Diana Nelson, CEO of Kazoo Toys, discusses business trials and triumphs with Tom Polanski

Jul 30, 2008 by

By Tom Polanski, EVP. eBrand Media and eBrand Interactive

Tom Polanski: Folks, I’m very pleased that Diana has found the time to spend a few moments with us today. Hi Diana, I hope that you’re doing well.

Diana Nelson: Thank you Tom. I am and how are you?

Tom Polanski: I’m doing great. Thanks for asking. You bought Kazoo Toys didn’t you?

Diana Nelson: Yes. I purchased Kazoo & Company is 1998 and launched Kazoo Toys in 1999, The Good Toy Group Catalog co-op in 2000 and Kazoo Global in 2008.

Tom Polanski: Why did you target Kazoo Toys for purchase?

Diana Nelson: I looked at an assortment of companies. Franchises, coffee shops, box and tape companies and nothing felt like a good fit. Nothing felt like coming home. I also looked at corporate positions within Fortune 500 companies and going back into the corporate fray.  That did not feel right because I knew I needed to find a firm that allowed me time with my sons and cash flow. Nothing fit easily. One conversation led to another and I approached a business (Kazoo) that was not on the market and it was NOT for sale.  Of course they stated no they were not interested and not for sale. My comment to them was: “The best things in life are not for sale. Can’t we talk?”

Tom Polanski: That’s interesting. How did you turn the owners of Kazoo Toys around? I mean how did you sell them on selling the company?

Diana Nelson: (laughs) Well, I loved the store and the toys it offered. I shopped there often. I think that love, that passion to do the right things with the business really shined through. A week later the owners called me and accepted my offer.

Tom Polanski: For those who are unaware, what separates Kazoo Toys from its competitors?

Diana Nelson: Customer Service, Customer Service and more Customer Service….. and empowering a great team of people to make the right decisions in taking care of our customers.

Tom Polanski: Diana, before we discuss Kazoo Toys in further detail, would you mind sharing what it’s like to be a woman, a mom, who’s President of a company?  It’s all about the balance in life and not easy to find.  My first priority has always been my 2 sons. Making sure that I have the right team in place and empowering them in their decisions – so I can be a mom.  Tons of hard work and dedication with a very strong vision.

Tom Polanski: You have two children, right?

Diana Nelson: (smiles) 2 sons…11 and 13.

Tom Polanski: What’s your typical day is like?

Diana Nelson: Where do I begin?  Up at 6 to start my oldest son for the day for school, a small run, wake up son #2, we both get ready for the day, drop him off at school at 8:15 – then to the office.  Managing everything from buying toys, to working on P&L’s, profit margins and negotiating contracts.  Leave at 6; spend time with the boys over dinner and homework.  Tuck them in at 9 and work from home for another hour or 2.  Then do it all over again.  Then balance that with a bit of a personal life.

Tom Polanski: Diana, as I understand it you were recently divorced when you purchased Kazoo Toys. Did you have any entrepreneurial experience prior to becoming a business owner?

Diana Nelson: No, that’s not quite right. I purchased Kazoo & Company in 1998 and divorced in 1999 when the children were 2 and 4 years old. My background came from Fortune 500 companies like Adolph Coors Brewing Company (national account manager) and Keystone Ski Resort (marketing manager) with my retail training out of college with Marshall Field’s Department Store.

Tom Polanski: What are a few of the challenges that you’ve faced and had to overcome in business?

Diana Nelson: During my second year of ownership $400,000 was embezzled. That was extremely challenging. Then was the divorce and IRS audits…shall I continue?

Tom Polanski: But you got up off the mat again each time. What risks have you taken that paid off?

Diana Nelson: Calculated risks. I rolled the dice and believed in myself. I purchased a business that had good bones (good legs). You know what I mean? A solid company that I knew could expand into other directions. I also knew the future was on-line – not with additional locations. Although this year I have launched Kazoo Global which is my licensing division and I have the first licensee opening a Kazoo & Company in the United Airlines concourse at the DIA airport in September of 2008.

Tom Polanski: Do you have any advice you’d like to share with women who are in business or thinking of going into business?

Diana Nelson: Believe in yourself and your strengths. Surround yourself with people who are smarter than you in their expertise. Delegate, delegate and delegate.

Tom Polanski: Kazoo Toys went through a rough patch in 2002. What did you learn from that and what changes have you made as a result?

Diana Nelson: Cut your controllable expenses, increase your margins and increase your visibility.

Tom Polanski: Kazoo Toys was recently selected as a preferred Armed Forces vendor.  How did that come about?

Diana Nelson: They found us based on our reputation and that’s a great thing. We’re bringing quality toys at great prices to military personnel around the world. Not a bad way to play Santa!

Tom Polanski: What does that contract with the Armed Forces mean in terms of what your company has to do to fulfill its contract?

Diana Nelosn: We’re the only vendor allowed to offer toys through the Armed Forces website. It’s an e-commerce transaction. We manage it the same way we manage our Amazon relationship. (smiles) Although I must admit it feels extra special, to be able to include among our many satisfied customers, people who have sacrificed so much for our country.

Tom Polanski: You’ve developed a great brand. To what do you attribute the brand’s value?

Diana Nelson: Birth to 12 educational, non-violent toys. Realistically, this brand has been in existence since 1980. We were handed over a brand with a lot of goodwill built in already.  I’ve tried to bring it to the masses to enjoy and have always been very careful with the brand. For example we monitor our affiliate networks very closely. There are types of advertising that we won’t do, implied or stated promises we won’t make and ad copy we won’t write just to sell a toy.

Tom Polanski: If you don’t mind I’d like to ask a few questions about online advertising.  At one point online sales amounted to about 16% of the companies revenue, has that changed?

Diana Nelson: Yes. Now it’s about 50/50.

Tom Polanski: What advertising has been most effective in bringing targeted, quality traffic to the website?

Diana Nelson: PPC and organic search has been huge.

Tom Polanski: So Kazoo Toys relies on search for much of its splash.

Diana Nelson: Yes.

Tom Polanski: Have you tried banner advertising or Can-Spam compliant e-mail campaigns to third party lists?

Diana Nelson: No to both. The only banner advertising that we do is through Commission Junction and Shareasale.

Tom Polanski: Those are the affiliate networks you referred to earlier.

Diana Nelson: Yes.

Tom Polanski: Diana, we noticed that Kazoo Toys is a Yahoo! store. Can you help us to understand why you’ve stayed with that e-commerce solution even as the site has grown?

Diana Nelson: We have never been down on the site in over 9 years and I believe that says a lot. We also do a lot of hand in hand marketing and PR with Yahoo and feel that we have benefited from that. It also just works for us for today.

Tom Polanski: Finally, Diana, is there anything you’d like to add that we didn’t cover?

Diana Nelson: Love what you do and have fun along the way!

Tom Polanski: Diana thanks for your time today. Besides being an extremely successful business person, you’re a remarkable woman. I hope others will find inspiration. It was a pleasure.

Diana Nelson: Tom, thank you so very much. You’ve made this a lot of fun for me. Thanks for the laughs along the way.

Tom Polanski: I enjoyed hearing you laugh, Diana. This was fun. Folks; thanks for reading this. Diana and I hope that we’ve added value in some way to your day. For those of you who aren’t familiar with Kazoo & Company Toys and would like to learn more; the company URL is www.kazootoys.com.

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