The OxiClean story…how they went from a humble garage to a $325 million payday

26 Feb

Image

If you want to know the true power of selling your product successfully on TV, look no further than the $325,000,000 OxiClean success story. Although the OxiClean brand didn’t fully penetrate the public consciousness until recently, the company’s unmitigated success actually began decades ago— in a humble garage!

Humble Beginnings Don’t Define—or Limit—Future Success

Orange Glo International (under its original name, Appel Mountain, Inc.) was founded by Max Appel in the 1980s. Max was more than just a businessman; he was an early environmentalist. Max had purchased a cleaning product from another company that he wanted to redesign and sell, but with one added ingredient: orange oil.

Max was concerned about the environmental impact of current cleaning agents, and wanted to create something less toxic and more beneficial for the environment. He had pledged to unleash the power of natural, toxic-free orange oil and though not a chemist by trade, began experimenting with various formulas in his family’s garage.

The result was Orange Glo Wood Cleaner and Polish, the brainchild of Max’s search for a toxin-free cleaning product. Each bottle contained the oily essence of 78 Valencia oranges and provided a fresh, appealing citrus smell that only enhanced the “green” nature of Max’s brainchild.

From Creation to Sales: The Birth of a Brand

Having successfully created the product that would launch Orange Glo International, now all Max had to do was sell it. Fortunately, the closet chemist was also a professional salesman. Max had prior experience fundraising for various environmental organizations and medical centers, and now put his love of networking and creating long-term sales relationships to work selling his own product.

Max’s wife, Elaine, came from a tax accounting and inventory management background and helped Max keep the books— as well as label, pack and ship the products! The husband and wife team struggled, for a time, to make the future Orange Glo International a success.

For the first few years, Max mixed the chemicals in his garage and, with Elaine’s help, sold directly to consumers on the popular home show and county fair circuit. In fact, Orange Glo Wood Cleaner and Polish was demonstrated publicly for the first time in 1986 at the Arizona State Fair.

From there, consumer feedback urged Max to produce several variations of the orange oil based products, from cleaners for hard surfaces such as kitchen counters and stainless steel to industrial strength cleansers for pots and pans. With Max and Elaine working tirelessly from their Littleton, Colorado garage, revenues were still under $1million until 1997.

The Appels were sure they had a hit on their hands, but both kept their “day” jobs and worked full time until they felt they had enough regular and repeat business to work on their Orange Glo “empire” full-time.

Max sold OxiClean Stain Remover and Orange Glo wood polish at consumer home shows around the country for several years. The packed venues created a loud and raucous atmosphere that fit the born salesman’s personality to a “T.” Max wasn’t alone in pitching his products for one and all to hear.

When Opportunity Meets Fate: A Powerful Partnership

In fact, he pitched several times right next to an energetic young pitchman named Billy Mays. Mays was a former walk-on linebacker for West Virginia University’s football team.

Billy had started his sales career on the famed Atlantic City Boardwalk, hawking a product known as the Washmatik portable washing device to onlookers and passersby. The Washmatik was pitched as a hose that could actually pump water out of a bucket even though it wasn’t attached to any faucet. Eventually, Billy took his act on the road and began selling a variety of maintenance products and tools on the same state fair and home show circuit as Max Appel.

The two converged once again on the day history was made. It happened at the 1993 Pittsburgh Home and Garden Show. Max and Billy were in adjacent booths, both pitching their products. Max was there with his Orange Glo cleaning products and Mays was once again pitching the Washmatik; his car washing system that didn’t require a faucet. Billy had drawn a large crowd and was literally drowning out Max’s sales pitch, which was suffering thanks to a broken microphone. To ease up on the competition, Billy loaned Max his spare microphone and actually turned down the volume on his. The two were good friends from that day forward. The friendship would turn out to benefit both in ways neither man could imagine.

The Family That Works Together, Earns Together

Max and Elaine’s son Joel, who joined the business in 1991, and later his brother, David, both successfully helped the company, eventually known as Orange Glo Internationa, gain distribution in thousands of retail stores across the United States. By then, Max had patented his new product, OxiClean, and was finding gradual success with its revolutionary “oxygenated” cleaning formula.

However, despite being in approximately 10 percent of all retail outlets nationwide, and having a huge track record from years on the state fair and home show circuit, the OxiClean products failed to connect with the general public at first, mainly due to lack of major advertising.

The retail outlets helped, but only so much. The Appels found that they could get the product into the stores, but then the OxiClean would sit on the shelves. Nobody knew what to make of this brand new cleaning agent that had yet to discover its true “brand.” In order to get the products off the shelves and into consumer’s homes, the Appels decided they needed to get the word out.

