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Rick Cesari: Billion Dollar Branding, Direct Response & Getting ‘em to BUY NOW

On this episode, my guest is Rick Cesari. If you're just getting to know Rick, he is a pioneer from the direct response advertising industry since the early ‘90s and ‘80s. He has been behind iconic brands such as Juiceman, Sonicare, the George Foreman Grill, OxiClean, Clarisonic, Rug Doctor and GoPro. He has helped companies go from next to nothing to over a billion dollars in sales in a few short years. We are incredibly grateful to have him on the show talking about how to grow a business through many different powerful strategies.

If you are a bit intrigued, let me talk about what we discussed. We talk about the billion-dollar branding. What makes for a great brand? How can you construct a great brand? In addition, we talk about direct response, what that is and why. If you're just getting started, small business owners and entrepreneurs should call upon direct response to get the word out about your business. In this age of video, it's important to be incredibly persuasive to get people to do the things that you want them to do, donate to your charity, invest in your business and buy your product or service. If you want to increase the sales and if you want to spread the message about whatever it is that you're up to, you are going to love this episode.

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Dustin
Rick, on your 50th birthday, you found yourself in Alaska where you summited the highest peak in North America, 20,310 feet known as Denali and Mount McKinley if you're a little bit old school. Why was this such an important moment in your life milestone for you?
Rick
I thought people do all sorts of things for their 50th birthday and I wanted to set a big goal to achieve. I thought that climbing the highest mountain in North America would be it. It turned out to be a fantastic experience all the way from the training to getting prepared to do it, to actually fulfilling the goal and standing on top of Denali. It was a fulfilling experience. I haven't written a book about this yet, but there are a lot of parallels between preparing and climbing the mountain and building a business. That's in a whole other conversation we could have.
Dustin
I definitely want to touch a little bit on it. Having never climbed anything substantial and living in Florida for a great deal of my life where there are no mountains just hills. That preparation, are you running? Are you going to the gym? Are you climbing mini mountains? What's that like to prepare for something like that?
Rick
The preparation involves getting in shape cardiovascular. A lot of jogging, but then once a week I would put 40 gallon water jugs in a backpack and hike up starting off with a smaller hill in the Seattle area, but eventually hiking up a four hour round trip in a mountain called Mount Si, which is located just outside of Seattle in North Bend. What I would do is start off with 40 pounds of water, which is one five-gallon jug. Eventually, I was hauling up 80 pounds of water to the top. What I would do is dump the water out at the top because coming down is what's hardest on your knees. I'd walked back down with empty jugs, but carrying that heavyweight because on Denali it usually could be anywhere from two weeks on the short-end to four weeks at the long-end. You have to bring all your food and supplies. You fly in on an airplane and land on a glacier at 9,000 feet, you have all your supplies that will last up to four weeks. Sometimes that can be 100 pounds of gear and there aren't any pack mules. You are the pack mule. If you aren't in shape from carrying heavy loads that's one of the things you definitely need to prepare for.
Dustin
I wanted to ask this because in doing the research I noticed that it's called Denali and growing up, I always knew it as Mount McKinley. Do you know why they changed the name?
Rick
For me, I prefer it. It used to be Denali then President McKinley got assassinated and they changed the name to Mount McKinley and they changed it back to the original name, which was the Indian name, which is what I prefer. Just another analogy to that, Kennedy Airport, I grew up in New York, it used to be called Idlewild Airport, which was a much nicer name. Obviously, after the assassination, that was called Kennedy Airport. It used to be Denali. It was an Indian name. They changed it to McKinley and then there was a groundswell to change it back to its original name.
Dustin
Thank you for enlightening me on that. Mansions, yachts, expensive cars, young bikini-clad women, and a Vietnamese-American real estate investor with quite a personality. Tommy Vu caught your attention one late night in the ‘80s and led you into this field of direct response. Arguably, you wouldn't be here if you hadn't seen this or had been taken part with Tommy Vu. What compelled you to take action when you met Tommy Vu for the first time?
Rick
First of all, I got into real estate because I studied biology in college. I have a degree in biology. I never studied marketing. After I graduated, I moved back to my hometown, which was Daytona Beach, Florida and started reading a lot of books about how people made money. Obviously, there are a lot of people, more millionaires have been created through real estate. I was reading books by Albert Lowry and Robert Allen and it turned out there was a small newspaper ad that there was going to be this seminar about how you could buy a foreclosure property. I decided to go to it and the seminar I went to was one that Tom Vu put on. Believe it or not, the very first seminar, there were eight people in the room, that was all. I did exactly what he told me like blind faith. I went down to the courthouse and found a foreclosure property. I went out. I made an offer. I had no money. I basically wrote a purchase for sale and did a double closing.
