September 02, 2015

U.S. News

LifeVantage Reports Full-Year Earnings Dip, Proposes Reverse Stock Split

LifeVantage Corp. (LFVN—NASDAQ) closed out its fiscal year with revenue down 10 percent to $190.3 million, the health and wellness company said Tuesday.

In the fourth quarter, ended June 30, revenue dropped 20 percent from a year ago to $45.3 million, beating analysts’ estimates of $45.1 million. Adjusted earnings were $3.1 million, down 50 percent year-over-year, but comparable to the company’s third quarter results.

“Our fourth quarter results reflected stability in our revenue and operating results,” President and CEO Darren Jensen, who joined LifeVantage in April, said in a statement. “We strategically implemented $4 million of annualized cost savings in the fourth quarter of fiscal 2015 to better align our cost structure with current sales trends, and position us for stronger EBITDA and net income in fiscal 2016.”

For the full year, LifeVantage generated adjusted earnings of $17.4 million, down 30 percent from 2014. On the back of a 28.2 percent revenue decrease in the Asia/Pacific region, net income fell 40 percent to $7.0 million.

The company also reported that its board of directors has unanimously put forth a reverse stock split proposal. If approved by shareholders, the reverse split would aim at driving up the stock’s minimum price and securing LifeVantage’s Nasdaq listing. The company’s 98 million outstanding shares are currently trading below the $1 minimum required by Nasdaq.

September 01, 2015

Stock Watch, September 2015


September 01, 2015

Publisher's Note

Industry Growing at Home and Abroad

by Lauren Lawley Head


As I write this, we just received outstanding news: Nine direct selling companies are ranked among the 2015 Inc. 500|5000 list of the fastest-growing private companies in the United States. 

Nerium International led the direct selling pack, coming in at No. 12 with 16,617 percent growth, reaching $403 million in revenue in 2014. Nerium was joined by No. 132 Plexus Worldwide, No. 442 It Works!, No. 564 Jeunesse, No. 915 WorldVentures, No. 2,210 Isagenix, No. 2,814 Ambit Energy, No. 2,864 Beachbody and No. 4,822 Stemtech. Eight of the nine companies are members of the 2015 Direct Selling News Global 100 and North America 50 lists, and the entire DSN team is delighted to see all of them receive this outstanding national recognition. This achievement speaks to the power inherent in direct selling as a distribution channel as well as to the ability of high-performing direct sales companies to compete with the nation’s top corporations.

While the Inc. 500|5000 list celebrates growth among U.S.-based companies, the story of direct selling’s expansion is truly global. In our cover story this month, writer Andrea Tortora explores the most recent research from the World Federation of Direct Selling Associations (WFDSA), which identifies 23 countries that each represented more than $1 billion in direct selling retail sales last year. Overall, the global data shows an increase in total sales to $182.8 billion in 2014, a 6.4 percent increase from $171.8 billion in 2013, and an increase in the number of independent business owners to 99.7 million, a 3.4 percent increase from 96.5 million in 2013. All regions of the world and three-quarters of all countries posted increased sales. As WFDSA Chairman Doug DeVos said, “It’s exciting to see more people, both customers and distributors, enjoying the benefits of direct selling.”

International growth played a significant role for one of the Inc. 500|5000 honorees profiled in this edition of Direct Selling News. Jeunesse, featured in the Company Spotlight story on page 34, is a skincare and nutritional products company based in Florida. Since its launch in 2009, the company has expanded into 120 countries, with 32 offices, 40 distribution centers and a salesforce of 550,000. Fifteen of those markets are now generating $1 million in sales each month. “We didn’t want to be at the mercy of any one country,” Co-Founder and Chief Operating Officer Wendy Lewis told writer Courtney Roush. “The economy may be going great in one market, but taking a temporary downturn in another. Tax rates are different among the markets. Spreading out to as many countries as possible, economic conditions begin to balance each other out.”

Also this month, you will meet FuXion, an $80 million Peruvian company poised to make its U.S. market entry later this year, and Trades of Hope, a young party-plan company dedicated to the belief that sustainable businesses offer a long-term solution to poverty. We hope you find this edition packed with growth, optimism and new ideas for taking your business to the next level.

 

Rank

Company

3-year growth

2014 revenue

12

Nerium International

16,617%

$403M

132

Plexus Worldwide

2,833%

$310.4M

442

 It Works!

1,060%

$538M

564

Jeunesse

811%

$419.2M  

915

WorldVentures

491%

$315.5M

2,210

Isagenix

177%

$725M

2,814

Ambit Energy

128%

$1.5B

2,864

Beachbody

125%

$938.9M

4,822

Stemtech 

49%

$66.5M

 

All the best,

Lauren Lawley Head

Publisher and Editor in Chief

September 01, 2015

News in Brief

News in Brief, September 2015


Mary Kay Keeps Focus on Philanthropy at Annual Seminar

Mary KayMore than 27,000 Independent Beauty Consultants gathered in Dallas this summer for the 2015 Mary Kay Seminar.

Mary Kay calls its anti-domestic violence initiative Don’t Look Away, and the company took its own advice by keeping the cause front and center during its 2015 Mary Kay Seminar. The annual event, held in five waves from July 15–Aug. 1, was all about empowering women—including survivors of domestic violence.

As 27,000 Independent Beauty Consultants gathered in Dallas, they had the opportunity to prepare care kits for survivors, donate professional clothing to local women’s shelters, and see Mary Kay’s new, award-winning series of public service announcement videos, One in Four. Mary Kay also recently announced $1.25 million in continued funding for loveisrespect, a text-for-help service launched as a tool for young people to help prevent dating abuse.

