FAST GROWTH

The Oprah Effect

After scoring a coveted spot on The Oprah Winfrey Show, these Inc. 500|5000 companies saw their sales skyrocket.
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LightWedge CEO Jamey Bennett was desperate to get his product, a book light, on The Oprah Winfrey Show. It eventually got to the point where the producers called his company to tell them to stop sending samples. Bennett jokes, "Their exact words we're, 'We have plenty of samples, thank you very much.'' When the product was actually featured a few weeks later, it came to Bennett as a complete surprise. His company noticed a sizable spike on the company's website on December 7, 2007. The site, which for the previous three days had averaged $3,700 in sales per day, soared to $90,000 in sales in one afternoon.

What Bennett later found out was that a sleep expert named Dr. Michael Bruce did a segment on Oprah about products that help people get a good night's sleep, and he brought a reading light made by Bennett's Newton, Massachusetts-based company, No. 1609 on the Inc. 5000. All it took was for Winfrey to take the light out of Dr. Bruce's hands and say, 'I have to get one of these,' for sales to go through the roof. Sales continued at more than five times the usual rate straight through the holiday season and well into February. Retail sales of the product at major bookstores increased by a factor of five. Dr. Bruce 'not only surprised us by going on the show,' Bennett says, 'he made a claim about the product that we didn't even know we could make—that the soft, even light that it puts out is not enough to trigger melatonin production.'

For Bennett, getting on Oprah was a major stroke of luck because it seems that most everything Winfrey touches turns into gold. She's one of the most influential personalities in media that has made (and sunk) many businesses. The so-called 'Oprah Effect' can bring fame to an obscure company translating into dramatically increased sales. Even a casual mention of a product, exposed to her 44 million weekly viewers, is a boon for the company that makes or sells that product. Several companies from the 2009 Inc. 500|5000 have been so lucky as to score a spot on The Oprah Winfrey Show over the past three years, perhaps accounting for a great deal of their growth during that period.

In some cases, a PR company helped bring a product to Winfrey's attention, and in others the convergence was pure serendipity. For Ossining, New York–based No. 708 Ecobags.com, which makes and sells stylish reusable grocery bags, it was the former. In late 2006, the 'bring your own bag' movement was just picking up steam. Al Gore's An Inconvenient Truth was in theaters, sustainability was all over the news, and Ecobags CEO Sharon Rowe had a feeling that it was time for her company to make a dramatic move. 'We hired a PR company,' Rowe says, 'with the single directive: ‘Get us on Oprah.'' In April 2007, the bags were selected to be featured on Oprah's Earth Day episode. The response was immediate—the company was flooded with phone calls and e-mails. At the time, Rowe was working at home with only one other full-time employee. Every time they hung up the phone, it would ring again. Sales tripled, with 2,789 orders in the first week after the episode aired. Rowe adds, 'We were lucky that our website was scalable, and our server didn't crash.'

Nancy A. Shenker from theONswitch was the PR agent that Rowe hired to get her product on Winfrey's show. 'The key to successful media booking of any kind,' Shenker says, 'is really just thinking like a journalist. You can't just call up and say, you know, ‘We've got recycled bags. Does Oprah want to put them on her show?'' Shenker knew that Earth Day was approaching and that there would likely be an episode with an environmental theme. She then engaged a freelancer who had a connection at Oprah and formed an intelligent pitch filled with facts. She sent the producer product samples and let her know that they were flexible about how the samples could be used on the show. She also made it clear that they were willing to provide enough product samples for everyone in the studio audience. They were persistent in following up, but also respectful of the producers' time and opinions. In the end, everything came together perfectly. 'Oprah isn't right for everybody,' Shenker says. 'Sometimes I'll say to people, ‘If you actually got on Oprah, what would you do?'' According to Shenker, Rowe 'had all the right factors that made her Oprah-worthy'—having a woman-owned business, being on the cusp of a new trend, and serving a good cause—in short, having a compelling story she knew would speak to Oprah's demographic.

Pierce Mattie, of New York–based Inc. 5000 No. 1428 Pierce Mattie Public Relations, agrees. His company was responsible for getting a line of clothing from Old Navy on the show last year (and incidentally, even a company as big as Old Navy benefits enormously from that kind of exposure; they sold out of that item the week the show aired). 'A business that appears on Oprah should be one that is sustainable and ready to do mega volume. For a business, it can be a benchmark of a success and can almost guarantee millions of dollars in new revenue," Mattie advises. "However after that one hit has passed, they must have solid legs to keep the momentum ongoing. We hear time and time again, ‘If I can only get my products to Oprah, I can be a success' or ‘I will have a hit on my hands if I can just get this on Oprah.' We typically shy away form those types of clients and advise brands to never build that into their strategy because you are playing with luck, not real planning.'

