September 01, 2013
AdvoCare: A Two-Decade Marathon
by Barbara Seale
- Founded: 1993
- Headquarters: Plano, Texas
- Top Executive: President and CEO Richard Wright
- Products: General nutrition, weight-loss, energy and sports performance
Companies that reach their 20th anniversary often celebrate great products and growth. AdvoCare can tout both of those, as well as one of the industry’s most loyal armies of distributors. But its celebration included one more unique highlight: giving.
For two decades, AdvoCare has taken care of people through its science-driven general nutrition, weight-loss, energy and sports performance products, so it made sense to executives to kick off its celebration by contributing $20,000 to food banks in each of 20 selected cities across the country. And at its semiannual Success School in February, AdvoCare challenged its distributors to commit to giving 20 hours of their time to a local charity by the August Success School.
“What better way to honor our 20th anniversary and our success than to give back to the communities where our distributors are building their businesses,” says AdvoCare President and CEO Richard Wright. “It fits with the things we believe in: building stronger families, getting healthier and having a little extra money that can, we hope, be used to pay off debt. It was such an easy fit for us.”
The idea was received so enthusiastically by the entire AdvoCare family that its National Spokesman, New Orleans Saints quarterback Drew Brees, asked the company to add city No. 21 to the list: New Orleans. Through the Brees Dream Foundation he matched AdvoCare’s donation, increasing the gift to the New Orleans Food Bank to $40,000.
Philanthropic focus is an unusual way to mark a significant point in a company’s life, but it speaks volumes about AdvoCare’s culture.
AdvoCare’s Founder Charlie Ragus set the stage for that culture in 1993 when he drafted the company’s Guiding Principles. Ragus was passionate about building a company that had principles that it stuck to. They continue to direct company decisions today. Ragus was driven by a desire to help people improve their lives nutritionally and financially. He chose the name AdvoCare to communicate his commitment to be an advocate who cared.
“Charlie passed away in June 2001, and he was with the company for eight of its 20 years,” General Counsel Allison Levy recalls. “It was the way he poured himself into the company through his principles and the standards he helped set for the industry—he was so intentional about it that it has withstood his not being present and has led us to where we are today. It’s an unbelievable legacy.”
Ragus also personally set the standard for growth by recruiting the company’s first distributor, Norma G., who is still active today. According to company lore, when Ragus approached her about becoming a distributor she asked how many people were already using the products. Ragus’ classic, honest answer: “As soon as you start, there will be two of us.”
Norma G. did start, and for 20 years she has been the aspirational example for more than 300,000 distributors throughout the company, earning a lifetime income of almost $4 million. Loyalty like hers comes from financial success, of course, and also from the unique AdvoCare culture that Ragus created.
“What better way to honor our 20th anniversary and our success than to give back to the communities where our distributors are building their businesses.”
—Richard Wright, President and CEO
Carrying the torch of a well-loved leader and founder is no simple feat. But Wright, who joined AdvoCare in 2007, has managed to maintain Ragus’ values even as the company’s base of distributors has grown by five times and its revenues have reached more than $400 million. Perhaps that’s because he was close friends with Ragus for years and served on the equivalent of AdvoCare’s board of directors—or because he believes in leading through character, expecting the same from his employees and distributors. Under his leadership, AdvoCare continues its distributor focus even as it launches strategic initiatives and increases its brand recognition.
“Everything we do is about how it’s going to impact distributors,” Wright explains. “When we’re launching or discontinuing products, or when we choose endorsers, it’s the way we compensate them and the way we train them to be the best they can be that lends itself to loyalty. When you’re building up people, they want to stick with you.”
|AdvoCare’s 24-Day Challenge products.|
Success School: Continuing Education
One of the key ways AdvoCare builds up its distributors is through Success School, the company’s twice-yearly event. The August event was held in Cowboys Stadium in Arlington, Texas, for the first time, attracting some 30,000 distributors. The previous event had almost overwhelmed the Fort Worth Convention Center nearby, where the company held two simultaneous events just to accommodate the outpouring of enthusiastic distributors. While many distributors consider Success School a “can’t-miss” event, between 40 and 50 percent of attendees at each Success School are first-timers.