Seminar attendees, including more than 2,000 husbands who accompanied their wives, took part in assembling care kits filled with basic Mary Kay skincare products. Consultants distributed the 2,000 kits to 20 women’s shelters across the country. One of those shelters was The Family Place in Dallas, where a Mary Kay pink Cadillac made a local delivery during the Seminar.

The Dallas Convention and Visitors Bureau estimates that the Mary Kay Seminar pumped $30.4 million into the local economy. The event has taken place at the Kay Bailey Hutchison Convention Center Dallas since 1974 and is one of the city’s top 10 in terms of economic impact.


Stream Awards First Batch of Teslas to Top Associates

TeslaTesla Model S

Stream is taking its car bonus program to the next level with the creation of a new National Director position for top-performing Associates. The home services provider recently presented an electric-powered Tesla Model S to each of its qualifying National Directors. Dallas-based Stream is the first direct selling company to tap Silicon Valley automaker Tesla Motors—a fitting choice for a brand built on an innovative approach to marketing energy.

The seven-seat Model S sedan is the only model currently marketed by Tesla, but a Model X crossover will be available this fall. Following its introduction in June 2012, the Model S earned a slew of awards, such as Time’s Best Inventions of the Year 2012 and the top score ever from Consumer Reports magazine.


Tupperware Tops Quarterly Estimates with $62M Profit

Tupperware Brands Corp. (TUP—NYSE) recently announced that second-quarter profit exceeded expectations, despite revenue figures that dipped below Wall Street estimates.

Net income for the quarter was $62 million, up 30 percent from a year ago. On a per-share basis, the Orlando, Florida-based company reported a profit of $1.23, versus 93 cents in the prior year. On average, analysts had forecasted earnings of $1.17 per share. Adjusted earnings were $1.21, down 18 percent in dollars but up 13 percent in local currency.

Quarterly revenue totaled $588.9 million, coming in just under the $589.8 million estimated by analysts. Emerging markets accounted for 67 percent of sales, with strong performances from Brazil, China, the Middle East and North Africa.

The kitchenware and cosmetics seller said its salesforce increased 3 percent versus a year ago to 3 million. In the U.S. and Canada, Tupperware recorded a 14 percent increase in new consultants.

For the current quarter, the company forecasts earnings of 69 cents to 74 cents per share. Full-year earnings expectations are in the range of $4.42 to $4.52 per share.


Usborne Books Sustains 2-Year Turnaround

Educational Development Corp. (EDUC—NASDAQ), parent of bookseller Usborne Books & More, is marking 24 consecutive months of growth following a nine-year decline, according to the company’s quarterly earnings report.

Oklahoma-based Educational Development Corp. (EDC) operates EDC Publishing as well as the larger Usborne direct selling division. For the first quarter of fiscal year 2016, the combined businesses recorded net revenue of $9.6 million, up 34 percent from a year ago. Net income for the quarter ended May 31 rose 35 percent to $324,600.

At Usborne Books & More, a 108 percent increase in new sales associates spurred 59 percent revenue growth in the first quarter. The marketer of educational children’s books, twice recognized by Forbes magazine as one of “The 200 Best Small Companies in America,” is in the midst of a turnaround that began in 2012. In a recent interview with DSN, CEO Randall White attributed Usborne’s growth to a number of factors, including the decision to cancel an account with one of the brand’s primary wholesalers, thereby boxing out competition from Amazon.


Avon North America Sees Rare Profit in Second Quarter

Avon

Sales at Avon Products Inc. (AVP—NYSE) continued to decline in the second quarter, but the beauty company’s lagging North America division posted its first quarterly profit in several years.

Second quarter revenue fell 17 percent to $1.8 billion, weighed down by currency pressures in several foreign markets. On a constant-dollar basis, overall sales remained flat, with growth in Russia and the Philippines offset by declines in Brazil, China and the U.S.

The New York-based company reported adjusted earnings of 11 cents a share, surpassing the 7 cents predicted by analysts but dropping 20 cents from a year ago.

Heavy cost-cutting initiatives are paying off for the company in North America, where it saw a modest profit for the first time since the first quarter of 2012. Despite an improving bottom line, the number of Avon sellers in North America fell 16 percent from the second quarter of 2014. Overall, the brand’s salesforce shrunk by 2 percent from a year ago.

Avon said its expectations for the full year remain the same. The company forecasted modest constant-dollar revenue growth, with continued negative effects from currency exchange rates.


After 30 Years, Longaberger Convention Returns to Small-Town Roots

LongabergerThe Longaberger Homestead in Dresden, Ohio.

Annual salesforce conventions are a common practice among direct selling companies, but the gatherings themselves are as diverse as the companies they represent. For Ohio-based basket maker The Longaberger Co., this year’s event was a literal return to the company’s roots and a celebration of its four-decade history.

Now a part of the CVSL family of brands, Longaberger got its start in the village of Dresden, home to the company’s manufacturing plant and a shopping, dining and entertainment destination known as the Longaberger Homestead. Dresden also hosted this year’s Longaberger convention, held July 23–25. Known as The Bee—think quilting or spelling—the meeting has taken place in Columbus for the past 30 years.

“Probably the most important factor was that we were really trying to get back to our roots and tell the story of the craft, as well as the small town in Ohio where all this was born,” Longaberger’s Director of Communications, Brenton Baker, told DSN. “We realized we were at odds with ourselves, talking about the charm of the Homestead and village but asking people to come to a cold convention hall in Columbus.”

