Kevin Harrington On The Next Blockbuster Sex Product and How to Build a Global Brand

Michael Kop |

Ex-Shark Tank panelist and investor Kevin Harrington – well-known as being the inventor of the infomercial - talks building a consumer brand and working to go global with ‘Prolongz’ in an exclusive interview.

Kevin Harrington has been called the ‘King of the Infomercial[i]’ and an authority in building global brands and penetrating retail channels with successful consumer products like the Gazelle, Oxiclean and Food Saver. In total, after 30 years in the infomercial business, Kevin has had cumulative sales of over $4 billion[ii] from products launched in the infomercial space. The Gazelle, for example, has had sales of over $1 billion in part due to Tony Little’s salesmanship, and a likeable TV personality. On the other hand, a not-so-successful product launch of Kevin’s was the Twist-A-Sizer, an aerobic and cardiovascular exercising machine, promoted by the legendary Chubby Checker who made “the Twist” a hit.

Gazelle.jpg

Figure 1. Gazelle Edge, exercise machine, popularized by Tony Little

 

FoodSaver.jpg

Figure 2. FoodSaver, a consumer product that was launched from an informercial   

 

On April 8th 2015 Kevin joined the board of directors of Redwood Scientific Technologies (“Redwood”). Redwood is a direct marketing company that sells, distributes and markets an over the counter FDA-registered drugs for premature ejaculation called Prolongz. Prolongz is an oral (sublingual) dissolvable strip (like Listerine) which has damiana leaf extract and Asian ginseng as active ingredients. The company, in their infomercial,suggest that you take 2 strips a day and another strip 30 minutes prior to intercourse to ‘last longer’ in the sack. Damiana or turnera diffusa is claimed to be an aphrodisiac and has a positive effect on the libido[iii], which in turn prolongs time to orgasm.

Prolongz.jpg                                        

Figure 3. Prolongz shown in its 30-day and 4-day supply packaging.

Kevin sees upside potential in Prolongz due to the purchasing continuity of the product and the unique niche space that Prolongz fills. In the past, Kevin was all about gadgets and products that the consumer buys once without repeat purchase. Jason Cardiff, the CEO of Redwood Scientific mentioned that on average, the consumer continues a Prolongz subscription for five months, creating a relatively stable cash-flow. The uniqueness of Prolongz is that it’s a comfortable product that’s digested by the body rather than a messy spray on or liquid that’s rubbed onto the penis (or, who knows where else?).      

Kevin Harrington Explains Why the Infomercial Has Worked All These Years

An infomercial tells a story, builds emotion, rapport and works best when people can identify with the testimonials. An infomercial is a powerful way to sell a product. A door to door salesman has 90 seconds to pitch you a product, possibly enter your house and show you how a vacuum cleaner works. Many of us would not want a salesman vacuuming our carpet and would rather see how effective the whole process is on television for 30 minutes. An infomercial essentially builds trust, an understanding of how the product works, and convinces the consumer that the product talks the talk and walks the walk. This is the bottom up way of building a consumer brand, and this is exactly what the FDA-registered premature ejaculation product - “Prolongz” - is doing.

The economics of an infomercial are another example of how the infomercial is a powerful and affordable tool to reach an audience, gain exposure, and build awareness for your product. For every 30 minutes of television you watch, seven minutes are commercials and 23 minutes are entertainment. If you were to get one minute of commercial air time, for example, the TV station would ask for $1000, so revenue-wise, they are making $7000.

Television stations have to pay for content and pay the show a $1000 licensing fee, so they make $6000 net. The way an infomercial works is that they offer $10,000 for 30 minutes of air time, or $333 per minute, and the TV station ends up making an extra $4000 net, and the client buying airtime ends up paying significantly less for the same air time. It’s a win/win situation for both parties.

