Electronic Retailer - April 2012 - 38

BY STEVEN FEINBERG

Pump Up the Offer: A Tale of 2 Fitness Marketers
CHANNEL CROSSING: PRODUCTION
Direct marketers understand the paramount importance of offers and are driven to create product combinations that give consumers a sense of satisfaction and value. One hurdle that stands in the way of achieving this is that it must be accomplished with a cost of goods sold of one-fifth or less of the retail price. This is necessary to cover all of the ancillary costs of a campaign, which include but are not limited to media, telemarketing and fulfillment. Enter into this discussion the consumer expectation that buyers are going to get a boatload of product for their dollar, and you have some formidable challenges. However, an examination of two leading fitness marketers ranked in the Infomercial Monitoring Service’s Top 15 infomercials for 2011 reveals that there are different paths that can be undertaken to achieve success. On the one hand you have the 6 Week Body Makeover program, a show with an offer build so complicated that the show’s call-to-action, where the actual description of what you get when you order is detailed, requires well over five minutes. The basis of the program involves a Body Blueprinting Program that, based upon its results, customizes an eating plan and body-sculpting plan. It comes with various video-based, audio-based and written materials, exercise bands and sundry bonuses that, all told, represent at least 13 different components by this author’s count. 6WBM is offered for six payments of $19.99, plus $19.99 shipping and handling. When depicted on-screen in a tabletop shot, the product assortment appears to be a cornucopia of items that fortifies the idea that the consumer will be rewarded with a rich array should they order; in other words, “everything you need to succeed.” This tactic has apparently paid off handsomely for marketer Provida Life Sciences as the IMS Report ranked the show 13th among 2011 infomercials. For almost exactly the same price, (three payments of $39.95 plus $19.95 shipping and handling), there is Beachbody’s ubiquitous P90X. With a core offering centered on 13 extreme home fitness workout DVDs, P90X comes in a kit about one-third the size of 6WBM. While it too contains a fitness guide and nutrition plan, the emphasis is on a compact footprint, in a small box with the following message emblazoned on the lid, “This is your gym for the next 90 days.” Even though one can argue that it too contains “everything you need to succeed,” there is an important distinction to be made between it and the 6WBM offer. While one can achieve great results using the core P90X program, there are several ancillary products that range from a pull-up bar to resistance bands, dumb bells and various supplements that can help optimize results, but they are not part of the core offer. The reality is that anyone willing to take on this notoriously challenging program may or may not already own these products, so the marketer is able to offer the basic program without violating the idea of a complete product, and yet still enjoy a robust aftermarket selling these items to new recruits once the latter have made a commitment. One could argue that there is a direct link between the sophistication of each of these offers and the level of understanding their respective buyers has of what it takes to achieve success. With no disparagement intended, the SWBM offer is attempting to overcome the apprehension of an obese, unfit prospect by offering a cavalcade of product that equates quantity with value. P90X is largely aimed at those who have already attained some level of fitness but are ready to take it to the next level. These are two very different audiences and two very different approaches. The lesson here is that when a marketer is configuring its offer, he or she need to not only consider who the target audience is, but where those potential customers are coming from psychologically as it relates to the value proposition of the product. The only way to attain that information is to get feedback from consumers about what it is that will drive them to a purchase decision. Given the pressure on direct marketers to create tremendous value with limited manufacturing costs, there are only so many pennies to spread around; arrange them wisely. Steven Feinberg is the CEO of SF Global Sourcing (www.sfglobalsourcing.com) and the chairman of the ERA Board of Directors. His company specializes in global sourcing of intellectual property via CDs and DVDs, value-added packaging, and all of the elements that comprise an offer by leveraging a worldwide partner network. Steven can be reached at 1-855-SF-GLOBAL or steven@ sfglobalsourcing.com

electronicRETAILER | April 2012

Electronic Retailer - April 2012

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