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EPISODE 0020 - MAY 29, 2018 Just For Fun

But Wait, There's More

with Peter Bieler, Andrew LaRowe, Carrie Jeske, and Rachel Tipograph
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Do you struggle with finding the right podcast? Are you tired of true crime shows and hosts trying to sell you a mattress? Introducing REWORK, a podcast that’s free of both murder and midroll ads. When you listen to this episode of REWORK, you’ll learn the fascinating history of infomercials and hear sales tips from experts like the marketing guru who made the Thighmaster a '90s sensation. But wait, there’s more! Stick around after the episode to hear Wailin explain the premise of Three’s Company to Shaun. Subscribe to REWORK today!

Transcript

Wailin: (00:00:00) In the 1980s Peter Bieler was working for a TV production company in Los Angeles

Peter: (00:00:05) And I would walk by this small… it was called an insert stage in Hollywood terms, meaning a small stage, which is usually used for closeups of people’s hands on a telephone or somebody picking up a drink or whatever, like that. It’s small, close up shots. But in this case, this studio was just bustling. There were phone operators, and he had tables taking calls. There was a stage in which interviews were taking place. There were some demonstrations taking place in another corner of the studio.

(00:00:38) Eventually, cornered somebody that I thought it looks empathetic and open to talking about it. And he described it’s a show that actually doesn’t have ads in it. It is an ad.

Wailin: (00:00:48) What Peter was seeing was something called direct response television. You probably know it as infomercials. Direct response is just what it sounds like. It’s an ad that asks you, the viewer, to buy something, usually by calling a number. This format dates back to 1949.

Vitamix Clip: (00:01:08) Ladies and gentlemen, in presenting home miracles for 1950, I’m going to give you a demonstration of one of the most wonderful machines that was ever invented, the Vitamix machine. And I’m going to talk to you on the most vital subject…

Wailin: (00:01:24) Since that first Vitamix ad, direct response has evolved into the infomercials we recognize today. Long form versions are 28 and a half minutes and short ones are two minutes. It wasn’t until the late ‘80s when the Reagan Administration deregulated the airwaves that infomercials really took off filling up the cheapest slots late at night or early in the morning. This is the format that Peter Bieler got hooked on and he started making his own.

Peter: (00:01:48) Eventually, it wasn’t right away, but eventually, this product came to me. It was called the V-Toner. It had been pitched on television a few times as a kind of a gym in a bag kind of thing. You know, you could throw it in your suitcase and it was kind of pitched as being a handy exerciser. And I did not think handy was what people were looking for. I thought people were looking for something that was effective and I focused on thighs.

Suzanne Somers: (00:02:16) Some people are born with great legs, but the rest of us have to work at it. I used to do aerobics till I dropped. Then I found Thighmaster. Every single time you squeeze Thighmaster…

Peter: (00:02:25) The skill that’s needed is a marketing skill, it’s not an inventing skill. There’s more inventors out there producing these kinds of a household products that—and fitness products and gadgets—then there are people that know—have the knowledge and the financial basis to bring them to the marketplace.

(00:02:43) Broken By Design by Clip Art plays.

Wailin: (00:02:44) Hello and welcome to REWORK a podcast by base camp about the better way to work and run your business. I’m Wailin Wong.

Shaun: (00:02:50) And I’m Shaun Hildner. Wailin, have you ever bought anything of an infomercial?

Wailin: (00:02:55) I have not, although I’m totally that the kind of person who would.

Shaun: (00:02:59) I think the only person I know who actually has is our Head of People Ops, Andrea. Should we give her a call?

Wailin: (00:03:06) Yes.

(00:03:08) [Phone rings.]

Wailin: (00:03:10) Pick up the phone, Andrea.

Andrea: (00:03:11) Hello.

Shaun: (00:03:11) Hi Andrea.

Andrea: (00:03:13) How are you?

Shaun: (00:03:13) Wonderful. How are you?

Andrea: (00:03:15) Doing good.

Shaun: (00:03:15) So can you tell me about this egg thing you bought off the TV?

Andrea: (00:03:21) Yeah, it’s called, it’s called the Egglette. And it is, so it was—I’ll give you the backstory. It was like three in the morning. I was on maternity leave, so I was up feeding the baby. And the infomercial came on TV. So, like going into it, I was sleep deprived and emotional. So, it’s six silicone, containers, egg shaped containers, with like a plastic screw top. And the idea is, if you don’t want hard boil eggs the old fashioned way, you can crack an egg into the little silicon cup and then boil the silicone cup. And then you get your hard-boiled egg. It’s supposed to just kind of pop right out of it.

