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Direct Response Marketing

A Vivid Plan for Growth

1 Jun, 2015 By: Thomas Haire Response

Mark Holland says building on Viviscal’s retail success by adding DRTV has helped Lifes2good’s U.S. operation reach new levels.


“We are after an evolution of brand and direct response,” says Mark Holland, Chicago-based CEO, North America, of Lifes2good, marketer of leading hair-growth supplement Viviscal. “We came from a branding perspective and have overlaid it with DR methodology. But, if you look at it all as a data-driven approach, we’ve always based our campaigns around return on investment (ROI). So, really, we’ve always had that DR mentality.”

Holland came to the U.S. in 2007 to head up North American operations for the company, which is based in Galway, Ireland. A native Irishman, he’d spent the previous three years in a series of sales and marketing roles that had seen him working in various countries in Europe and the Middle East.

But when he joined Lifes2good with the mission of launching distribution of a hair care brand into U.S. retail, he didn’t know he’d found a position that would grow to such size and scope. A company that had been mainly focused on marketing and distributing products would eventually restructure in the U.S. to build this brand.

Holland and the company found initial success distributing in major national retailers like RiteAid, Walgreens and CVS, as well as in professional salons and through medical offices. But, Holland says, if Viviscal was to become a true breakthrough brand, “We needed to relinquish our reliance on retail.”

With that thought, in 2013, Viviscal began to work on its now successful DRTV campaign that has helped push the product across nine different channels of distribution in the U.S. alone.

From Ireland to America

The beginning of this success story stretches back to the 1997 founding of Irish Response Ltd., by James Murphy in Galway. Originally a small distribution company with a call center, marketing department and warehouse, Irish Response was rebranded as Lifes2good in 2002 as its warehouse and call center capacity increased to serve the U.K. market. Less than a year later, the company launched retail distribution in the U.K.

While Lifes2good was expanding, Holland earned a bachelors degree in accounting from the University of Limerick and a post-grad degree in modern management from the University of Ulster in Coleraine, Northern Ireland.

“I left Ireland because it was a low-growth market at the time,” Holland says. “I got into an international sales and marketing role, where, initially, I was based in Belgium. I worked on many projects, and spent time in Beirut, Essen, Germany, and Lille, France.”

In this role, Holland was tasked with creating economic journals on these regions, profiling them from an investment and tourism perspective. “But I was looking at getting into brands and the CPG (consumer packaged goods) space,” he says. “I had some experience, as my family has a retail business in Galway.”

When he visited his family in Ireland during the 2006 holiday season, he met with Murphy about setting up a U.S. branch of Lifes2good. Though Lifes2good did own a couple of its own brands at the time, it remained — mainly — a brand builder and distributor for Ireland and the U.K. market.

“The idea, at the time, was to take products that had been successful in the U.S. and elsewhere internationally and bring them to Ireland,” says Holland. “At the time, it was mainly an As Seen On TV company in Ireland, with some products in the health, beauty and personal care lines — particularly one successful hair care brand.”

Holland moved to New York in early 2007 with the idea of setting up distribution of that product into regional U.S. retailers. “Toward the end of that year, we ran into distribution issues with that hair care product,” Holland says, noting that the owner of the brand moved the manufacturing of it to China without informing the Lifes2good team.

“Due to this distribution issue, the company decided to purchase the Viviscal brand in 2008,” Holland says. “It represented a complete shift in the scope of Lifes2good and what we were about. We went from being a distribution and marketing business and moved into having manufacturing, supply chain, and regulatory concerns. We had to completely restructure the company to build this brand.”

The Viviscal brand, itself, had been around since 1989, when it was developed by a group of scientists in Helsinki, Finland, as a dietary supplement to fight hair loss. “The founders had done clinical trials throughout the 1990s on the product, related to treating alopecia and immune-related hair disorders,” Holland says. “When we bought the brand, we looked at their customer database and were surprised to find that half of it was women.”

And when the Lifes2good team began talking with its customers, they found that the products actually did work better for women. “So we repositioned the brand for females and it exploded,” Holland says.

In early 2008, Holland moved U.S. operations to Chicago, while working on restructuring and repositioning the brand and its sales, marketing, manufacturing and regulatory processes.

“It was a slow building process,” he says. “We were historically a DR firm, so moving into branding was a paradigm shift for the company. We did some public relations and print marketing for Viviscal between 2008-10, developed our core digital marketing concepts, and spent a lot of time educating consumers while building our regional retail distribution base. Consumers needed to understand that this is a drug-free supplement, backed by powerful clinical trials, that helps grow thicker, fuller hair.”

Holland says that the long-term nature and cost of Viviscal were also potential roadblocks that had to be overcome. “It’s a three-month program,” he says. “Results aren’t instantaneous and it’s a lifestyle commitment. So our marketing efforts — whether our website or with our call center training — had to educate while PR and print drove the brand.”

Viviscal’s big break in the U.S. came in 2010 when it launched in 5,000 RiteAid stores across the country. “It was our first national account — and in 2011 and 2012, we grew more than 300 percent each year,” Holland says.

In 2012, Viviscal added national retail distribution at CVS and Walgreens — and enjoyed great PR breakthroughs, appearing twice each on popular TV shows “Dr. Oz” and “The View.”

Throughout the process, Holland was not only operating the marketing efforts, but also keeping a keen eye on Viviscal’s clinical trials and regulatory compliance. “We needed to prove that Viviscal does what we’re saying it does,” Holland says. “And by having four clinical trials in our back pocket, it allowed us to build the medical office distribution side of the business.”

