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SKEPTOID BLOG:

Beware Direct Response Marketing

by Alison Hudson

August 10, 2015

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Donate Here at Skeptoid, we like to promote skeptical and critical thinking about a variety of topics. I think that one place that deserves skepticism, that a lot of consumers fail to apply critical thinking to, is marketing and advertising. There are a lot of tricky sales tactics out there and far too many people willing to buy into them. The old wisdom about fools and their money is as true today as it's ever been.

Specifically, today I want to talk about direct response marketing, or DRM. Anytime something is available solely via a toll-free phone number that connects you directly to the marketing company, it's DRM. For most people, DRM is primarily encountered through short-form commercials and long-form infomercials. You know, those things that sell you Ginsu knives, Pocker Fisherman, and the Snuggie.

Regular readers of this blog are likely more critically minded than the average person, and so they may be thinking, "Well, duh! Everyone knows infomercials are scams!" The fact is, though, everyone doesn't. If everyone did, than direct response marketing companies would all go out of business. Instead, they are thriving. Beachbody LLC, for example, has been the darling of the DRM market for several years now. Beachbody is the company behind many of the popular fitness programs of the last decade, such as Insanity, P90, Brazil Butt Lift, and Body Beast. It's privately held, so actual profit numbers are hard to come by, but there's ample evidence out there that Beachbody is making good bank with their slate of direct marketed health and beauty products. Granted, Beachbody is also a notorious network marketing scheme; but DRM is a key component of their business model, and they are only one company of many profiting through DRM.

Now, I am not saying that all products sold through DRM are poor products; oftentimes the products themselves are just fine (for example, Beachbody fitness programs DO help people lose weight, albeit by repackaging standard CICO principles into gimmicky exercise routines and expensive fancy colored containers). There are legitimate sales to be made via DRM.

The trick with DRM, one that many people aren't initially aware of when they pick up the phone, is what's commonly referred to as the "upsell". That is, the company isn't really interested in selling you JUST the advertised product; instead, the advertised product is usually a lead generator used to get you on the phone with a salesperson whose job it is to get you to spend more money on more (often overpriced) products. These salespeople are, like used car sellers everywhere, coached in the art of breaking down buyer resistance and convincing them to open their wallets for more than they need.

For example, I called to order 21-Day Fix, the current "hip" exercise program (chances are you have at least one person in your Facebook feed acting as a "coach" for the system). The advertisement I viewed was selling a $59.85 exercise system. Over the course of the call, I was offered:
  • A "deluxe package" with more workouts and other paraphernalia -- $59.85

  • A workout mat -- $29.85

  • A pair of workout resistance bands -- $29.85

  • "Up to three" additional sets of the "portion control system" (i.e. "expensive Tupperware") used in the plan -- $17.85 each

  • A bottle of vitamins -- $1 [continuity: $29.95 a month]

  • A second bottle of vitamins "for someone else in the household" -- $1 [continuity: $29.95 a month]

  • A subscription to an online club for the program -- Free for 30 days [continuity: $2.99 a week, or approx. $12 per month]

  • A lifetime warranty on the DVDs in the workout kit -- $9.96

Altogether, if I had said "yes" to everything, they would have been getting me on the hook for more than $245 that day, four times the amount I thought I was going to pay when I made the call. And saying no doesn't end the pitch; there's always a rebuttal argument insisting that, no, really, you need this overpriced yoga mat.

The other common tactic is "continuity" -- that is, by purchasing a consumable thing like a vitamin or diet shake, you are automatically enrolled in recurring shipments of the product, almost always at a price higher than the initial offer, that require you to call a phone number to opt-out if you don't want to be charged. There's three continuity commitments in that call (two bottles of vitamins and an online service subscription), meaning that after 30 days I would be charged an additional $72 per month. Assuming one keeps the continuity for a single year, that phone call will cost more than $800 in continuity costs. Added to the initial buy-in, that's potentially a $1000 phone call.

Another thing to be on the lookout for in these kinds of sales pitches is the cost of delivery. Shipping is a necessary evil when purchasing through the mail, of course, but it can also be a place to sneak in "handling" or "processing" fees. The 21-Day Fix call, for example, would rack up around $30 in initial shipping costs, plus another $40 or so with the continuity shipments. Not bad for shipping, when compared to a popular DRM kitchen appliance which is currently offering a BOGO free deal. To take advantage of the BOGO deal you must pay $30 S&H for each appliance, plus another $30 S&H for "free" cookware that comes with it. The shipping, in this case, is $90 -- only $10 less than the offered price of the appliance itself. So much for the "get one free".

Let me be clear: I'm not accusing these companies of breaking the law. Everything they do is legal (and vetted by well-paid lawyers). Being legal doesn't stop them from being shifty, though. Common DRM sales tactics prey on tired (why do you think so many infomercials run at 2am?) and uncritical minds, with salespeople trained to break down objections and convince callers to spend more than they called in for. None of the prices are hidden, but they're almost always broken down into payments (three monthly payments is the most common) to mask the true cost of things. There's also a high-pressure sales pitch wrapped around each , such that the price is tucked in the middle of a lot of marketing rhetoric relying on other sales pitch techniques with names like "building value" and "assumptive closure".

I have a general philosophy: if the only way I can get something is to call a 1-800 phone number and talk to a salesperson, I do not want that thing. [And in case you're wondering, I did not commit to the exercise package purchase; as I've written about before, I already have a system that works.] If you absolutely must call one of these numbers, however, here's a phrase that will save you from having to suffer the litany of upsells:

"If you offer me anything else, I am going to cancel my order."

Most telemarketing salespeople work on commission and with target sales numbers, so the threat of losing any sale at all will often get them to close the order quickly. If nothing else, it will save you about 15 minutes of mind-numbing sales pitches.

by Alison Hudson

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