(00:04:13) So, yeah, I ordered six and then I got six free, for the limited time only.

Shaun: (00:04:17) How much was, how much was the six plus six.

Andrea: (00:04:20) They were $25, but I also got a microwave egg cooker.

Shaun: (00:04:28) Well, now you’re making money.

Andrea: (00:04:31) Yeah. Yeah. So…

Shaun: (00:04:31) Would you, would you say it was worth it?

Andrea: (00:04:34) Yeah, it was worth it. I like have a weird, I really don’t like peeling hard-boiled eggs. They always get messy, and I get frustrated. So, I guess it’s worth it. It’s like such a nothing problem to have, but it did solve that problem for me.

Shaun: (00:04:53) That’s awesome. That’s perfect. Thank you so much.

Andrea: (00:04:56) Yeah, no problem.

Shaun: (00:04:57) All right, we’ll talk to you soon.

Andrea: (00:04:57) Bye. Sure. Bye-bye.

Shaun: (00:04:58) Bye.

(00:05:00) Broken By Design by Clip Art plays.

Wailin: (00:05:02) Infomercials and As Seen On TV ads have a reputation of being really corny and formulaic, but the products sold via infomercials rake in billions of dollars in sales every year. There’s something about the formula that works. On today’s show, we explore what infomercials can teach us about sales and marketing and look at how the basic principles of direct response TV live on in more modern formats. So, don’t change the channel. We’re going back to Peter Bieler and the Thighmaster.

Thighmaster Clip: (00:05:35) When these muscle groups get out of shape, the result is flabby thighs. Thighmaster is designed to isolate and strengthen these muscles. That’s why it works so quickly. That’s why I recommend it, and use it myself.

Suzanne Somers: (00:05:49) I thought I’d never fit into this…

Peter: (00:05:49) So, it was my idea, right from the very beginning that I was going to go into retail stores as quickly as I could. The percentage of the population that is going to watch a product demonstration or a page on television and pick up a phone and order it was relatively small. You’re really walking away from a very large audience if you don’t get it into stores at the height of its popularity on television. In other words, when it’s running heaviest, that’s when you want to get into the stores. And that’s what I did. So, I only ran it for about a month and a half or so I think, before I approached all the major retail chains and they took orders because buyers were seeing it on television at that point. You know, six million or so units of the product in about 18 months and you know, four and a half of those were sold in stores and a million and a half are sold in direct response.

Wailin: (00:06:44) This is the way direct response TV still works today

Carrie: (00:06:49) And a lot of people think that the money in As Seen On TV is made through the television commercial. That’s really not the case.

Wailin: (00:06:52) This is Carrie Jeske. She helps inventors get their products on TV and into stores.

Carrie: (00:06:57) We still make money at the retail store level. So, what the TV is used for is testing. Testing the name of the product, testing the price point of the product, testing the right features and the benefits that you’re pitching. ‘Cause for every one person that buys on TV, about 10 to 15 people will still buy at the store level, and that’s where the money’s made.

Wailin: (00:07:17) according to Carrie, the lifecycle of an As Seen On TV product is relatively short, just one to five years. But hit products can sell five to eight million units a year. If you’re an independent inventor with an idea for the next PedEgg or Snuggie, Carrie will license that product, pay you a royalty and take on the TV commercials and distribution. She knows about the industry because she was once an inventor.

SportShade Clip: (00:07:41) The sun is a welcome friend, encouraging outdoor fun, but it can also transform itself into a relentless enemy. Get quick relief from the scorching sun with the innovating SportShade. The SportShade is a portable…

Carrie: (00:07:54) To think it was 20 years ago now. It’s amazing how time flies. But, my husband and I played softball and we were in our forties at the time that you were planning against the 20-year-old teams and you’d have to get in and out of the dugout quick. And so I said, can you jiffy-rig me something that can be quick shade, some kind of a portable shade product that we can move quickly in and out. And so he came up with SportShade, a portable retractable awning.

SportShade Clip: (00:08:15) So, the next time you go out in the sun, don’t forget the SportShade! Solace in the sun.

(00:08:23) SportShade Informercial music plays.

Carrie: (00:08:28) So it failed. Miserably. And that was quite disappointing, you know, to invest that money and the two-minute TV commercial and have it fail. But, I did learn a lot. That something that’s $169 is not a good candidate for a two-minute TV commercial. Really, anything under 50 is the price point.

