May 01, 2014
Circling Back to Move Forward: Arbonne’s Transformative Five-Year Journey
by Beth Douglass Silcox
When Arbonne launched in 1980, Founder Petter Mørck brought a progressive and pioneering vision of natural consumer beauty products seldom seen in the United States.
On a recent trip to Warsaw, Poland, Kay Napier and members of the Arbonne International Executive Team sat down with some 300 people eager to hear more about this U.S.-based wellness company with European roots. With the company’s launch into Poland projected for later in the year, this was no clear-cut opportunity pitch but rather a guided tour of Arbonne’s promising future.
Arbonne has been on a transformative journey since Napier landed the CEO position five short years ago. Today, they tout accelerated growth at home in the U.S. and are re-emerging as an international player in the direct selling industry. But the path Arbonne traveled to get here was not linear. Instead, by design, the company chose a circular route that led them straight back to their roots.
Natural Beauty Comes to America
It was the early 1970s in Switzerland when Petter Mørck began drawing correlations between the natural perfection of botanicals and their ability to enhance feminine beauty. “He was not a scientist per se, but he was an intelligent and curious man, and he knew people who knew about ingredients and formulations,” Stian Mørck, Arbonne’s Managing Director, says about his father. By 1975, Petter had created Arbonne.
“He saw Arbonne as a vehicle to bring a better product to market, while creating an opportunity for people to enhance their lives,” Stian says. Petter reflected on his mother’s survival instincts raising him alone in war-torn Norway and became sure women were the stronger sex and deserved better lives and the opportunity to do more, be more and realize their dreams.
As a firm believer in Europe’s green movement to rid products of unnecessary or harmful ingredients, Petter wanted to offer botanically based beauty and skincare products free of animal byproducts to a brand-new audience—an American audience of women who wanted more from life.
“There were products out there in Europe that I don’t think really existed in the U.S., and he wanted to bring this pure, beneficial and really awesome product to America,” Stian says. When Arbonne launched in 1980, Petter brought a progressive and pioneering vision of natural consumer beauty products seldom seen in the States.
“In 2014, Arbonne is still a leading direct selling company in the green movement in the United States,” Napier says. In fact, the company’s name—inspired so long ago by the Swiss word for “beautiful tree”—now outstretches metaphoric branches to encompass an enduring and natural philosophy that provides shelter and abundance while remaining green and continually growing.
Grappling with Growth
After nearly three decades of expansion, including a new nutritional line, the company’s millionth Independent Consultant, and international markets in Canada, Australia and the United Kingdom, Arbonne’s future was upended by financial strife in 2009.
“The company went through a lot of problems, not created by the brand or by Petter, but issues that put us in a difficult financial situation. The gift was to be able to restructure our company. It gave us the freedom to operate and really create the situation that we have today,” Napier says.
After five years of putting the right building blocks in place, Arbonne hit the tipping point in 2012 by accelerating consultant recruitment by 54 percent and experiencing double-digit growth in 2013, including their most successful fourth quarter since 2008.
When Arbonne took its first steps onto that fresh business path in 2009, little was certain. Yet one of Petter’s founding mantras always seemed close to the surface. “What he said was just do a little more than is expected of you,” Stian says. “If you do just a little bit more, you exceed expectations.”
The mantra reflected Petter’s original vision for the company and its transformative culture. Soon Arbonne was circling back, collectively, to regain it. On dark days when Napier’s thinking leaned negative, she says, “I would think about our field. What would they say? They would say, ‘You can do it! Anything is possible!’ ” What originated in the field permeated Arbonne’s corporate offices, and then corporate delivered it right back to them. Arbonne’s culture became circular in nature—something Napier wishes was to her credit but gladly bestows applause to Petter Mørck.
To transform the company and establish newfound financial footing through business growth, Arbonne’s circular culture was only the start. “We are trying to take a nice culture, retain what is good and drive it to a culture of high performance, both in the field and among our employee base. While it is a journey, I feel good about where we stand today. I don’t think we would be growing so consistently if we hadn’t taken the right steps,” Napier says.
