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Business Plan for Infomercial

Infomercials have a bad reputation. Many people dislike them, and most of the viewership only watches to marvel at the fact that that sort of advertising actually prompts people to buy a product. At their worst, infomercials are seen as the last resort of the desperate, the late-night panacea for the insomniac. It's not often you'll see a serious business plan that even discusses the idea of using an infomercial as a marketing technique. However, if you want your business plans to use infomercials as part of the marketing strategy the business plan outlines, take heart—research shows that these much-maligned television spots actually serve a very legitimate purpose that will only gain steam as time passes.

There's an interesting phenomenon at play in the consumer market: despite people's general reticence to watch or be compelled by infomercials, as consumer cynicism rises (which is currently the verifiable trend), would-be customers demand more knowledge about products before they make purchase decisions. What better way to reach a rapt audience, massive in scale, than to use a standard 30-minute national cable and broadcast television infomercial? The average cost of this method is only twenty cents per viewing household, a figure that all but guarantees profitable returns on the advertising investment in most cases. Usually, the cost per order (CPO) obtained via infomercials outstrips other direct marketing channels like print advertising and direct mailings, so perhaps it's not so crazy after all to make this concept a part of your business plan.

There are, however, some factors you need to consider before describing your infomercial approach in a business plan. First, evaluate your product carefully. Try to make sure that it will have "mass appeal" so that it will be an effective sell in the infomercial, and check to see that it is marked up 3:1 or better over cost of goods. The bottom line is, does the product have a broad enough appeal so that it will stimulate substantial retail sales after the infomercial airs? Assuming it does, then you should structure a fair (and convincing) offer, develop a creative pitch for the TV spot, and produce internal price point and product positioning statements that will give you an overarching vision for the project. Putting together an infomercial is more an art than a science, but given the expense of the undertaking, grounding the infomercial in proven methods that will increase your sales is imperative.

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