Strategic Spending Can Reap Rewards

Have you ever heard of the Snuggie^®? How about Pillow Pets™? Chances are not only have you heard of these products; you probably have one in your home! The Snuggle^® boasts sales in excess of $100 million; quite impressive since the brand has only been around for a few years. Pillow Pets™, on the other hand, have been around a little longer —about 7 years— and look to be one of the must have items for Christmas this year. What’s so appealing about these products? How are they thriving while so many other businesses are struggling? More importantly, what lessons can we glean to share in this success? The short answer: advertising. Both these companies took the road less traveled during these tough economic times, strategically choosing to spend on advertising and it’s paying off – to the tune of millions of dollars!

Snuggie^® Warms Up to Infomercials

In 2008, when the recession was in full swing, the Snuggie^® was introduced and quickly became a huge success. Contrary to perception, Snuggie^® was not the first to market with the concept of a sleeved blanket. A product called Slanket^®, among others, had been around for years. Each predecessor experienced a certain level of success and in some cases offered a better quality product.

So what made the Snuggie^® stand out? Simply put, direct response marketing, commonly referred to as infomercials. While most companies were slashing advertising expenditures as a means to balance the budget, All Star Products, the parent company of Snuggie^®, bucked common logic and started airing quirky, yet effective infomercials on TV. The ads touted all the advantages of a blanket with sleeves while reminding the viewers of the money that could be saved on heating bills with such a versatile product. During a recession, this message resonated with viewers and when paired with the very affordable price of $14.95, consumers were sold.

For all the snickering associated with infomercials, Snuggie^® is a case in point of their potential for success. Direct response marketing (DRM) works for a couple reasons. The first reason being, that DRM communicates using the mass media forum of TV at a reduced rate. The reduced rate is offered in exchange for an unknown air time. These media buys are referred to as remnants and are available in all forms of media, not just television. By sacrificing the control of when the ad would air, Snuggie^® was able to affordably speak to millions of prospective consumers.

DRM is also impactful because it emphasizes a call to action. DRM ads either encourage you to call now or visit the website to take advantage of whatever offer is being made. Plus, for those who order without delay there is usually a free gift of some sort. By driving consumers to either the call center or the website, the company satisfies the consumer’s need for on-demand shopping, in addition to offering enhanced value via the free gift. More importantly, this forum allows the brand to maximize profit margins by selling the product directly to the consumer. In addition, by advertising the product, consumer demand is created and retailers will certainly notice.

Pillow Pets™ Makes a Case for Mass Distribution

What started as a wish to bring some practicality to a pile of stuffed animals has, in seven years, turned into a multimillion-dollar global business. Pillow Pets™ changed their future, when in 2009, they decided to change their communication strategy. Pillow Pets™ moved from a strong “push” effort, attending numerous tradeshows a year, to both a push and pull strategy – going straight to the kids via advertisements on children’s cable channels. Commercials ran demonstrating how this cuddly stuffed animal could also serve as a pillow. Kids love the fun animals; moms love the dual purpose. Reasonably priced at just under $20, Pillow Pets™ made it easy for parents to consent to the pleas of their children asking for one of these adorable “pets.”

This strategy looks to have succeeded, with the company now boasting millions in sales and its products seemingly available everywhere. Furthermore, countless media sources are touting the Pillow Pets™ as one of the hottest must-have gifts for children this Christmas. The company is poised for tremendous growth, likely due to its decision to pursue strategic spending.

Strategic Spending Works

It can be uncomfortable to spend what little resources are available in the hopes that not only will you make your money back but that the calculated risk will pay off. While these examples both reference television advertising, communication via any form of media is essential to the continued success and growth of any company. Paid communication, advertisements (in print, TV or online), are the surest way get your message out there. Public relations, social media and other unpaid forms of communication are great for objectively informing consumers about a product. However, unpaid communication neither guarantees that your message will be delivered in the form intended or that it will be delivered at all. It would be wise to hedge your efforts by executing initiatives on both sides.

One last word with respect to the message itself, it must be relevant and speak to consumers in a way that motivates them to purchase. Snuggie^® and Pillow Pets™ could have spent millions in advertising, however, if their products didn’t directly speak to a user need it would have been for naught. It’s important to understand that spending money cannot ensure success. Television ads are also not the only way to achieve success; many products have done quite well without ever appearing on TV. What is important is that the product serves a legitimate need, either functional or emotional, and that it is communicated effectively. Success will follow.

About Insights Discovered
Penny Redlin is a regular contributor to the “Business Sense” feature on The Giggle Guide, sharing insights about business planning, effective communications and marketing strategies. To read more articles by Penny Redlin, see http://thegiggleguide.com/biz/features/business-sense

Based in Las Vegas, Nevada, Insights Discovered was founded by Penny Redlin in an effort to share her professional expertise within the children’s product category. The company’s mission is to give every mompreneur an opportunity for success. Insights Discovered exclusively services children’s products brands. The specific industry focus demonstrates a strong dedication to the unique needs of children’s products companies. Insights Discovered offers strategic planning, market research and traditional marketing services.

For more information, visit www.insightsdiscovered.com or call 702.218.5707