Chris Pegula is a father of three who was frustrated by the lack of choices of diaper bags on the market for dads-on-the-go and decided to create his own bag and his own brand, “Diaper Dude.” Chris recognizes that dads are more involved than ever in their children’s lives and they need a brand to reflect that involvement.

Unfortunately, after many years of success and growth, “Diaper Dude” began observing a steep decline in their revenue. When his business was at the height of success, Chris enjoyed $2 million in revenue, but as buyers began to reject Chris’s diaper bag, the company exhausted its capital funds which lead to an overwhelming deficit that was threatening the future of the business. This is where Marcus Lemonis comes in.

Chris reviewed his business with Marcus, including a failed social campaign, increasing staff to include 2 designers (a position Chris originally held during the start-up phase of his business), hesitancy to increase the quality of his product and many failed line extension ideas. As he reviewed the current versions of the product, Marcus was quick to teach Chris and his wife, Meredith, a lesson on product quality.

After understanding the financial constraints and the vision of the company, Marcus offered Chris $200,000 as working capital for inventory and marketing and in return, he will own 60% of the business. His strategy was to increase the volume of orders to the manufacturers to decrease the overall manufacturing cost while putting that financial savings back into increasing the quality of the product through upgrades to the fabric and the zipper. Chris accepts his offer and the hard work begins!

Chris dives head first into committing himself to upgrade his product and marketing to attract new buyers. Marcus arranges a focus group in Diaper Dude’s key market to get some initial feedback on their current product. While Chris struggles with Meredith’s micro-managing of the group, he does extract key improvement ideas including a wet/dry pouch, a clear pouch to store notes in, more organizational compartments on the insides and insulated bottle pouches.

Marcus suggests that Chris goes back to being the main designer as he was for the first iteration of products (which were also his most successful designs). As Chris thinks over this suggestion, it becomes immediately apparent to Marcus that Chris has lost his confidence in his own design skills, business negotiations and even his company. Chris opens up to Marcus about how he has struggled with confidence issues since he was a child.

While Chris begins to work on getting his confidence back, Marcus takes aim at rebranding Diaper Dude’s social campaign. Chris explains that the intent behind this social campaign was to help fund domestic abuse awareness, however, they were never able to actually do that because the company wasn’t returning a profit. Marcus gave him a firm lesson in how social campaigns work. He tells Chris very directly that he can not say that he is going to donate proceeds of a product to cause and then not do it. That is actually counter-intuitive and damaging to his brand.

Marcus and Chris then took to the streets to review the company mantra to determine if the public can link the results of the expensive marketing campaign that Chris funded to the company’s main product line. The statement shown to the public participants was, “What’s a True Dude? He isn’t scared to love or cry or even feel. He chooses action every single time. He has flaws, as we all do, but he doesn’t let them win. #BeATrueDude #JoinTheMovement”. Not a single person interviewed could link their product line with the social campaign or understand how the two reflected each other. It was clear that a new social campaign must emerge.

Marcus pitched a “No Bull” campaign to Chris. This campaign would focus on anti-bullying missions where 5% of the proceeds would go to fund anti-bullying programs. This mission resonated with Chris as a father whose children have been bullied and Chris was also a victim of bullying himself. Chris feels a deep connection to the cause which is necessary for a successful social campaign.

With an upgraded product and a clear social campaign, Marcus arranged for Chris to meet with Overton’s store to make a pitch to have his products sold in their store. He was clear and confident in his delivery and approach which ended in a positive way as Overton’s confirmed that they felt a strong emotional tie to his cause and would sell his product in their store.

This episode gave us some insight into how Marcus integrates his businesses together as well as some valuable advice on the importance of a high-quality product and how to run a successful social campaign. Check out what twitter had to say about this episode of “The Profit:”

“The Profit” airs every Tuesday at 10 p.m. on CNBC.

What are your thoughts on the upgrades to the Diaper Dude product and brand? How did you feel about the “No Bull” social campaign that they launched? Let us know in the comments section below!


Stay Connected

Join over 100,000 of your peers and receive our weekly newsletter which features the top trends, news and expert analysis to help keep you ahead of the curve.