Listen to the podcast here…
Jake Randall: Well everybody, welcome to another episode of the Profit Junkie podcast where we talk about increasing your sales and making sure you keep as much of your hard earned money as possible. Today, I’m so excited to have on our guest who needs no introduction, but I’m going to do it anyway. Kevin Harrington, the original Shark founder or the inventor of the infomercial and just all around a business mogul. Kevin, thanks for being here.
Kevin Harrington: Hey, thank you for having me. It’s a pleasure to be here. Thank you.
Jake Randall: Hey, real quick, so you’ve got your hands in so many different things. How do you manage it all?
Kevin Harrington: That’s a good question. So in the earlier days of my business existence, when I did a deal, I went all in. I basically owned the entire product. We did all channels of distribution and we would then, we would ramp two or three of these things a year, but we were 100% responsible for every aspect of it, fulfillment, shipping, manufacturing, distribution, taking the orders and customer service. That was very intensive. But my model today is more advising, taking equity, making investment and relying on the existing management to do the grunt work, the day to day. So when I invest in somebody else’s business, I may join the board so I’m going to be doing advisory things, but I’m committing to quarterly board meetings, monthly calls. So when you think about it, how many projects can you spend something quarterly or monthly? It’s not like I’m doing it hourly or daily. Right? So I can have literally dozens and dozens of significant investments and projects if I’m not the CEO of the company. Right?
So that’s been the shift in my model. I used to be CEO and run every aspect of a few projects. Now I’m advisor, mentor, investor taking smaller portions of many more projects. And what I love about really sort of my new style of management is I like getting involved with public companies. So I’ve got eight or 10 public companies I’m involved with and it’s amazing to see one go from 10 cents to $3.50, one go from a dollar to $20. Of course I’ve seen some go from a dollar to 10 cents, too. But there’s a monetization on a day to day basis where I can wake up one day, see a stock, yesterday I had a a 25% gain on one of my stock portfolios and made millions of dollars. So it’s really cool for that kind of stuff to happen and not have to be so focused on a day to day basis.
Jake Randall: That’s cool. It’s kind of like the instant gratification of your investment a little bit too, right?
Kevin Harrington: Yes, exactly.
Jake Randall: Well, so I think for our listeners who are mostly small business owners, I think there’s an interesting lesson there, too, right? Sometimes I think at some point in your career did you get forced into that or was that kind of a hard thing to let go of being CEO and doing everything and tell us about that journey a little.
Kevin Harrington: Well, I’ll tell you, what happened was this, it was an interesting timing on two fronts. Number one, I was one of the guys that started the As Seen on TV business. I’m credited as being the inventor of the infomercial, right? Back in the early eighties I started filling up air time on television where they had downtime, right? When cable TV hit, there was many more channels and these channels didn’t have production budgets to fill 24 hours a day. So I was six hours a day on this channel, six hours here, two hours there and then I started taking this around the world. And this business just grew and grew and grew. We took the company public, New York Stock Exchange. We had a $20 stock on the New York stock exchange from $1 to $20 and that was my entire life. It consumed every minute of every day.
Now I ended up selling my interest in that, made some some nice money and I continued to do things in the As Seen on TV space. But then all of a sudden, TV viewership has now dropped by 50%. There’s all these streaming services. HBO streams and CBS streams and ESPN and Disney has now just launched a streaming channel and obviously Netflix and Hulu and all that, so there’s 60 million fewer cable subscribers in the United States alone. And so my business started having a dovetail, like a back end of the bell shaped curve on the downslope. And it was right at this time that I got called to go on Shark Tank.
So it was sort of like all of a sudden there I am on Shark Tank and I filmed the very first number of seasons, 175 segments. And so people said, “Yeah, but you’re not shooting anymore.” But the last two weeks, all of those segments have been running on CNBC. So literally for the last 10 years I’ve been on television and now I’m getting all these inquiries from people saying, “Hey, can you help me?” And so between the other side of my business taking a little bit of a dive and then all these people saying, “Can you give me some help?” It kind of worked very fortuitously for me to morph my business model into mentoring and helping and investing instead of owning all of it and being the CEO. My father used to say, and he was my original mentor, my dad. He said, “Don’t keep all your eggs in one basket.” And so you know the basket I kept my eggs in went to $600 million in value at one point. So yes, I did very well with that entity, but after that the model said take pieces and parts and share in the wealth of many.