I made $12,000 in two weeks and I was like, “This is amazing.” At the time, it was like a fortune. I was so grateful. I don't know why I did it. I called a Florida business magazine called Florida Trend. I called to ask for the business reporter and I said, “You'd never believe it. There's this Vietnamese immigrant. He came over as a boat person. He's teaching people how to make money in real estate. I did what he told me and I made $12,000.” They did a story about him and it put him on the map. It created instant credibility. Also, what I wanted to do was go out and buy more houses and he kept knocking on my door, calling me, “I need you to help me market.” That's how I got started with them. I got dragged into it against my own will, but then once I started doing it, I found that I had a knack for it and helped build up his seminar business to one of the largest in the country at the time.
Dustin
There was no prompt for you to call this newspaper or this magazine, I’m blown away. I wish more people would do that on my behalf.
Rick
I'm not sure why I did it. It's one of those crazy things that happen. Not only that, the crazy thing is why would they rate a four-page feature story about the guy? It was an interesting story, but literally as a marketer that third-party credibility is huge and that put him on the map and led to growing as his business. I was involved with him before the yachts, the bikinis and everything else and I had a more serious approach to the marketing. I was just as successful.
Dustin
If you're reading this first time and you don't know Tommy Vu or maybe you're a little bit green to space, you should definitely look it up on Google. It is quite a trip. He's a professional poker player. I got to imagine whenever I think of your career having read some of your books, it always seems like the Wild West to me. You'd mentioned the yachts and stuff that came after you. I imagine you saw some crazy stories along the way. I’m curious, what do you take away that early on from that journey with Tommy Vu? What did you learn and what sticks out to you?
Rick
When I first started marketing and working with him, it didn't matter. The results were more important than how you got there. I think that's probably the biggest lesson that I learned is how you do your marketing and doing it in an ethical way is as important as getting successful results. I have some great Tommy Vu stories. To make his first infomercial, we went out to Hollywood and he rented a Rolls Royce. He didn't own one at the time. He was driving around Beverly Hills in a Rolls Royce. It was a convertible with the top down. What happened was he started going to seminars and people started asking him about his Rolls Royce. We were down in Palm Beach and he actually walked into a Rolls Royce dealership and bought a convertible Rolls Royce with a Diner's card so that he could tell people that he had one. This was down the road after he had done well with the seminars. Getting back to your question, the biggest things I learned in the early days was how powerful marketing could be and you have an opportunity to do it the right way or the wrong way. I definitely have made it part of my career to always do it the right way and be ethical. It's paid off in the long run.
Dustin
There's no shortage of folks making claims out there. When you do it for the long haul and you do it the right way, I 100% agree. That's what I admire about you is you've had some incredible successes and that doesn't compound time after time again if you're not a reputable person and doing things the right way. Your interest in health led you to the seminar. You came out of the seminar arena and you met juicing legend Jay Kordich. It's one thing to meet a guru, a trainer or a personality. How did you go into that and end up putting together an incredible deal that catapulted you on your own?
Rick
Just to give people a little bit of background, I'm one of eight kids. My dad passed away from heart disease when he was only 46-years-old and I was twelve-years-old. Obviously, going through that experience is what led me to be interested in health. For whatever reason, I started reading books and I gravitated towards not so much modern science but more traditional. You are what you eat and you can be healthy by the foods you eat, what you put in your body. I was living in Tampa at the time. I'd gravitated. I started in Daytona Beach. Tommy Vu was in Orlando and I was over in Tampa working with another real estate person. I got introduced to a friend who was big in juicing and I started drinking fresh fruits and vegetable juices because it tied right into you are what you eat, you put in your body. I went to see another seminar. I'm always curious. I found a lot of products over the years like this. Jay Kordich was the speaker and I immediately was blown away by his ability to mesmerize people.
If you had to look at anything I've done in my career, it was to take something that was successful on a small level. I look at marketing as putting gasoline on the fire. I used to use the analogy of holding a magnifying glass up to a piece of paper and you're blowing it up and creating more awareness for what's happening. I didn't invent his pitch or what he was doing. I was just able to bring more people to what he was doing. The other good lesson I learned, which you touched on is I took everything I learned about putting on real estate seminars and I transitioned it to a different product and we started putting on health seminars. We did the same exact thing. People would see advertising. They would come to a free lecture. It was a 90-minute lecture. At the end of the lecture, people could purchase the juice machines and structured it exactly like the real estate seminars, but instead it was about juicing and it was a health message.
Dustin
A lot of people when they go to an event, there's this stage persona. You see a person on stage and sometimes you feel like they're special or they were born in a certain way and some people are intimidated by that, yet you went up to him and created a relationship. How did you do that? You seem pretty introverted, kind of a quiet guy. Were you so driven like, “I’ve got to go talk to this guy and show him what I was doing before to help him blow his business up?” How did you find the courage to go up to him?
Rick
I don't know if it was courage. It was believing in what he was doing and the fact that I was already drinking the juice. I could go up and say, “I'm not a business promoter that wants to promote you to make money. I believe in the message you're delivering and I want to help more people become aware of it.” That was a true statement. That's what enabled me to have that first meeting with Jay and his wife, Linda Kordich. It was interesting. I always have tie ins with real estate, but the other person that was approaching, it was a guy named Dave Del Dotto, who if you remember at that time was one of the biggest real estate guys out there. He had successful infomercials and really well-financed compared to what I was bringing to the table but he was approaching Jay just to make money and not spread the message. Jay ended up signing with me to promote himself because I was into living the lifestyle and helping spread the word. That's what won him over to working with me.