In addition to visiting the Homestead and meeting the craftspeople behind Longaberger’s handmade baskets and home goods, the crowd of approximately 1,000 heard from Longaberger’s new CEO, CVSL Vice Chairman John Rochon Jr. Rochon stepped in following Tami Longaberger’s exit in May.


Herbalife Members Give Blood, Give Back with Red Cross Partnership

HerbalifeHerbalife kicked off its Red Cross partnership with a blood drive during its convention in St. Louis.

The 25,000 members who recently attended Herbalife’s North America Extravaganza in St. Louis helped the nutrition company kick off a new partnership with the American Red Cross. Herbalife held a two-day blood drive during the annual meeting, which had an estimated $18 million impact on the local economy.

In addition to sponsoring a blood drive, the company announced it is donating 280,000 Herbalife protein bars, which will be available at select blood drives and blood donation centers by the end of this month. This fall, the Los Angeles-based brand will launch a grassroots social media campaign to raise funds for the American Red Cross.


ARIIX Announces Merger with Nutrition Brand Voluxa

ARIIX, a wellness and personal-care products company, recently announced a merger with Voluxa, a marketer of antioxidant-rich nutrition products that was founded just last year. As a result, the two companies have combined their product portfolios and sales networks.

After three years in business, ARIIX joined the top direct selling companies in the world on the 2015 DSN Global 100. The Utah-based brand ranked No. 95, based on 2014 revenue of $73 million. Prior to the merger with Maine-based Voluxa, ARIIX’s representative count had topped 35,000. ARIIX has previously expanded its business through a series of mergers with smaller health-focused brands, including Trivani Intl., ZENVEI, HAVVN and RevvNRG.


$50K Primerica Grant Will Equip At-Risk Teens for the Future

The Orange Duffel Bag InitiativePrimerica CEO Glenn Williams presents a grant award to The Orange Duffel Bag Initiative.

During its 2015 Convention in July, Primerica brought home the event’s theme—“Freedom Redefined”—with the announcement of a $50,000 grant that will equip at-risk teens for future success.

CEO Glenn Williams presented the grant award to Sam Bracken, Co-Founder of The Orange Duffel Bag Initiative (ODBI), an organization Primerica has supported since 2013. ODBI helps Georgia teens who are homeless or aging out of the foster care system, often without the means or skills necessary to support themselves. ODBI’s team of certified life and executive coaches provides coaching, training and ongoing advocacy to these youth.

The Orange Duffel Bag Initiative grew largely from Bracken’s own experiences. Though he would later become a star football player for Georgia Tech and an executive with FranklinCovey, Bracken was once a homeless teen who could carry everything he owned in an orange duffel bag. He has shared his experiences in My Orange Duffel Bag: A Journey to Radical Change, a book he co-authored.


Q&A:

Herbalife VP Talks Member Meetings with Congress

Eric RosenEric Rosen

Amid ongoing scrutiny from regulators and the press regarding its business practices, Herbalife is taking every opportunity to tell its own story to the public and policymakers.

In July, a dozen Herbalife members traveled from five states to Washington, D.C. Their mission: to meet with representatives in Congress and personally communicate their experiences with the nutrition company—the kind of legislative relationship building promoted by the Direct Selling Assocation. To learn more about Herbalife’s meetings with Congress, DSN reached out to Eric Rosen, Vice President of U.S. Government Relations at Herbalife.

DSN: What was the main takeaway these members hoped to communicate to their representatives?

ER: Our members visited their elected officials to talk about the real way Herbalife is helping them live healthier, more active lifestyles and supporting them to own their own business.

Each Herbalife member around the country works hard to have a healthier lifestyle, and in some cases, have their own businesses. Being in Washington, D.C., gives our members the opportunity to share their stories with elected officials and educate those in Washington about the important role Herbalife plays in their lives.

DSN: What was a highlight of the day?

ER: There were a lot of beautiful moments from our fly-in, but the conversation between Andres Gaspar, an Herbalife member from Alabama, and staff in the Office of Representative Gary Palmer (R-AL) was particularly memorable. Andres was very emotional when he talked about his previous work doing manual labor to support his family, including seven children. It was hard work and never enough, but through Herbalife, dedication and discipline, he now has the means to provide a good home and education for his family while promoting a product that is helping his community live a healthier life. He went on to say that for an immigrant like himself, this was more than he could ever dream. It was clear that the congressional staffer understood the deep impact Herbalife has had on the entire Gaspar family and the high regard they have for the quality of the product.

DSN: Does Herbalife plan to coordinate these meetings on a regular basis?

ER: Our fly-in program has allowed people from around the country to come to Washington, D.C., and represent their fellow 550,000 Herbalife members in meetings with elected officials. Through our fly-ins, we have empowered our members by helping them speak directly to their congressional representatives. We plan on continuing this program going forth.

DSN: What else is Herbalife doing right now to educate lawmakers about its business model?

ER: Herbalife’s efforts to explain its role as a global nutrition leader to policymakers in Washington and around the world are ongoing. We visit with elected officials in their districts, in the halls of Congress, and at events around the country to make them aware of the opportunities Herbalife products offer people who are interested in living healthier lives and working towards personal financial goals. We will continue to seek creative ways to give lawmakers a chance to interact with our products and learn more about Herbalife.

September 01, 2015

Cover Story

Direct Selling’s Strength in the World’s Billion Dollar Markets

by Andrea Tortora

Direct selling continues to gain ground worldwide, with global retail sales and the total salesforce both reaching record highs in 2014.