Jason Cardiff said that for every dollar Redwood spends on an infomercial, they get four dollars back in revenue. Statistics are that roughly 30% of viewers will buy the product after seeing it on TV, while the other 70% don’t trust the TV process. The remaining 70% that have been captivated by the infomercial will then either go online or to their local retailer to better understand what’s being offered.

Kevin Harrington’s Role with Prolongz

Kevin Harrington’s role with Prolongz is to take the product to the next level. By that I mean that Kevin brings extensive retail relationships with sales representatives from Wal-Mart Stoes, Inc. (WMT) , Target Corporation (TGT) and other big box stores. Kevin mentioned that instead of taking a risk with investing his own capital to potentially launch a product [like Prolongz], he uses his retail expertise and experience as leverage to help promising consumer product companies to go global and access retail space.  The US market acts as a springboard for the rest of the world in terms of the success or failure of a consumer brand.

To start, Kevin and Jason plan to expose Prolongz to the worldwide market by utilizing Kevin’s relationships with giant international distributors at the upcoming Infomercial Conference in Barcelona. Kevin says he has planned 50-60 meetings within a span of a day or two with global distributors. During these meetings, Kevin shows them a proven track record of sales growth with Prolongz in the US. If everything goes well, Prolongz starts to sell all over the world. Such a leap forward for Redwood Scientific can only be described as though the company was strolling down the road…and now they’re flying. The next stage would be the licensing, running and dubbing of the infomercial into the local language for airing on international networks. For example, Kevin mentioned that he is working with Japanese distributors, so in this example, the infomercials would be translated and dubbed into Japanese.

Product Life Cycle – From Infomercial to Big Box Retailers

The product life cycle starts with the TV (infomercial), building the brand and accelerating growth. The next stage is retails sales with phased in growth and a huge jump in sales. The key is to never stop television media, and you’ll be able to achieve predictable growth in a steady upwards line, rather than a bell curve. A great quality about TV infomercials is that they drive retail sales. Retailers are always looking for branded products with a track record.

Once $3-5 million has been spent on media (infomercials), a product like Prolongz becomes known, builds a brand and a following because of all the eyeballs that have already seen it on TV. Those same consumers that don’t trust buying products from TV go to a retailer and buy them there. Pharmacies, corner stores, big box stores like Wal-Mart, CVS Health Corp. (CVS) and Target can definitely be approached and supplied with all the necessary credible statistics and information of how Prolongz has done – at which point they’re likely to give the product a shot.

Prolongz is used to treat premature ejaculation – it’s a known fact that sex sells. On the other hand, an entrepreneur might be thinking, will a big box store carry such a product? The answer is a resounding “yes!” First off, Walmart sells guns, which are a lot more dangerous than Prolongz. Second, the world is becoming a much more open place, with people more engaged in dialogue about their problems and issues. The retailers benefit in three ways: the product increases their key performance indicators (for example: 30 boxes of Prolongz can fit a sq./ft.), the demand for the product is there from the infomercials, and they don’t need to educate the consumer on how the product works.

Perhaps the most interesting takeaway from my interview with Kevin Harrington is that if you have the right product, TV media exposure – for example, by way of infomercials – is a self-fulfilling cycle of driving direct and retail channel sales. Moving forward, I’ll be following Harrington and Prolongz closely.     

 


References

 

[i]http://www.thinkentrepreneurship.com/entrepreneur-interview-with-kevin-harrington/

[ii]http://www.businessinsider.com/shark-tank-kevin-harrington-small-business-marketing-mistakes-2014-10

[iii]http://www.researchgate.net/profile/Rosa_Estrada-Reyes/publication/234088130_Pro-sexual_effects_of_Turnera_diffusa_Wild_(Turneraceae)_in_male_rats_involves_the_nitric_oxide_pathway/links/00b7d51bbb36a326ce000000.pdf

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
WMT Wal-Mart Stores Inc. 70.88 0.21 0.30 6,674,206
TGT Target Corporation 77.94 0.12 0.15 7,523,696
CVS CVS Health Corporation 77.62 0.86 1.12 11,911,301

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