“One thing that Arbonne has done incredibly well from inception goes back to that magic Petter Mørck had for inspiring women,” says Heather Chastain, Senior Vice President and Chief Sales Officer.
Arbonne attracts a different caliber of individual—mostly women who, as Napier puts it, say, “ ‘Enough is enough. We want more flexibility and freedom and the ownership of our own businesses.” Arbonne’s consultant base skews to the highly educated. Of their top leaders, 90 percent have some college and over 60 percent have earned an undergrad, graduate, master’s or doctorate.
They are lawyers, MDs, advertising executives and professionals who leave behind six-figure incomes for something more. But such a pedigree is by no means a prerequisite, because Arbonne professionally grows extraordinary leaders, according to Napier. “When you come in, it doesn’t matter if you were a swim coach or you never attended college or you chose to be a stay-at-home mom from the get-go or you were an unwed mother at 16,” she says. “It doesn’t matter as long as you live by the culture and really teach and train each other across downlines and down sidelines.”
Beyond sales and sponsorship training, Arbonne’s focus on personal development, leadership and empowerment changes people’s lives by improving minds and perspectives. Perhaps, Napier says, an Arbonne leader in Canada put it best when she said, “I’m a physician, and the reason that I’m not practicing anymore is, in all the time I practiced, I couldn’t write a prescription for a pill that would transform lives like Arbonne does, in terms of physical wellness, mental wellness and spiritual wellness.”
Arbonne Charitable Foundation
One of Arbonne International’s strongest attributes as a company is a transformational element that takes everyday people and turns them into extraordinary leaders. In developing the Arbonne Charitable Foundation, Ashley Good, Senior Vice President and Chief Legal Officer, says, “We wanted to take that same concept and apply it to youth, who could really benefit.”
The Arbonne Charitable Foundation harnesses that transformational philosophy to help teenage girls and boys in the U.S., Canada, Australia and the United Kingdom develop confidence and self-esteem.
To date, the foundation has awarded $500,000 in grants, all sponsored by Arbonne employees or Independent Consultants and ranging from $1,500 to $5,000. Organizations like Boys & Girls Clubs of America, Big Brothers Big Sisters and smaller local groups, all with the common mission to develop and empower teens, are among the recipients.
“I’m very pleased at the amount of grant requests we are receiving, the feedback we’re getting and the difference we’re making,” says CEO Kay Napier. “It’s the circular mission of our consultants to transform everyday people into extraordinary leaders. Why not start in those formative years?”
Good adds, “It’s really important that we support the local grassroots efforts of our field and what they are doing in their own communities. We’ve been totally blown away by the professional approach and giving nature of both our consultants and employees.”
Giving opportunities, large and small, take place year-round, including event-based fundraising, sales of specialized Arbonne products, and direct donations through www.ArbonneFoundation.org. Arbonne International covers all management costs of the Foundation and attempts to match contributions each year. They also participate in their own charitable giving and sponsorship opportunities, including The TODAY Show Holiday Toy Drive.
A smart and tech-savvy consultant base has high standards, as does Arbonne, but upgrading the company’s technology platform was at times painful. Made more difficult by a legacy system that Napier says had been “patched and built on to the point where it was not cutting edge,” the company decided to re-platform Arbonne’s IT in its entirety.
The mid-year 2014 re-platforming gives the company license to grow, shortening business operation time frames for consultants, providing on-the-fly mobile applications, expanding social media marketing efforts, and seamlessly allowing for further international corporate expansion.
Because big technology platform changes take longer than corporate and field leaders like, Arbonne bridged that gap with impactful steps forward that plugged into their existing technology system. They re-launched Arbonne University as an easy, intuitive and interactive conduit for training the world-over, and they introduced The Source.
“The Source is a knowledge sharing system that allows us to instantaneously communicate with the field on any variety of topics,” Chastain says. It provides fingertip access via mobile or desktop to incentive and purchase offers, even database business needs like tracking out-of-stock items, plus informational and training MP3 files available for download.
