Happy Deal

It was a call that Bill Flaherty never really expected.

After nearly two years of inundating Chicago-based McDonald’s Corp. with information about his toy company, a representative of the fast food giant finally called him back. The company had received his mailings and the representative wanted to talk.

“It’s kind of like a kid’s dream,” says Flaherty, president of Cleveland-based Toy Craze, a privately-held company. “Every toy company probably dreams of having their toy in a Happy Meal, just like every kid wants to be president. Well, some kids get to be president.”

Although usually a slot reserved for toys related to movie tie-ins or perennial favorites such as Beanie Babies, Flaherty’s Crazy Bones line of collectible game pieces, with names like “Eggy,” “Speedy” and “Menace,” ultimately won a place in McDonald’s 2000 schedule of Happy Meal toys. For those who doubt the power of such a deal, consider the fact that the fast food chain sells between 50 and 70 million Happy Meals during an average three- to four-week run.

Then there is the money spent on television advertisements and the 13 million to 14 million people who walk into a McDonald’s restaurant in the United States each day and see advertisements for the toys.

Flaherty, who has 30 people on his payroll, still seems a little boggled. Sitting at a conference room table that is surrounded by Crazy Bones-related merchandise ranging from baseball caps to boxer shorts, Flaherty is careful not to let the stellar success of fellow Happy Meal toy brands such as Beanie Babies and Furbies go to his head.

“I’m not sure that kids don’t want a Happy Meal because of the toy that’s in it or they do want a Happy Meal because of the toy that’s in it,” he says. “The best you can hope for with a product like ours is they may get it the first time and not know what it is. But, they start playing with it and their friends get some, then they go to our Web site and say, ‘This is pretty cool,’ and that drives them back.”

No matter what the outcome, just getting to this stage has been an overwhelming victory for a 3-year-old company, which is admittedly in a fad market and does not have the money to invest in flashy television advertising campaigns. Instead, Toy Craze is living proof that a good product, the steady construction of a recognizable brand name and a fair amount of hard work can net big results.

“I wish I could say there’s some magic to what we do,” Flaherty says. “There is magic, but it’s the fact that we’re committed to it and we stick to it and we do it … It would be much easier to run a zillion dollars worth of TV, but that’s not what makes us what we are and it’s really not in the cards.

“We’re a small company, but we’re doing well, we’re having fun and it seems to be working.”

Catching the eye of McDonald’s executives has been one of Flaherty’s goals since he founded Toy Craze in 1997. He had always believed the social and game-based nature of his product, an extension of traditional games such as jacks and marbles, was a natural fit for selection as a Happy Meal toy.

When the “Crazy Bones” product line was officially launched in February 1998, he dropped McDonald’s a line, just to put himself on the map with the fast food giant.

“We thought it was the kind of thing that would translate well into a Happy Meal because you could use it right there in the restaurant,” Flaherty says. “But the problem was, it wasn’t movie based and there wasn’t a lot of other ‘umph’ behind it.”

Toy Craze is nowhere near in the same league as industry heavyweights such as Hasbro and Mattel, which routinely throw bushels of marketing dollars toward television advertising campaigns to build product awareness. Flaherty instead relies on a small fleet of vans, which are driven to cities with one goal that never changes: Find children, give them the product and teach them how to play.

He knew the line would be a hit when he licensed the concept from Magic Box International, a partial owner of Toy Craze, because more than 400 million packs of Crazy Bones had already been sold in Europe.

The retail environment in the United States, however, is not the same as in Europe, where most children don’t have to go more than one or two blocks to buy a pack of Crazy Bones. When Flaherty had to choose how to position the product, which costs about $1.99 for a package of four game pieces, he skipped the convenience store route in favor of stores including Zany Brainy and Toys R Us.

All the while, he had his staff periodically mail information to McDonald’s, and waited for what could be a monumental break for the company, if it ever came.

“It was simply a matter of getting it in front of them without harassing them,” Flaherty explains of his dealings with McDonald’s. “We just sent some reminders that this is what we’re doing and they should keep an eye on us. I’m sure they probably have hundreds of submissions every year, and you don’t know if you’re connecting or not connecting.

