secrets to scale

Secrets To Scale Podcast
017 - The Strategy Behind a TV Infomercial Campaign with Steve Glick

017 – The Strategy Behind a TV Infomercial Campaign with Steve Glick

Secrets To Scale is a marketing and entrepreneurship podcast that revolves around hearing the stories of successful entrepreneurs and uncovering their secrets to scaling their businesses. Music for every episode of this podcast was written and produced by Treycen Clausse.

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xClosure (Website)

Tanner:

This week on the show, I have Steve Glick, CEO and founder of xClosure. Steve has a very successful track record when it comes to mass marketing products, specifically with TV infomercials. Steve and I talk about how you can run a successful infomercial campaign, and he has a lot of amazing insights that you won’t want to miss.

Welcome to the show, Steve. I am really excited to have you on the show. Go ahead and introduce yourself to the audience.

Steve:

Well, my name is Steve Glick. I am the founder and CEO of xClosure. Nice to be here.

Tanner:

Awesome. And so let’s go back to the very beginning. Have you always been an entrepreneur and how did your career get started?

I was always anxious to get out and spread my wings and see what I could do on my own.

Steve:

Well, that’s a, that’s a good question. Have I always been an entrepreneur? Well, you know, when I was a little kid, I was out mowing lawns and pulling weeds when I was six, seven, eight years old and had a little business making money way back then. So I guess that’s where my roots started, but my parents were very industrious. You know, my dad was an architect and workaholic type, but very successful. My mother was a freelance artist and she was the art director for a company called ZCYMI and she was very industrious as well. It was not popular for a woman to work back then, but I grew up in a family of producers. So I learned to produce when I was really, really young. So that’s where it all started. When I was just a little kid.

Tanner:

So did you go to school? When did you start your first business?

Steve:

Well, you know yeah. I went to I went to the University of Utah for four years, studied marketing and management, and then I went down to Brigham Young University and started their accounting program down there. Spent about a year down there then went on a semester abroad to Israel. So I have a lot, I’ve had a lot of schooling but never really took any entrepreneurial classes or courses. I think it was just sort of in my blood, you know, I was always anxious to get out and spread my wings and see what I could do on my own. You know, I did work for a couple of companies years ago, you know, when I was right out of college. I worked for the, the FBI actually as a clerk and I was going to become an agent and I realized I was going to be tied down to the government for years and years and years, and I didn’t want that. So I tried my hand at being a stockbroker for Merrill Lynch for a few years. And didn’t like that, didn’t like the manager coming in and telling me what to do and how to do it. So that didn’t last long. I started really spreading my wings when I was in my early thirties, late twenties.

Tanner:

Awesome. So going back to the very beginning, what was your first company that you started?

Steve:

Well you know, funny thing is, this is going to sound really kind of funny, but we were actually my wife and I ran into a gentleman that had leather bags. We had just gotten married. We were in our twenties and he wanted to sell leather bags door to door. These are like tote bags, you know, you put clothing in and your gym stuff in. And I just thought it was the coolest thing because it was kind of my last years of school. And I said to my wife, I said, what the heck? Let’s just try it. So we actually created a sales team of about 10 salespeople. They were, you know, out of the streets selling these leather bags and we were making, I don’t know, three, four or $5,000 a month doing that.

And really enjoyed that, but, you know, it wasn’t a great business, but it helped put us through school. And I think that was my very first sort of entrepreneurial business, but the one that I think really kind of launched me was a personal coaching business that I got into with Zig Ziglar and Denis Waitley. These are motivational authors and back in the day there were some what I would call get rich quick, real estate, personal coaching programs out there, but they kind of, they just seemed really sleazy, you know? But I like the concept of having a personal coach sort of mentor you and train you to be successful. That whole concept really resonated with me. And so I kind of learned what I could you know, from a distance. Kind of watching that sort of personal coaching space and then decided I knew enough that I can actually go out and try to start a business.

And so I met with Dennis Waitley down in his home in Rancho Santa Fe, California. We struck up a partnership and then got a call from Zig Ziglar after I’d had some success with Dennis and Zig called me and said, I want to do the same thing. So I created a program for Zig called Over the Top, and then I created one for Dennis Waitley called Winning for Life. We started out with you know, two or three salespeople and three or four coaches. And before long I had probably, I don’t know, 20, 30 salespeople and well over a hundred coaches. It was a thriving business and just a lot of fun.

