself, “Does our product have a broad appeal?”. Does it appeal to the masses? Does it have enough of a potential audience to be run across many channels? Because the broader the market the more likely your success.
As an example, if your product is for Great Dane owners TV is probably not for you. If it’s for ALL dogs then, yes. My point is very niche products are generally not good TV products.

Now I can give you dozens of examples of successful products just for golfers, fishermen, women , children, men over 50 and more. But those tend to be the exception to the rule, rather than the rule. So when you are considering direct response television keep in mind its mass media, and mass retailers that make up the majority of the sales.

#8 Voodoo Math: Margins and Markups
Mistake: Not properly accounting for the needed markup to cover media costs

OK you have hired an experienced company; you have a product with great appeal to the masses. But do your numbers work? One of the first things we do when we are interviewing a new potential client, is figure out if their costs of goods is in line with the product offer and if there is enough margin for media. Yes, we interview our clients. If the project is destined to fail, we don’t want to waste our time and our client’s money. So what does that mean? As an industry rule of thumb you need a 4 to 5 time’s markup from your cost of goods to be potentially profitable on television.

Example:

1. Your product costs $4 to make. You want to sell it on TV for $19.95. Perfect that works.
2. Your product costs $10 and you want to sell it for $19.95. No way. You will lose money on every sale.

Now in many cases we are able to help our clients lower their costs of good through negotiating volume deals with their manufacturer or finding them new manufacturing overseas. But otherwise you would have to sell that $10 cost of goods product for no less than $49.99 for it to work. The bottom line is you can’t lose a dollar on every sale and make it up in volume.

#7 The Price Is Wrong, Bob.
Mistake: Over pricing the product to meet the margins or pricing yourself out of the market.

The previous section brings me to pricing. So you thought ok so we’ll just raise the price on TV. We’ll just offer the product for more. Not so fast. Your product’s pricing needs to be in line with what we know works on television and the format you use.   So the price offer also dictates, in most cases, whether you are creating a short form commercial or a half hour infomercial. Above $29.95 requires a half hour show. Under $29.95 can be a short form spot.

However, I would even go so far as to say, the rule of thumb is a short form commercial needs to be at a price point of $19.95 or less. Again, there are always exceptions to the rule, but generally speaking you want a short form spot to be in that range. Now, you could do a soft offer, or lead generation offer, without a price but usually that is for a service or product that requires a close by a dedicated call agent. Pricing and offer development is a critical part of what makes a show work and you need the proper guidance to help you make those important decisions.

#6 A Long Story Told In 30 Seconds
Mistake: Creating a short form spot for a product that needs a half hour infomercial.

Price is one of the many reasons you would chose to make a half hour show or a short form spot, but certainly not the only reason. There are many products that are simple enough to sell in a short form commercial, but others need more explanation, an argument for their purchase, examples of results, testimonials from users, and so much more. Choosing the right medium, either a short form commercial or half hour show is a very, very important decision.
Definitions: Short form commercials are generally created in several lengths so you can run them interchangeably; 120 seconds, 60 seconds (& 30 seconds used to push retail). Half hour shows are really 28 minutes and 30 seconds long.

#5 Building without A Good Blueprint
Mistake: Not being fully involved in the scripting and working out the details on paper before shooting.

Scripting is the first phase of the project where the rubber truly hits the road. Scripting is one of the most critically important aspects of the project, since it is the creation of your blueprint for everything you will eventually build upon and is the foundation of all of your television marketing efforts. And this is the part of the project, you as the product owners need to be fully involved and take the time to dissect, review, ponder, discuss and even debate.

How is the product being presented, what are the demonstrations, who will be speaking, does it really convey all of the products features and benefits, what’s the offer, how does it sound and feel? You get the idea. This is where you should be able to visualize how the commercial will eventually become.  And this is really your first and last chance at changing your minds about the direction the project will take.

IMPORTANT NOTE: It is much less expensive and time consuming to script out different versions of the spots, and elements in the infomercial, then it is to change them after they have been shot and edited. Paper is cheap, and even if you are incurring additional scripting fees, it is worth every pay you will pay in determining your product’s story on the long run. Additional scripting will cost you a few thousand dollars, additional shooting is $10K per day on the low end.

#4 Hurry Up and Fail
Mistake: Rushing your project as opposed to taking the time to do it right.