Galaxy Desserts, based in Richmond, California and No. 2297 on the Inc. 5000, is another company that owes much of its success in recent years to the influence of Winfrey. In both 2002 and 2003, Winfrey selected Galaxy products for her 'Favorite Things' list after noticing them in the Williams-Sonoma catalog and requesting samples. More recently, in 2005, Oprah featured Galaxy's croissants as an all-time Favorite Thing; then in 2006, the croissants were on an 'Oprah's Favorite Breakfast' segment. For the Favorite Things episode, Galaxy's president and CEO, Paul Levitan, says, 'My partner, Jean-Yves Charon, took the red-eye to Chicago with about six hours notice in order to get fresh croissants ready for both Winfrey and the audience for that show.' Since its first exposure on the show, Galaxy has increased its croissant production capacity by approximately 1,000 percent.

It was being in the right place at the right time that brought Inc. 500 No. 156 College Hunks Hauling Junk to Oprah. The president of the company, Nick Friedman, met a business coach named Steve Dorfman at a networking function in Washington, D.C. (where his company is headquartered), and told Dorfman about his junk removal service. It turned out that Dorfman's parents were compulsive hoarders and that he had contacted Oprah for help. Moreover, Dorfman mentioned the producers of the show were becoming frustrated with the company they were using to haul away the trash. He called the producers that night and told them about Friedman's business. The show called Friedman the next morning, and he immediately sent four trucks and 10 workers to the property, removing the unwanted furniture, appliances, trash, and clutter and transporting them to be properly donated, recycled, or disposed of. The company's website traffic for the day the show aired was 10 times the usual amount. Because Friedman's company was able to help them out in a bind, he got a call about a year later about assistance on a similar project taking place in New York City. 'At the time,' Friedman says, 'we did not have a franchise in New York City, but when Oprah calls, we drop everything. So four of our guys and I jumped into our trucks in D.C. and drove up to New York to appear on the show for a second time.'

Inc. 500 No. 479 James Ray Internationalpresident and CEO James Ray, an author and inspirational speaker, is featured in the documentary version of the ubiquitous self-help tome, The Secret. In 2006, Ray appeared on an episode of Oprah dedicated to the movie. Afterward, sales of his books and DVDs jumped 376 percent. That year, his Carlsbad, California-based company enjoyed a 225 percent jump in revenue from the year before, and the company sustained 77 percent growth the year after that. Ray says, 'Being on Oprah was the fulfillment of a 10-year vision that I held and it was every bit as exciting and fun as I imagined.'

Economist Craig Garthwaite from the Kellogg School of Management at Northwestern University, who published a paper on Winfrey's influence on President Obama's campaign, says that there is a plethora of anecdotal evidence—from companies like Philosophy and Ciao Bella—that sales jump dramatically, especially for any product picked as one of "Oprah's Favorite Things.' After Ciao Bella's Blood Orange Sorbetto was selected for that list, its website hits went from 75,000 per day to more than 3 million. He says, 'If you can get 600,000 people to read Anna Karenina, obviously you have some market power.'

There can also be a downside to the Oprah Effect, he warns. In 1996, Oprah made comments during a segment about 'Mad Cow' disease about never eating another burger. As a result, she was sued by a group of Texas cattle ranchers who claimed that her comments had caused them to lose $11 million in business. However, in 1998, a jury rejected the lawsuit. An appeal was dismissed with prejudice by a federal court in 2002. The ruling didn't deny that the cattlemen lost money; the dismissal was based on Winfrey's right to free speech and the fact that she didn't say anything untrue about the industry.

 

Although each of these case studies involves a vastly different company, the common strand of being on Oprah affected each in a similar way—up to 1,000 percent growth over the short term immediately following the episode and sustained higher revenues for months or years afterward. Many of these companies promote "As seen on Oprah" on their sites and other marketing materials to help sustain that growth. And success breeds success: once you've been on Oprah, every other media outlet will give you a closer look. One thing they also have: Bragging rights!

Last updated: Aug 4, 2009




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