I had a lot of people telling me it couldn’t be done.

Tanner:

Wow. That’s crazy. And then what about after that? Can you help us bridge the gap between that and what you’re doing now with xClosure?

Steve:

Yeah, yeah. So, so after international consulting, that was the personal coaching program. I actually worked as a stockbroker for Merrill Lynch where I wanted to sort of try my hand out, working for big company to see how that worked. And I just I worked for a number of years in the securities business, you know, learned about stocks and bonds and trading and options. And you know, I had quite a bit of success at it, but I just didn’t like it because it seemed like I always had a manager’s thumb over me and I didn’t feel free and carefree. I just couldn’t do what I wanted to do.

And I was approached by a friend of mine who asked me if I wanted to market, a revolutionary speed reading program. And I’d never taken any speed reading courses. It didn’t know much about it. And I said, well, I’m interested, I’ll take a look at it. And then he introduced me, subsequent to that, to a fellow in Japan who was actually the author of the program who had been having quite a bit of success with this program called IQ. And I flew out to Japan two or three times to meet this gentleman to see if this sort of speed reading concept was real. You know, it wasn’t just a sort of flash in the pan. And I was honestly, I was really blown away at the students that were using his program. It was a program really focused on training the muscles of the eyes basically to work better and faster. The theory is you can strengthen the eye muscles, like you would strengthen a bicep. For example, if you go into a weight room and lift curve curls, you would eventually essentially be strengthening your biceps, or if you do squats, you’re strengthening your legs and so on. But this theory was, if you can strengthen the eye muscles that support the eyes, you could actually enhance the eye brain connection. And I just thought that theory was so interesting that I went to Japan, we investigated it and to make a long story short, we ended up buying and acquiring the worldwide rights to the program. We came back and it created a, what they call an old dos version, sort of a black and white software. We put all the bells and whistles on it, you know, color and music and videos, and created this really great software that maintained the integrity of the science. And we started marketing that.

I came from a sort of a background of you know, direct to consumer. The partner of mine was more of a corporate guy. So we tried selling it to corporations. And we failed miserably. We just couldn’t get companies to buy it. And we were ready to sort of tube the business. And I decided that I wanted to take it directly to the consumer because I felt we could sell hundreds of thousands of copies of this. I don’t know if I had convinced my partner of that, but he said, well, let’s give it a try. So I essentially took control of the company. I became a CEO and took control of the company. And we started marketing a direct to the consumer through infomercial campaigns. And within six, seven years, we had sold a million copies of this revolutionary speed reading program. And it was the ride the entire seven years was just a blast. I mean, we were meeting celebrities and vendors from all over the country and you know, the program, the regular version cost $199 and then the deluxe version, which was sort of a multi-user was $249 and we sold a million copies. So you could do the math on that.

Tanner:

Yeah. That that’s incredible. I mean, that, that’s a cash cow. And to think that you almost even didn’t even get your shot to take it to direct to consumer.

Steve:

Yeah. Well, I don’t know if it’s common, but in my case, you know, I had a lot of people telling me it couldn’t be done, you know, that you couldn’t mass market a speed reading program. And so I had all this negative influence coming at me from different angles, even people in my own family said, you’ll never be able to mass market this thing. It’s not popular enough, or it doesn’t have the sizzle, you know, that you’d need. But I was just bound and determined and I just knew that, that if we could increase somebody’s reading speed, if we could double their reading speed in seven minutes, we had something. And we actually had a sample program that we put out there online then people could actually test their reading speed and then go through one session, a seven minute session, and then they would have an instant feedback on whether their reading speed had increased or not. And the seven minutes we could actually double somebody’s reading speed. So if you think about that, if you can double your reading speed, how much more effective are you going to be in school or in college.

I love my offshore model.

Tanner:

I mean, you’re doubling your capacity, you’re doubling how much you can take in and gather all the information you’re gathering, learning, like that’s crazy. So something that you’re really good at is building sales teams. Right? I know you have one that’s overseas, but have you always had an outbound sales team overseas? Have you ever tried doing one here?

Steve:

Yeah, we had I’ve had about a hundred salespeople in a call center environment here. And it was great. It was a lot of fun, had different teams and different managers and incentives and spiffs. And we did it all. It was a lot of fun. It was it was tough though. It’s like herding cats, you know, you got a hundred sales guys and sales people don’t always have the easiest personalities. The fact is, my experience is the better the salesperson, the harder they are to deal with. The salespeople that are passive and you can push around, they’re just not any good, you know. So if you want to have a really good sales team, you have to go out on a limb and hire somebody with an eccentric personality. It’s kind of what you get.