This is one of my personal favorites. We get a call from a new client that has never made and infomercial or commercial before and they want the entire project done and on the air in 3 weeks. Well if you were a seasoned infomercial marketing company that knows this business, it can be done. But my first question is what’s the rush, and my second question is if the commercial loses money and does not perform is there still a benefit to you and your brand? In some cases there is and they need to capitalize on timing, so each situation is unique... however, rarely is that the case.

So, if this is your first foray into this business you need to allot more time. An important part of the process is not just completing the project, but educating our clients throughout the process so they can make conscientious and informed decisions along the way. Good scheduling is 30 – 45 days for a short form commercial and 60 – 90 days for a half hour show. Remember the old expression, “Failing to plan is planning to fail.” Take your time and do it right.

#3 Sticking it in the Backend
Mistake: The media and telemarketing can be just as critical as the commercial itself.

So your infomercial is done and your commercial looks great. You have taken the time to do it right and you know you have a winning ad on your hands. Now what? Now you have to buy media, set up telemarketing, fulfillment and develop the backend. A good agency will handle the critical details for you, but it is important to understand the media and telemarketing is almost as important as the creative. If you don’t buy the right time, or get it at the right price your doomed. Buying general media is NOT the same as buying DRTV media time. Again it is critical you work with a infomercial media agency that preferably buys only DRTV media. They need to not only understand how DRTV works, but also coordinate with your telemarketing company so you can determine exactly which media worked, how much your cost per call and cost per order was at the end of the test.

Believe it or not your telemarketing can be just as important. Image this… the commercial and the media are working great… the phone is ringing off the hook, only to discover your call center can’t handle the volume and is missing calls! Literally not picking up the phone for customers trying to buy your product!   (True Story)  Again, this is where it is important to work with specialists. There is a systematic and proven approach to making, marketing, and profiting from the infomercial business. This is a science, and when it’s done right it’s the science of success.

#2 Running A Marathon and Giving Up 2 Feet From The Finish Line
Mistake: Not budgeting properly for testing and not properly analyzing the results.

There are instances of projects that simply don’t have a pulse and have no chances of resuscitation, period. No matter what you offer, or what you do, it’s not going to make money on TV.

But the truth is we see far more projects that fall into the gray area. Not a bomb and not a runaway success out of the gate. This is where many unseasoned companies fail. They make a spot, test the media, and get marginal results. Not terrible, not great, but don’t understand how to develop the backend or create additional streams of profit and income with upsells, cross marketing promotions that can turn a so-so project into a winning campaign. It is at this critical juncture where the project is abandoned or left for dead.

You have to ask the right questions; Can the offer be tweaked? Did the creative fall short? Is the offer right? Is there lots of interest but a low close rate? Was the media right? Was it the right call center?

True Story: We had produced a great spot, the offer was strong, the product seemed like a winner, and after the media ran… we heard crickets. We got just a handful of calls. The results sucked. They were so bad, I called the 800#’s myself to make sure they were working. The client was ready to abandon the whole project and write it off as a bomb.

So we went to work to analyze all of the data we could to figure out what went wrong… Incredibly the duplication company made a simple mistake. They only put the 800#’s up for 15 seconds in the call to action in a half hour infomercial. So the phone number was only on the screen for 45 seconds in an entire half hour show! We corrected the problem, retested the show and the project ultimately went on to generate over $30 million dollars in sales!

With the right guidance it can be much clearer what can and needs to be done. So remember this is like running a marathon, so plan on taking your project the distance.

#1 It’s all Mine, Mine, Mine!
Mistake: Not bringing in the right partners when it makes sense.

100% of nothing is nothing. Now this is not a requirement, but we’ve found when everyone has skin in the game… even if it’s a little skin in the game we all play harder. It’s not a bad idea to find the right infomercial marketing company and give them a piece of the action, for creating and managing a successful campaign. 1% of your commercial’s sales is not an unreasonable bounty for the company that creates a campaign that works and ultimately makes you millions.

It’s like when you are playing cards for fun or when there’s money on the line. I know even when our family plays a friendly game of gin rummy for pennies everyone gets a little more aggressive.  Plus you can usually negotiate a substantial reduction in their fees in return for a piece of the sales. And remember, if they don’t make it work they don’t get their percentage.

I know for sure we have worked harder, longer, and fought to make a project work when we have a piece of the action. Plus it’s a great indicator about your product’s potential when companies are willing to work for less money up front and a piece of the sales in the end. If they just want to be paid upfront you have to decide how much confidence they have in your product’s success in the long run.