Dustin
What surprised you while you were there in helping to build that brand and market it? What surprised you that was different from the real estate arena?
Rick
I think if there was anything surprising, it was about the amount of groundswell that existed in the country that wanted alternatives to conventional medicine. We weren't treating diseases or anything, but it all ties into natural medicine, you are what you eat. I was shocked because we had built a very substantial business. If you look at the time of the juicing and it turned out that it was the tip of the iceberg. If you look at how it grew since the early ‘90s, there are juice bars all over the place, juicing things. It's amazing and that groundswell still exists. That's a great opportunity for marketers to look at. There's conventional medicine and it does a great job in some areas, but there's this huge desire, knowledge and thirst for alternatives to conventional medicine that work. I'm not talking about snake oil, but fruits and vegetables, you can't argue. They work, they're healthy.
Dustin
When he said, “Let's do a deal together,” what was your thinking? Let's ramp up the seminar business? Let's do an infomercial?
Rick
Here’s a good entrepreneurial message because what I was thinking was I had about zero assets when I made a deal with Jay and I didn't tell him that. I had to figure out a way how I can start promoting seminars and start generating some income. Luckily, sometimes you fall into a situation and Jay had about half a container of juicers. I think there were about 1,100 juicers or 1,200 juicers that he already had in the country. He was basically selling them onesie-twosies at a time. I remembered a PR contact in New York that I had met in the real estate seminar days. There was another guy out of Orlando named Charles Givens. He used a company called Plan Television Arts. I contacted them and for whatever reason, they didn't want to work with me, but they referred me to two young guys named Eric Yaverbaum and John Sawyer.
They started a company called Jericho. I was their first client and I told them what we wanted to do. They had a contact at WWOR and they had an opening for a guest. They booked Jay on an episode of the Richard Bey Show on WWOR-TV, which was a superstation back then. This is back when everyone was watching television. Jay was on there for one twenty-minute segment and this was the very end of June. I'll never forget this. Nothing happened. We had Jay give out. Basically, we said, “If you send us $1 and a self-addressed stamped envelope, we'll send you a dozen juice recipes.” They put that graphic up on the screen. Almost a week goes by because it's the July 4th holiday and on July 5th, a mail truck pulls up outside of our office in Seattle and the mailman gets out. He's got a three-foot high canvas sack and over his shoulder like Santa Claus.
He walks into the office and it's full of letters. He goes back out to the truck, brings in another one. He does that two more times. We had four of these sacks. We had 18,000 self-addressed stamped envelopes with a dollar in them. All we did was run down to the corner printer, print up a juice recipe on one side of an 8.5x11 on the backside. We said, “Here's how you can order your juicer.” Sent it out. I think we sold 300 juicers at $300 apiece. That’s how we started the entire business and from there it just took off. Sometimes when you run marketing, you hit the right product at the right time. That's what happened with the juicing. Not that there weren't ups and downs or urge with any business, but after that, it was off to the races.
Dustin
How did you end up exiting that business?
Rick
What happened was and another good business lesson. I remember the month of August and this was in 1993. We had firm orders from retailers for 400,000 juicers. A month later that had dwindled to about 20,000. Meanwhile, we had lines of credit out. The reason is that there's an analogy many years later with GoPro. When you have a product like that, even though it's a brand, people were bringing in inexpensive juicers. Ours was $300. You could buy an inexpensive juicer for $39 and the market got flooded with cheap product and totally the bottom fell out of the juicer market.
We did have the brand and a company out of Chicago was still interested in buying it because at that point the business transferred from direct response or direct to consumer marketing to more of a retail business. Brick and mortar retail were big back then. They bought the company, the brand and the inventory from us in 1993. The first thing I did was take a little bit of time off and relax and enjoy life a little bit. That same company came back to us with two products and one was a homemade bagel maker that didn't take off and the other one was this funny slanted grill called The Fajita Express, which ended up being the George Foreman Grill. That's how I got into the marketing agency business.
Dustin
I definitely want to talk about the George Foreman Grill, but we're going to tease it a little bit because that’s what a good infomercial would do. You went on to sell a $150 toothbrush when nearly all toothbrushes were selling maybe for a max of $3 or $4. How do you sell a $150 toothbrush?
Rick
The product that you're talking about, if anybody hasn't figured out yet was the Sonicare toothbrush. For me, sometimes life is a series of coincidences. I read a quote once, “The harder you work, the luckier you get,” type of thing. It turned out Sonicare was a startup in the Seattle area. The name of the company was Optiva Corporation. It was an inexpensive product with new technology so they couldn't get shelf space. They were having trouble marketing the product, and the owner of the company and the CMO had known what we did with the Juiceman because it was all over the papers in Seattle and the success we were having. They reached out to me and they said, “Can you help us with this product?” I basically said, “Yeah, I'd love to try.”