And so I decided to find an off shore model and have sales managers manage the people as opposed to me being too close to it. And I was really reluctant to do an offshore sales group. You know, because you hear all the horror stories of call centers in India or the Philippines. I’m sure there’s some good ones out there, but there are other ones that are aren’t very good and you can’t understand them very well. And so I was really reluctant, you know, based on all the rumors out there.

But my son who I’ve worked with before, is just a really great businessman. He had been doing some work for a company and had been traveling from you know, Honduras, El Salvador to Belize, to Costa Rica. And he was managing about a thousand salespeople for this company, a very big company down there. And he’s the one that talked me into it and he says, you know, if you go down there, if you win the trust of people down in central America, they will work for you forever and they’ll give you everything they have. And so I took him at face value on that. And it’s been true the last four or five years. I’ve had this call center down in El Salvador and I have almost no turnover. If there is attrition it’s because it’s because of some calamity or some catastrophe that hit their family or they had to move or something, but no turnover as loyal as they come. And this particular call center is down there in San Salvador, near the university. So they speak, they’re educated. They speak really good English. Most of them have lived in the United States for 10, 20 years. So you can’t even hear an accent. But I love my offshore model. I just do, you know, we’ve got several accounts that we’re running through them and they consistently outperform anything that we could be doing here.

Tanner:

Wow, that’s crazy. And of course it’s cheaper as well, right?

Steve:

Yeah. Less expensive, although it is getting a little bit more competitive, but it is less expensive for sure. So you could cut your costs by 25 to 50%, you know, by going to a group in. But you know, the tricky part is doing the leg work to find the right group, because you can also find a group down there that you know, you might be out of money really quickly.

The product has got to have some sizzle.

Tanner:

I’m a digital marketer, and I still have no idea how a TV ad works. So I’ll be really interested in hearing,

Steve:

Well, you know, if you’re going to market a product to a consumer through radio or TV, even online. I mean at least from my experience the product has got to have some sizzle, you know, I mean, there’s gotta be some sizzle and there’s gotta be a need for the product. This sounds really basic, right? Yet, people still fall in love with an invention and it has no sizzle to them, but what they probably should have done is put it through some kind of focus group and spent some, a little bit of cash to see if people really like the product, if it had any sizzle to it. And then many people miss that.

The other thing they miss is the cost of goods. The sales price to cost of goods ratio. You know, there, you have to have an adequate markup too. I mean, if you have a product that costs $10 to make and you can only get $15 out of it, good luck making any money. In our industry, the best products, or at least the ones that have the highest likelihood of success has a four or five to one markup. That way you can take your media buys. I mean, look at this way. If you have a two to one markup, let’s say you have a product that cost $10, and you’re going to sell it for $20, but let’s suppose your media ratio is two to one. So for every dollar you spend, you’re going to make you’re spending 50% of the money on media.

You know, half your costs now goes into media. You don’t have very much leftover to pay for the other things like the product itself or the product development costs. You don’t have money to for websites, you don’t have money for salaries. You don’t have money for fulfillment. And so you have no money to make a profit at the very end. So, you really need an adequate markup to be successful in marketing. If you don’t have that market, you might as well kiss your chances, goodbye. The packaging also is a big factor, in success now. Is your product packaged correctly? Can you put it on a shelf at Walmart and can it be shipped easily? You know, those are really important factors in marketing.

Tanner:

Yeah. Yeah. And I mean, if you’re on the retail route, you need to make sure that you’ve optimized the size of the packaging. So everything stacks up nicely. And so you’re not paying like really premium slotting fees retailers, stuff like that.

Steve:

Yup. Plus you have bank fees, you know, when you run, when you run a sales transaction through a merchant account, you’re going to probably pay three or 4% there. So every percent, every certain percent that you pay to market your product adds up, at the end of all, that, do you have enough to make money and feel good about what you’re doing? And so that’s why, going back to what I said earlier, most marketers should take the time to put together a really detailed proforma, you know, are they really accounting for all of their expenses? See how it looks on paper.

