David Oreck uses the tried and true to build a business empire 4/27/01
ALFRED While so many companies have resorted to quirky sales and marketing gimmicks to lure customers, David Oreck has stuck with what has worked for him for more than a half century: sincerity, honesty and friendliness.Oreck, chairman of the board of Oreck Corp., one of the most successful manufacturers and retailers of vacuum cleaners in the world, delivered the second annual Cutco Foundation Lecture on Entrepreneurial Leadership Wednesday, April 25, at Alfred University's Nevins Theater. Oreck told a large crowd of students, faculty, staff and area business and civic leaders how he built Oreck Corp. into a company that does more than $300 million in business each year. He said he has succeeded by treating customers the same way today as he did as a salesman for RCA shortly after World War II."When it comes to building a brand, the fundamental things apply," Oreck said. "People used to respond to
friendliness, useful information and a smile and gentle humor. They still do."In 1963, Whirlpool, unable to succeed in the sale of its line of upright vacuum cleaners, sold Oreck exclusive rights to market them throughout the United States. Oreck Corp. was founded that year after Oreck redesigned the Whirlpool upright and began manufacturing it at a facility in New Orleans, LA. The new Oreck XL model, because of its design, used a lightweight motor and was not as heavy as conventional upright models. Sales grew steadily, and today, millions of the lightweight uprights are used in hotels, businesses and homes around the world.The company's growth was gradual and required persistence, hard work and focus. Most important, Oreck said, was identifying a niche for his business."To build a brand, you must pay attention to the fundamentals. You have to offer the customer a benefit, a reason to buy. I gave mine a niche by making it lightweight. It takes the work out of housework: that's the benefit," Oreck said. "Early on, I targeted places that traditionally were clean: luxury hotels," Oreck said, noting that his message to consumers was: If the Oreck XL is good enough to use in luxury hotels, it's good enough for the home. "I would have given (the vacuum cleaners) to the hotels if they would say they used them." Using direct response radio and television ads, an in-house telemarketing department, and direct mail - considered by many to be poor marketing strategies Oreck touted his product to
consumers, all the while developing the Oreck brand name."To build a brand, you have to be a salesman. You have to come up with ideas to win people over," Oreck said. For Oreck, those ideas included a unique product - in this case a revolutionary lightweight vacuum cleaner - and an equally unique way of marketing it. Oreck may be best known for his popular television and radio ads, many of which are humorous and entertaining. He writes many of his own commercials and appears and speaks in most of them. All present the same simple message: that customer satisfaction is a top priority for Oreck. The "Oreck Challenge," which invites people to try the XL upright risk-free for 15 days, has become a company trademark.Oreck said customer service - before and after the sale - is his top priority. He said he places a high premium on customer satisfaction because he knows each customer's opinion will be passed on to others. "Word-of-mouth advertising can be the best, or worst, of all methods of advertising," he said. Oreck said that when developing a brand name, a business should present a simple and honest message when marketing a product to the masses. He said some companies' practice of using complex and often confusing advertisements would never work for him. "Nobody was ever mystified into buying a product," Oreck said. "You have a fleeting moment to tap someone on the eyeball and get his attention. Don't blow it." The Cutco Foundation Lecture on Entrepreneurial Leadership is sponsored by The Cutco Foundation and Alfred University. The series of annual on-campus lectures is made possible by a gift from Erick and Marianne Laine and the Cutco Foundation. Erick Laine is CEO and chairman of Alcas Corp.
of Olean, NY, chairman of Cutco Cutlery Corp., and an Alfred University trustee.Cutco is the largest manufacturer and marketer of high-quality kitchen cutlery and accessories in the United States and Canada. Laine and his wife endowed the Cutco Foundation Lecture as a way to bring nationally prominent entrepreneurial leaders to campus to meet with students, faculty and friends of Alfred University."Entrepreneurship is enormously important to the U.S. economy,"
Laine prior to Wednesday's lecture. "He (Oreck) is one of America's entrepreneurial legends.""The Oreck Corporation exemplifies entrepreneurial leadership," said Dr. David Szczerbacki, dean of the College of Business at Alfred
University.Oreck was the second high-profile entrepreneur brought to the Alfred University campus to deliver the Cutco Foundation Lecture. Last year, Tami Longaberger, president of the Longaberger Company, presented the first annual lecture. The Longaberger Company is a producer of handmade baskets and one of the leading direct selling companies in America, with more than $850 million in annual sales. Longaberger's lecture focused on the important role businesses play in the social well being of their communities.