The World Federation of Direct Selling Associations (WFDSA) estimates that retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013, with all regions and three-quarters of direct selling countries posting gains. The total salesforce grew by 3.4 percent in 2014 to 99.7 million people, up from 96.5 million in 2013. All of which lights the stage for coming geographic shifts in market dominance.

“The most recent figures highlight the increasing opportunities that direct selling offers,” says WFDSA Chairman Doug DeVos. “Customers seek personalized service and quality products, and direct sellers are able to meet those needs in a way that is convenient and enjoyable. At the same time, people who aspire to earn a little extra or launch a full-time business venture are drawn to direct selling due to its flexibility and pay-for-performance structure.  It’s exciting to see more people, both customers and distributors, enjoying the benefits of direct selling.”

As part of WFDSA’s annual global statistics gathering, data is collected in local currency figures, which are then converted to U.S. dollars using 2014 exchange rates for all years. When comparisons are made to determine year-over-year change, this practice eliminates the impact of currency fluctuation, explains Judy Jones, Market Research Insights Leader at Amway and Chair of the WFDSA Global Research Committee. The 2015 report comes with an expiration date of May 2016, when the next year’s data will be published. For some markets, sales are estimated until the respective country reports its official figures to the WFDSA. At that time, actual data is restated and accounted for the next year.

These most recent figures confirm direct selling’s strength and its ability to keep reaching more people—as sellers and consumers—in all corners of the globe. The industry’s 6.5 percent three-year compound annual growth rate (CAGR) from 2011 to 2014 is evidence of that power.

The Top 5 countries account for 61 percent of all global sales. All but one report a positive CAGR (2011-2014):

  1. United States, 4.9 percent
  2. China, 18.7 percent
  3. Japan, -2.3 percent
  4. Korea, 8.1 percent
  5. Brazil, 6.7 percent

In all, 23 countries posted retail sales from direct selling of $1 billion or more in 2014. That group accounts for 93 percent of global sales from direct selling.

Leading the pack of the Top 5 countries once again is the United States, where the 2014 sales of $34.5 billion set a record and grew by 5.5 percent from the prior year. The U.S. CAGR for 2011 to 2014 is 4.9 percent. There are 18.2 million people who distribute products, up 8.3 percent from 2013. Nearly 75 percent are women, which means 14 million females are building their own businesses.


Overall estimated retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013.


Companies that are members of the U.S. Direct Selling Association (U.S. DSA) employ 55,300 people who are highly trained experts in their field. For example: 3,000 employees are science professionals, including chemists, biologists and engineers.

“Robust salesforce and revenue figures only tell part of the story behind direct selling’s success in the United States and around the world,” says Joseph N. Mariano, President of the U.S. DSA. “Our channel also provides tremendous professional opportunities to thousands of individuals committed to sound science, product integrity, ethics and a superior customer experience. As the direct selling channel continues to grow, so too will new prospects with companies across a wide variety of industries.”

The China Factor

Despite the growth in the U.S., all eyes are on China. With 2014 sales of $30.2 billion, it is growing ever closer to claiming the No. 1 spot among the world’s billion-dollar direct selling markets. China’s phenomenal year-over-year growth rate of 18.6 percent puts it on pace to bump the United States to the No. 2 spot in 2015, as long as current growth trends continue, predicts DIR Group Management Co. Ltd., a Wuhan City-based firm that provides industry research and consulting to direct selling companies in China.

DIR Group Management subsidiary and consultancy Syncplex predicts China will continue to grow in retail direct selling revenue for 2015. According to Syncplex CEO and Founder Lau Chong Guan, “The number of licensed companies is on the rise and should reach 70 by the end of 2015. The Chinese government granted 15 new licenses as of July 2015, and there is rapid growth among new companies.”

China’s $30.2 billion in 2014 sales, as recorded by the WFDSA, only includes licensed companies. Syncplex believes there is another 20 percent in sales recorded by companies without licenses, which would bring the China market close to $36 billion in 2014.

Clearly, China is a country primed for direct selling. Its growing middle class has money to spend and is eager to experience a wide range of consumer goods, including health and wellness products that focus on prevention. At the same time, transportation issues that once made it difficult to get products to consumers in rural China are less of an issue today.

For the bulk of direct selling companies, China will remain an intriguing market to observe. Only the very largest direct sellers based outside the country—such as Amway, Avon, Herbalife, Mary Kay, Nu Skin and Oriflame—have achieved success in China. As well, several Chinese and Asian players have been successful, for instance, Perfect, Infinitus, Joymain and Tiens. Still, growth in the market is likely to be concentrated among a few players. Here’s why:

China’s relationship with direct selling began in the 1990s, when Avon entered the country. Scandals among other companies caused the Chinese government to ban direct selling in 1998. When China joined the World Trade Organization in 2001, it agreed to reopen its doors to direct selling, which it did in 2005. Today there are about 50 licensed direct selling firms operating in China. The official number of independent consultants is unknown.

During the ban, companies that first entered China, including Avon and Amway, evolved their business models to comply with Chinese law. This meant opening standalone retail stores (called specialty shops) that allowed for continued sales and a brand presence. Despite the ban, direct sellers that operated retail outlets maintained growth rates and grew their market share in cosmetics and toiletries from 2000 to 2005. Stores expanded at rates between 2 percent and 5 percent, and direct sales grew between 4 percent and 9 percent.


The industry’s 6.5 percent three-year compound annual growth rate (CAGR) from 2011 to 2014 is evidence of direct selling’s strength and its ability to keep reaching more people in all corners of the globe.