Even back to the call center, if you driving X number of calls, how much does it cost? What is your cost per call? How many calls can you generate for a certain amount of media that you buy, and then what is your close rate gonna be? If you generate a lot of calls, but have a very low close rate, it doesn’t matter. You know, the commercial may have been resonating on TV or radio, but you didn’t have salespeople that can convert. On the other hand, you might generate a few number of calls would have really high close rate, but that’s going to catch up too. So you have to really factor in all of that.

Tanner:

Yeah. So you need to focus on every stage of the funnel, right? Otherwise you’re just going to have a hole in it and like a hole in your boat, water leaks out, ship sinks, you’ve wasted half a million dollars.

Steve:

Yeah, that’s exactly right. And that’s why a lot of a lot of marketers go out of business, you know and that’s something we’ve done for our clients for years is the first thing we do is we try to understand them and what their objectives are. We try to understand their product and where they manufactured it and how much it costs and if it’s ready for market. Can it be packaged, does it have all the ratios that we’re looking for? And if it meets some of the basic rules and requirements, then we put together a very detailed proforma that stretches out over three years. And so we really know going in whether we can make it or not, and it becomes a sort of a blueprint that’s where all your key performance indicators are, is right there in that proforma. And I know a lot of markers that start out and they don’t do any of that. And some have success and they make it and others fail, you know?

You need to get the right person communicating your message.

Tanner:

Yeah, yeah. I mean, you gotta be strategic. You have to have a plan. You have to know who you’re going after. That’s going to be really important when it comes to creating an actual ad. Let’s talk about the elements of the infomercial itself. What are some important things that, obviously you need to speak to their pain points and stuff like that, but what makes up a good infomercial?

Steve:

Well, I think if you were to ask me, what is the one thing that makes up a good infomercial? There’s a number of factors obviously, but the one thing is testimonials. I mean, if you can get the right person communicating your message it’s a lot better to watch somebody tell you how great this product is rather than hear through a voiceover. And so, most of these infomercials, if you watch them, you’ll notice that there’s generally a celebrity behind the campaign. That reading program, for example, you’re way too young to remember this, but there was a show called Mark and Mindy. Yeah. it was it was great show and one of the stars is a lady by the name of Pam Dawber. Pam Dawber had this sort of really squeaky clean image. She was very likable. She was easy to look at pretty, you know, it just seemed very trustworthy. And I had watched Mark and Mindy when I was young. Robin Williams, you know, the comedian, he was Mark in the show and I called it was able to get Pam Dawber on the phone. And we talked about this reading program. I said, you know, Pam, you’re going to be perfect for this. I told her what we’d pay her a celebrity fee to film, and then also a royalty on all the sales. And that was pretty attractive to her. But I think more importantly, she really liked the concept. What we were doing to help, you know, younger people learn how to read faster. She was our host. And I would tell you that just having her as our host was huge. It was huge.

And then we had a number of people that had gone through the course that we filmed. Yeah. And they were looking sort of eyeballed eyeball, right to the camera saying, I’ve tripled my reading speed. I feel like I do better in school. I feel like it can concentrate better. I feel like I’m getting better grades, you know? And it was believable. And so people watching the infomercial would see these testimonials and the parents would be thinking, I want my child to be like this. I need to buy this thing to help them be successful. And so for sure, having the right host and having the right testimonials was key, and then there are other things too, but those would be the key factors for sure.

Tanner:

Yeah. I mean, if you want to just sprinkle in a couple more things.

Steve:

Well, yeah. You know, the call to actions are really important. Depending on whether you have a long form or short form, for example, in a long form infomercial, that’s 30 minutes. If you don’t know when to pop that call to action, and how long that call to action is, you’re probably not going to succeed. And so, you know, there’s a lot of science that goes into this too, not just the artistic flair, but there’s science. So with a 30 infomercial, you want to pop your first call to action at a certain time frame and then you want to pop it in the middle, and then you want to pop it at the end. But it has to come on at a certain time. It needs to be a sequence to it. And so having the right call to actions is really important. And then, of course, displaying the product in the best light, you know, making the product shine is really important as you’re filming.

Tanner:

And then of course another important element would be showing someone actually using it and how most people could resonate with using it. Right?