We sat down, there was a lot of thought behind it. About the $150 toothbrush, we had to say, “The feature of that product was Sonic technology.” If you said, “Do you want to buy a sonic toothbrush for $150?” Nobody would say yes but if you understood the cause of gum disease and they had some periodontist from the University of Washington, who was one of the cofounders. He explained gum disease to me at the time. This is well-known but not back then that it was caused by bacteria that would hide in the nooks and crannies of your teeth. It was easy to make a jump to say that the Sonic technology allowed the toothbrush to go in and clean beyond the bristles. That's the unique difference of the Sonicare toothbrush. You can clean beyond the bristles and reach into nooks and crannies that regular toothbrushes can't and if you do that, you'll help reverse gum disease. That was our marketing message and it was a matter of using a vehicle to get it out in front of people and people responded to it like crazy.
Dustin
I think there's so much gold in a lot of what you said and I want to unpack one of them. You said there was this crazy technology. We've got product developers, we've got people that love to talk features of the product. Scientists, let's call it that. Data, not necessarily the most attractive thing to communicate in your marketing, but you said clean beyond the bristles. How do you go from that technology, that data, that science and package it in a way like you did there? That instantly communicated what you said that was more attractive and it's so succinct. Is that a gift? Do you hire a copywriter? Where does that magic come from?
Rick
I have to be honest with you. I don't know if I know the answer to that. I've always been able to look at things a little bit differently. One of the things I learned and you talk about the Tom Vu seminars. I literally sat in the audience almost every night for 300 nights listening to sales pitches and fine-tuning what worked, what didn't work. There was a lot of sales training that understood, but also what would be said that would make someone take action versus something that didn't make them take action. You know from being in direct response, we knew that we would spend a certain amount of money, put a certain amount of people in the seats and we'd have to convert a certain percentage of them to break even.
We would track all that and we would change some of the pitch until we got it fine-tuned to get the results that we needed. I think it was that basic sales training that led me to look at every product from the standpoint of the end user. It was like, “What's going to get somebody excited about this product?” That's why I may be looking at things a little bit differently. I look at it from a sales perspective and from the end user perspective and trying to figure out what it is going to make them excited to buy a product.
Dustin
I want to ask you this question. I'll give a little context. Advice for entrepreneurs or business owners or inventors, anybody who's selling something that wants to sell it at a premium price. That's what I'm looking for. One of the things you said is go and get the data, go get the science to prove that your product can deliver the goods. The other thing is to understand your customer and understand what's going to get them into action. Is there more here in terms of strategies for business owners to sell at premium prices that you layer in?
Rick
Yes, there is more and it's something very simplistic. In every product I've ever done, I always start off at the highest price possible. A lot of business owners shoot themselves in the foot right out of the gate by thinking, “I have to sell it for X.” When I'm thinking I want to sell it for 3x, 4x, 10x but legitimately if you can support what the product does and the benefits. That’s a crucial mistake that many businesses make right out of the gate. It's like you almost have a piece of paper and a pencil and say, “What do I have to sell this product for in order for me to make enough margin for my business to be successful?” Do you ever wonder why Starbucks has been so successful? Their margins on a latte are 4x or 5x and it's consumable every day.
One of the reasons that not every product can be a direct response product is a lot of times there isn't enough margin in it. Almost all of the products we've talked about and we'll be talking about, there's enough margin there. Going back to your question, for me a basic rule of business is always starting at the highest price possible because it's that margin that's going to be the lifeblood of your business. If you have repeatable or consumable revenue, that's great, but if not, that's the margin you have to live off of so you might as well make it as big as possible and figure out a way to market to get there.
Dustin
I want to clear some up for people. We've been throwing around some slang here. Direct response, if folks are not familiar with that, would you define direct response?
Rick
If I spend $1 on advertising for me, it means you're able to measure every single dollar of advertising and what type of revenue is generated from that advertising. If I spend $1 on advertising and I get $1 back, that's a break even, but not because there's a product cost involved. A simple goal and direct response advertising for me is I spend $1 on advertising. I always shoot to get $2 in return. If I can hit that model, I can usually make a product successful. Direct response advertising is basically accountable advertising where you're able to measure your return on every single dollar of advertising that you spend.
Dustin
I don't know if brother or cousin. I don't know what term I want to use here but let's talk about the other form, which is Nike billboards.
Rick
It’s brand advertising, you just said the keyword Nike, which is a Fortune 500 company. They can afford to do brand advertising. Every single business that I've been involved in, every product brand that I've helped build has always used direct response advertising because most of them were startup companies and didn't have a big war chest to spend. I find that products or companies that don't have big budgets and have to struggle to figure out their marketing and do it correctly ended up growing successfully. You take the internet bubble that happened in the late ‘90s, people were throwing money at it. They'd like the pet socks and things like that. They had no clue. Also, what they had to do was a little bit of direct response advertising. Some of these companies would have been successful. Brand advertising is useful for bigger companies. It's not a good way for any type of startup, inventor or small business. I'm a proponent of direct response advertising.
Dustin
With that said, you're here because you created multiple courses for us at WealthFit and you married direct response with branding. You call it brand response. Define brand response?