“Then, one day they call you and say this may have some potential.”

Early tests of the Crazy Bones product in McDonald’s restaurants in Chicago showed it testing higher than Beanie Babies did on an individual store basis.

That was good news for Toy Craze, but still far from a signed deal with the giant of fast food. The research phase is just one of many steps in the process, and from the day of that initial phone call from McDonald’s, it was more than 10 months before Flaherty had an inked contract in his hands.

“You have to go through the screening processes with McDonald’s,” he explains. “You can be discarded right away. We got through the first wave and, just based off the process, I believe there are probably two or three layers it goes through, and then there’s a creative element that says how does this fit into the Happy Meal format.”

Those steps only lead to the quarterly meeting of McDonald’s owners and operators from across the U.S. It is at these events that decisions about Happy Meals and other product offerings are made, and it was at this meeting that Flaherty’s 10 months of waiting finally came to an end.

“It’s one of those situations where you pinch yourself,” he says. “You get a sense, you get a grin, and hopefully it turns into a smile, and we were very fortunate that it came down this way.”

Between now and October, Flaherty’s crew of toy designers will work very closely with McDonald’s designers to create the look of both the Crazy Bones toys and the Happy Meal boxes.

Design teams from both sides meet regularly and talk several times a week over the phone.

“Nobody makes their own product for McDonald’s,” explains Flaherty. “Nobody does, whether you’re Mattel, Hasbro or Toy Craze. They license your brand and you then have approval through the entire process … We pick the color, we pick the shapes, we pick what will go in the bag … It’s a very good partnership. It’s very enlightening.”

As the year of excitement winds down toward October, Flaherty says he truly has no idea what to expect once his company’s toys hit the national spotlight. Toy Craze has already been a fast success in its first two full years of existence, generating sales of $3 million in 1998 and $17 million in 1999. This year, Flaherty expects that figure to at least double, and that’s not even taking into account whatever boost the brand receives from its affiliation with McDonald’s.

If past performance is any indication, the payoff for Toy Craze from its association with the Happy Meal will be very big.

“Obviously, the effect of the Happy Meal is a wildcard that you just don’t really know,” Flaherty says. “The marketing muscle that McDonald’s brings to your brand is enormous. You have incredibly high rates of targeted television running through the entire thing, so the brand Crazy Bones will be in everybody’s face for the entire time … Obviously, they can take your brand to the next level, anybody’s brand, whether you’re new or established.

“They have the kind of marketing clout that can take you up a dozen notches.”

How to reach: Toy Craze, (216) 595-0807

Jim Vickers ([email protected]) is an associate editor at SBN.

Roll the bones

The genius behind the tiny 1-inch tall Crazy Bones characters is that they are used to play a variety of kid-proven games similar to the ones children have played in schoolyards for years.

The difference is the hundreds of collectible game pieces with names including “Eggy” and “Funny Bone” and “Fang,” which drive kids back to the store with allowance money in hand to add to their collection.

If you’ve made it this far, curiosity has likely gotten the best of you and you’re wondering exactly what games you can play. For a full explanation, check out the “Crazy Bones Official Handbook and Sticker Collecting Guide,” but here’s a quick rundown on how to play a couple popular games.

The traditional game

1. Each player takes turns throwing or rolling five Crazy Bones at the same time.

2. You score points depending on how your Crazy Bones land. Standing up = 5 points, on its side = 2 points, face up = 1 point and face down = 0 points.

3. The winner is the person who scores the most points after three throws.

On the line

1. Draw a straight line on the ground or use a line that is already there.

2. Each player throws a Crazy Bone.

3. The player whose Crazy Bones end up closest to the line is the winner.

4. The game can go on for as long as you like as long as everyone throws the same number of times.

Sure, they’re simple, but so were marbles and jacks. To find out more about Crazy Bones, check out www.crazybones.com. In the meantime, just remember that “Eggy” is trading 13 to 1 in schoolyards across the country.

Jim Vickers