Spotlight: Tim O'Leary, CEO, R2C Group
Question and answer session with Tim O’Leary, CEO of R2C Group.
Q: A number of people expected DRTV to flourish this year due to the recession. Is that working out?
A: Typically, DRTV does better in a recession for two reasons: One, rates fall; and two, for some, “comfort” products tend to do significantly better. Initially, DRTV suffered the same way as everything else in the economy. In the September to October timeframe, we still had the same media pricing, but response rates plummeted because people were freaking out about the economy. Later, though — just after the election — the rates fell drastically, and response rates for those comfort products — things like fitness and kitchen products — were back up. People weren’t running out to Saks Fifth Avenue, but they were buying things through DRTV. That has held pretty well for the past six months. Things have leveled out a bit — I wouldn’t say this is the strongest period we’ve ever had for DRTV, but it’s been a good period, and there are surprises all the time.
Q: You’re running a successful DRTV spot for NordicTrack right now. What is it that appeals about a product like this, despite its relatively high price point, in the recession?
A: People are giving up things like their expensive gym membership. If the consumer can say, ‘Hey, I can knock out a big expense here and replace it with this,’ that’s pretty good for them. People want to be sold to more in a recession — they’re not impulsive spenders, but they still buy things. Better salesmanship becomes much more important.
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