Oak Lawn Marketing
As soon as you walk into the spacious Tokyo office of Oak Lawn Marketing, every employee stands up and graciously welcomes you. It is a humbling experience but indicative of the way the company sees itself and its relationship with the public.
Founded in 1993, Oak Lawn Marketing is a branding and media company in Japan. It engages in direct marketing through multiple sales channels, such as television, Internet and catalogs. The company primarily focuses on home convenience, health and beauty consumable, and fitness and wellness products. It edits and produces localized infomercial programs; and finds hit products from Europe and the United States, as well as localizes these products for the Japanese market. Headquartered in Nagoya, the group company has offices in Tokyo, Osaka, Ichikawa, Sapporo, Chicago, U.S. and Shenzhen, China. In 2009, NTT Docomo purchased 51% of the company for 31 billion yen.
Heading the operations is Harry Hill. A graduate of Cornell University, Hill first came to Japan in 1985 to work at the Gifu Prefecture Board of Education. Following his 3 1/2 years working for the Gifu government, he established several business ventures that taught him how to create and sell ideas and the importance of managing cash flow and profit creation. One of the most successful was H&R Consultants which he founded in 1991 with Robert Roche (founder of Oak Lawn Marketing, 1993). The two entrepreneurs created an organization that became one of the leading relocation services and lease providers for furniture and cars in Nagoya and Tokyo.
After the bubble years, Hill took a 2-year working hiatus in the U.S. before returning to Japan in late 1999 when he joined Oak Lawn Marketing to manage the call center. Hill says his time at the call center gave him an appreciation of listening to the customers and developing the necessary skills to earn the trust and loyalty of Japanese customers. In 2006, Hill became president and has steadily increased revenue from 17 billion yen to 54 billion yen in 2011.
Hill is frequently asked to give speeches and lectures. In 2009, he was featured on the Nihon TV program titled, “Top 20 people you should know in Japan.” Last September, he was appointed Chairman of the Electronic Retailing Association (ERA), the first time a non-American company has chaired the ERA, headquartered in Washington, DC.
When he is not working, Hill is involved in numerous charities and non-profit organizations. He is also an instructor for the Nagakute branch of Shorinji Kempo (he holds a 5th degree black belt) and competes in kickboxing tournaments.
Japan Today editor Chris Betros visits Hill at the Tokyo office of Oak Lawn Marketing to hear more.
How often do you come to Tokyo?
I spend Tuesdays to Fridays in Tokyo and the other days at our home office in Nagoya. I don’t get tired of the traveling because business is exciting.
How was 2012?
Our fiscal year ends March 31 and it will be a good year.
To what do you attribute the company’s success?
What spurs growth is our ability to grow our media presence. We have been able to buy more media because with us, everything is direct response. So the more media we buy, the more we can grow. Our media buying went up 11-12% this fiscal year. Another factor was the strength of our brands. Hill’s Diet, Leg Magic, FoodSaver, True Sleeper, SlenderTone, Shark Steam Mop and Steam Portable have been steady consistent brands. True Sleeper is in its 10th year and we will have our best sales ever this fiscal year.
Have you had to adapt campaigns for some products?
Yes. One of the challenges is that traditional TV media viewers are aging. Take Leg Magic, for example. We had sold 2 million through the end of 2011 essentially to the core demographic of women in their 30s and 40s and we completely rebranded the show in 2012. We used a 79-yar-old Japanese actress who had been using Leg Magic for rehab after an accident. As a result, in 2012, we sold a million Leg Magics to customers 60 and above.
What are your main business pillars?
We have three. Shop Japan is focused on the home – sleep, kitchen, cleaning. Hill’s Collection is focused on beauty and diet and Exabody is focused on fitness.
Where can we see your infomercials?
Our infomercials are on almost every station except NHK. There are 127 terrestrial stations and we buy media space from all of them. We also buy from most of the BS and cable stations.
Where do your sales come from?
Most of our sales come from either terrestrial or BS channels during the day. About 60% go into call centers, 20% are online and 20% in retail. The older consumers prefer call centers where they can talk to somebody, while younger buyers prefer e-commerce.
How important are the call centers?
