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"Koeppel Direct's media buying expertise has played an integral role in making my company successful. Koeppel generated so much business for our company, occasionally we have to limit their media buys, in order to handle all of the new business." | |
| - R. Gregg Marketer of Senior Products |
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MEDIA BUYING DIRECT RESPONSE TELEVISION (DRTV) ARTICLE ...... |
What's the Big Idea?
Published: 06/07 Entrepeneur Magazine |
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Braun's not the only one making inroads at QVC. The TV shopping destination proved
enormously successful for Peter Janssen when he launched Thumbs Up! Hanger. This Middleton, Wisconsin, area
veterinarian got the inspiration for his product while hanging pictures in his office. He thought there should
be an easy, reliable way to hang pictures on the wall without using tools. The result was his design for a metal
hanger with a sharp edge to pierce through drywall and a hook edge to hang the picture. With a push of the
thumb and a twist into place, the picture is up. Because the product was easily demonstrable, it was a great
fit for the QVC format. An old friend proved to be a true six-degrees-of-separation contact for Janssen--his
friend knew someone who worked with QVC and helped him introduce the product to the retail giant. "QVC is an
unbelievable place," says Janssen, 48. "I had no idea how powerful it was."
Once the deal was set, Janssen flew to QVC's studio in Westchester, Pennsylvania, for an all-day "guest expert"
training course to prepare him for his on-air debut in March 2006. During his first QVC appearance, he sold
2,000 of his 20-pack picture hanger units, generating $4,900 per minute in sales. "We sold out 2,000 units in
six minutes," recalls Janssen. "All I'm doing is showing people how this thing works, and the phones are
just going crazy. It went really fast, and it was really exciting." Since then, Janssen has appeared on the
channel five times. For more vendor information on the home shopping arena, including FAQs and application
criteria, check out QVC and HSN.
Persistence Pays
Janssen found that it takes time to get even a truly unique and easily demonstrable product out into the world.
Never quitting his day job, he worked on his design and patent steadily for years before officially launching
his company in 2005. He researched the market and overseas manufacturing business extensively during the
startup process. "If you feel you have a good product, persistence is probably the most important thing you
can have," says Janssen. "There were a lot of twists and turns, and [sometimes] I thought, 'I should just let
this go.' But I didn't. Being persistent about taking the next step essentially got me where I am. Just keep
at it." Today, he would like to maintain the relationships he has with QVC as well as local ACE Hardware and
TrueValue stores. He also hopes these brick-and-mortar retailers will help him sell his product at the national
level in the future. Janssen expects sales of up to $400,000 this year.
Tenacity like Janssen described worked well for husband-and-wife entrepreneurs Noah Houghton and Katrina
Merrem, founders of Noka Chocolate, a high-end chocolatier in Dallas. With a vision to market the purest
form of cacao to chocolate connoisseurs, Houghton, 30, and Merrem, 34, did tons of research on everything
from chocolate manufacturing to high-end box-makers for their ultra-chic packaging before they launched
their enterprise in 2004.
They also researched high-end retailers and believed Neiman Marcus would be a perfect match for their chocolate
brand. Houghton contacted the Neiman Marcus buyers repeatedly, first to introduce the company, then to send
product samples and follow up. "It was an attentive persistence," says Houghton.
One day, Merrem actually went to the Neiman Marcus offices downtown, located above the flagship retail
store. She asked a security guard for directions on where to drop off her product samples, but ended up
getting lost in the offices. She accidentally found herself right in the buying office--a place vendors
generally aren't supposed to be. Instead of turning back, Merrem politely handed them the samples. Says
Houghton, "She thought, 'Hey, I'm here, let me take the opportunity.'" Her boldness won the day--now Neiman
Marcus is the high-end retailer for the Noka brand.
A foundation of solid research certainly helped launch Noka Chocolates, and now Houghton and Merrem even have
a few Noka flagship stores of their own in Dallas and Tokyo. They also have plans to expand to the Middle East
and further into Asia, pushing 2007 annual sales to $1 million.
The bottom line in your epic product launch is to do your homework. Seek out books on distribution channels
and read retail industry trade publications to make yourself an expert. "The more honestly you can see your
product, the better off you're going to be," says Haley. "But the greater your commitment, the greater your
absolute faith in that product, the more successful you'll be, too."
Damage Control
Jodi Braun had everything set. A big-box retailer had made a significant order from her line of For Goodness
Cakes. Just 48 hours before delivery, when every cake was baked, packaged and ready to go, Braun got the
devastating news (via e-mail) that the order was cancelled. "I was really upset," says Braun.
What might be a small setback for more established companies could be a fatal blow to a new business. First,
you need to check your contract closely to see if the action is within the retailer's rights. If it is,
you've got to gear up to get that product out quickly, says George T. Haley, professor of marketing at the
University of New Haven School of Business. "In negotiating the contract, insist on some degree of
compensation if [a cancellation] happens," he says. "Putting it into the contract means it's less likely
you'll get the sale, but it's a trade-off you have to consider."
Braun let herself be upset for one day before gearing up to weather the storm. Her backup plan included
donating some of the inventory to nonprofit shelters and thankfully, she was able to store the rest in
freezers. The plan proved financially viable and helped to restore Braun's spirits. Turning the negative into a
positive, Braun says, "I use [the experience] as fuel. It gives me so much motivation and energy to move
on."
Welcome to the Infomercial Age
Selling directly to a consumer via an infomercial can be a great way to launch your product. "[If] entrepreneurs
can show their product is successful on TV and the consumer wants it, that makes it easier for them to get that
product into retail," says Peter Koeppel, founder of Koeppel Direct, a direct-response and media buying company
in Dallas.
Products that often do well in the direct-response/infomercial space are ones with the broadest appeal, such as
household products and kitchen products. "If it's too niche or too expensive, it probably won't sell as well on
TV," Koeppel says. He advises entrepreneurs with new products to seek out companies with solid experience in
direct marketing, especially with products in your arena.
You'll likely spend about $10,000 to $15,000 on a media test, and a two-minute short-form infomercial can run
you about $25,000 to $50,000. A full-length 30-minute one can run more than $100,000. The great thing about
this format is that it generally provides specific data about which consumers are buying your products. If you
decide to go this route, remember that your website is key, too--many people who see your infomercial will go
straight to the website to order instead of picking up the phone, says Koeppel. "The internet is an important
part and works synergistically with the TV to improve the performance of the campaign."
Just Don't Do It!
Experts Jay Abraham of The Abraham Group and George T. Haley of the University of New Haven School of Business
reveal five common mistakes to avoid during your product launch.
1. DON'T spend a fortune on media that doesn't target your product's specific audience. If a publication has a
circulation of 10 million and you only get 2 percent to respond, you probably figure you'll make a fortune, but
"it's much harder than you think," says Abraham.
2. DON'T assume that just because you think your product is fantastic, everyone will automatically agree. You
must objectively evaluate the merits and shortcomings of your product.
3. DON'T under-research your market, including who your competitors are and why retailers might want to stick
with them, says Haley. You have to figure this out before you can come up with a solid plan on how to overcome
their objections.
4. DON'T overlook the skepticism of most buyers, says Abraham. "The buyer is inherently suspicious," he says.
"He or she has an infinite number of options in the product or service category you're offering." Understanding
that can help you market yourself in a way that highlights your product's assets while making it stand out
from the crowd.
5. DON'T be shortsighted about the risks involved for a retailer taking on a new product. Says Abraham,
"Understand what the level of psychological, real and perceived risks are in a transaction. If you can
eliminate or reduce them entirely, it's easier for someone to say yes to you."
Click Here to .view the entire article
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