Wailin: (00:08:50) So, price is important and before you even get there, you need the right kind of product. One that solves a problem. Whether people even know they have that problem. You want TV viewers to go, oh yeah, I do hate chopping ingredients for salad. Or, I am looking for an easy way to tone my abs.

Carrie: (00:09:07) The problem that you’re solving is critical. You can’t be just a nice to have product. It’s got to be really something of value to the market.

Peter: (00:09:16) Well, I need to establish a need and it has to be a widespread need, because you’re paying… When you buy the media time, you’re buying an awful lot of eyeballs. If your potential buyers are only, 30% of the people who are watching, then you’re probably not going to make a go of it. In other words, you really don’t want to do an infomercial for curlers or you know—about curlers, I meant people who play the sport. Curlers themselves would be fine, right? Because that’s 50% of the audience.

Wailin: (00:09:48) Once you’ve got a product, it’s time to make the ad and the infomercial has to set up the problem and show in a clear and direct way how the product solves that problem.

Carrie: (00:09:56) It has to have some kind of a wow factor. These are impulse items. Like, for my canopy it was a how quickly it rolled up. The little scene where it sucks itself back into the canister.

SportShade Clip: (00:10:08) Set up and head down and just seconds. It’s easy to use! Just hook, pull, swing, and stay. Everything is…

Peter: (00:10:15) So then you need to be able to make some believable claims and you need to provide some authority for those claims, why people should believe.

Suzanne Somers: (00:10:25) All across American, people are discovering what personal trainers like myself have known for years. With Thighmaster, it’s easy to squeeze, squeeze your way to shapely hips and thighs. But that’s not all! Thighmaster…

Peter: (00:10:34) You need a very good offer. You need, you know, that’s the overlooked part of infomercials. You need to have a price point and up-sells. And if somebody is on the verge of buying or not buying, then they can hear about something else as part of the product that they really want and that tips them into a buying position.

Wailin: (00:10:52) That’s why TV is used as a rigorous testing ground. Like Carrie said earlier, advertisers make multiple versions of commercials and run them in small local markets. The ads might have different product names or prices or they might highlight different features.

Peter: (00:11:06) First test you do is, you know what I call a does America love you test. I mean, you just go out with your basic infomercial. You can tell very quickly, I mean it’s an amazingly small buy. How success is measured in the direct response businesses by something called media efficiency ratio. It’s basically the gross revenues divided by the cost of the media. So, basically, if you spend a dollar in media and you make $2 for every sale, you have a 2:1 ratio and you need to have a fairly high ratio for it to work. I was looking for something like maybe a 1.65, or 1.7 ratio between revenues and media costs.

(00:11:49) And that’s what you test about. You buy a small test, $25,000 or even quite a bit less. I think you tell with a lot less. You go through an agency, you buy that time and you’re looking to see what kind of a ratio you get. If you get a 1:1, you’re not gonna make it, you know, or you’re not going to make without a lot of reworking. You get a 1.5, maybe you think, well, I can maybe change a few things and eek it up to where I need to be, which is a 1.7 to a two or above. If you’re a two or above, you’re really in for a treat. So, when we put out the Thighmaster in the first test, it didn’t work. America did not love us. It was a failure and was clearly a failure at the point where it could not be fixed by something like a price point change. And, really, the problem was the first time we shot it, Suzanne insisted on wearing a kind of a brown suit.

Wailin: (00:12:41) For you Millennials out there. This is Suzanne Somers, a television actress who was very famous in the late ‘70s and early ‘80s. Peter signed her up to pitch the Thighmaster.

Peter: (00:12:51) She said, I think I’d be more believable or I’ll have a better presence if I’m not in a leotard. Well, she was wrong because… she was really wrong.

Suzanne Somers: (00:13:01) The secret to shapely thighs is exercising these muscles with just the right resistance. Too little isn’t effective, too much may be painful. This balance…

Carrie: (00:13:08) The testing process is very well defined and extremely fine-tuned. It’s really a thing of beauty. One of my products that I found was the get up and go cane.

Get Up & Go Clip: (00:13:18) Standing up from a sitting position can be a real challenge. And reaching out for unsteady objects can be dangerous. Well, not any more. Now there’s the Get Up & Go Cane. The first cane with a second handle…

Carrie: (00:13:29) At one point we called it the mobile cane. So you run the same commercial, everything’s the same. Only one’s mobile cane, ones Get Up & Go Cane. And then you see the, oh, the Get Up & Go Cane name resonated more, sales were better. So now once we have that established, let’s figure out what price points. So let’s run a whole ‘nother series of two-minute TV commercials with the price point difference. So now the name’s Get Up & Go Cane. We got everything solid on the features and we’re going to run it at 19.95 and 39.95 and it turns out that, oh, lucky for us, 39.95 did better. That’s a great thing to have happen because then you find out that wow, all the costs are the same whether it’s 19 or 39 but now at 39 you’ve basically doubled your profits.

