Sunday, May 3, 2009

Blog#4:The Lead Generator

I'm going to skip ahead a bit on the "small steps" theme, because I want to plant a seed of an idea in your mind about products and finding them.

One of the easiest ways to make money is with what is called a lead generator. To get all the details it's in Chapter 13 of my book, but here are the high points. Generally, if you're going to put a product on TV and it's going to sell for right around twenty dollars, it's going to be advertised with what is called a "spot", meaning 60, 90 or 120 second commercial.

On the other hand, the next level of pricing begins at $40 and up and for prices like that, you're going to need an infomercial, meaning a commercial that's a half-hour long (actually it's 28 minutes, 30 seconds in length, or 28:30 in TV language.

Now, when we get to the more expensive products, usually $300 or $400 and up, you very, very rarely see them on TV as a direct sale, instead their commercials are "lead generators" where the view calls in for more information.

The lead gen as it's known, enables the company selling the product to do 2 things:
1. They capture the viewer's name, phone, email and address so they can send them additional, more carefully targeted sales material like a DVD, brochures etc.

2. The company can now contact the viewer within a few days of the viewer receiving the sales materials and try to "close" them on a sale, using a professionally trained, telemarketing company.

But here's the greatest thing about lead generators for you. There are lots of companies out there, with great products that ARE NOT being shown on TV and they could be, so the goal for you is to be on the look-out for the good ones and then bring them to someone's attention.

I know what you're thinking..."Wait a minute, Olson wants me to find products and bring them to him. Why should I do that?"

Great question. First, you don't have to bring them to me, but you're probably going to want to bring them to someone, because it's going to take money and a company with a lot of "know how" to put the product on TV and make it work. But when it works, you can make money every single time someone buys the product and I'm not talking about chump change here, but pretty decent money.

If you bring a product to someone, don't show your hand too early. Be extremely general, as in: "I've come across a really amazing product that I think you might be interested in as a lead-generator." Don't tell any more than that...I'd even keep the category to myself.

Next, ask for a simple deal memo, whereby you are paid a small percentage of every sale on TV, including upsells and all back-end sales, all retail sales, all web and catalog sales for that product.

You're not going to get 10 bucks on each sale, but it's completely possible that you could get a buck, or even $5 on each sale, depending on the price and that should go on for as long as the product is selling.

How many Bow-Flex machines do you think have been sold? I know it's in the millions and if you're getting a buck on each....???

The big secret is to have simple, but air-tight agreements with both the company you're representing and with the marketing company.

What kind of products do I look for you should be asking? Exercise machines always get a lot of attention and it seems like every day there's a new one out there. The cheap ones go as direct sales, while all the Bow-flex, Nordic Track stuff is usually a lead-gen, but most of those big guys know the TV business. You may stumble on a new one, so never stop looking!

What else? I've always thought those mechanical sunshades for a porch could do well, but never seen one on TV.

Hey, it could be a revolutionary, fold-up picnic table, or a tiny, electric bike....on and on and on....

Start looking and thinking. This will really help as you begin to get the feel for the world of direct response selling and DRTV.

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