Jake Randall: That’s awesome. That’s a great story. With all these businesses and stuff like that, what are you most excited about right now in your portfolio?
Kevin Harrington: Various things, but I will say this, the US marketplace has become very saturated. If you look at different industries, the world of As Seen on TV and infomercials and home shopping, I mean, QVC was a $15 billion company at one time. They’re now under 5 billion because, it’s 50 year old people watching cable, right? Well this is, they’re older people watching a dying industry. So there’s a slide happening there. And so to make a long story short, as I’m looking, where is the next frontier? India turns out to be an area that has unbelievable opportunity because it’s sort of like the prime minister who we’re sort of connected to, we’re in discussions with the prime minister’s office in India and I’ve been going back and forth doing entrepreneurial events and investing in companies in India. And so I believe that my next big, big deals, and I got one in particular, retail is not anywhere near a saturation level in India like it is in the US. In the US we’re like a 90 plus percent saturation level. You go into any city, you turn around, you’ve got CVS, Walgreens, Publix, whatever they are, drug stores, grocery stores, malls. You go to India, it’s at a 10% saturation level.
So one of our ventures is called New Shop and we’re calling ourselves the Uber of retail because we’re putting these little stores in condos and apartment buildings and office buildings, in gyms, in hotels and cutting deals. So we have 6,000 locations under contract to put retail. But these are pop up retail and we don’t pay rent. We pay a percentage of sales. So we feel that this is going to be very exciting in our evolution of taking a venture to India and now bouncing out of this, because now we’re launching with already 200 stores built and a thousand by first quarter of next year so on our way to 10,000. And at 10,000 stores, we’re approaching billion dollar status and already I’ve had a 50 X multiple on my investment in India. So this is one of the places I love to be checking and it’s just a long trip to get there as the only downside. But yeah, I do a lot of international business and India’s is one of my favorites to be thinking about for the future.
Jake Randall: That’s really cool. I like that. It’s like the fractal services, right? It’s getting small and being super creative. I love what you’re doing.
Kevin Harrington: And the Prime Minister is calling is the year of the entrepreneur, so it ties in nicely with my branding as kind of an entrepreneurial mentor.
Jake Randall: Yeah, that’s awesome. That’s really cool. This is kind of a little bit of a flip of a question, but in your businesses, what do you see as the key to growing sales for most small businesses right now? What are they doing wrong when they’re trying to grow their sales? I know it’s kind a broad question, but do you have some thoughts on that?
Kevin Harrington: So I go back to the early days when when I was 15 years old. I was knocking on doors and Cincinnati, Ohio. Jumped on my bicycle, knocked on doors and it’s at dinner time that people, sometimes it’s, “Hey kid, you’re bothering us. We’re eating dinner.” And I’d come back later and knock on that door after dinner. But I’d take them outside and say, “See these cracks in the driveway? When water gets in there and freezes, it’s going to triple the size of the crack. We’d better get some sealer in there.” And boy I was doing 10, 12 jobs a week, driveway sealing, 15 years old. That’s 45 years ago plus. So I was all about sales. Then I started a heating and air conditioning company and how do you get sales? I was a startup. Well, I went down to the courthouse and I bought all the records of new homeowner transactions, new real estate transactions, and we had outbound telemarketing. We called them and said, “Hey, congratulations on the purchase of your new home. We’ve got a free gift for you. We’re going to come out and clean your furnace and give you a free safety check.” We were getting 15 new clients a week from that. We built a million business from scratch in the 70s which is the equivalent of a $5 million business and I was in college.
So every company that starts has to not just wait for the business to come in. I don’t care if you’re a restaurant, a dry cleaner, a flower shop. I know a flower shop, I’ve worked with this entrepreneur, and she’s putting on evening classes over the internet with people all around the world, teaching them how to make their own plants and she’s selling them the parts and the vases and the flowers and the this and the that. And so yes, she delivers flowers within a five mile radius and does weddings and things on the weekend, but she’s building a global presence by generating leads globally.
So you have to take your business and see, “How can I create leads and how do I get customer acquisition at a low cost that has high return?” So that’s been my business model from day one, whether I was knocking on doors, going to the courthouse, buying unused TV time. It’s all about customer acquisition and a model that works, that brings leads in, convert at the right level that you can handle and then have a long term strategy on rolling it out.