Get Up & Go Clip: (00:14:13) The Get Up & Go Cane is perfect for temporarily rehabbing or for difficult spaces like your car or the washroom. So you can enjoy the independence you deserve. Order yours today.

Rachel: (00:14:26) We live in a world now where you can’t just upload one video to Facebook and call it a day. You actually really need to upload 20 versions of that video to Facebook and then optimize based on the best performing audience.

Wailin: (00:14:40) This is Rachel Tipograph. You may consider what she’s doing the next generation of direct response advertising.

Rachel: (00:14:46) Things that you’re looking to optimize for is what I first call the hook or other people call the climax. What’s going to be that first image and first line of caption copy that’s going to get the most people to continue watching through the duration of the video.

Wailin: (00:15:03) Rachel is the founder and CEO of MikMak, a startup that makes mobile video ads for social platforms like Instagram and Snapchat. These ads are product videos, but they’re short, usually between seven and 12 seconds. For those of you keeping track, infomercials have gone from a two-hour live show to 28 and a half minutes to two minutes to a matter of seconds.

Rachel: (00:15:23) And then if you’re doing this within an environment like Instagram stories or Snap, the reality is, you really only have three seconds. And the most important thing that you need a user to do is to get them to hit add to cart. What brands don’t realize is that no one’s watching the majority of the rest of your video. You really need to focus on the first three seconds. So we create multiple variations within that first three seconds. And then once we understand what’s the best version of the creative against which audience segment, we’ll then optimize the rest of the creative. So, we’re working with a chronic deodorant brand and when we first started working with them, they gave us seven key customer segments that they felt like were the people most likely to buy their product.

(00:16:07) Within the first 48 hours of us flighting creative, we really learned that it was about the female athlete. So, then we doubled down on all content and then literally optimized all of the frames and all of the copy to cater towards that female athlete.

Wailin: (00:16:21) There are enough viewers of TV infomercials to sustain entire cable channels dedicated to nothing but that kind of programming. But these viewers skew older and they don’t live their lives on their phones the way younger people do.

Rachel: (00:16:33) If you put on QVC or HSN in a household, what will happen is the 45 and above year old women, they’ll start to really watch. Why? Because they grew up watching long-form content programming. The Millennial generation, aka, my generation, or even younger than me, Gen Z? You put that on and it’s background noise because we don’t consume content that way. But the psychological principles of what makes it work still apply.

Wailin: (00:17:02) One of those principles is a friendly face. These ads only work if the person pitching the product on camera is friendly and believable. Just like Suzanne Somers was when she talked about the Thighmaster.

Rachel: (00:17:13) That’s what psychologists call a parasocial relationship, where you, the viewer believe that I, the host, am your friend. And when you buy from me, you get the same emotional benefit as friendship.

Peter: (00:17:26) You know, since Facebook and Instagram are such large verticals. What seems to work the best on those verticals is this very personalized approach. I mean, it kind of copies, if you will, the average experience on Facebook or Instagram where you feel like you’re talking to a friend. That’s the kind of ad that works.

(00:17:50) Now, I believe that ultimately all of Madison Avenue is going to come around to something like that. I think the days of, you know, story ads are almost all gone, right? Apart from maybe Geico. And you know, there are advertisers that you story ads but, but, uh, but increasingly it’s basically a straight to camera pitches.

Rachel: (00:18:11) People really gravitate towards personalities and quirky is often the way that you get that person to hook. So, we look for people who have unique voices that almost you can imagine, like they’re really good, like physical comedians that can capture someone’s attention within three seconds. And then actually making sure that there’s an authentic connection between the host and the products. So if I have a girl, um, promoting like acne, skincare products, but she has perfect skin, like you just, you can’t fake that, so we really look for people who can have an emotional connection with the products as well.

(00:18:50) Broken By Design by Clip Art plays.

Wailin: (00:18:52) So, Peter. My last question for you is, do you still own a Thighmaster? Do you have boxes of them in your house?

Peter: (00:19:00) Well, yeah, oh Lord. I did, and I had, I don’t know, 30 or something in my garage. But, my garage was broken into and all they took was the Thighmasters.