To avoid a repeat of earlier scandals, in 2005 the Chinese Ministry of Commerce put strict rules in place to obtain a direct selling license. The process is complicated and lengthy. However the government did loosen up rules for online sales. It wants online shopping to account for more than 5 percent of China’s total retail sales by the end of 2015. To achieve that goal, Chinese officials are encouraging multi-channel sellers that operate traditional stores to offer online shopping.

Today, direct selling fits nicely into China’s current economy and cultural outlook. The person-to-person interactions dovetail with the cultural aspect of guanxi or “doing business with people you know. “

“More people want to be entrepreneurs, and so direct selling, in fact, provides them with the opportunity to invest small to start their own business,” Brian Liu, a senior manager at DIR Group Management, says via email.


China’s phenomenal year-over-year growth rate of 18.6 percent puts it on pace to bump the United States to the No. 2 spot as soon as next year, some industry experts believe.


Claiming a Spot on the World Stage

From the Chinese perspective, there are two major direct selling markets in the world: one is the global market minus China, and the other one is the China market. The ability to use Internet sales and smartphones in direct selling embraces China’s entrepreneurial spirit.

Social media channels such as WeChat let consultants create online “micro-shops” to promote and sell their products, and many of these online stores use a simple multi-level payout structure, says DIR Group Management President Brian Cai.

\Native and international companies are keen to tap the China market, especially pharmaceutical firms. Two new healthcare and beauty product firms began direct selling operations in 2014—Taiwan-based Orient Pharmaceutical and Shandong Province-based Sanzhu Fuer Pharmaceutical. Both make medical and health products. Other established native Chinese direct sellers are eager to show off their success while rewarding their salespeople with tours around the world.

In May 2014, Perfect China (a seller of health food, household, beauty and skincare products) sent 7,000 distributors on a tour of California. The group logged 12,000 hotel room nights at 30 hotels. It was the largest single group meeting from China to ever visit the U.S., says the Anaheim/Orange County Visitor & Convention Bureau. The event generated $85 million in revenue for the region’s economy.

This May, the Tiens Group, which offers healthcare products, booked more than 4,700 rooms in 79 hotels in France to take 6,000 consultants on a four-day excursion to celebrate the company’s 20th anniversary. The trip generated $20 million in revenue.

In the same month, Infinitus, a direct seller of modern Chinese herbal products, sent 12,700 consultants, sellers and customers on six-day trips to Thailand. The company sent people in groups of 2,000 to 3,000 to visit Bangkok and the beach town of Pattaya. Thailand’s tourism officials reported an economic impact of $18 million, according to published reports.


Today, direct selling fits nicely into China’s current economy and cultural outlook. The person-to-person interactions dovetail with the cultural aspect of guanxi or “doing business with people you know.”


Surrounded by Growth

Direct retail sales and direct sellers are on the rise across the globe, as WFDSA data illustrates.

Asia is by far the largest region for direct sales in 2014, claiming 45 percent of global retail sales. China, Japan and Malaysia make up 64 percent of that. The three-year CAGR for the region is up 8.4 percent to $81.5 billion.

Ten of the 23 billion-dollar markets are from the Asia/Pacific region:

2: China

15: Thailand

3: Japan

19: Australia

4: Korea

20: Philippines

9: Malaysia

22: India

12: Taiwan

23: Indonesia

The Americas account for 37 percent of 2014 retail sales. South and Central America generate 17 percent, and the United States and Canada combine for 20 percent. The three-year compound sales growth rate for this geographic sector is up 5.9 percent to $67.4 billion. The region claims seven of the 23 spots:

1: United States

16: Peru

5: Brazil

17: Canada

7: Mexico

18: Argentina

14: Colombia

 

Europe is the world’s third largest region for direct sales. As a whole, it delivers 17 percent of retail revenue. Of that 17 percent, 75 percent is from Western Europe and 25 percent takes place in Central and Eastern Europe. The region’s three-year CAGR is 3.4 percent to $32.6 billion. Six of the top markets are European:

6: Germany

11: Russia

8: France

13: Italy

10: United Kingdom

21: Poland

Africa and the Middle East, together, account for roughly 1 percent of global direct retail sales.

As one might expect, Asia is home to the most people participating in direct selling as independent consultants. Its salesforce grew 1.6 percent in 2014 to 51.1 million people, according to the WFDSA. The Americas jumped 5.7 percent to 33.1 million sellers. Europe climbed 4.4 percent to 14 million distributors.

Emerging Markets

China and other Asian countries, plus emerging markets in Latin America, are fueling much of the industry’s growth. Emerging markets as a whole produced 45 percent of all 2014 direct retail sales, an increase of 7 percentage points from 2010 to 2014.


In 2014, Argentina had the highest year-over-year growth among the billion-dollar markets with 37.7 percent, as well as the highest three-year cumulative growth rate with 28.8 percent.


It can be interesting to look at what’s driving growth in individual countries. The national economy, government regulations, technology and social media, and a rising consumer class all play a role. Emerging markets as a group have experienced a three-year CAGR of 10.7 percent. Advanced or more developed markets posted compound annual sales growth of just 3.5 percent for the same period.

In 2014, markets with the highest year-over-year growth are:

  • Argentina, 37.7 percent
  • China, 18.6 percent
  • United Kingdom, 10.9 percent
  • Colombia, 10.4 percent

Countries with the highest three-year cumulative growth rate are:

  • Argentina, 28.8 percent
  • China, 18.7 percent
  • Philippines, 17.6 percent
  • India, 12.3 percent
  • Indonesia, 11.3 percent

Latin America offers huge potential for direct selling, says Roberta Kuruzu, Executive Director of the ABEVD, the Brazilian Association of Direct Selling Companies. Many residents are seeking new earning opportunities to supplement their household income, and governments are launching programs to encourage national economic development and foreign investment.

