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!
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