Should You Create an Infomercial for Your Product?

eCommerce

After 1984, when the Federal Communications Commission (FCC) eliminated regulations to govern the commercial content of television, infomercials began to proliferate the late-night airwaves because they were cheap to make and proved to be a highly profitable media, selling anything that could be easily shipped.

In fact, infomercials became so profitable that more and more money poured into the industry and by the dawn of the 21st century, big brands started pumping money into the infomercial profit party in a much bigger way. This raised the profile of the infomercial industry as a whole, and furthered the acceleration of rising rates.

Having been involved with some of the most successful infomercials, I have observed that infomercials, as an advertising media, have matured in a way somewhat analogous (although not nearly as fast), as what has happened in the Pay Per Click advertising channel. As PPC became a successful advertising model, over the years advertisers have driven up PPC costs.

Further, the level of sophistication in PPC strategies to stay profitable has also increased.

In a similar way, the costs and risks associated with creating and testing infomercials have skyrocketed since their humble beginnings.

And yet, the investment to test for sales potential via PPC is less than TV.

So, when someone asks me if they should produce an infomercial, rather than delve into the relative merits of their product or service and how broad the demographics are for the market that buys it, I simply ask how much testing has been done through less expensive media?

When that has been refined and scaled up to maximize the demand and profits, enough marketing data will be gained to determine what are the best keywords and messages that underlie this product’s success. And all that data will be very important as a research basis for scripting and producing an infomercial TV “test,” to see how it would do on a limited trial basis as a TV advertisement.

There is much more to know about creating infomercials, but the simple answer about whether you should create an infomercial for your product would be based upon how well it’s selling on the Internet and using the supporting data to help evaluate a translation to TV.

Stated another way, for most business persons, the question about whether a product would be successful as a national infomercial shouldn’t even be considered until it’s been tested online and then tested in smaller geographical regions on TV.

“Offer Service” (For Free?)

The concept of giving away something valuable for free, to gain business attention, has been ongoing grist for argument, within internet marketing circles for a while. The obvious point of contention is that giving away something free, to get your product or service into the hands of potential paying customers (who would not otherwise know or care about you), does not make money.

Of course, the point of “why” one is giving away anything for free is completely missed if one is not also selling a product or service.

Low Cost Advertising

The notion of giving something away “free” as a low-cost advertising media to garner attention for your product or service has been so heightened via the internet, that it’s now an expectation for many web users that they should be able to find any information they are seeking for no cost.

Regardless of whether one can find “any” information for free, or not, the notion of “free” is certainly not new. And I’m sure anyone who would argue “against” the merits of giving away freebies could also cite examples of when they, themselves, received free product samples, or free consultations, or free trial offers before they ever used the internet. (Well, I guess that would depend upon one’s age….)

Scientific Advertising, by Claude Hopkins

Regardless, the point of this article is to simply draw some attention to “how long” freebies have been in existence. Although I would bet free samples and free trial services goes back to the beginning of commercial enterprise, what I can cite as a reference goes back to 1923, in the book Scientific Advertising, by Claude Hopkins.

Chapter 3, “Offer Service,” is all about offering something for free. In fact, in the first sentence of the second paragraph Mr. Hopkins states, “The best ads ask no one to buy.” He further goes on to say, “The ads are based entirely on service.” He offers real-world examples of giving away hair brushes, coffee, cigars and sewing machine trials, and refers to a consumer “…anxious to reciprocate the gift. So the salesman gets an order.”

Of course not every free gift or free service will result in a sale for one’s paid product or service, but the opportunity to make sales based on giving something away can be easier (and more economical) than repetitiously telling people, who don’t know you, to buy from you.

Price Test Flowchart for an Undeveloped Product

What’s the best price to charge for a product? How about, what’s the best price to charge for a product that’s not even developed yet?

Market price-testing is a simple concept: It’s mostly about finding the price that makes the most money.

For example, if you market test the prices of $50 and $100 for the same product, you might expect to make more money on the $100 price. However, if you sell more than twice the amount of the same product by charging $50, then the lower price would be the most profitable one.

Of course, you really have to analyze this against all your costs, to reflect your overall return-on-investment (ROI) of producing, marketing and delivering the product.

Although in another example you may very well sell less of the same product at $100, as long as you make more overall profit than selling a larger quantity at $50, then the $100 is the way to go.

From a business perspective, sometimes it’s best to select the price that creates the most customers, regardless that it may not generate the most profit, simply because more first-time customers means greater opportunities for increased sales later on.