Direct selling companies “need to address their efforts to understanding the tax and legal aspects of the model,” Kuruzu says. Other important aspects include working to understand the logistic processes of navigating a large country like Brazil or other less developed markets.

In Colombia, a government plan called Pipe 2.0 was designed to generate investment in education, infrastructure, housing, industrial production, mining and tourism. The plan is expected to create 322,000 jobs and juice the economy by up to 3.5 percent, says Netherlands-based business operator TMF Group.


Amway’s adaption strategy in China of employing the Chinese people and featuring Chinese models in advertising could pay off in other emerging markets, Chairman Steve Van Andel told Fortune magazine in 2014.


But in Colombia, like in many other countries, starting a direct selling business that succeeds depends on being able to navigate the local culture, in-country regulations, and laws and licensing processes.

Amway’s strategy in China could pay off in other emerging markets, Chairman Steve Van Andel told Fortune magazine in 2014. He noted that in China, Amway employees are Chinese and advertising features Chinese models. “We always took the approach from the beginning that we need to make sure that when people look at our business, even though they know it’s a U.S. business, they know it’s been adapted to China,” he says.

Van Andel says Amway was not as grounded as it could be in Latin America, and would be working to change that.

In China, companies that incorporate the preferences, history and beliefs of consumers are finding huge success. Nu Skin recently built a new regional headquarters and is capitalizing on its anti-aging treatments. Amway constructed a Nutrilite plant research center in the country, the first facility for its brand of vitamins, minerals and dietary supplements.

Amway also launched a dedicated social media channel in China called Amway Plus, as well as cloud service through WeChat. These offerings let members interact directly with Amway, access member privileges and accumulate points through purchases.


“Brazilian consumers like to receive recommendations from each other. Brazilians are very relational people who enjoy being together and exchanging experiences.”

—Roberta Kuruzu, Executive Director, ABEVD (Brazilian Association of Direct Selling Companies)


Wellness, Cosmetics and Personal Care

Direct sellers provide customers with a wide variety of products and services, from cosmetics to utility services. Many consultants were product users before becoming company representatives, and some choose to use the products themselves and not sell them at all.

This works perfectly with the social selling aspect of direct selling, which was discussed at length at the WFDSA World Congress in 2014 as the original social network. For more than 100 years, the industry has used personal recommendations in an organized way of doing business, Kuruzu says.

“Social media tools are a powerful way to leverage the relationship skills that direct selling has always had,” she says. “Nevertheless, we believe that social media or digital life will never replace the personal contact.”

But for those who do, product categories in beauty, personal care and wellness are the most popular. This holds true globally and regionally.

2014 global sales by product category:

  • Cosmetics & Personal Care: 34 percent
  • Wellness: 29 percent
  • Household Goods & Durables: 13 percent
  • Clothing & Accessories: 7 percent
  • Utilities: 3 percent
  • Financial Services: 3 percent
  • Books, Toys, Stationery: 3 percent
  • Home Care: 2 percent
  • Home Improvement: 2 percent
  • Foodstuff & Beverages: 1 percent
  • Other: 3 percent

Cosmetics and personal care along with wellness items are the top two product categories in each region for which data is available. Household goods, home improvement, and clothing and accessories round out the third slot in the various regions (see below).
2014 regional sales by Top 3 product categories:

Asia

  • Cosmetics & Personal Care: 25 percent
  • Wellness: 39 percent
  • Household Goods & Durables: 17 percent

North America

  • Wellness: 30 percent
  • Cosmetics & Personal Care: 18 percent
  • Household Goods & Durables: 15 percent

South & Central America

  • Cosmetics & Personal Care: 66 percent
  • Wellness: 18 percent
  • Clothing & Accessories: 8 percent

Western Europe

  • Cosmetics & Personal Care: 24 percent
  • Wellness: 26 percent
  • Home Improvement: 13 percent

Central & Eastern Europe

  • Cosmetics & Personal Care: 61 percent
  • Wellness: 16 percent
  • Clothing & Accessories: 7 percent (tie)
  • Household Goods: 7 percent (tie)

Data is not available for Africa and the Middle East as a region. But in South Africa, cosmetics and personal-care items claim 40 percent of direct retail sales, followed by household goods (26 percent) and wellness products (17 percent).

Regional Spotlights

In Brazil, which is the No. 5 market with 2014 sales of $13.0 billion and a CAGR of 6.7 percent, the country’s economy is struggling, says Kuruzu, of the ABEVD. “Despite that, direct selling is a very good opportunity for people who are unemployed and looking for extra or a main source of income,” Kuruzu says. The country’s cultural aspects are the perfect environment for direct selling, says Kuruzu. “Brazilian consumers like to receive recommendations from each other,” she says. “Brazilians are very relational people who enjoy being together and exchanging experiences.”

Russia is the 11th largest market for direct selling. Its $3.6 billion in 2014 sales set a record for the country. Growth is a bit slower here than in other nations, but sales remain strong. Russia’s CAGR is 1.6 percent from 2011-2014. Look for that number to grow as more residents sign on to be independent consultants. The field grew by 7.6 percent to 5.4 million people, and 88 percent are women. Such growth is a good indicator of coming sales increases.

