As CEO of BrandJuice, I’ve worked with many large organizations. But, I learned some big lessons from a small company with a unique innovation model that allowed them to compete with, and beat, some of the most iconic brands in the world.
My teachers were the husband and wife team of Max and Elaine Appel, the founders of Orange Glo International. The Appel’s founded Orange Glo in their fifties. Max had been a business development consultant but was also a closet chemist and technology tinkerer. Elaine was the glue, she did accounting and ran operations
Max and Elaine established Orange Glow behind their first product, Orange Glo Wood Polish and Conditioner, and steadily grew to a few million dollars in sales.
Upon meeting them, I recognized that I was in the presence of greatness. If there were a Richer Scale to measure innovation prowess, Max would have tipped it. He was driven by a sense of vision, possibility and purpose.
The Appel’s followed their intuition and focused on sales, which broke a myriad of rules dearly held by the consumer products industry. They also moved at a lightning-fast pace. In my early years working with them, I sometimes became frustrated by how little thought was given to brand strategy. My years in brand management for top consumer products companies convinced me that a sophisticated marketer leads with strategy, then executes carefully. The Apple’s did not share this view. “Focus on speed,” they said. “There is no need to justify every decision with data.”
Like many small businesses, Max and Elaine started selling Orange Glo at home shows and state fairs where thousands of consumers walk aisles of booths manned by pitchmen wearing microphones. It’s controlled chaos, and basically amounts to a sales contest.
Max was a natural at understanding what to say to get people to stop at his booth and buy. He had developed an informed intuition. The Appel’s saw the parallel between home shows and the Home Shopping Network so they decided to try selling Orange Glo on TV.
The first time they went on HSN, they doubled the hurdle set by the network and sold out. So, they decided to try the infomercial platform, but it was clear they needed more products in their line-up.
Max came across a sample of sodium percarbonate; a white, crystalline, water-soluble compound of sodium carbonate and hydrogen peroxide. He began experimenting, and soon discovered it’s amazing properties; it could remove organic stains like grape juice, blood and coffee like nobody’s business. Once sodium percarbonate was activated with hot water, it made stains disappear instantly. The effect was magic.
He named the product OxiClean. Rather than pigeon-hole it as a carpet cleaner or laundry pre-treater, we created the “stain specialist” category. This was critical for two reasons: first, it allowed Orange Glo to take volume away from huge brands without a direct confrontation. Second, it broke out of information sameness, the only way to get it off the ground in the face of such ominous competition.
If OxiClean had been concept tested and subjected to traditional research when it was discovered by Max, the testing methodology would have required categorization.
At the time, it would have been a reasonable to categorize OxiClean as a laundry pre-treater and stain remover. But the truth is that it created a new category – one that sourced usage occasions not just from laundry pre-treaters and stain removers but also from laundry detergents, bleach, carpet cleaners and a variety of hard surface cleaners.
In the consumer’s mind, OxiClean was a new animal, but because established brands were slow to recognize it and concept testing tools did not understand the brand’s true genome, we had five years to establish OxiClean as the number one player in a new category.
One of the key principles to the success of Orange Glo International was that the Appel’s realized their new products did not have to be perfect before they started selling them at home shows. This dynamic came as a shock to me. I did not think OxiClean was ready to be sold when we first rolled it out because it wasn’t perfect. The Appels, relying on intuition, went ahead and started selling it anyway. Guess what? It sold and became a $300 million business.
Around the time of the OxiClean discovery, Max was working a home show and began listening to the pitch of his booth neighbor, Billy Mays. Billy was a professional pitchman selling a broad range of products at various home shows. Max realized what an asset he might be to Orange Glo and asked him if he would be interested in pitching the Appel’s product line.
As soon as Billy started appearing in OxiClean infomercials, sales increased. He was bold and passionate, and some say he yelled at you, but his approach worked and we sold millions of OxiClean kits.
As the company’s direct-to-consumer sales flourished, the Appels began to focus on national distribution with two major retailers, Wal-Mart and Bed Bath and Beyond.
Wal-Mart can make or break any manufacturer’s year, so it’s with good reason that most consumer product companies have a love/hate relationship with the account. Wal-Mart’s demands for pricing concessions are legendary and many companies make the mistake of focusing too much on that dimension of the relationship.
The Appels focused on innovation instead. They approached Wal-Mart believing they could set a torrid pace for innovation – something Wal-Mart was hungry for.
It was a relatively straightforward sales call. The buyer said, “Everyone knows these products from TV. We’ll try them.” Once on the shelves, Orange Glo products did well. They were fueled by what is called the infomercial multiplier effect: for every consumer that buys on TV, six to ten more buy at a brick and mortar retailer where they feel more comfortable.
The Appels introduced many more new products. From concept creation to retail distribution on the shelves of Wal-Mart, they compressed the development cycle to a staggering six months. That’s between two and eight times faster than the typical large company.
To hit this amazing cycle time, products first had to graduate from Max’s school of innovation. He understood a product didn’t have a chance at Wal-Mart unless it sold first at home shows, then the infomercial, and finally the retail incubator Bed, Bath and Beyond.
By measuring sales, the Appels were able to see the effects of changes to marketing variables like pricing, packaging, positioning and promotion. At the time, a learning lab like this was unheard of. But, it allowed Orange Glo to test, tweak and re-test endless product variations.
Orange Glo was innovative, fast and sales-oriented. It created a rule-breaking new product model. While larger manufacturers carefully organized around brands and cultures of precision, Orange Glo organized around sales and a culture of entrepreneurship. They once told me, “We always preferred real data over research. All our products had to be good, but not perfect, before we took them to retailers.”