The Inside Secrets of "The Pampered Chef"...
I recently had the privilege of sitting in on a lecture featuring the founder and chairman of “The Pampered Chef,” Doris Christopher…
It was one of the most enlightening talks on entrepreneurialism and growing a business I’ve ever heard.
Here are some of the highlights…
Doris claims she isn’t an entrepreneur in the classic sense. She isn’t a risk taker. She didn’t know anything about business when she started. She isn’t interested in starting more businesses.
Doris was a teacher by trade until she married and starting having children. It was her wish to be a stay-at-home mom BUT ALSO have the ability of earning extra income.
She was an economics teacher in school who also loves to cook. She especially loves kitchen “gadgets”. Her kitchen was full of them… But unlike other people she knew how to use them correctly. Friends visiting her house would marvel at her “gadgets” and the amount of time they saved Doris in the kitchen.
The idea hit Doris…Why not put on home parties showing and selling kitchen gadgets? She borrowed $3,000 from a life insurance policy to start the business, which consisted of 71 different products that would be carried in six large trunks. By the way, this $3,000 is the only money she ever borrowed to fund the business.
She spent a long time putting her first Kitchen Show together. Finally the night arrived to go out and do it. She remarked how it poured that night, literally drenching her to the bone. On top of that the big trunks she carried her products in were too big. They couldn’t be carried through the doors. The hand to be pushed through awkwardly. While she was doing this she thought, “This was the stupidest thing I’ve ever done.”
Needless to say, at this first home party she sold $175 worth of products and had four more parties scheduled… and “The Pampered Chef” was born (as a side note the average Kitchen Consultant today sells $525 worth of products during an average home party). Doris said that she didn’t do surveys or marketing studies or even a business plan. She just did what she felt was right and natural for the business.
That’s not to say she was doing everything herself because her husband was a source of support. He helped where he could and didn’t complain. He would go out on Saturdays and help deliver the products Doris sold during the week.
Doris admits she was scared to death. But she knew what she was doing was the right thing.
Her “business” consisted of 400 square-feet in her basement amongst the pipes and bugs. This served as her headquarters until 1983.
Another woman approached her in 1981 to be a “Kitchen Consultant” but Doris didn’t feel she was prepared for that commitment. Her husband pushed her to do it. She did and soon had 12 women working as independent Kitchen Consultants.
Doris remarked, “How each consultant brought something new to the business.”
After spending a few years making the deliveries on Saturday’s, they struck upon the idea of using UPS to deliver the products. This allowed the business to expand well beyond its home base of Chicago.
Doris says, “I never imagined people outside the mid-west wanting to be consultants”.
At the 10th anniversary of the company the statement was made that it was the goal of the company to have 600 consultants…at the time they had 300.
At one point in the 90’s they actually had to stop recruiting consultants in order to let the business “catch-up”.
Along the way they hired employees also, but these folks are never referred to as employees. They are “Co-workers” and everyone is on a first name basis.
Today the “Pampered Chef” has 75,000 Kitchen Consultants worldwide. And their main building is over 700,000 square-feet in size.
Today they have approximately 200 items, 15 of which are holdovers from the original 71 Doris took on her first Kitchen Show.
Today the “Pampered Chef” has annual sales of over $700,000,000.
When it comes to the “Secrets” of her success, Doris says, “Look at all the business books listed at Amazon, there are no secrets.” Her success can be attributed to 3 things:
1. “Working hard with determination and persistence.”
2. “Have total focus.”
3. “Commitment to the highest standards in your work.”
Along the way Doris stuck her thumb in the eye of two principles often held with great reverence in the entrepreneurial community.
1. Multiple Streams of Income-She remarked that they had opportunities to take the business in different directions at many points in time. Such as when they were offered the chance to distribute other product lines. But she always felt by doing this it would take their focus away from their core business. Or in the late 90’s when they put up a web site, everyone thought they would start selling direct to the consumer and bypass the Kitchen Consultants, which did not and would not happen according to Doris. She knows what the “Pampered Chef” does well and doesn’t deviate from that path. Repeatedly throughout the lecture she talked about how important focus was in the growing of their business. I know from my perspective that focus is more of a problem with most entrepreneurs and not a lack of finances. I use to think multiple streams of income was where it was at but over the past few years I’ve changed my mind completely on the subject. Most people do not have the capacity, and not necessarily financial but mental and managerial, in order to create several successful business units at the same time. How often does Multiple Streams of Income end up being Multiple Streams of Mediocrity?
2. Doris never had an “Exit Strategy”. Even though she sold the business to Warren Buffet in 2002, she insisted (which I’m sure he supported fully) that she stay on as the head of the company. She said, “I’ll never retire” and added, “Why exit something that you love doing?” Warren Buffet said he shared the same point of view. This one hit me hard… “Exit Strategy” is such a fundamental belief in the entrepreneurial community but if you are doing something you love how could you just jettison it and go on to something else? And if you can do it, how connected to the business could you have been in the first place and how much did that hamper your ultimate success?
Incentives still work. The “Pampered Chef” uses with great success incentives like trips. They started using them in the late 1980’s and are still a powerful tool today. We’re not so educated or cultured that free trips aren’t effective as a sale’s tool.
Doris had mentors along the way. She allowed and welcomed the help of others. Quite often today I see small businesses stay “small” because the owner thinks they know all the answers. Impossible. The fastest way to grow a business is using the skills and insights possessed by others. What doing everything yourself limits is your paycheck.
When I first received my invite for this lecture, the card gave some background information on the “Pampered Chef”. I looked it over and read the annual sales volume of $72,500,000 and thought, “That’s pretty impressive”. Yesterday before the lecture I was re-reading the card and it suddenly occurred to me that I had left out a “0”, and the sales were $725,000,000. That is a huge figure no matter how you slice it and it speaks highly of Doris’ management style.
Her core beliefs fully supported her core competencies. She believes companies go wrong when the two no longer support each other. Many entrepreneurs I come in contact give very little thought to their core competencies… not too mention their core beliefs. Their entire focus is “making money” and they don’t care how they get there or what they sacrifice.
“Hard work is necessary,” according to Doris. You can’t fake it. I guess I can’t imagine someone sitting around in the underwear growing their business to ¾ of a billion dollars per year. If I would have had the time I would have asked her about what she thinks of the folks trying to get rich without sacrificing anything. But, I already know how she would have answered.
If you think about this, the concept Doris put together is extremely simple. And that is why is so darned profitable. Now look at this…
Doris did not manufacturer any of the products she sold. All she did is show people how to use existing high quality products more efficiently. This is where she created value. Yes the products she sells are very good products. Are they the best out there? Probably not. But the value is in the showing how to use them. This is what people pay money for. The high quality of the product is just an adjunct. The Kitchen Consultants put on a show, they entertain. Remember people will spend their last dollar to be entertained.
Are you boo-hooing how your business is going or how the economy sucks so badly that you can’t start a business? Doris pointed out that when she started her business in 1980 the prime lending rate was 15% and inflation was double digits. Unemployed was several points higher than it is right now. But people still bought expensive kitchen gadgets. Do you still think it’s a bad time to start or grow a business?
Doris knew nothing about sales and marketing. She didn’t wait to find the one book or audio program to “inspire” her to greatness. The only thing she knew was how to use kitchen tools better than most and had the ability to teach others how to use them too.
I’m sure I’ve missed some other key points from the talk, no matter how fast you write you can never get everything. But I think I got the main points and those main points I gladly give you the reader and hopefully they make your entrepreneurial life a little easier.