This is a nuts and bolts post on operations for a DR TV/Radio/Print business for a consumer product. It includes the pieces you need to setup and manage in order to run such a business, whether it is part of a business or is the business. Think of these components as your team on the field and you’re the quarterback. If you are a start-up or small company, all of these components, unless otherwise noted, should be outsourced to a qualified provider. This article assumes you are producing product already and want to market it via direct response.
1. The spot producer. For a TV spot, whether it’s a long-form 30 minute or short-form 30, 60 or 120 second, you will need a producer to create the ad. You’ll pay for a TV spot, but in my experience, the radio spot is produced by the partner who will also buy and place your media. You will need pitch-person(s), which you will pay for in addition to what you pay the spot producer, unless you have your own spokesperson, like your company founder. Ideally, you will want your media buyer involved in helping you select and guide the producer. Once your spot is complete and in production (on air), you may use your producer from time to time to make changes and refine your spot or to modify its length for ad time (for example, taking a 120 second spot and creating at 60 second spot).
2. The media buyer. This entity purchases and places media for you, selecting the networks and time slots based on the likely demographic profile of your target customer and the profitability ratio that you desire. They will also try to get you approved on networks that might initially not accept your spot based on content and/or claims (such as dieting products). They will constantly refine their buys based on past results to help get you to your profitability target or improve upon it. They will do the nitty-gritty analysis of media performance for both call centers and web, taking into account product cancels, declines and returns from customers who responded from a specific network. They are a key partner that you will work with on an almost daily basis and ideally, should have input into many of the operational pieces of this business, especially spot production and call center selection and script.
3. In-bound order call center. This is a dedicated company that answers the phone and takes orders. It could be a live agent or automated agent (known as interactive voice response – IVR). They create the call center agent script with your guidance and direction that agents use to help guide them in closing the sale and taking the order. You will work with them at least weekly to improve on the myriad of metrics that you watch on their performance and you will participate on a monthly basis to train agents.
4. Overflow in-bound call center. If you use live agents and start small in your media buys, you will have low call center volume. It may not make economic sense to use a large call center, so use a small one instead. However, if you get higher than anticipated call volume, you will need an overflow call center. Your regular in-bound call center should be able to help you select one, unless they already contract with certain ones to handle their overflow.
5. 3rd Party product upsells. This is a component of the in-bound call center. After the sale has closed on your product and its associated upsells, and if you chose to have the agents try to sell the customers again, the agent will introduce 3rd party products to upsell the customer, of which you will derive a portion of the revenue (but you will also pay for the minutes the agent spends on the phone for these 3rd party upsells). You will work weekly with the call center to analyze these metrics and their impact on your revenue and profitability.
6. Outbound call center on phone and web in-completes. This may or may not be a part of the call center company you use. There are customers that call in or visit your website and do not order. They may leave some contact information sufficient for an agent to call back or their contact information is gleaned from phone records. In either case, an agent will call back within 24-hours to try to close the sale.
7. Outbound snail mail phone and web in-completes. You might want to use a 3rd party company that will send postcards via U.S. mail to phone or web in-completes as another method to try to close the sale.
8. Website. If you outsource your website, you will work weekly with your provider to optimize your site for sales conversion and search engines (SEO). If you use and outsource online marketing, these are additional components to manage.
9. Warehouse. This provider can also be known as a pick and pack warehouse, order fulfillment center or a third-party logistics (3PL or TPL). Orders flow in and they process the order, from banking (charging credit cards, depositing checks), packing and mailing. This includes processing product returns and charge-backs. They will also assemble your product, if it comes from manufacturing in pieces or parts or if you have different configurations of the product. They should have a robust IT back-end not only for accounting purposes, but also so you can gather and analyze key metrics that help run your business.
10. Customer service. This is most likely a part of the warehouse, or probably should be, since customer service does everything, including not just taking orders, but solving customer problems, processing returns and everything in between. If you use social marketing, you may have customer inquiries from this channel that you will need to route in a timely manner to customer service so they can be handled appropriately. Customer service should have a robust IT back-end that gathers customer inquiry data that is useful for product feedback, marketing and operations optimization.
11. Outbound email after purchase. Ideally, your warehouse/customer service provider can handle this. This is not just emails sent to customers to confirm order, charge of your credit card and shipment of the product, but can be, for example, additional emails you create that are sent to your customer at future specified time periods to help them get the most out of the product.
12. Legal. You will need legal to review ads. Also, If you sell a digital product on the web (DVD, book, game, etc), expect to have pirate websites try to dupe customers into purchasing your product(s) for less than what is sold on your website. Ideally, you will establish your own internal process for addressing these sites as they pop up (sending cease and desist letters to them and their hosting companies, contacting search engines, etc) and have legal assistance available if more immediate action is needed against violators that are impacting your sales and/or brand in a significant way. It is likely that you will have Better Business Bureau (BBB) complaints filed against you, so you will need to establish a process for handling them, whether its internal or through a contract provide, which is ideally your customer service center. If your sales volume is small, you could handle in-house but as it grows, it is recommended that you outsource this function.
13. Customer feedback and research. This is a proactive component where you initiate contact with past customers to obtain feedback to improve your product(s) or your order taking and customer service processes. It is best for you to handle this in-house, especially if you are making direct-to-customer calls or emails to gather deep qualitative data. For surveys, use outside applications and services to handle.
This list may seem daunting, but it’s not as bad as it seems, if you use providers that are in the DR business. Some of these components are not required out of the gate and optional, like third-party upsells, outbound on phone and web incomplete, and outbound snail mail postcard. If you are a start-up and testing your product in DR, you might not want to go through the effort and expense to set up these components, but over time, realize that you might be missing on valuable ways to increase revenue and profitability if you do not use them. Once you are setup and past the initial operating phase, assume 20-30 hours a week in man-hours to run.
I post what I see and do in consumer products. But I am just one person with my own perspective. I want your opinion and observations from your point of view. Please comment below so I and others can learn. Thank you!