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Infomercials thrive as family budgets shrink

TV-related shopping will hit a record $200 billion this year. That's a lot of Shake Weights.
TV-related shopping will hit a record $200 billion this year. That's a lot of Shake Weights.Image courtesy Shake Weight

Money is tight. Family budgets are stretched. Non-essential purchases are being put off. And yet, infomercial sales are booming. Demand for “As Seen on TV” products is stronger than ever, in fact.

“They sell so much hope,” notes media critic Barbara Lippert. “You’re going to get thin while you get tan while you get better abs.”

According to the trade publication Response magazine, TV-related shopping will hit a record $200 billion this year. That’s a lot of ShamWows, OxiClean, Shake Weights, Belly Burners, PedEggs, Neckline Slimmers and Microwave Pasta Cookers. And let’s not forget the Absonic Belt, Ab Circle Pro, AB Slide, Ab Rocket, Smart Abs and Crazy Abs.

John Yarrington, publisher of Response, says infomercials work because they make people feel good.

“People are making a lifestyle decision with their disposable income,” he explains. “When an infomercial comes along and offers a product at $29.95 or four easy payments of $19.95, all of a sudden that dream of who you are aspiring to be and where you want to go becomes achievable.”

But wait – there’s more.

Because of the sluggish economy, the cost of buying TV time is way down. Yarrington says the average 30 minute block was about $700 in 2006. Now it’s more like $425. And the available time slots are better. In the past, infomercials only ran in the wee hours of the morning. Not anymore. This allows direct-response marketers to reach a more diverse audience with more buying power.

Star power is the final ingredient of this success story. Infomercial pitchmen and women are now household names. Billy Mays was so popular he’s still being used to sell products long after his passing. Who hasn’t seen trainer Tony Little, the guy with the ponytail? And one of the greats, Ron Popeil, is still going strong. These guys, with their larger-than-life personalities, have become marketing icons.

Direct-response marketers know how to sell
Jeff Meltzer helped create the modern infomercial more than two decades ago. In a June 2009 documentary, Meltzer explained to CNBC why the infomercial is such a powerful sales tool.

“The real magic of an infomercial is you’re trying to create as many situations in as short a period of time that are going to click the light bulb on for somebody to say, ‘Wow, that would be great.’”

In other words, these full-length commercials are selling hope. Who doesn’t want to look younger, feel better and have financial freedom?

“Let’s face it, a lot of infomercials are in the same aesthetic tradition as the old snake oil salesman,” notes Robert Thompson, professor of television and popular culture at Syracuse University. “Many of them promise some kind of miraculous solution to a problem. In fact, the word ‘miracle’ often appears, not only in the adjectives used to describe the products sold, but in the very product name itself.”

Infomercials are designed to get that impulse buy. That’s why $19.95 is a common price point. Most people feel they can part with $20 without much concern. Consumer Reports says a product that sells for $19.95 usually costs $5 to $6 at wholesale. So the profit potential here is enormous.

Do the products work?
The Good Housekeeping Research Institute and Consumer Reports both regularly test infomercial products.

(Read: The Best (and Worst) Infomercials!)

“Some are outstanding and do a really good job,” says Stacy Genovese, Good Housekeeping’s director of consumer electronics and engineering. “Some are just flops. They just don’t perform at all.”

For example, Good Housekeeping recently tested Aqua Globes, those pretty glass tubes that promise to water your plants automatically. In the magazine’s tests, the Aqua Globes performed poorly.

“In some cases, they dispensed super fast, so all the water came out at once,” Genovese tells me. “In other cases, they didn’t dispense the water at all.”

For its February 2010 issue, Consumer Reports checked 15 popular infomercial products and concluded “many are not worth buying.”

The editors were not wowed by the ShamWow. They say the Slap Chop chops unevenly and the Snuggie sheds large amounts of lint when washed.

(Read: CR Tests of 15 Popular Infomercial Products Reveals Many Are Not Worth Buying)

Senior editor Jeff Blyskal says some infomercials, such as the one for the Hercules Hook use “trickery and sleight of hand” to sell the product.

“There’s a scene where Billy Mays puts three 50-pound weights on a wall hanger,” Blyskal explains. “And it says “holds up to 150 pounds” on the screen. But look carefully and you’ll see each of those weights is hanging from a separate hook. So each hook is really holding 50 pounds, not 150 pounds.”

Peter Marinello runs the Better Business Bureau’s Electronic Retailing Self-Regulation Program. He believes the direct-response industry is committed to doing the right thing.  Marinello says when his group challenges a claim made in an infomercial, most advertisers make the requested change.

“I think they’ve come a long way,” he says.  “Just like any other industry, maybe five percent are bad players and they give everyone else a bad name.”

Beware of the extras
If you do respond to an infomercial and make the call, be ready for the up-sell. Operators are going to pitch accessories, refills and additional products. That’s part of the overall marketing program.

“While they’ve got you with your credit card out, they want to get you to buy as much stuff as they can to make that sale bigger,” Blyskal says. “If something comes with three vacuum bags they’ll try to sell you another pack of 10.”

There may be another option. Many of these “As Seen on TV” products are now available at discount and drug stores. In some cases, they’re cheaper at the store than if you order directly from the company. And this way, there’s no shipping charge.

The bottom line
Some infomercials pitch products that live up to their claims. Others may just be a waste of money. And a few could be dangerous to your physical or financial health.

Before you let that over-eager announcer convince you to “order right now,” take the time to do a little research. Many infomercial products are reviewed by previous customers and trusted publications, such as Consumer Reports and Good Housekeeping. You can also check out the company’s track record for customer satisfaction with the Better Business Bureau.

I would avoid any program that offers financial advice. And I would urge extreme caution with all exercise and health-related products. Reality check: you cannot work out for just three minutes a day and look like those sexy models with six-pack abs.