Making a profit through Direct Response advertising means paying close attention to the pennies. A friend of mine with whom I have done many deals came to me with a new product he had created. He was selling it for $19 over the Internet. He wanted me to help him get it on one of the shopping channels. I asked him what his cost was. He said, “Nine dollars.” That’s too much. Three dollars, maybe. But at a $9 cost and a $19 retail price, you can’t make any money using television.
This example brings up two points:
First, you have to keep your manufacturing costs low enough to have a significant transaction margin. I’ve had people tell me, “But it is made in America!” I am as patriotic as the next guy, but I can tell you most people in this country do not care where something is made. They care much more about cost.
The second mistake is being in love with your product. Yes, it is your baby. You gave birth to it, probably over months and months or years and years of effort. If you are in love with it though, you won’t be able to step back and ask, “How much will people be willing to pay for this?” You will be thinking, instead, “My product is three times as good as all the other ones, and it is worth three times the price!” The consumer won’t be thinking anything like that.
Always have an agency with experience in Direct Response handle your campaign. There are a number of such agencies in this country that will serve you well and won’t rob you. When I say this, I am not impugning general advertising agencies. They have been doing what they do for many years and they are very good at it. But Direct Response calls for experience and knowledge that most general advertising agencies just do not have.
The biggest mistake you can make is to try to go it on your own. Direct Response -especially DRTV – isn’t as easy as it looks. In television, for example, most of the media time is owned a year or more ahead of time by just a handful of agencies. And they’ve paid special DRTV rates you won’t be able to get on your own. So find a good, reputable agency, and you’re on your way to making Direct Response profits.