Steve:

Yeah. You’d have the child at home using the product, or for example, if it’s an exercise product, you have a somebody that’s really, really fit. What’s really interesting about these infomercials, I know it sounds kind of kind of goofy, but you show the before and afters really quickly. So you show the before. With an exercise product, you might take you just a minute or so, and show people that are overweight. You know, they’re struggling with their weights, they can’t stop eating popcorn and eating ice cream, and how frustrated they are with life. And then you go from that, which a lot of people are going to resonate. If they’re unhealthy, they’re going to say, well, that’s me. Right? And then you immediately move to the aspirational person. The person that’s in great shape that looks great in a bathing suit and is working out and they’ve got muscles and they look great and they feel great. And they’re talking like they’re a million bucks. And I mean that’s TV stuff. That’s what you have to do, you know?

Tanner:

Yeah. Yeah. And, you know, it might seem really cheesy and a lot of people might say, Oh, it’s just corporate grade. It’s like, that’s the only thing that will get someone to pick up the phone.

Once you get over a hundred dollars, you have to start thinking of a long form.

Steve:

Right. And you can do that in one minute too. You know, they have one minute infomercials, they have two minute infomercials. Typically, the shorter versions of the TV spots are less expensive products. So your products that cost $10, like the flashlight that you could run over with a tank, something like that. Or sunglasses that you could run over with a car and they bounce back into shape. But the products that are generally $9 or $19, you wouldn’t need to do a 30 minute infomercial. Because you can show really quickly what did that, what it is and how it works and even what it costs and $9 isn’t a whole lot of money for most people.

Tanner:

Yeah. I mean, it’s a really easy decision for them to make. So at what price point would it make sense, assuming that it’s a good product and that there’s a market demand for it, for a 30 minute infomercial?

Steve:

Yeah. I’ve always thought that once you get over a hundred dollars, sort of in that a hundred to $150 range, you have to start thinking of a long form. Because now you’re asking people to pay you a little bit more money and there’s going to be a little bit of pain associated with that. And so you want more time to sell your product and if you could catch them really quickly, they’ll sit and watch the show. And if you can’t sell them in 30 minutes, then you obviously haven’t done a really good job. So the 30 minute infomercials really, really effective. If it’s the right, it’s gotta be the right product. There has to be a little bit of luck. There has to be a need for the product and that’s the biggest factor, I think, is making sure you establish, there’s a sort of a global need. Not just a need for a small demographic of people, like you would want to sell on TV. You wouldn’t want to sell a product specifically to a small demographics, you know, maybe pre-school preschoolers, for example, that’d be tough one. Although it’s worked. I know products that have worked really well, like hooked on phonics. But most often it’s gotta be a big demographic.

Tanner:

Right. I mean, it’s gotta be something that everyday people can buy. Right? And that’s the whole point of mass marketing. So would you say that’s probably the biggest mistake that product-based businesses make is just not establishing a real market need for their product?

Steve:

Yeah, they do that. They don’t establish the need. They rush into it. They don’t focus on the details. They lack capital. They don’t have adequate money to fund it. They might have some early success, but then run out of steam because they don’t have money to keep the machine going, you know? And I see a lot of people fail. I mean, that’s one of the questions I always ask people is are you funded? Do you have adequate capital? You know, and they ask me how much it’s going to take. And I put together a proforma. I say, it’s going to cost X to just get through 90 days. And then if we have success, if you offer a payment plan and you’re only getting one payment that first month you have to wait three or four months for the rest of the payments to come in. You somehow you have to float during that period of time, so you have to cashflow your campaign until those payments catch up.

Tanner:

Which is a lot of money, of course, which leads me to my next question. At the bare minimum, how much does it cost to run an infomercial campaign on TV? Now let’s just assume long form for this example.

Steve:

Well, if you want to do a successful long form and you have adequate funding that will take you through sort of that negative cashflow period, because there’s going to be a negative cash flow probably well past six months, maybe even eight months. But if you want to make sure that you’re funded for an entire year with the show produced, with adequate inventory. So you got to buy inventory to make sure you’ve got that in place. Then you’ve got to have cashflow ready for the next month’s buy-in and all the other expenses that go into it. You’re going to be in the million to $2 million range for a long form easily.

Tanner:

Steve, I really appreciate you taking the time to come on the show. Is there anything that I have not asked you that you think might benefit the audience?

Steve:

No. Other than if you want to visit my website, xclosure.com. You can come here and learn all about me and I’m happy to help you anytime. If anybody in the audience needs help or just some simple, free advice, I’m happy to be there for them.

Tanner:

Awesome, man. We’ll, we’ll make sure to link that up in the show notes and thanks again. I really appreciate it.

Steve:

Yeah. Thanks Tanner. Really appreciate it. Take care.

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