All of these different facets had come together by the end of 2012 to create a retail and brand behemoth in the hair care space. “We had celebrity support, distribution in more than 22,000 U.S. stores, and a growing professional distribution operation,” Holland says. “But when we looked at the overall business, we saw one way to lessen our reliance on retail and build Viviscal into an even larger player.”

 

Untangling Direct Success

“We decided to move into a long-form DRTV campaign,” Holland says. “Building a huge retail presence and then jumping into TV, it seems a little backwards in terms of how traditional DR companies work. But we felt like it was the perfect fit with a product that needs to get a lot of information across to our target consumer in an emotional category — a lot of women feel like they’ve been burned in the past by ‘quick-fix’ hair growth products.”

The move into building a DR campaign was yet another sea change for Lifes2good and Viviscal. “In early 2013, we started working on the production and operations efforts, setting up continuity programs and the supply chain, and the Web infrastructure,” Holland says. “It was a complete transition for the U.S. business — from how we service our customers, to accounting, to business information.”

In what Holland calls an “all-hands-on-deck” effort, the Lifes2good U.S. unit transitioned from a sales and marketing effort into “an operations unit” throughout 2013. The goal? “To keep the premium look and feel we’d built online and for our retail brand, while providing the education that only a 28.5-minute show could,” Holland says. “We had to share the brand’s 25-year history, speak about its four clinical trials, and show how the product works better for females.”

In September 2013, the Viviscal DR campaign hit the air for its first media test. “The initial test results showed a 0.3 to a 0.5 media efficiency ratio (MER) through our call center,” Holland says. “Even though we look at DR media as a way to lower costs for both sales and branding, our breakeven on the front end of the campaign was a 0.7 MER, so we decided to refresh the show and change agencies in early 2014.”

Moving to Tustin, Calif.-based Classi­tech for a production refresh was step one. “They redid the creative look and feel, changing some graphical elements, swapping pods, refreshing the call-to-action (CTA),” Holland says. By second-quarter 2014, Viviscal was back on air for a second media test.

“But we just didn’t have the buying power through that test in order to get a true read,” Holland says. At that point, the Lifes2good team turned to Cannella Response Television for its third media test.

“In September 2014, Cannella rolled out our third test and we started to hit our breakeven metrics,” Holland says. “After testing through November, we finally began full rollout of the campaign earlier this year.”

Holland says that the Lifes2good team has developed its own proprietary business information systems that help it measure campaign success. “We’re not only measuring front-end MER and stick rates, but we’re also tracking returns back to the station level,” he contends. “It’s helping us evolve our media planning and manage key elements of the campaign. It’s honed how we buy, and this level of granularity is going to become a competitive advantage as we evolve.”

While the DR campaign was slow to come together initially, that was by design. “We were incredibly risk averse at the start of the campaign,” Holland says. “We really took baby steps, which helped us be able to make major tweaks as we went along. We didn’t lose a lot of money early on. We tested slowly across two years and learned the hard way. It’s bearing incredible fruit for us. Now it’s a much more effective way for us to get our brand message out there.”

As the campaign has moved forward, Holland says, the company is now seeing 30 percent of its sales coming from the DRTV effort (with a 65-35 split in phone sales vs. online). “We’re testing about 15 percent above our target on the front end currently, ranging between 0.7 and 0.9 MER,” he says. “It’s been incredibly effective so far this year, and we continue to tweak our CTAs and our buying efforts to reach a 1.0 by year’s end.”

Holland also credits TV Squared for its efforts in helping hone in on Web attribution for the campaign. “They’ve really helped us refine our front-end buying to specific networks and channels that drive more Web attribution,” he says. “With TV Squared, we’re buying more national cable now. We saw a huge gap in certain stations across the broadcast and cable spectrum, but we’ve really been able to react and tweak our efforts more effectively.”

All of this has only added to Viviscal’s brand and power at retail, where it still resides in 22,000 stores. Viviscal ranks No. 2 in the hair category at Walgreens, while Amazon ranks it No. 3 among more than 500,000 “beauty” products.

 

Growing It Out

Continuing to drive success across all of Viviscal’s distribution points — drug stores, mass retail, grocery stores, club stores, home shopping, medical offices, professional beauty salons and spas, DRTV, and online/catalog — is now Holland’s key goal.

“We now operate a retail team, a DR team and a professional team, with 25 people between our Chicago and Vancouver locations,” Holland says. “The professional team serves salons and the medical side. But across those three areas, during the past couple years, I’ve really focused on the DR side of business. Not only do direct sales have better margins, but also we’ve found that DR drives everything, including retail and professional — when it works.”

But, Holland is clear to note that DR success does not have to come at the expense of the brand. “We purposely try to create a premium look and feel for the brand on TV and online,” Holland says. “Of course, the CTAs are rooted in DR. But, to brand effectively while selling a premium product at a $120 price point, we need to build significant value throughout the DR campaign by maintaining that premium look and feel on TV, radio, print, and online. Everything adheres to our brand bible while educating the consumer. We have put our money into the science; we’ve proved the product works, with top doctors and stylists supporting those claims.”

Viviscal’s retail and DR success has also driven Lifes2good to look at expanding its product portfolio in the U.S.

“We’re launching a range of oral care and pet care products during the next six months,” Holland says. “One of the things we’re doing now, as a result of developing the DR side, is looking for brands that have over-indexed in one channel — say, in DR or in drug stores or on Amazon. We’re looking for those that have done well in a single channel to help push them to success in other channels.” ■


About the Author: Thomas Haire

Thomas Haire

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