Carol’s Daughter In Harlem To Develop Products For Disney

Business

Before social marketing became synonymous with viral marketing, and opening her flagship store in Harlem there was a tactic called word of mouth. Old-fashioned word of mouth got Lisa Price, former television script coordinator, and her company, Carol’s Daughter, featured on B. Smith, The View and the brass ring of publicity, Oprah.

Carol’s Daughter is a body care company that creates and sells fragrances, body lotions, hair care and cosmetics. Price started developing fragrances for herself in her Brooklyn kitchen while she worked behind the scenes on The Cosby Show. She was soon producing and bottling fragrances and body lotions and selling them from her home, and in 1993 she started selling at flea markets. She expanded her line to include hair care and set up a catalog in 1994 and then a website in 2000.

In 1999 she opened her first brick-and-mortar store in Fort Greene, Brooklyn. In 2004, Price partnered with marketing wunderkind Steve Stoute (See sidebar “The Image Maker”) and assembled a team of investors that includes Jada Pinkett-Smith, Will Smith, Sean “Jay-Z” Carter and Tommy Mottola. The all-star roster paid off, and today Carol’s Daughter has seven retail stores and 73 employees. Its products are currently carried in 72 Sephora stores and will be in 140 by summer. Carol’s Daughter is also carried by Macy’s.

NY REPORT Editor-in-Chief Robert Levin sat down with Price in the home where it all started to discuss strategic partnerships, getting on Oprah and appreciating the journey, not just the destination.

RL: How did creating unique fragrances for yourself evolve into a cosmetics business?

LP: Initially, I started making Christmas gifts out of the products. Then I started to have little holiday sales in my apartment. My family would come and shop. I also had access to makeup artists, some actors and actresses, and hairstylists who I worked with in television and movies; I would give them products either as gifts or samples. That started to build my underground Hollywood following.

When it came time in 1999 to open the retail store, initially, we just took the traffic that was coming to this house and let them know we moved to a real store [on the corner of South Elliot Place and Dekalb Avenue in Fort Greene]. And people would walk into the store off the street. It was very much word-of-mouth, very viral.

When Steve Stoute came into the picture [as a partner in 2004], there was more money to put into website development, packaging and bringing on a PR firm. We just sort of put that viral thing on steroids — e-mail blasts, strategic partnerships with people like Mary J. Blige and having Jada Pinkett Smith as an investor. So, it’s still that word of mouth, one girlfriend telling another girlfriend, but it’s more. It’s beefed up.

RL: Tell me about your partnership with Steve Stoute.

LP: Steve Stoute is a marketing, media, brand and imaging person. He got his start in the music business and went from music to advertising, then from advertising to marketing. He is a very smart guy, a real innovator in the marketing and advertising industry.

RL: Taking on a partner is a big step. Why did you decide to partner with Steve in 2004?

LP: I knew that I had done all that I could do by myself to make the company grow. I was still experiencing growth, but my growth was very subtle, $20,000 one year, $100,000 another year.

I had been on Oprah. I had written a book [Success Never Smelled So Sweet: How I Followed My Nose and Found Success]. While I was waiting for the book to be published, I felt, “How much more can I do to catapult this?” What I needed to do required more money than I had access to — changing my labels, advertising, marketing. I couldn’t save up for it. All I was doing was supplying the product and keeping things going.

Steve really understood what I was doing. He was the only person that I ever spoke to about investing and becoming my partner that didn’t talk down to me, just talked to me directly and knew exactly what I was going through. He appreciates what I’ve done. I found with other people, they were trying to reinvent what I did, and not evolve it. Steve took Carol’s Daughter and evolved it into a beauty brand. He said, “Well, you have fragrance. You have body. You have hair. If you sell color cosmetics, you’re a beauty brand.” Now we’re a beauty brand, and that is, in and of itself, amazing given the fact that there are very few African-American owned and operated beauty brands.

RL: How do you and Steve divide up responsibilities?