Rick
I used to be the least advocate of brand advertising, but I learned over the years that if you do some simple things that will contribute to the brand. As you're doing your marketing, you’re selling product and you're consistently doing the things you need to do to brand your product, your marketing will turn that product into a brand. I think it's Dan Kennedy that had a statement in his book. He doesn't brand to sell, he sells to brand. That's a unique difference there. That's my philosophy all the time. I don't ever spend a dime on branding. I spend money on marketing but making sure the things you need to do to build your brand are in place. We can talk about some of what those things are like unique selling proposition and positioning and delivering more value. Think of branding as a simple concept of what is a customer's experience with your product and your company. If it’s a great experience, you want to be able to duplicate or replicate that as many times as possible and you'll be building your brand.
Dustin
You did legendary pitchman, Billy Mays first infomercial. Rick, what's the story here? How did this come to be?
Rick
It's actually a great story and there's a backstory to everything. There was a local Seattle company called Quick ‘n Brite. I had done an infomercial for them that was very successful. It probably generated about $20 million in sales and the founders of OxiClean, the actual parent company was called Orange Glo International and it was Max Appel and Joel Appel, his son. They must've followed me around for about a year asking if I would help them because they had seen the success of the Quick ‘n Brite, Sonicare. I had already done the George Foreman Grill. This is where ethics came in. I didn't want to do two cleaning products at the same time. I went to the owners of Quick ‘n Brite and I said, “I have these other people that have a product. They want me to work with them. Is that okay?”
I got their permission. They said yes. They said, “We have this new product coming out there.” Their original product was Orange Glo Furniture Polish and just like lemon Pledge but they were using orange oil instead of lemon oil. Billy Mays was actually their pitchman on Home Shopping Network for Orange Glo International, the furniture polish. They said, “We have a good pitch. We want to use him in an OxiClean commercial.” OxiClean was this brand product that no one had ever tried. I do know where the idea came from. This is only people that are old who know, but there was an old laundry detergent called Borax. It's 50-Mule Team was their advertising. Basically, the chemical makeup of Borax is the exact same thing as OxiClean.
They took a product which wasn't patented and repackaged it with a great name OxiClean. I didn't know this. I found this all out afterwards. Getting back to the Billy Mays’ story, they said, “We’ve got this pitch guy. He’s good at home shopping. They showed me a video of them. He wants to fly out to Seattle and he's going to host the infomercial.” I had never met Billy, never worked with them before, but when Billy came out, he made one request. He goes, “Get a handheld camera and I need you to be pointing it at like you and I are sitting three feet across.” Billy wanted the camera so that he could look right into the camera. His background was pitching products at state fairs and he was used to being close to people and he was pretending the camera lens was his audience. It worked fantastically.
Obviously, there are a lot of things that go into it. We had to do great demos and show OxiClean at work. You can look this up on YouTube. There’s an aquarium with dirty water and you put OxiClean and the water turns bright. That demo itself is probably worth $10 million in sales. Billy is a force of nature. I've done the first thirteen OxiClean and Orange Glo and Kaboom infomercials, we did out in Seattle with Billy. As the company got larger, they started working with lots of other people to produce their shows. We had a great run and Billy was the best there was.
Dustin
It’s easy to look back especially after people have success, but did you know at the time you were special or were you figuring it out and you were like, “This guy, he's loud.”
Rick
For me, I get a sense that something might work. Otherwise, I don't get involved in it, but you never know. You know this from direct response marketing. For me, it always comes down to testing it. When we tested the original OxiClean infomercial, we would spend $1 on media and we got $4 or $5 in return. This is a consumable product and that was on order for a $39 product, so the numbers don't lie. I knew from the first test that it was going to be $100 million business and it actually grew more than that. You can extrapolate out because you are used to seeing certain products, certain return on investment. When you saw the numbers on this thing, you knew right away it was going to be a giant hit. Billy was the one that was responsible for that.
Dustin
Rick, I want to bring this to people's awareness. You're so modest. You are a humble giant, a legend to me when it comes to selling direct response and in building brands. I haven't pressed you for it, but I feel it is the time to share. Will you share some of the companies that you've worked with, what they ended up selling for? Just give people an idea of what it's like to take a product, take it to the masses and then benefit from that brand where you'd mentioned one of the companies had bought a product.
Rick
Let's start with the one that I owned and I started this business with my brother. It was the Juiceman business. I'm going to date myself, but I'll take these products in sequential order. We started that business in 1989 and we grew that to $75 million in sales and we sold it in 1993. That's when we started working with Sonicare. Sonicare took a little bit longer. It took about ten years, but I started working with them when they were doing less than $1 million in sales. They grew to about $150 million in sales. They were number one on the Inc. 500 list of fastest growing companies two years in a row. They eventually sold the Sonicare brand to Phillips Electric for $500 million.
The next one after that was the George Foreman Grill. George Foreman ended up being the largest selling appliance ever. It's well over a hundred million units. The way to measure that one was that the stock of Salton during the time of George Foreman went from 4 to 60. Salton itself and I've seen this happen both to small businesses and big businesses, they got hugely successful with this product, but then started buying lots of other brands and ran into financial trouble. They had to sell the company to a company called Windmere and in Florida. They make hair dryers and things. OxiClean that's another incredible success. It was Max Appel, the dad and Joel Appel, they brought in their other brother David Appel and I think their sister too. They built that business, Arm and Hammer, the company that makes baking soda, they wanted to get into the cleaning business.
One of the things back then gave a company value was that OxiClean was taking up all the shelf space on Walmart and guess who they were knocking out? They were knocking out Tide and all the other people. They were knocking out Clorox. Arm and Hammer said, “We want to get into the cleaning business.” They purchased the company. They paid them $325 million for the OxiClean business. The next one is the Rug Doctor. Rug doctor was strictly a rental company. You could go to 30,000 grocery stores, hardware stores around the country and you saw the little racks of Rug Doctors and they could rent them. They decided that they wanted to start selling product direct to the consumer.
They did that and we were able to build that business up to about $100 million in sales in a few years. They sold that business for about $420 million. A private equity firm bought it. The owners went and bought a nice resort in Napa called Silverado, which I still go down and play golf there. It’s a lot of fun. One last story is GoPro. Many of you have heard the story over and over. They started and eight years later they went from 0 to $1 billion in sales. They went public on the New York Stock Exchange and the Founder, Nick became a billionaire overnight when they went public.
Dustin
You helped Nick Woodman there and I love the story of how you met him. You worked with him so modest. You helped him in those eight years. Take us to that moment when you first met him and what you saw in that product.
Rick
You start off talking about climbing Denali. I was into outdoors. I was into that type of thing. That's what led me to go to the outdoor retailer show in Salt Lake City. I go to some of these trade shows to walk around and see what products are out there, who are doing well. That's where I ran into Nick and he was selling his original GoPro camera out of the back of a Volkswagen bus. The reason he did that was he couldn't afford a trade show booth. It was early in the history of the GoPro camera. We hit it off and two weeks after the trade show in Salt Lake City, he flew up to Seattle. We sat down for lunch and spent four hours together, planning out how to build the business and how to do marketing. I always remember what he ate because I was a healthy eater. I remember he had a beer and a plate of chili cheese fries. That was his meal. I have to give him huge amounts of credit because he was talking about building a $1 billion company when the company was doing less than $1 million in sales. He had that vision and that's usually one of the things that you need setting that big goal.
I think what I brought to the table was the concept of direct response marketing and help create the advertising that he used to build the company. I had an agency at the time called Cesari Media and we placed all the media time for every GoPro ad that was on the Olympics. I can tell you stories about a regular Olympic ad costs $5 million, but we were able to reach 80% of the markets and only spend $1 million. The thing that made to GoPro take off in the beginning, was a simple direct response offer at the end of each spot that said, “Someone will win one of everything we make every single day.” There was a mechanism called to action. It wasn't a normal brand spot. We were asking people to take action, go to the website and register for this contest. We gathered names, built a database. That kind of offer is what made the company take off.
Dustin
Rick, what's required for a brand to catch fire? What are those principles or keys? Every entrepreneur wants to know what's the secret recipe? What's the magic sauce for somebody like GoPro to take off or form a griller insert whatever product.
Rick
I can use GoPro or Sonicare as an analogy. All of them can fall into the same category. You and I finished building a course for WealthFit. One of the things we talked about is the five keys for building a great brand. I think that two of the most important things that any product needs to do is come up with a differentiator. How are you different than every other product on the market? That's known in marketing as a unique selling proposition and it's like old school marketing. You'd be shocked at how few people spend the time up front thinking about how they can differentiate their product or service. That's one of the key things. GoPro did that from the standpoint of creating a camera, how they differentiated themselves. Think about it, here's a guy building a camera out of his garage when he's up against Sony and Panasonic and even Kodak, which is bankrupt.
What he did was very something simple. He turned the camera around and provided mounts so you could mount it on a ski pole, a helmet, a surfboard, a mountain bike and take pictures of yourself. Just that one flip of thinking differentiated his product from all the others. The second part of a brand is positioning. Think about positioning in simple terms, “Is there a category in the marketplace that is underserved or underutilized?” In the case of GoPro, all these big camera companies are out there, but none of them were building action cameras that extreme athletes could use to document what they were doing. He had a wide-open category and those two things enabled that product to take off. That's it with GoPro.
With Sonicare, we talked about the cleaning beyond the bristles. The unique selling proposition is the fact that it can clean beyond the bristles. The category was up until Sonicare, most toothbrushes talked about whitening your teeth and freshening your breath. Sonicare was the first one to come out to say “We’ll help reverse gum disease.” It’s a brand new category, I can go all day long. The juicer, the unique selling proposition and the positioning. We positioned it as a health machine versus a kitchen appliance. You see a trend here. To answer your question and for business owners and product owners out there, think strategically about some of these issues before your product hits the market. It's easier to do it in advance than to try and change everything after the fact.
Dustin
I would definitely want to continue with that. I want to give people one more example because this one I am personally curious about. I was privileged enough to know the flushed out example in the course that you created. I’ve got to ask you, Rick, The Fajita Express. I love this story. The Fajita Express is how it came to you. This is not how it left you and it involved a heavyweight champion of the world and a nice buyout for him from what I understand. Tell us the story of how you got this deal and then how you took it to where it ended up.
Rick
The Fajita Express was basically a slanted grill and the thought process was that you would set this grill on the edge of the table, cook ground meat in it, put your taco shell up to the edge of the table and they had a little scraper where you could scrape the meat into the taco shell. They sold a few units, but nothing big. Coincidentally, George Foreman had just re-won the heavyweight title. He was 46-years-old. He was the oldest boxer ever to regain the heavyweight title. It turned out his agent was looking for a product to indoors. The last piece of the puzzle is the company that created this Fajita Express with Salton Housewares, the company that bought our juicer business.
I was involved with them in marketing some of their products. There was a brain trust of people were all this was happening. It was the CEO of the company Leon Dreimann and Barb Westfield, who's the co-author of my book Building Billion Dollar Brands, brainstorming and coming up with, “Let's take this slanted grill and we'll put George's name on it. It will be the George Foreman Grill.” Everything else fell into place. It's the George Foreman Grill. The boxing analogy, it knocks out the fat. The slanted grill is a feature, but the benefit of the slanted grill is it drains the grease and fat away from your food as you cook. You could do a very visual example. You could show sausages or hamburgers cooking in a cast iron pan and you'd let it sit and you'd see the white congealed fat around it.
You take the George Foreman Grill and you'd put the camera down and show his hamburgers were cooking. You'd see the fat running out of the grill. That little demonstration created an amazing success. There's more obviously to work but those are the big highlights to it. It was repositioning. It was taking a product that was designed to cook fajitas and turn it into a product that cooks healthy food. These things aren't always so obvious. There's a lot of hit and miss. Let me give you an example of a miss with the George Foreman Grill. I'm a guy, I'm thinking, boxing is cool. We called up HBO and we said we want to buy the footage of George Foreman knocking out Michael Moorer when he won the championship.
They sold us 30 seconds worth of footage for $15,000. We started the infomercial off with George knocking out Michael Moorer. Remember how we test everything in direct response? It got lousy results when we put it on the air. Here's where sometimes common sense doesn't come into play. It turns out that most of the buyers at the time that it originally introduced were women looking to cook their food faster. That's the other benefit no one talks about with the George Foreman Grill, it cooked food on both sides at the same time. You could cook hamburgers, steaks and fish twice as fast as normally. Most women I know and there are always exceptions, they hate boxing. When you saw her commercial starting out with boxing, the first thing they did was flip the channel. We went back out. We took the boxing footage out. We are testing and remaking something. We did that and the second time we tested it, it worked fantastically.
Dustin
I’ve got a couple of directions I want to go to. Number one, with Foreman putting his name on it. Did you know this is going to be big?
Rick
What Salton was good at because they made some other deals like with Linda Evans when she was at the height of her popularity in Dynasty. They made a licensing deal with George that he would get half the profits of every grill that was sold. They had a formula for figuring out what of half those profits were. It got to the point that the grill was selling so much. The licensing deal was so big and they wanted to put his name on more products, so they offered to buy out his half of the licensing or his net profits.
At the time, it was the answer to a trivia question, “What was the highest sports endorsement ever?” This was before some of the Michael Jordan things happen and things like that. George got paid $120 million in cash and $10 million in Salton stock to buy out his share. That's the half share of the profits on the George Foreman Grill, which is a pretty nice payday. To give him credit, he wasn't getting a lot of endorsement opportunities and so he only got paid a very modest fee and then a profit sharing. That's a good education for someone who's looking to sign up a spokesperson that you can make some creative deals out there, even with some big name people if you structure it properly. That's a great example of that.
Dustin
How do you decide if you're going to use an influencer in marketing?
Rick
When you say influencer, celebrity or athlete. First of all, I always like to use one if there's a good connection to the product. If you have to struggle to make that connection, it's not authentic and the viewer and consumer will see that. If there's a good connection, I would rather use an influencer, a celebrity or a spokesperson if I have the opportunity because it unties your hands from a marketing perspective and then you can get PR for that person. They can do appearances, you can use their image on the packaging. It's always a benefit to doing that if there's the right connection, but there have been so many people that try to force the situation like a square peg into a round hole. Everyone tried to emulate the George Foreman Grill. People started to make the Evander Holyfield Grill. If it’s a clear authentic connection to something and there was with George and the grill because George before he won the heavyweight championship, he weighed 300 pounds and he was famous for eating burgers.
Dustin
We've talked a ton about success. Oftentimes you learn more from the flops. Do you have any flops that make you laugh now?
Rick
There are quite a few. I probably tend to forget those more than the successes. One of the things I used to think or claim was that if I couldn't make something successful, nobody else could either. That does sound egotistical. I was thinking of more of it in terms of infomercials that I've failed at many products before and nobody's ever taken that same product and make it successful. I'll give you a good one for a product I owned. When we did the Juiceman, we came out with a second product called the Breadman Bread Machine and it was all about healthy eating. We were getting people to eat fruits and vegetables. The idea behind the Breadman was that they would have whole grains and we'd create whole grain bread. Bread machines were popular and we spent a lot of money and made a nice infomercial. It didn't work, re-edit it and tried it again. We never got the Breadman to take off, but then to the credit of Salton when they bought our company, they bought the juicer and the Breadman, Barb Westfield was into artisanal bread and they were able to build the bread business into $100 million machine business where we had failed miserably. That's one that definitely jumps out at me.
Dustin
You’ve got a book called Video Persuasion. We touch on in the course. A big question I have for you is how can business owners, entrepreneurs and product sellers be more persuasive in the videos that they're putting out to the world?
Rick
I think it boils down into a couple of areas. I use the analogy and you have a background in this in teaching people to do speaking from the stage. I use a lot of the same rules when I try to create engaging videos. One little simple example I gave is the Dale Carnegie formula, which is for a speech, tell them what you're going to say, say it and tell them what you said. The book goes into a lot of different ways that you can use to “hook the viewer, keep them engaged.” A simple one I'll share is three great ways to open any video that is tried and true proven is you can start with a question. Do you want to lose ten pounds in the next 30 days?
You can start with a factoid. Did you know this element in broccoli can prevent breast cancer? You can start with a story. People respond to stories. Those are three ways you could start a video to keep people engaged. What I've done is take everything I've learned in the last 25 years about producing video and what works and what doesn't work because it's all been tested through direct response. I share those principles or tips in the book on how to make your videos work better. Videos are such a huge component of any type of marketing and it's only getting bigger that I highly recommend it. We just created the WealthFit course for video persuasion. All these things will be great tools for people to use when they come out.
Dustin
Rick, you've been at this quite some time. I feel I'm starting to get some chops and some awareness. I feel businesses are cyclical. I want to add a little more color here. Infomercials sold many millions of product. We now know that people every day are lesser watching TV. The infomercial is becoming less effective in that media. I'm curious since you've gotten started in this world, how has the landscape changed and what are you doing to keep up with that change?
Rick
One of the things I'm a big believer in because I've utilized it is studying the fundamentals of direct response marketing. Human behavior doesn't change much. Human psychology doesn't change much. You know because you're a marketer and you've looked at history. You can go back and take a look at the advertisements that worked in a Sears catalog or a direct mail piece. There was radio, infomercials fall into this category of TV, direct response marketing. For me, those are all delivery platforms but the underlying fundamentals and concepts of direct response marketing always work because they're based on human psychology. You have to understand the distribution platforms, social media, Facebook and Instagram.
If you are making your videos with some of these direct response components but using a different delivery platform, you're still going to have success. Look at GoPro. GoPro uses some TV, but it was 30 seconds of ads. The main reason for them was to drive to an online site and the rest was done through YouTube videos. That's where I see things shifting. TV is less and less effective. I hardly use it anymore except to drive people to a site. Online video is skyrocketing and taking off, Facebook and Facebook Live, Amazon are starting Amazon Live and LinkedIn started LinkedIn Live. Understand the video concepts that make people respond and then they'll work on the delivery platform that you choose to use.
Dustin
It's definitely an exciting time and I'm 100% on board with you. Studying the classics and understanding what gets people to take action is a skill that if you're in business, you're going to use for the rest of your life. The media may change and there may be virtual reality ads or augmented reality ads. However, you’ve got to put a message out that's going to get people to do something. What are you working on that you're most excited about? What does the future look like for you?
Rick
It's changed a little bit because I ran a marketing agency for 25 years. I wound that down. I'm focusing on what I'm doing with you, writing, speaking and consulting. It's a fun time because I get to share a lot of the experience that I've learned and a lot of expertise. Video Persuasion is my third book. I'm already working on a fourth about selling on Amazon with a co-writer. I set a goal just like I set a goal to climb the mountain. I set a goal that when I turned 60, I was going to write five books before I was 65. I'm well on the way to making that, but part of it is I doing that. I like sharing information. I like educating people about marketing. Writing, speaking and consulting on projects that I can get excited about and have fun with, that’s how I'm spending my time.
Dustin
Rick, I could totally geek out and I know the average audience will not geek out with us. I want people to follow you. For folks that are following the show, definitely check out the courses. If you want to continue the journey with Rick, where is the best place for folks to find you either online or anywhere?
Rick
A couple of things, RickCesari.com, which is probably the best place to go. My books are on Amazon. I have an author page under Rick Cesari. I have a YouTube channel, which is RickCesari.tv. If you don't remember anything else, remember my name .com, that's where you can find the information.
Dustin
Rick, I want to say thank you big time. You've been a big mentor to me and I'm grateful that we've been able to continue the journey over multiple business ventures. Thanks for being you and doing you.
Rick
Thanks, Dustin. I always enjoy talking with you, one marketer to another.
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