There are 19 member companies in Russia’s DSA. The group employs 6,743 people. One-third of the businesses make their products in Russia while 40 percent outsource to Russian suppliers. Some firms do both. And 70 percent of Russia’s direct selling entities operate national head offices within the country.

Argentina posted 2014 direct retail sales of $1.8 billion, making it the 18th largest market on the globe. Those sales are a record for the nation and calculate to a year-over-year increase of 37.7 percent. Fast growth is likely to continue, as evidenced by a CAGR of 28.8 percent and an expanding salesforce.


Turkey is about to break into the billion dollar club. With 2014 sales of $877 million and a year-over-year growth rate of 10.5 percent, the market is backed by a strong growth curve.


There were 715,000 distributors in Argentina, up 2.1 percent from 2013. Of those, 95 percent are women who own their own businesses. Argentina’s 11 DSA member firms employ 3,621 people and are heavily invested in manufacturing their products within the country’s borders. Thirty-six percent of direct selling member companies make their products in-house and 73 percent outsource to other Argentine companies.

Australia is No. 19 among billion-dollar direct selling markets with $1.4 billion in sales in 2014. That’s up 5.4 percent since 2013. The country, which is home to popular spice maker Your Inspiration at Home, counts a field of 557,000 distributors. Seventy-eight percent of sellers are women. The salesforce grew by 10.2 percent last year. Combined with cumulative three-year growth of 3.9 percent, the country should continue to post strong sales figures.

Poland is now the 21st largest direct selling market in the world. Its 2014 sales were $1.2 billion, marking a record year for the European country. Poland’s compound growth rate from 2011 to 2014 is 5.2 percent.

Women dominate the Polish direct selling salesforce, making up 87 percent of the 970,933 independent consultants. The number of distributors grew by 7.9 percent in 2014. In addition, Poland DSA’s 22 member direct selling companies employ more than 1,500 people.

Indonesia is the world’s 23rd largest direct selling market with 2014 sales of $1.1 billion, up 8 percent from 2013. The nation’s double-digit CAGR of 11.3 percent bodes well for continued growth. The salesforce of 11.7 million people grew by 14.5 percent last year. DSA member companies employ 3,472 people.

Direct selling firms in Indonesia have developed a robust supply chain. Among member companies, 1 in 5 operates manufacturing centers in Indonesia and 2 in 5 outsource to other Indonesian suppliers.

Turkey is about to break into the billion dollar club. With 2014 sales of $877 million and a year-over-year growth rate of 10.5 percent, the market is backed by a strong growth curve. The country’s CAGR is 5.4 percent from 2011 to 2014. Turkey is also growing its salesforce, up 2.1 percent in 2014 to 1.1 million sellers. Women make up 84 percent of that group.

The Turkish DSA includes 10 member companies that employ 702 people. Only two of the member companies are based in Turkey. The others support their in-country operations from regional infrastructure centers outside of Turkey. The WFDSA says this “provides a strong example of the interdependence of nations and how direct selling helps attract direct foreign investment to a market.”

September 01, 2015

Company Spotlight

Jeunesse: One of the Industry’s Youngest Companies Takes the World by Storm

by Courtney Roush


Company Profile

Founded: 2009
Headquarters: Altamonte Springs, Florida
Executives: Randy Ray, CEO; Wendy Lewis, COO
Products: anti-aging
2014 Net Sales: $419 million


The typical growth strategy of a direct selling company is to establish roots in one’s home market, develop a brand, generate buzz, and then look to expand overseas. Jeunesse, a direct seller devoted to healthy and youthful living through a suite of skincare and nutritional products, took that approach and flipped it on its head.

“We were looking at U.S. companies who had great momentum initially, but who then would reach a saturation point around $700 million to $900 million. They couldn’t break the $1 billion mark,” explains Scott Lewis, Chief Visionary Officer and son of Co-Founder and COO Wendy Lewis. So, while a lot of new companies might spend their first year stateside and focus their resources on the creation of a marketing brand, Jeunesse quickly turned its attention to global infrastructure in the Asia Pacific region. Taiwan was the company’s first international market, followed by Hong Kong and Indonesia.

The result? In a matter of six years, Jeunesse has grown to have a presence in more than 120 countries, including 32 offices and 40 distribution centers, and a worldwide independent salesforce of 550,000. The company closed out 2014 with $419 million in global sales. Eighteen of its markets post sales of more than $1 million per month. “Our strategy of diversification has set us up for success and sustainability,” Scott says. Perhaps the most exciting aspect of this growth, he adds, is that “none of our markets are anywhere close to saturation. In fact, as of last month, the company is already on a growth rate of over 190 percent compared to last year’s numbers.”


“Our strategy of diversification has set us up for success and sustainability. …None of our markets are anywhere close to saturation.”

—Scott Lewis, Chief Visionary Officer


Focused on Longevity

Jeunesse—which fittingly means “youth” in French—launched at 9 p.m. Eastern Time on Sept. 9, 2009. That’s 9 on 9/9/09, by the way, and it’s no coincidence; the number 9 signifies longevity in Chinese.

The company follows an “A to Z” checklist for market openings, though the details vary based on region-specific factors. “We adapt to the local market as much as possible, and the right leaders are absolutely essential,” Scott continues. “Probably the most challenging aspect is working with the local DSA and regulatory ministries, presenting our business structure and compensation plan, getting approval, determining such details as whether we’ll need a pay-in [cash] or pay-out system [interfacing with local banks and uploading commissions into direct deposit].”