Perhaps its most revolutionary feature is real-time Q&A. “It gives consultants the ability to ask questions about an ingredient in one of our products, a qualification rule, or directions. They can just type in the question, and we can answer it from the home office,” Chastain says.
Answers drop into a knowledge sharing system that can be searched anytime, anywhere. It reduces call volume significantly and appeals to those millennials who crave instant information. “It’s been really gratifying,” Chastain says, about the out-of-industry technology the company has so adeptly put to use.
Expertise from Within and Without
Stepping outside the industry for solutions and innovation comes easy to Napier, who earned her track record as a brand revitalizer with companies such as Procter & Gamble and McDonald’s. Arbonne’s management team is a hybrid of both direct selling and the corporate business world.
Adding yet another dimension to Arbonne’s business, the company actively engages and utilizes the expertise of its Scientific Advisory Board in product reviews, clinical trial protocols, and Arbonne’s ingredient policy.
“We tackle both the skincare and beauty worlds, in addition to nutritional needs. We’re very careful about our ingredient policy. We believe it’s not just what’s in our products, but also what’s not in them that is really important, and we are very vocal,” says Michael D’Arminio, Senior Vice President and Chief Creative Officer.
Arbonne’s fastest-growing business segment is nutritional products that center on a strict ingredient policy, including but not limited to gluten-free, vegan and non-GMO. The same is true of Arbonne’s skincare line.
“Picking up that torch and pushing it forward and constantly challenging the science and botanicals is really important to the ongoing success of the company,” D’Arminio says. “It really is about providing facts and proof behind our products because people can believe in them and they can perform well, but it’s good to have factual data to put behind that.”
Napier adds, “I’ve participated in many advisory boards and formed them in the past, and I would say that ours is the most consistent with our culture of ‘roll your sleeves up and get whatever needs to be done, done.’ We’re all playing on the same team, and they’re really jazzed about changing lives.”
Fresh eyes are also keeping Arbonne viable for the long term with “retail-esque” consumer sales innovations. “We decoupled our clients from our genealogy,” Napier says. “Our consultants get recruited one way, and we have a Preferred Client base—our consumers. We’re working very hard to make them feel like consumers.”
Traditionally, direct selling leaves the consumer loyalty piece to the field, and often repeat purchases fall off as a result. But Arbonne is in the thick of it, driving longer-term consumer loyalty through a designated Preferred Client category, as well as loyalty and repeat purchase programs that offer rewards for dollars spent.
“They’re spending, and they’re earning and redeeming all the way through,” Chastain says. “Since we implemented that program and put in enhancements in the past year, we have seen significant increases in the clients that order each month and those that order more than once or more than twice with us. It’s another way of taking an out-of-industry approach to an issue and generating great results for our field leaders through it.”
Arbonne also challenged the industry’s preconceived notion about “share of wallet” last fall when they launched Genius. D’Arminio, who earned his marketing chops at Unilever Cosmetics International, Coty Prestige and L’Oréal, took the issue as a personal marketing challenge. “That launch broke us beyond that share of wallet, and we’re seeing growth from that as well as the Preferred Advantage Program. We’re just getting started, but I have great hope for the combination of both those programs and those products that will encourage people to buy more,” Napier says.
|Arbonne Walking Club|
“Really making sure that every element throughout the business is fully integrated has been a big piece of what we have done these last couple of years,” Chastain says. In fact, it’s the successful integration of many pieces and parts that has transformed Arbonne into a company once again ready to take a step outside the U.S. and open for business in Poland.
Napier’s voice clearly rises in enthusiasm and anticipation when she speaks of this year’s opportunistic expansion play into Poland, where Arbonne aims to leverage existing in-country relationships of 400 U.S. Independent Consultant leaders. “We think that Poland will be a great launching pad for the potential for more European countries. It’s an important tenet of our strategic approach,” she says.
“I do believe that we will, over the next few years, double this business and ultimately double it again,” Napier says. “Not only have we brought back the spirit of Petter, but we’ve created what will be a global operation that will provide employment and entrepreneurship opportunity to millions of people as we go forward. And for that, I think, as a management team, we are very, very proud.”