LP: His area of expertise is marketing, so I totally leave that alone. He’s very good at relationships and getting people to understand what we’re doing. Let’s say there is a plan to open up new stores in malls. He doesn’t just rely on phone calls and e-mails or sending someone else to meetings with mall people. He personally will sit down and talk to people so that they can put a face to the project and they can understand his passion behind it. He’s better at that than I am. I’m kind of shy. I’m more creative — product development, writing brochures, supplying quotes for product labels, and the esoteric… what he calls the “fairy dust” stuff.

RL: What is a typical day at work like for you?

LP: I travel for the company and make appearances in stores. I’m requested to give speeches and be on panels from time to time. I help with the education of our staff. I’ve basically been the only trainer for our sales staff, Sephora sales staff and Macy’s sales staff. And you know, I’m the face and the story and the thing that makes everything legit. [laughs]

RL: How has the process to develop new products changed since you were cooking up your products in your kitchen?

LP: For some things, I still come back to the kitchen. For example, if we decide that we want to do a massage oil for Christmas, it’s much easier for me to do that because that’s a simple product. And then we can go to a production house and say, “Here’s the recipe.” But if we decide to make a bronzer for spring of ’08, I can’t make a bronzer in the kitchen. And all I’m going to do is waste time trying. Everything takes longer to do now than it did before because I was naïve about a lot of things. I would make something, test it on a couple of people, let the product sit for a few months just to make sure that everything was OK, and then I’d sell it. Now, everybody in the company has to be happy with the way the product came out, then it goes on stability, heat and cold testing for months before anything happens.

RL: Before Steve handled your marketing, you did all right for yourself. How did you get booked on Oprah and The View?

LP: It’s actually a series of events that started two years before I ended up on the Oprah Winfrey Show. I did a segment on television with B. Smith; I had worked with the people who produced her show. B. Smith also was publishing a magazine. She had a party for advertisers and wanted to have live demonstrations of the types of things that would be in the magazine and she called me. There was a producer at that party who worked for The View, and about four weeks later, that producer called me to do a segment.

Two years later, that same producer from The View went to Chicago to interview for a job on the Oprah Winfrey Show. She’s having lunch with the other producers and they’re talking about doing a segment on women who started businesses in their home with little or no money. The View producer asked, “Have you called Carol’s Daughter?” And they asked, “Who’s Carol’s Daughter?”

RL: So, you didn’t do a thing?

LP: I didn’t do a thing. My brother called me and said, “Lisa, this dude just called the store. He works on the Oprah Winfrey Show. You want the number?”

I got on Oprah without having Jada or Mary J. Blige [our spokes person] or Steve or a PR firm. It’s just what was meant to be. Everybody has a path in their personal lives, and for some entrepreneurs, our personal lives spill over into our business. And it’s hard to define which is which. It’s part of my path to do this, to be an innovator in this industry.

RL: What did the call from the dude at the Oprah Winfrey Show mean for your business?

LP: Being on Oprah gave us the credibility that nothing else could have, and that made me that much more of an attractive prospect to Steve because he said, “How the hell do you get on Oprah without a PR firm? What is this woman doing?”

It just adds to that story, and adds to that credibility. So, I don’t think that Carol’s Daughter could complete its mission in this business, and I wouldn’t be able to complete what I have to do in my life, had that not been a component.

RL: What were some of the tougher challenges you faced?

LP: There were a couple of hairy moments prior to the partnership where I wasn’t sure if I was going to be able to make payroll. I remember calling my cousin, who works for the company, and saying, “We got to do something this weekend because it’s really tight. The store is really going to have to perform in order for me to cover payroll on Monday.” And he said, “OK, let me think about it.” He came back with an idea to send an e-mail blast offering, lifetime memberships to customers who joined our club before Sunday. For $25, club members got 10% off their purchases. It generated $14,000 in sales on the Internet that weekend, which, at that time, was huge for us. I said, “Yay! Payroll’s [done].”

RL: How much time went by between when he came up with that idea and actually sent the e-mail blast?