Extremely important. Last year, our call centers took about 5 million calls from customers. We are very actively engaged with our customers, not only in taking inbound orders, but in customer service such as surveys on how they like the products, the infomercials. I started in our call centers, so they are near and dear to me. I visit them every month. We get a lot of suggestions for products and ideas. Essentially, we are a word of mouth company. We take that word of mouth and put it into TV.
How does the concept of TV shopping differ in Japan?
With TV shopping, we tell stories over 29 minutes. We take a topic that people can easily identify with, whether it is weight loss, wellness or cleaning and then create a story – for example, this is how somebody solved the problem and how it made them happier. In that sense, it is similar to other countries. The biggest difference about Japan is in the back end delivery – packaging, call center customer service, quality.
We believe that something which is a hit product somewhere in the world, has the potential to be a hit here, too. We may have to modify the message, but essentially we believe that the core desires of people, i.e. to look and feel healthy, to save time and have a clean home, or to sleep well, are universal. Of course, we test many more things than we roll out - maybe one product in 10 is rolled out.
What about product life cycles?
Our products’ life cycles are much longer than in other countries. We spend a lot of money on media and branding to present a product that Japanese consumers will respond to. If our brands only had a 12-18 month life cycle, which is typical for many products outside Japan, we would not have the ability to invest to deliver the quality and service the Japanese consumer demands. So we invest and make much longer commitments with our brands. For example, True Sleeper was a one-hit wonder in the United States. We bought the rights for it and we have been selling it for 10 years.
Was Billy’s Boot Camp an exception?
The exercise DVD market started in the U.S. as a video boom with Jane Fonda. Today, it is a $1.6 billion a year industry. Prior to Billy’s Boot Camp in 2007, there was no exercise DVD market in Japan. People had tried and always failed. We essentially created that market and even though Billy’s Boot Camp only lasted about 12 months, we have consistently sold about $100-150 million a year in exercise DVDs since the Billy’s Boot Camp boom. Every year, we bring our several new sets of exercise DVDs and maintain our position as the market leader in this genre.
What are you doing with mobile marketing?
To be honest, I don’t think we are delivering great marketing messages through mobile platforms or PCs yet. Our strongest branding opportunity is still TV. But we are succeeding in driving traffic to our e-commerce sites. Our tie-up with NTT Docomo gives us the ability to talk to our customers 24 hours a day over what is becoming a media-agnostic device – whether it is a mobile phone tablet or TV, it is all interchangeable and interactive.
How many offices do you have?
Our head office is in Nagoya and we have other offices in Tokyo, Osaka, call centers in Nagoya, Sapporo and Fukuoka, and a logistics center in Ichikawa. We have a product procurement office in Chicago.
What areas of the business are you hands on?
I am very hands on in the operational details, customer service, marketing and sales, and creating new business opportunities. I think of myself as a resource for the teams.
How many staff do you have?
About 500 full-time and 750 contract employees in call centers.
How did Oak Lawn Marketing respond to the March 11 disaster?
I am chairman of the Hope International Development Agency, Japan. After the March 11 disaster, we created the OLM x HOPE = Genki Japan Fund. Within two weeks, the fund raised over 150 million yen and over 500 tons of emergency goods were delivered to neglected shelters.
Are you optimistic about the Japanese economy?
I would like to say that I am more optimistic than I am. I think the new government has brought some optimism. Between the government, media and business, there is a responsibility to be optimistic. I have tremendous respect for the Japanese work ethic and if you look at history, when it gets really tough, the Japanese have always shown an ability to overcome adversity.
A lot of Japanese media interviews with you feature photos of you in martial arts poses. Do the principles of martial arts apply to business?
Yes. In business, you always have to deal with change and the unexpected, and if you panic, you’re going to lose. It’s the same with martial arts. You learn to control your fear and emotions and respond in the appropriate way - that’s how you succeed in the ring and in business. When things are going your way, you should push that the best you can. But learning how to win is different from winning at the expense of others. I guess the media picked up on my martial arts because in March last year, I did a charity fight at a pro event. I fought a guy 21 years younger than me. It was a draw. However, I raised 4 million yen with half for Tohoku and half for Somalia.