And If You Order Now…Developing and Getting A Million Dollar Product on TV
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Transcript of And If You Order Now…Developing and Getting A Million Dollar Product on TV
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And If You Order Now…Developing and Getting A Million Dollar Product on TV !!!
Marty M. Fahncke
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Marty M. Fahncke
DRTV since 1986Projects and campaigns generating over
$1 BillionDRTV in over 70 countriesFocus on DRTV/Online interaction since
1999Over $200 million online revenue
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Writer/Media resource
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But wait, there's more!
SpeakerConferences and Associations
Corporate and Education
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DRTV…facts & figures
DRTV stands for Direct Response TeleVision $200 BILLION worth of goods and services
sold through DR annually One in four Americans (28.6%) report that
they have purchased a product advertised via an infomercial
*Source – Direct Marketing Association and Electronic Retailing Association
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DRTV…facts & figures
In addition to generating immediately trackable sales, DRTV campaigns also drive retail store traffic.
– More than one-third of viewers indicate that they have purchased a product they were exposed to via advertising at a later time, primarily through brick and mortar retail stores.
1:7 ratio
*Source – Direct Marketing Association and Electronic Retailing Association
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DRTV...facts & figures
Infomercial viewers are more likely to trust infomercials over used car salesmen, corporate executives...
...and congress!
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Forms of DRTV
Infomercials (Long form 28:30)Short form (:60 and :120)Home shoppingInternet/E-CommerceRadio
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Examples of DRTV success...
Showtime Rotisserie - $300 million
Total Gym - $1 Billion
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Examples of DRTV success...
AbDoer - $200 million
ProActiv - $2 Billion
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Examples of DRTV success...
And of course...
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It's for the “Big boys” too...
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Criteria for successful DRTV product
#1 Solve a problem?
#2 Great “demo”?
#3 Mass-market appeal?
#4 New and unique?
#5 Line extensions / upsells / bonus?
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Criteria for successful DRTV product
#6 Testimonials
#7 Track record of success
#8 5:1 margin? 7:1?
#9 Short form - $30 or less?
#10 Long form – Double “Perceived Value”
#11 Back up the claims?
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Criteria for successful DRTV product
#12 Does your product fit into a category with proven success in DRTV?
– Fitness/Exercise
– Housewares/Kitchen
– Weight Loss/Self Improvement
– Cosmetics / Health & Beauty
– Tools/Automotive
– Business Opportunity/Making money
– Golf, Fishing, Music/Entertainment
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Types of deals in DRTV
Licensing
Joint-Venture Distribution
For-hire / Agency
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Licensing
Lowest risk, lowest rewardYou do nothingCosts you nothing1-3% royaltyLoss of control over timeframe, marketing
message, etc.
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Joint Venture
Both parties contribute:Time, money, expertise, product, etc
Both parties take riskProfits are split (Not necessarily 50/50)
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For hire/Agency
You run the showCreative, media, order processing,
fulfillment, customer service, etc. Highest risk, highest reward
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Case Study:The 5-year overnight success
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History:
Retail price of $199COG $60Too many bells and whistlesTurned down for 4 yearsIn fifth year, $500,000 market testFailed product
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Elements of success:
COG lowered to $35Tested $129, $149, $199 retailRetail price of $149.95 (3 payments of $49.95)
Sold approximately 600,000 units at this level ($118 million)
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Additional revenue (Upsells!)
Videos $29.95Power Spring $29.95Tri-roller $19.95
Average order: $196.00
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Decline of Product
Went to retail too early, creating our own competition
COG lowered to $28.00Tested $129.95 without successTested $99.95 with good resultsWith upsells. Average order $124Moved another 200,000 units at this level
($25 million)
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Final Phase
$89.95 with videos ($29.95) included
100,000 units ($9 million)
Net $$ to inventor: Approx. $5 million
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Case study:Don’t forget the rest of the world!
Product: Soccer training device targeted toward youth
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Slow start, small Success
Short form DRTV test failedRetail distribution sporadicHome shopping showed life
($500,000-$700,000)Average customer purchased 2.1 items
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Leverage outside the U.S.
Based on success on U.S. home shopping, took the show on the road
Success in UK, Germany, Japan Japanese distributor reworked US DRTV spot
and sold $3-4 million on TV, Print, and retail
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Bringing it back home
U.S. distributor purchased company for several million $$
Had existing distribution to all major retailers
Product in Wal-Mart, Target, etc.
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Questions?
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Want to connect?
Email: [email protected]
Read my Blog: http://www.MartyFahncke.com
LinkedIn Connect: http://www.linkedin.com/in/martyfahncke
Follow me on Twitter: http://twitter.com//fawnkey
Friend me on Facebook: http://www.facebook.com/martyf