They Tried It and Liked It : Sisters-in-law operate Sunshine Promotions, which sends workers to stores to pass out samples of food and beauty aids. They like the people-oriented aspect of business.
Caroline Cotten Nakken and Sandra Cotten never buy anything they haven’t already sampled. And, they’re betting lots of other Southern California consumers feel exactly the same way.
So far, their hunch has paid off big time. The two sisters-in-law have spent the past 16 years turning a fledging operation run out of a spare bedroom into a multimillion-dollar business based on a simple premise: “Try it, you’ll like it.”
Their company, Sunshine Promotions Inc., hires up to 4,000 contract employees each weekend who work in grocery stores, movie theaters and even school cafeterias throughout Southern California, peddling free samples of products for such high-profile clients as Procter & Gamble Co., General Mills Inc. and Colgate-Palmolive Co.
With 1993 revenues of more than $5 million, the profitable company has a team of 40 full-time workers in its Anaheim headquarters. The two women have now formed another company, Mass Connections, which offers similar in-store direct marketing services nationwide. And Cotten, 48, and Nakken, 40, are brushing up on foreign-language study in anticipation of one day expanding their operations internationally.
The pair attribute their success to hard work, staying focused and getting in on the ground floor of a growing industry.
“Would you really buy something that you haven’t tried?” Nakken asked. “I have four children, and I am very hesitant to buy anything I haven’t tried. But if a friend tells me or I try it, then I am your typical repeat purchaser.”
The marketing industry for in-store samples and coupons is expected to grow at an annual rate of 11.7% between 1993 and 1997, according to a study by Clayton, Curtis & Cottrell, a Colorado marketing firm. Nearly 80% of consumers said that when they take a sample during a demonstration that they buy the product if they need it, the study found.
“This is an industry that’s alive and flourishing,” said Robert Lieberman, president of the National Assn. of Demonstration Companies, a trade group formed nine years ago that now has 150-member companies.
“Sunshine is one of the most progressive companies we have. You’re talking about one of the brightest lights in our industry,” Lieberman said.
Sunshine’s employees pass out samples of everything from chips and salsa to health and beauty items. The employees collect data on consumers’ interest and comments about a product. The comments are tabulated and reported back to the company the next day. Sunshine also works with the sponsoring company on marketing plans--printing coupons and devising ways to educate consumers. Sometimes a company will change the product based on early response from in-store marketing.
“They are very innovative, creative and hard-working,” said Terry Fyffe, a vice president of sales with Bradshaw Inc., a Santa Fe Springs food broker that hires Sunshine for in-store marketing for their large manufacturing clients in 1,400 grocery stores in Southern California.
Fyffe praised Cotten and Nakken for coming up with a marketing technique called “recipe rebate,” where in-store consumers are given a recipe, plus coupons for at least four items in the recipe.
“It’s very effective,” he said.
Sunshine Promotions’ employees work from 6 to 18 hours a week, an ideal job for students, mothers, senior citizens--anyone who wants to supplement their income, Cotten said.
But sometimes, a part-time employee doesn’t work out. Like the demonstrator who decided to invite his wife to the grocery store, order in a pizza and sit down for dinner during work hours, Cotten said. Or the surfer from Huntington Beach who reported a “massive” inventory of product samples at the beginning of his shift. At the end he told the company his inventory was “still massive.”
“We’ve had every type of person doing this, and it’s really a people business,” Nakken said. “We’ve had people where the store falls in love with them and people who are no longer with us.”
Still, the two women never forget the early days, when they were working out of their homes and often told clients who telephoned that those noisy children in the background were just broken copy machines. Or the years they went without salaries and the nights spent supplementing their incomes by working as bartenders and cocktail waitresses. They even tried to cut down on food costs by eating the samples they passed out in grocery stores.
“It was really hand-to-mouth in those days,” Nakken said. “We sometimes ate the beans we were marketing. And we were always on the verge of closing the doors.”
The two became sisters-in-law after Nakken, then Cotten’s next-door neighbor in Phoenix, introduced Cotten to her brother, Mike. Nakken started the company in Phoenix in 1976, and Cotten joined her two years later. Sunshine was officially incorporated in 1981 in California. “We both had the desire to be our own boss, and we liked the challenge created by forming your own destiny. We love it. We’re working with new products all the time,” Cotten said.
The two say their partnership works because they are good at different things; Cotten is the business planner and Nakken provides the sales and promotional expertise. But because neither Cotten nor Nakken finished college, they said that they were plagued with doubts when starting their business.
“You question yourself all the time--are you good enough, are you smart enough? But the question is not are you good enough--it’s about the desire to make your business succeed,” Nakken said.
Sunshine charges its clients a base weekend rate of about $88 for a six-hour promotion. The retail client must also pay access fees to the grocery store of about $40 per day. Sunshine competes with other demonstration companies, including KDS Inc. of Orange, which conducts about 3,000 demonstrations every weekend.
“SPI is a worthy competitor and we do battle with them on a daily basis,” said Todd Priest, an account executive at KDS. “This is a business that is really changing and getting more competitive every day.”
Cotten and Nakken attribute their success to the support of their families and the fact that they chose a growth industry--one they think will only continuing growing.
“With money being so tight, consumers are more and more cautious,” Cotten said. “When I’m in the store, I will go with the product that we already like, unless I’ve tried a new product. I don’t want my family to say, ‘Yuck.’ That’s why you need to try new things.”
Sunshine Promotions Inc.
Location: Anaheim
Chief Executive Officer: Caroline Cotten Nakken
Chief Operating Officer: Sandra Cotten
Business: In-store direct marketing agency
Founded: 1976 in Arizona
Q & A WITH CAROLINE COTTEN NAKKEN
How did you get started? I had worked for promotional agencies as a first job. I started this company just doing promotions, then really fell into the grocery side of the business.
Where did you get financing? Our own back pockets. Also through loans from family and friends. One was for $30,000, but we paid it back with interest in two years.
What was your biggest challenge? Not getting discouraged. There are days you wake up and think, ‘If I didn’t have to worry about this anymore, my life might be easier.’
What was your biggest mistake? Trying things before we had done enough research. We have only had one or two things that took longer than planned, but it cost money.
What was the best advice you received? When we were first starting out and no one took us seriously, there was someone who said, ‘You’re worth it. Don’t sell yourself short. You can do it.’ I still remember him.
What advice would you give someone now starting out in business? Do your research. Really understand the business you’re going into. Really understand the potential and the liability involved.