One of the key ways AdvoCare builds up its distributors is through Success School, the company’s twice-yearly event.
“We know it’s not easy to come to Success School, so we’re intentional about making it worth the time, effort and struggle to get there,” Levy notes. “We have lots of product training and field leader training on business basics. We always have inspirational speakers to talk about some of the intangibles of this business. Our distributors are always stretching to have a better life, so people do come back every time. They find it meaningful and impactful.”
At Success School in August, attendees heard motivational speaker and former NBA guard Walter Bond; artist, author and entrepreneur Erik Wahl; and contemporary worship singer/songwriter and AdvoCare endorser Michael W. Smith. The company’s philanthropic focus also played a role. AdvoCare hosted a diaper drive for Captain Hope’s Kids, an organization that dedicates its time and resources to meeting the needs of homeless children in Dallas. Distributors were asked to bring a small package of diapers, training pants or children’s underwear to donate. And, as a Success School tradition, the company introduced three new products.
“We just plan to keep doing things the way we’re doing them now—the right way, with integrity in everything we do.”
The new products joined a family of more than 70 wellness, weight-management, skincare and athletic performance products. Its flagship is the bundle of products included in its 24-Day Challenge™, AdvoCare’s comprehensive supplementation and nutrition program that encompasses six of its products. Users can customize the products based on their goals. The company provides a recommended food plan, and a workout DVD is also available.
AdvoCare’s marathon-like attitude is evident in its tagline, “We Build Champions.” As much as amateur athletes—whether they’re weekend warriors or fitness fanatics—appreciate AdvoCare’s products, a large number of elite competitors from virtually every sport actually stake their athletic careers on AdvoCare. More than 100 of them help fuel their performance with AdvoCare supplements. They consider the supplements so important to their success that they endorse the products. Some endorsers are million-dollar professional athletes who could buy any product at any price—but they choose AdvoCare.
In addition to Brees, endorsers include such well-known figures as Dallas Cowboys tight end Jason Witten, Atlanta Braves pitcher Jordan Walden and even NASCAR Hall of Famer Richard Petty, who has endorsed the company’s products since 1996.
“Our endorsers are compensated with products,” Levy says. “They use and endorse our products because they believe our products work.”
Those athletes also value the fact that AdvoCare has formed a strategic alliance with INFORMED-CHOICE to certify that its products do not include banned substances. The INFORMED-CHOICE program adheres to regulations put forth by the World Anti-Doping Agency, the National Collegiate Athletic Association (NCAA) and professional sports organizations including the NFL, MLB, the NBA, the NHL, Major League Soccer (MLS), the PGA and LPGA, the Association of Tennis Professionals, the Women’s Tennis Association and NASCAR.
Sports marketing has traditionally played a major role in AdvoCare’s awareness program, as well as its incentive programs. It has sponsored the NCAA-sanctioned AdvoCare V100™ Bowl for five consecutive years; it’s the title sponsor of NASCAR’s Sprint® Cup Series race at Atlanta Motor Speedway and the primary sponsor for Nationwide® Series driver Austin Dillon and the No. 3 Chevy. Last year, it became the first-ever jersey sponsor of the MLS team FC Dallas. The agreement places the AdvoCare name prominently on the front of the club’s jerseys. Team jerseys sold throughout the nation also feature the AdvoCare name.
“Sports sponsorships are important to our distributors,” Levy says. “When you are able to have a meeting at your house and watch the AdvoCare 500 NASCAR race, it’s a great opportunity to talk about the company’s legitimacy. Sports sponsorships help them leverage the opportunity when they can talk with pride about the company. It’s about softening the market—what is AdvoCare, and what do they do besides sponsor a bowl game? It leads to conversations about wanting to be healthier or how to lose weight, and those are all AdvoCare topics.”
|Last year, AdvoCare became the first-ever jersey sponsor of the Major League Soccer team FC Dallas.||AdvoCare is the primary sponsor for Nationwide® Series driver Austin Dillon and the No. 3 Chevy.|
Sports Build Businesses
Sponsorships offer other unique opportunities for the company to help distributors build their businesses. As a NASCAR race sponsor, AdvoCare has 500 tickets available to field leaders who want to run incentives for their teams. Its soccer sponsorship with FC Dallas includes tickets to every home and away game, which they share with distributors.