Jake Randall: That’s awesome. I love that story picturing young Kevin doing the door to door sales. But I think that’s important, right?
Kevin Harrington: I had to hide my bicycle because I didn’t want them to know, I mean I was four foot 11 probably at the time anyway. So actually at the age of 15 I wasn’t even that tall, I don’t think. I wrestled in freshman year of high school, 98 pounds. So I was a teeny little guy back in the day and I’m still not necessarily huge, but I’m about 160 pounds, five foot nine now. So anyway, it’s been a good run.
Jake Randall: That’s awesome. But I think that there’s a really cool lesson in there for our listeners. Go find your customers. Don’t wait for them and get creative. I love that. You went to the courthouse and you said, “Let’s dial for dollars.”
Kevin Harrington: Exactly.
Jake Randall: People are thinking like, “Oh, I’ll just post on social media every three hours and I’ll get some stuff.”
Kevin Harrington: I was in school with a kid whose father owned a heating and air conditioning company, had been in business 20 years and they were an $800,000 a year company doing very well, making good money, et cetera. I come out, start from scratch, go to a million our first year. It’s because here’s a guy who had been a business 20 years, he was happy, he was making money and he just let the phone ring. But how does an entrepreneur start from zero? You’ve got to have a customer acquisition strategy. Sales strategy is where it’s at.
Jake Randall: Yeah, I love that. I see so many people today that are just like, “Well I just post on Facebook all the time and the leads are going to come, right?” You’ve got to have a better strategy and go find some, go sell something.
Kevin Harrington: Exactly.
Jake Randall: So what do you think is the best advice you’ve ever received for your explosive business career?
Kevin Harrington: I would say this, and I’ve had some pretty good mentors in my life. I mentioned my father was a mentor. Zig Ziglar was a mentor in teaching me sales and creating value stacks and things like that. I mean Zig’s value stack theory was if the price is here and the value is here. You’re not going to make the sale, but wait, there’s more. Add value and now the values here and the price is here, you’re going to make the sale. So that was amazing and this created a frenzy of adding on more products. If you watch infomercials, but wait, if you order in the next 30 minutes, we’re going to give you six free steak knives and a paring knife and a bread knife and that whole concept.
But in running a business, I think I got some good advice from a couple of folks that over the years said, “You can’t do it all yourself.” I was a marketing and a sales guy and I short-changed myself in building businesses with the finance people and operations people thinking, “Look, we’re all about sales, yeah, but they’ll figure out how to operate it.” But I wasn’t hiring what I called the dream team of people. I’m like, “No, I’m not going to pay somebody that much money to be my CFO.” And so I had an argument with my accounting firm and they’re like, “Look, you need to pay 120, 150 for a CFO, 120,000 a year.” And I’m like, “Well, I’ve only got an $80,000 budget.” But aren’t you going to be building $100 million business? You can’t be thinking what you can afford, necessarily. You need to think what you need. And so once I was okay to bring in much smarter and much higher paying people, it was a short term kick in the butt of maybe taking it financially, having to pay out some heavy duty salaries to some top people. But I had a top CFO, a top legal guy, a top COO, and these were the people that can handle the problems that were coming with the fast growth that we were experiencing.
So in the beginning, I had a CFO, he was putting all these things in a box and I didn’t realize, it’s like, “Wait a minute, these are people that are asking for their money back. Right” He’s like, “I’ll get to them later.” Well, if you don’t respond to people in a timely fashion, they start calling the bank, then you’ve got problems with your bank. So I’ve been through issues galore with building businesses, not having the right people. I seek the highest level of partners and service providers that I can find because it makes life a lot easier. And again, because I’m not the CEO and I want to be able to manage and give good advice, I want to bring in the best of the best for the people that I’m involved with also.
Jake Randall: Good implementers, right? That’s a lesson that you sometimes have to learn once or twice, but once you finally get it, you’ll never do it wrong again.
Kevin Harrington: Exactly, you got it.
Jake Randall: So this is kind of a bit of a twist question, but in your business, besides growing sales, what’s one thing that you have done to make sure that more of that money that’s coming in on the top drops to the bottom line as profit? Not just necessarily sales, sales are great, but profit’s the best, right?