Wailin: (00:19:14) You are kidding me.

Peter: (00:19:16) That’s it. They wiped me out of Thighmasters, you know, 30 Thighmasters. So when I went on a book tour, if I wrote this book, This Business Has Legs about the whole experience, I had to put an ad in one of the free newspapers around, saying if you have a Thighmaster, I’ll buy it back from you for twice what you paid for it because I need to have them for the book tour so I could give them away to radio interviewers and so on. So, those people did well. They got all their money back, plus and then I demonstrated their Thighmaster on television or radio.

Wailin: (00:19:47) Yeah, so your media efficiency ratio was very bad then, because you had to put an ad in and pay money for these Thighmasters to come back to you.

Peter: (00:19:55) Exactly, exactly, exactly.

Shaun: (00:20:02) REWORK is produced by Wailin Wong and me, Shaun Hildner. Our theme music is Broken By Design by Clip Art.

Wailin: (00:20:09) Special thanks to Emma Courtland and Khrista Rypl. Peter Bieler is the president of Media Funding, a financial services company that lends money to people making direct response advertising. His book about his Thighmaster experience is called This Business Has Legs, and I’ll link to it in the show notes. I’ll also link to Carrie Jeske’s company Will It Launch. And I’m going to link to an infomercial that Shaun made for Basecamp 2. It’s really funny.

Shaun: (00:20:37) We are on Twitter @reworkpodcast. You can find show notes for this and every episode at our website, rework.fm. And, if you want to call us and leave us a voicemail, we always love to hear from you. You can give us a call at (708) 628-7850.

Wailin: (00:20:54) Operators are standing by.

Shaun: (00:20:57) Four easy payments—

Wailin: (00:20:58) —of 39.95.

Shaun: (00:21:08) I have to admit something to you.

Wailin: (00:21:20) Yes.

Shaun: (00:21:20) I have no idea who Suzanne Somers is.

Wailin: (00:21:24) Really?

Shaun: (00:21:24) Yeah, really.

Wailin: (00:21:25) Have you heard of the show Three’s Company?

Shaun: (00:21:26) No, I mean, I’ve heard of it, but I’ve no idea what it’s about or ever seen it. I didn’t grow up with TV.

Wailin: (00:21:33) You were in a TV-less household.

Shaun: (00:21:35) Yeah, hippie parents.

Wailin: (00:21:36) Oh man. Oh my gosh. Okay. Quick Primer. Three’s Company was a sitcom that ran on network TV from like the late ‘70s to the early ‘80s. And the premise of it is that there was this kind of swinging bachelor-type played by John Ritter. Do remember John Ritter, he passed away a few years ago?

Shaun: (00:21:56) I don’t think I could put a face to the name, but I remember him passing away and people being upset about it and having no idea who this person was.

Wailin: (00:22:03) Yeah. So he was a big TV star also from the show and he started at, along with Suzanne Somers and this one actress, I’m sorry, I do not remember your name. You are the brunette. Suzanne Somers was the blonde.

Shaun: (00:22:13) She didn’t sell Thighmasters.

Wailin: (00:22:14) This is very reductive of me. The brunette. But the three of them live together in an apartment and the whole deal was that their, either their landlord or their nosy neighbor, this older guy named Mister Roper was very disapproving of co-ed cohabitation. And so they had to pretend that John Ritter’s character Jack was gay. And so the whole thing was innuendo because also I think Mister Roper’s wife was like very sexually unsatisfied in that marriage. So, she would always like come around and say inappropriate—anyway, so the whole thing was like we’re pretending that this guy is gay and everything was just like sexual innuendo.

(00:22:57) And I remember the reruns used to come on when I was little and I would watch a little and just be really confused about it. Like I didn’t find it funny and be like, oh this just as like a show for grownups. And it honestly wasn’t until maybe college, like I was really old before I discovered what the real premise was.

Shaun: (00:23:14) Right.

Wailin: (00:23:14) And then I was like, oh, that’s what it was about. And I had just had no idea for all these years I caught the reruns.

Shaun: (00:23:20) It kind of sounds like a bad show.

Wailin: (00:23:22) I think that if it aired today or even if today there was a news item saying that this was a show being pitched, that the Internet would like burn down with hot takes and think pieces about how problematic it was.

Shaun: (00:23:36) Right. Thank you.

Wailin: (00:23:37) You’re welcome. This has been this edition of—

Shaun: (00:23:40) Another edition of Wailin explains pop culture to me. It’s my favorite show.

This is an episode title

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