Rather than spend millions on a traditional advertising budget through the regular media channels of print and television advertising, Max and his family decided to take advantage of another revolutionary marketing channel: HSN, or the Home Shopping Network.

Pioneers and Pitchmen: The Birth of HSN

HSN had started as the “Home Shopping Club” in the early 80s, seen on local cable channels in Pinellas County, Florida. It became the first national shopping network in 1985, revolutionizing the way shoppers could view, phone and buy products right from the comfort of their own home.

In 1997, OxiClean first tested on the Home Shopping Network. It was OxiClean’s  first real experience with national advertising of any kind, let alone on live TV! When they needed a reliable, confident and effective TV pitchman, they first thought of Billy Mays.

The partnership between Billy’s brash, positive and confident sales pitch with the OxiClean product was an instant success, selling 3,500 units the first day alone! It was a “perfect storm” of product (OxiClean) meeting pitchman (Billy Mays) meeting venue (HSN), and soon all three were household names.

Orange Glo International quickly ramped up to over 20,000 units per month of OxiClean and Orange Glo, and then soon added several other products like Power Paste, each also selling around 20,000 units per month. Revenues of Orange Glo products grew to $500,000 per month on HSN alone, and the business was now very profitable.

Direct Response Directly Responsible for Massive Profits

After their early and sustained success on HSN, Max and the rest of the Orange Glo International team decided to test a thirty minute “infomercial” in early 1998. The return was around a 2.0 MER (Media Efficiency Ratio), meaning that for every dollar the Appels spent on advertising, $2 were earned in revenue. They grew to spending $300,000 per month on TV, and reached total company revenues of over $300 million in 2002.

In 2000, after a competitor began selling a competitive product via 2 minute short form direct-response advertising, OxiClean produced its first 2-minute spot with Billy Mays. The MER declined slightly to range between 1.7 and 1.9, but the business was still profitable on TV, and awareness took off in a big way.

To put this achievement in proper perspective, remember: this was in an era where 100 percent of the revenues were received over the phones! Forget banner ads and eBay and mouse clicks and Amazon.com. Website sales really didn’t exist for this industry until the mid-2000s. Meanwhile, web sales now account for 50 percent or more of most campaigns (vs. telephone sales).

The short form (2 minute infomercial/spot) and long form (30 minute infomercials) advertising was a solid hit in the industry for Orange Glo International, and both forms of advertising ranked in the top 5 or 10 in the industry rankings Jordan Whitney and IMS (Infomercial Monitoring Service). Both are third party organizations that track media across dozens of networks to judge which products are spending the most on media (and are presumed to be the most successful). Retailers often use these ranking reports to decide which products to list in their stores (especially for the coveted “As Seen On TV” section of the stores so popular today).

The Retail Connection

With bigger numbers came bigger retailers. In late 1999, Sam’s Club began selling OxiClean and, shortly thereafter, in early 2000, Wal-Mart picked up both OxiClean and Orange Glo. Suddenly, Max Appel had gone from blending orange oil in his garage to blanketing not just the airwaves but the shelves of the world’s biggest retailers as well.

With TV advertising now in full swing, tubs of OxiClean and bottles of Orange Glo started to fly off the shelves, and other retailers began to take notice. Eventually, major retailers started to list many other products made by Orange Glo International. Today, of course, OxiClean and its many subsidiary products are sold in tens of thousands of retailers all over the country.

Much as the products made by Orange Glo International evolved over time, so did its success. Finding the right pitchman—Billy Mays—helped bring rapid success; finding the right medium, TV, helped bring national, then worldwide, name recognition. Meanwhile, the medium of TV advertising evolved as well.

Over time, advertising went from 30 minutes, to 2 minutes to 30 and 15 second advertisements. The short form, 30 second and 15 second advertising, was used to drive revenue growth in retail. Eventually the business was sold to Church & Dwight in July 2006 for $325 million.  All OxiClean TV advertising still featured Billy Mays until his untimely passing in the summer of 2009.

Parting Words about the OxiClean Success Story

The story of two very different men—Max Appel and Billy Mays— and their very similar rise to success via HSN and direct response TV marketing has within it the germ of everything you need to succeed by Selling on TV. What’s missing is a repeatable system that can help you translate OxiClean’s success into your own personal template for success.

Well, your own personal success system isn’t missing any longer. The next blog post, in fact, provides a step-by-step guide for turning products into profits via direct response television marketing (DRTV)…

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: