Field Reports1 Oct, 2006 By: Thomas Haire, Courtney Beth Pugatch Response
A. Before joining OLM, I was a serial entrepreneur. In fact, Robert Roche and I were partners in a separate business venture, H&R Consultants, which is now a 100-percent subsidiary of OLM. H&R is a real estate and relocation services company for the ex-pat community in Japan. I joined OLM in 1999. I already had a long and close relationship with Robert and Tadashi, and it was obvious that by joining OLM — and pooling all of our efforts — we could create something really special. When I joined OLM in 1999, its sales were about 4.2 billion yen (less than $40 million U.S.). Our fiscal 2005 sales exceeded 17 billion yen (about $155 million U.S.). With our recent acquisition of the Vector companies in the United Kingdom and Germany, our worldwide sales are more than $250 million (U.S.).
Q. How has OLM grown to its current size?
A. OLM started as an importer of U.S. products for a Japanese recorded TV shopping company. When Robert suggested to the owner of that TV shopping company that he should try using the U.S. infomercial as well as the product, the president of the company told him that if OLM thought it was so smart, it should buy time and air U.S.-style infomercials on its own. Hence, OLM was born. When I joined the company, it was over-diversified for our limited management resources at the time. We realized that what we were uniquely qualified to become the best in Japan at was power branding. In about 2001, we joined the Global Alliance with Vector Versand in Germany, Vector Direct in the U.K. and several other companies from around the world. Our value proposition to suppliers was that if they gave us the rights for our respective countries, we would test and roll out simultaneously. This allowed us to differentiate ourselves from our competition — and for OLM we were suddenly able to beat out competitors to secure the rights to the best shows in the U.S. At the same time, we concentrated very hard on developing a strong team of media analysis experts and creative brand managers who could adapt the shows to the market, as well as developing a quality control system with traveling team of experts. The results were outstanding. Sales essentially jumped to $155 million in 2005 with consistent profit margins. Today, we are the No. 1 infomercial company in Japan for sales, and we air more than 2,600 hours per month of time throughout terrestrial, cable and satellite.
Q. What does Oak Lawn Marketing do for direct response marketers that sets it apart from other companies in this space?
A. Japan is a unique market. Unlike the United States, where media is a commodity, when we purchase media in the typical contracts of three, six, nine or 12 months, the contracts essentially roll over unless we decide to give the time up. While some time is available on the spot market, it is normally very expensive. Our control of relevant media allows us to roll out products in great volume. We are particularly strong in the terrestrial channels, and since cable and satellite combined still reach less than 30 percent of Japanese households, this presence gives us a competitive advantage. Our quality control system also allows us to go in and develop processes to create and maintain quality for the products that, unfortunately, many U.S. product owners don't have. In Japan, problems with a package's appearance, let alone product quality, result in returns due to defects. Since we established our roaming quality control teams and our design team, which completely rewrites the manuals and directions, we have reduced the average defect rate from 3-5 percent to less than 0.2 percent.
Q. Who are your current most successful clients?
A. We have had many successes. Our recent hits, which have exceeded $50 million (U.S.) in sales in the past 12 months, are the Slendertone series of products and the Swivel Sweeper.
Q. What are your plans for the future of OLM?