Lessons from the Shop Japan Success Story

Harry HILL

How did a company launched by a "couple of gaijin in Nagoya" find their rhythm and end up with 230 full-time employees, several very profitable subsidiaries, a 200-booth call center with over 400 contract employees, and after-tax earnings in 2005 of US$23 million?

"We were hired by a TV shopping company in Nagoya 14 years ago to import products for them," Harry HILL, COO explained about how OLM (Oak Lawn Marketing) entered the Japanese business space. "As we started doing that, the man who sold us one of our first products recommended that we should try and use our infomercial and start selling the products in Japan. We suggested this to the TV shopping company owner who said that if we were so smart we should buy our own time and do it ourselves."

"Instead of selling a little of a lot of products, we brand a certain product to the maximum to sell the maximum amount of units." This strategy has allowed OLM to create brand awareness and recognition for its top selling products so that in the last few years, the business has had the best selling brand in Japan. Hill pointed out that it is key for fixed channel companies to have the maximum amount of households and sell-through many products, while in contrast, infomercial companies like OLM/Shop Japan focus on maximum exposure of a small number of products over all different channels to drive sales and profit.

As many entrepreneurs will be able to identify with, the founders started with nothing. "We had no money, no contacts, and no ideas," Hill said bluntly. "But what we did have was the ability to look outward. What we saw was that the direct marketing industry, and in particular TV shopping, was a burgeoning industry in Japan. So, what we did was look for best practices."

Hill said, "Over the last 15 years, we have continued to build up all spots across all channels in Japan so that now we control over 2,200 hours of programming per month; over 8,000 airings per month. Now, once we secured cost-effective media, the challenge was to decide how to maximize it in a profitable way, and that's why we came up with a brand management concept."

Hill then moved on to discuss innovation. He pointed out that one of OLM's key philosophies for building their business is to look for best practices and be the first to apply them. "The reason we created our own in-house 24/7 multi-channel call center was because no call centers would offer 24-hour service," he said. "We were told that Japanese consumers don't mind calling between the hours of 9~5pm. But we were paying a lot of money to air shows at 2~3am in the morning or whenever we decided to air shows and we couldn't get anyone to do it, so we created our own call center, and in the process became the first 24-hour direct marketing company in Japan to do so."

Hill said that OLM was the first TV shopping company in Japan to provide multiple payments. the response doubled. "We were also the first company in Japan to offer a non-conditional 30-day money back guarantee," Hill said. "So, we were looking for successful sales techniques and strategies from around the world and applied them first in Japan. Our business here in Japan has been a very effective strategy for us."

Lastly, Hill mentioned another technique OLM uses to boost sales that could be beneficial for entrepreneurs - customer testimonials. In OLM's case, testimonials from Japanese customers are integrated into their shows. This increased our sales by about 40%."

Further reference: www.oaklawn.co.jp

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