The As Seen on TV industry has long been ripe for parody, but the fact that it pulls down an estimated $400 billion a year from infomercial viewers makes it no laughing matter. It’s one of the most successful retail platforms in modern history. Yahoo’s Daily Ticker recently talked with As Seen on TV stalwart Scott Boilen of Allstar Products Group about the five top secrets that drive the success of an industry that sells you stuff you never thought you needed.
1. $19.95, the forever price
“$19.95 has been our magic price point, unfortunately, for 20 years as costs have gone up and everything has gone up,” Boilen told the Daily Ticker. “When you go above [$19.95], you just don’t get a sale.” But why $19.95? Why not, say, $29.95? “There’s no $30 bill,” says Boilen, suggesting that paying with two bills rather than one creates a psychological effect that can kill a sale.
2. The iconic As Seen on TV logo is everywhere and open source
The As Seen on TV logo is not copyrighted, so it can be used freely, which has made it ubiquitously recognizable. “It’s become a powerful sales tool,” Thomas Haire, editor-in-chief of Response magazine, told the Daily Ticker. “The industry as a whole was smart enough to open-source that logo and let everybody use it. . . .” The thinking here is that the logo actually limits competition between products that adopt it. “As the business grows, we all grow,” says Boilen.
3. The shift from direct-response to retail
Customers are no longer buying As Seen on TV products via 1-800 numbers displayed during infomercials. In fact, an estimated 95 percent of sales are made in stores, although interest is largely driven by the infomercials. “Our advertising is basically to just build retail demand,” says Boilen. Retailers like Bed, Bath & Beyond, Walgreen’s and Wal-Mart all have retail space devoted to As Seen on TV goods. The companies behind these products make a lot more from retail than direct-response sales.
4. It’s a crapshoot
There’s no formula for the success of a product. Even veteran marketers can correctly forecast the success of a product only 30 percent to 50 percent of the time, says Haire. Only one in 20 products that are launched succeeds.
5. Recession? What recession?
The Snuggie launched right in the middle of the 2008 global recession, but has still managed to rack up half a billion dollars—that’s billion, with a B—in sales. “There’s been this idea for many years that the As Seen on TV industry was recession-proof,” Haire told Yahoo. “And 2008 was a great year even though the economy took a downturn.” Boilen agrees, and even suggests the recession boosted business: “The recession has impacted our business in a very positive way.”