LP: Oh, a day. We were a small indie brand, so it was a down-and-dirty e-mail. Just get it out there.

RL: I understand that you’re donating a portion of profits from your Candy Paint lip-gloss line to the Lupus Foundation of America.

LP: We decided at the beginning of the year that we wanted to have a philanthropic marketing push because it’s just the responsible thing to do. We didn’t want to lend our voice to something that already has so many voices where you just kind of get lost in the sauce. We asked our PR firm to do research and bring us a list of potential ideas. Lupus Foundation was number one on the list. We also found out that Jada’s aunt has lupus and is on the board of the Lupus Foundation of America. And my mother had polymyositis, which is a lupus-like illness, so, it was definitely the thing to do.

RL: When you’re making a decision in terms of deciding to support an organization, to what extent do you come up with a plan for how you will leverage that for marketing purposes?

LP: It seemed like the marketing aspect of it just sort of set itself when we found out that Jada’s aunt has lupus, and that she was on the board, and [with] my mom’s illness.

The other part that led to us doing this is that we get solicited daily to donate for everything. And we really try. You try to give a little here, a little there — and then it just gets to be a little crazy. So, we wanted to have something that was very targeted and focused — you can show that you’re giving back; because people will start to bad-mouth you if they don’t think that you’re giving back. But just for us, this is something that we really believed in and could be passionate about.

RL: Other than press and giving to not-for-profits, how are you allocating your market budget? What are some of the other things you do to market?

LP: Another way we market is through television. Last year we appeared as guests on the Tyra Banks Show with Mary and Jada. It was amazing for us — the exposure. And this year we did America’s Next Top Model, where the challenge winner won the prize of being in a photo shoot with us.

RL: You probably get offers from people who want to buy your business. Under what circumstances would you sell the company?

LP: That’s a hard question to answer. I think I would prefer to leave that to Steve to answer because he will answer it in that correct business way that I won’t. I’ll answer it in that esoteric artist kind of way. [laughs]

RL: Do you want to take a shot at the esoteric artist kind of way?

LP: There definitely has to be a certain dollar amount that makes all of the work that everybody has put in worthwhile. Then you kind of have to be at a point — I think we’d have to be at a point as a team — where I was when Steve came on board. When you feel like, “OK, this is all that we can do on our own. We’ve laid the groundwork. We’ve built this up to this point. And it’s in a good place, and it’s time to pass the baton so that this can keep going.”

You definitely don’t want to do it if you feel like it’s going to falter, because it’s your baby. You want her to be successful, and 50 years from now, for somebody still to be talking about Carol’s Daughter.

RL: What would you like business owners to know?

LP: I think it’s important to appreciate where you are in your process because I find that being an entrepreneur means a lot of looking ahead and striving for more. Your business is great in a lot of ways, but you don’t always see how great it is. You think about the higher sales, or the bigger profit margins, or the savings, or the improvements to employees, and there’s always something that you can fix. Sometimes I look back on what things were like before and I think, “Yeah, I thought it was difficult, but I guess it wasn’t that bad.” I’m almost nostalgic. Not that I want to change my situation, not that I don’t want to have partners, but you’re a little nostalgic for when everything was under your control, and you didn’t have to check or think — you just did, because you were naïve, no one knew who you were, and you’re under the radar. You could just take risks that are so much harder to take when you are more established, because if you fail, it’s really big, where before if you failed, no one knew. I’d just clear off the table, “OK, nobody liked that. Let me just put it away,” and no one remembers.

Now I have employees that I meet two weeks after they’ve been hired. I remember when I knew everyone. I knew their names and I knew their kids’ names. Their kids were here after school waiting for their moms to finish working. I don’t want to go backwards, but I didn’t appreciate that enough when it was like that, when it was that little tiny family all under this roof working together.

So, I think it’s really important to appreciate where you are at each step. Look back on it and do not constantly focus on “What can I do to make it better,” because it’s pretty great right now, you’re just not noticing it.

NY Enterprise Report