And just to make things more interesting, there are examples of selling a product at a higher price that results in a larger volume of sales than offering it a lower price.

Still, the more pertinent question for this article is how do you determine what’s the best price for a product that’s not even developed?

Market Testing For The Best Price

The accompanying flow chart illustrates a simple way to test 4 different prices via online pay-per-click advertising (in this case, using Google Ads). This particular example is also constructed to determine if the product in question should be developed at all. (In this example, what is being tested is a potential information product).

An important purpose here is to spend a small amount of advertising money upfront – before creating the product – to determine if the product will be profitable enough to bother developing in the first place.

Another important purpose of this test is to determine the response levels of four different prices. The responses are then evaluated to determine which price is the most profitable. Of course you would also evaluate the results against your business intent:

  • Do you want to use the price that generates the highest ROI?
  • Or do you want the price that generates the greatest number of responses with an acceptable ROI?

Price Testing Flow Chart

In this flowchart the four prices are rotated and displayed to searchers looking for the keywords specified for this product. (The same keywords are used for all four ads).

Google Ads allows rotation of the ads to searchers and provides good metrics to evaluate the responsiveness of each ad. (Which, in this case, is simply how many clicked on the product landing page).

If this were solely a “Price Test,” this campaign could be simplified by ending the test at the landing page to reveal which ad generated the greatest response. However this flow chart depicts a test which goes further by also seeing how many respondents would click on the “Buy” button.

If you were testing different prices with a product that was ready to be delivered, then anyone who clicked the “Buy” button could be charged the indicated price and the product delivery would be executed.

However, in this flow chart example, the product has not been developed.

Hence, each visitor who clicks “Buy” is directed to the Registration Page, informed that the product is not ready, and is given the opportunity to be notified as soon as the product is available.

Of course, not everyone who lands on this page will enter their name and email. For example, those who would want the product immediately will probably continue their Internet search to buy what they’re after. However, any visitors that do add their name and email would be categorized as “hot prospects” in a database.

So in addition to using this test as a way to determine the best price, it’s also a way to generate potential buyers. (Of course a number of the hot prospects will have been introduced to the offer by any of the other four prices than the price they originally clicked on, so not all “hot prospects” will buy the product in the end with a different price).

From a testing perspective, the amount of visitors who click the “Buy” button represents an important metric, since it would be the best estimate of what percentage of visitors would result in a purchase.

Once the results of the test have been evaluated and the price determined – and in this case, the decision made to even develop the product – then the hot prospects can be sent a series of emails offering them the opportunity to buy the product when it is ready.

In this way, some of the advertising money may be offset by some initial purchasers.

This would also be the time to ramp up all of your marketing efforts to sell this product in volume at the best price.

Future Price Testing

Once a product is developed, price testing for the exact same product can be repeated from time to time, as the market evolves and changes. Some of the conditions that might indicate an opportunity for a higher or lower price could be accounted for by more (or less) competition, an increase in your brand’s prominence, a greater (or reduced) demand for your product, or even a different business intent for the product itself within your company’s overall business goals.

Of course if the results of the test demonstrate that it won’t be profitable to develop the product at all, then the next step is to abandon this product and test your next product idea.

By the way, it’s worth emphasizing that this article is about “Price Testing,” especially to determine the viability of developing a product. However, there are other types of testing. In fact, testing is an ongoing proposition. For example, once you have determined to develop a product and have determined the best price, a larger body of testing would be directed towards improving various aspects of the ad copy and the landing page presentation, to make the sales process MORE profitable.

How to Test Your Business Idea – The Right Way

Or, How a Small Team Built at Business from 0 to Over $100 Million in 3 Years

OK, so you believe you’ve got a good idea for a product or service. But will it sell? And if so, can you sell it at a profit?

Would it be helpful to know the answers before you invest resources into developing and marketing the product or service?

Hi, I’m George Alger, a long-time, seasoned advertising pro. I’m the owner of Skyworks Marketing and also the producer of a local TV series just north of LA, in between Malibu and Santa Barbara, CA (Our Ventura TV). One career highlight was working on a small team that built a business from nothing to over $100 Million in 3 years. Now, granted, we used national TV advertising to make the big numbers happen. But before we went that route, we started out small, testing the basic premise and then testing details before going big time. It’s a step-by-step process. The whole idea is to invest as little resources as possible to determine if it makes sense to go the next step. It’s like taking baby steps before walking and then eventually running. Or in certain cases, finding out that it’s not worth running or starting the business at all.