“Soccer is the longest sports season, and that provides lots of opportunities for brand recognition,” Levy explains. “Our distributors go to the games and wear their FC Dallas jerseys at games around the country.”
AdvoCare showed its proficiency at combining products, promotions and marketing expertise as it entered its 20th anniversary year. With distributor excitement running high as the year-end AdvoCare V100™ Bowl approached, the company announced that it would produce its first-ever fitness DVD, a two-disc set that features AdvoCare distributors who have successfully met fitness goals using the company’s products. The DVD product was launched New Year’s Day 2013, the day when many people embark on New Year’s fitness resolutions.
“Our distributors are always stretching to have a better life, so people do come back [to our Success School] every time. They find it meaningful and impactful.”
—Allison Levy, General Counsel
To build momentum and fuel overall sales, AdvoCare bundled the program with its 24-Day Challenge products, calling the DVDs and the bundle Can You 24?. The company carried the theme through to the DVD set, which includes seven 24-minute, equipment-free workouts and is billed as the “perfect companion to the 24-Day Challenge.” AdvoCare created a promotion around the limited-quantity bundle, entering distributors who purchased it into a drawing for a chance to attend the company’s upcoming incentive trip to Hawaii. They discounted the bundle during the first two weeks of 2013 to help create urgency. AdvoCare also launched the Transformation Challenge, a 72-day contest among distributors to use the Challenge products with the Can You 24? DVD and share their results.
The results were record-breaking. On New Year’s Day alone—a holiday for most people—AdvoCare independent distributors sold a whopping $8.2 million in products, exceeding its previous one-day sales results by some $5 million. In addition, they recruited a record number of new distributors on the same day, and the highest number of distributorships to qualify for leadership in one day was reached. The company anticipated the promotion’s success, and its IT, customer service and distribution centers worked for weeks to prepare, even working on New Year’s Day to process orders. Wright was so impressed with the results that he changed the rules of the promotion. Instead of drawing the name of one distributor from among those who qualified, he drew two.
Results like those show why AdvoCare is growing consistently on every front. Its 2012 net sales were $255 million, placing it at No. 47 on the Direct Selling News Global 100 list. Compare that to 2011 when it ranked a still-impressive No. 62 with $138 million in sales. One of Wright’s stated goals is for AdvoCare to become a household name and to be a billion-dollar company by 2015 in the United States, currently its only market. The strategy: Keep on doing the right stuff.
“We just plan to keep doing things the way we’re doing them now—the right way, with integrity in everything we do,” Wright says. “We’ll continue to have products, sponsorships, leaders and distributors that uphold our integrity. Those things will take us into the future.”
With a product line based on science and marketed through sports, AdvoCare takes its cue from two advisory councils: its seven-member Scientific & Medical Advisory Board and a 13-member Sports Advisory Council.
Highly regarded and recognized in their areas of expertise, members of the Scientific & Medical Advisory Board use their knowledge and experience in the fields of medicine, nutrition and science to ensure that all AdvoCare products are formulated with the highest-quality ingredients based on the latest scientific research.
Members of the board are knee-deep in AdvoCare’s product development, holding monthly conference calls and twice-yearly face-to-face meetings.
“They feel passionate about having quality products,” says Allison Levy, AdvoCare’s General Counsel. “They work closely with our internal Research and Development department to make sure that the products we make are safe, effective and appropriate for our audience. Safety and efficacy drive product development.”
The AdvoCare Sports Advisory Council, along with the company’s sports marketing program, carries a bit of Founder Charlie Ragus’ DNA. Ragus was an athlete and sports lover throughout his life. The council includes many of the top strength and conditioning coaches and athletic trainers in the country who are involved in football, hockey, motorsports and wrestling. Strength and conditioning coaches and trainers were among the first to discover the superiority of AdvoCare products. Today they exchange information on a variety of topics relating to the use of nutritional supplements in the training of athletes and rehabilitation of athletic injuries. These experts also consult with AdvoCare on issues relating to current and future product development.