Kevin Harrington: Yeah, so I would say this, in the early days we focused on making the sale. But one of the things that was very important for us was, okay so here we find a product. We go out, we engineer it, we prototype it. We then make molds for it. We then go manufacture it. Then we put inventory behind it. Then we’d shoot the infomercial. We’d go buy the media. We’d get the order. All right, we think we’re done. No, that customer is a lifetime customer. What else can we sell that customer on the inbound, even? So we had campaigns for selling a $29 product. Average order came in around 38 bucks.
Well, once we focus on what else can we sell to that customer, we could increase that to as high as a hundred dollars and now the profit was triple because we were able to sell more products to the same people. And so if they just bought the Tony Little Ab Isolator, maybe they want some Tony Little Metabolic Boosters, right? I mean shame on us for years not thinking of offering other products. We do five, six upsells on people now and we were one of the creators of a lot of this kind of stuff, but for 10 years we didn’t do it. To think today that we were making money back in the day, but we weren’t focused on getting, I say the squeal out of the pig. And once you have a customer, the extreme costs to get that customer, focus on the customer to treat them right and see what is the lifetime value of that customer and how do you make that more valuable?
Jake Randall: So awesome. Now you have a lot of a mentorship and training stuff that you do as well. Where can people find out a little bit more about it or find you on online and get some of that good stuff?
Kevin Harrington: I appreciate it. So there’s a lot of different things that we do and I’m involved with various companies, partners, et cetera. But at the end of the day, my main website is a kind of a good place for people to check out. It’s KevinHarrington.tv and we’ve got some free reports and downloads and chapters and books and all kinds of stuff there. But also we talk about events that we’ve got coming up. This past weekend I was in Zurich, so it’s a little far for most people. But the weekend before I was in Las Vegas. Coming up, I’ve got events coming up in LA and San Diego in Las Vegas and coming into next year, I’ve already got probably 70 events already booked between now and the end of next year. So it’s going to be an amazing 2020. I’m super excited, starting the year with, with a power packed a year ahead.
So, I love hanging out at events. just this week I was in Sarasota, I don’t know if you know Mike Calhoun board of advisors, he’s got a nice program. He had about 150 people at the Westin Hotel. Today is his last day. But I was did a keynote on Wednesday there and boom, I get off stage and there’s two or three people lined up, more than that actually, but lined up to give me a pitch and I pulled an amazing product out of there that somebody’s looking for some help on. So that’s why I do these things. I like to get out there and as I speak and mentor, other things are coming back. It all just kind of seems to, the world is an even playing field of you give out and it’s going to come back. And that’s always been, I mean, Zig Ziglar says it best, “You can get everything in life you want if you just help enough other people get what they want.” And I really feel that I’ve been doing that my whole life, but I’m even doing it more focused today than ever before.
Jake Randall: No, I have not been to this event yet, but I really want to come to one of your events where you have Zig Ziglar, the holograph.
Kevin Harrington: Yes.
Jake Randall: Just really quick, can you tell people what that event is like?
Kevin Harrington: So we’ve done this a number of times now and there’s always new technologies coming out and to pull Zig Ziglar up who was a mentor to me beside me on stage in a hologram format is pretty amazing. And we’ve done this now a number of times and had some pretty cool excitement. And as the technologies are getting better, it’s even becoming more lifelike. And you could go to see Michael Jackson like this, and there’s lots of, these are big, big kind of Hollywood Vegas productions, but on a scale of one to 10 we’re probably at about a seven where those are more like a 10, but we’re excited about the future there as technologies are getting even better.
Jake Randall: Well, I love that you’re kind of taking Zig and making him live a little longer.
Kevin Harrington: Thank you. Back to the future, I say.
Jake Randall: Yeah, exactly. What a great mentor. So anyway, Kevin, thank you so much. You dropped some really amazing wisdom today for our listeners. And everybody again go to KevinHarrington.tv to follow him. You won’t be disappointed, lots of great stuff. You can learn a lot from Kevin.
Kevin Harrington: Hey buddy, Jake it’s been great to be here. Thanks for having me and maybe we’ll see you at one of my events. Okay. Take care. Thanks, everybody.
All content on this site is the property of Taxbot, LLC, The Profit Junkie Podcast, or the author. You may link to any article that you wish, or share via the social media buttons below. However, please do not copy articles or images for use on other sites without express written permission.