If you’re a business person who has spent years developing and marketing a business idea to ultimately learn that it’s only marginally profitable, then you would have wished you had applied this process early on to find out your idea shouldn’t have been launched. Or, alternatively, finding out that it would have worked better if the right adjustments were made.

If you’re an entrepreneur who invested all your savings and maxed your credit cards to make a go at a business idea that ended up crashing your finances, then you know, in hindsight, it would have been much better to test your idea in the beginning. It could have altered the trajectory of your life.

The fact is, you can test your idea before you develop it. And I’m not talking about building a “Minimally Viable Product,” although for certain products, that can be relevant. And even when it is pertinent, it’s a later step. Since it still takes resources to launch a product or service that’s “minimally viable,” wouldn’t it be better to find out if it’s worthwhile to even bother?

Again, the idea here is to invest as little resources (time and money) as necessary to inform any future commitments.

And by the way, you will need to spend some money as you’ll understand in a few seconds. The process requires advertising on a small scale to your potential clients to find out quickly if your idea is workable.

So, how do we do this?

In Brief, Here’s the High Level Overview:

  • You run small, inexpensive advertising tests
  • You advertise to real people
  • These people would “potentially” be spending real money

(More on “potentially” in a moment.)

The Purpose of these Steps is to Learn the Following:

  • Will people buy this product or service?
  • What is the right price?
  • How much does it cost to get a customer?
  • What “offer” generates the most sales or leads?

(Offer includes more than price. It includes things like shipping/handling, customer support, guarantee, time payment options, “sale” discounts, availability, options and more and varies with the product or service.)

There are many variables that can be tested, depending upon your specific product or service. And also depending upon how much data you want before you launch.

An important concept here is that this is not a survey for people who may or may not be real buyers. Nor is it a focus group of people who aren’t spending money. This is a process of creating real-world buying scenarios to uncover real, meaningful answers to the above questions.

If you want to find out more, including how the “potentially” works above, enter your email below for the full report and step-by-step process. The report is called How To Test Your Business Idea – The Right Way, or, How a Small Team Built at Business from 0 to Over $100 Million in 3 Years.

There’s nothing to buy.

The report provides the steps on how to get the results outlined above.

Many of you will be able to start implementing this today and in a short while you’ll know the answer to the above questions, including “Will my business idea work?”

Why?

So what’s in it for Skyworks Marketing? Why provide this testing blueprint?

A small percentage of you will want help, or will want someone to walk them through the process. If that small percentage includes you, then you may want to inquire about our paid services, which includes training or simply performing the step-by-step process for you. Having said that, it’s up to you to seek that help, if you desire it. We do
have the resources to help you but that’s not the real intent behind giving away this process for free. “Testing” other people’s ideas as a business service doesn’t take much time so it’s not a good business model.

Here’s the real reason: Some of you who test your idea will find that you have a winner. And some of you who have a winning idea may want to partner with an agency like Skyworks Marketing to take you much further. For an even smaller percentage of these business idea winners, they might be interested in our pay-for-performance partnership opportunity.

Regardless, you’d have to test your idea first and then reach out to us to make that happen. (If you’d like to know more about our services, visit SkyworksMarketing.com).

Get The Free Report Now

So, get the report. Enter your name and email for instant access. If your business idea is not ready for prime time, then you may wish to send us a “Thank You” email to let us know we saved you from the grief and aggravation that would have transpired in the next few years if you tried to make it happen anyway.

If this testing process proves you have a successful business idea, we hope you’ll consider us a potential partner if we fit your needs. But even if we don’t fit into your future, we wish you much success!

Enter your name and email for instant access.

How to Test Your Business Idea – The Right Way

Download HOW TO TEST YOUR BUSINESS IDEA – THE RIGHT WAY. You’ll also receive the monthly Skyworks Digest on P4P marketing and cutting-edge advertising, including data science and artificial intelligence.

“Testing” Your Way To Internet Marketing Success

What is Direct Response Testing? (3 minute video)

Advertising performance testing is the ongoing comparison and refinement of marketing elements and campaigns to maximize the impact of copywriting, sales offers and marketing messages to optimize the return on investment of advertising dollars.

Inadequate market testing will not only generate inferior results for your advertising campaigns, it can be the difference between profitability and unprofitability.

Fundamental to Internet Marketing, and Direct Response marketing in general, is the importance of testing, comparing and refining the various elements that generate traffic, leads, subscribers and sales.