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Mon May 23, 2011
Feeling the bounce from the Oprah Winfrey Show
This week marks the last we’ll be seeing of new broadcasts of the Oprah Winfrey Show.
I’m someone who basically has grown up with the show (to be exact, the nationally syndicated show has run for 25 years).
It’s spawned the empire of all things Oprah – including her magazine and now her own cable network.
Over the years, Oprah’s singled out many products for her Favorite Things list.
Regrettably, the video montages of people hysterically screaming during those episodes are quickly removed from YouTube, so I can’t embed them here. But what people don’t realize is that many business owners are just as excited about trying to get their products on the show.
Whether they’ve tried to get on the list or not, it’s an incredible opportunity (hat tip to my our reigning Changing Gears punster Dan Bobkoff, who coined the phrase Oprah-tunity) for companies as varied as Zingerman’s in Ann Arbor to Nonnie’s Southern Food in Spring Valley, Ohio.
To find out what happened to those businesses years after Oprah’s spotlight has left, I started out in the west suburbs of Chicago, in a town called Geneva.
Twenty five pounds of chocolate chips smell heavenly. And Moveable Feast owner Matt Lennert told me that when you get a couple of hundreds of pounds of his fudgey brownies baking, the smell is "intoxicating."
I’m sure the neighborhood must love those smells from Matt and Kim Lennert’s shop in Geneva. That’s where the couple runs their café and catering business, Moveable Feast.
A while back, the business transformed from storefront café to a national mail order food company – in the span of about a month.
“We were catering for Oprah and she tried these brownies that we make and she fell in love with them,” Lennert told me.
It was a while later – maybe a year and a half – that they got a call from a producer who said they wanted to put the brownies on Oprah’s Favorite Things segment on the show.
I asked him whether he was excited, or terrified.
Matt said both.
“We were of course really excited. But we were concerned – we wanted to make sure we could sort of insulate our existing customers,” he said, adding they knew the horror stories from other business who had been featured and they weren’t ready for it.
At the time, the Lennerts had 10 workers.
They were making brownies in small batches, stirring by hand about 20 pounds at a time. They knew they would have to be ready to make hundreds – it actually turned out to be thousands of pounds – of fudgey brownies.
They weren’t even selling their brownies in a package – but on a plate in their store.
“So we had to actually come up with a whole retail package so we could offer the whole shipping and fulfillment side,” he said. They did it all in about six weeks.
At the peak in 2006, Moveable Feast had 50 employees, including at call centers and doing shipping. Business has calmed down some since then and a smaller staff is back to baking brownies in the café kitchen.
But Matt Lennert says mail order customers are still adding about 10 percent to the company’s sales.
Going from a neighborhood café to a nation-wide mail-order business is risky.
It takes planning and according to economist Craig Garthwaite – a savvy business strategy.
That’s what he teaches at Northwestern University’s Kellogg School of Management. I met up with him to talk business strategy at the Pastoral Artisan Cheese, Bread and Wine in Lakeview.
Garthwaite is a big fan of their cheese. So is Oprah – it’s made O magazine’s Favorite Things list two years running.
“The benefit to being on Oprah is that it’s for a small business in particular is that it is an advertising buy that they could never do on their own,” he said. But it’s not just an opportunity – it can be a critical juncture of success or failure.
“I think it’s hard to understand the increase in demand that we’re talking about,” he said. “Garretts Popcorn in Chicago was featured in 2002, and they had a 100,000 hits on their web site the day they were featured on the show, and their December sales increased 100 percent from the year before.”
That type of increase in demand is hard for any business to adjust to – even large companies, Garthwaite said.
“Even the largest companies like Yum Brands – [they] own KFC, Pizza Hut, Taco Bell, to be candid, they underestimated the amount of demand that they would have,” he said.
So KFC ended their free chicken promotion early. And people were so upset they’re suing.
“Make sure you have the ability to have a large number of hits on your website,” he said simply. “Make sure you have more than two or three phone numbers, and make sure you have the inventory to satisfy people, because you don’t want the people coming to your store and being perpetually unable to get the product that they want.”
Pastoral Artisan sent samples to Oprah to get her attention. They were rewarded in 2009 – and again in 2010 – when they made the Favorite Things spread in O magazine.
“People listen to what others say about your business much more than what you say,” Pastoral co-owner Greg O’Neill told me. O’Neill knew they had to be ready for the onslaught – even notifying their cheese supplier – many small businesses themselves – to be ready to send more.
Even then, Pastoral was inundated.
O’Neill’s partner ended up having to drive to Denmark, Wisconsin in the middle of a snowstorm in December to get more of the gift boxes they ship their baskets in.
O’Neill told me they would do it all again in a heartbeat.
“If she’s listening – do you think she’s listening? The Oprah magazine is not going away,” O’Neill told me. “We want a three-peat.”