He continues, “Rather than investing mostly in marketing and branding, we chose to invest our resources in establishing international infrastructure. It’s been a full-time, behind-the-scenes effort, but by the time we refocused on the U.S. late last year, we’d already worked through most of the challenges that come with international expansion. We wanted to get all of that out of the way our first few years so we could meet the expectations of our distributors in the U.S.” 

Last year, during the company’s annual conference (called EXPO, and held in different locations every year), executives proposed an ambitious goal of a $50 million month—and, thanks to an army of distributors, they did just that last October. Jeunesse announced a record for monthly sales revenue in June 2015, with a grand total of $120 million in global sales. More than 116,000 new distributors started a Jeunesse business that same month. “In 2015, we are focused on hitting $1 billion—we’re already more than halfway there,” says Wendy, who was named one of DSN’s Most Influential Women in Direct Selling in 2012 and 2014. She leads the company with her husband Randy Ray, who is Co-Founder and CEO.


“[We chose rapid international expansion because] we didn’t want to be at the mercy of any one country. …Spreading out to as many countries as possible, economic conditions begin to balance each other out.”

—Wendy Lewis, COO


Jeunesse ranked No. 258 on the 2014 Inc. 5000/500 list, with a three-year growth of 1,788 percent (revenue in 2010 was $11.9 million; revenue in 2013 was $224 million). This list measures the three-year revenue growth of 5,000 companies in the country, the first 500 being in the top 10 percent of private companies in America. To accommodate this rapid surge in growth, Jeunesse just acquired a new 130,000-square-foot headquarters in Heathrow, Florida, and on Sept. 1 opened Jeunesse West, a 40,000-square-foot facility in Draper, Utah, with 150 staff.

One significant milestone that could push Jeunesse closer to that $1 billion goal is its March acquisition of nutritional products direct seller MonaVie and its health and fitness brand, myntTM. Although the integration process has been gradual, leadership of both companies hope the acquisition creates the perfect product experience for consumers while maximizing distributors’ potential for sales.

Jeunesse isn’t alone in its pursuit of the magic formula that can hit the pause button on the aging process, facilitate weight loss or otherwise promote improved quality of life. According to the U.S.-based market research firm Transparency Market Research, the global anti-aging industry is expected to exceed $191 billion by 2019, while the global weight-management industry is said to exceed $650 billion by the end of 2015, with the United States representing the largest share.

Wendy adds that Jeunesse’s rapid international expansion gave them a competitive edge in these arenas and stemmed from the decision that “we didn’t want to be at the mercy of any one country. The economy may be doing great in one market, but taking a temporary downturn in another. Tax rates are different among the markets. Spreading out to as many countries as possible, economic conditions begin to balance each other out.” Jeunesse now has a presence in Africa (Nigeria and South Africa) and the Americas (Mexico, Latin America, the United States and Canada), plus an extensive presence in Europe (Israel is included in this category, along with 19 other countries) and an expanded Asia Pacific region that includes Australia, Taiwan, Japan, Korea, Thailand and Malaysia as well as others.


Jeunesse has grown to have a presence in more than 120 countries, including 32 offices and 40 distribution centers, and a worldwide independent salesforce of 550,000. The company closed out 2014 with $419 million in global sales.



Recruiting the best regional management experts they can find, Randy, Wendy and Scott have taken great care to learn local business laws, establish entities, register formulas and products, and obtain licenses and proper labeling in each new overseas market. It’s not an easy process by any means, but standard operating procedures and, above all, listening skills, have helped clear the pathways. “Some companies come into foreign markets and want do things the ‘American way,’ but to be successful, you need to adapt to local cultures and customs,” Scott says. It helps, too, that Randy and Wendy’s background includes founding and later selling nationally ranked medical software and computer hardware companies, as well as providing back office solutions for startups, so they were familiar with some of the challenges inherent with any new business launch.

Needed Treatment Opens the Door

The concept for Jeunesse was born when Randy Ray, suffering from eroded cartilage in both knees, was seeking stem cell treatments. Randy had heard about Dr. Nathan Newman, a Beverly Hills, California, cosmetic surgeon renowned for his work with stem cells. Newman’s injectable procedure was designed to regrow cartilage using a patient’s own stem cells from fatty tissue.

Jeunesse's Emerald ExperienceSales leaders take a boat excursion during Jeunesse’s Emerald Experience in Hawaii.

While receiving treatment from Newman, Randy found out that eliminating knee pain wasn’t the only thing these stem cells could do. Newman also had the world’s only stem cell skincare facial serum that could minimize premature aging without scalpels or lasers. Randy and Wendy tried the serum, and the proverbial light went on. The couple had years of experience in the direct selling industry, first as distributors and later as company owners. Collectively, they’d taken several companies public and had no illusions about the hard work ahead of them, but they felt direct selling would be a great vehicle to get a youth enhancement system into the hands of global consumers and improve the quality of their lives.

The result was Jeunesse’s flagship product, Luminesce, a cellular rejuvenation skincare serum that represented an enhancement to Newman’s formula. While the company set its foundation on stem cell technology’s ability to utilize growth factors to support the body’s natural power to renew, restore and rejuvenate the skin, “we didn’t want to just be a skin care or nutrition company,” Scott says. Instead, the company set out to create a niche with its Youth Enhancement System (YES). Following the international launch of Luminesce, Jeunesse next ventured into the nutritional arena with Reserve, a gel-based antioxidant supplement. In 2013, the company’s product scope expanded with the launch of Finiti, a supplement designed to slow down the aging process by adding length to critically short or damaged telomeres, which are attached to chromosomes and are linked to aging.

Co-foundersCo-founders Wendy Lewis and Randy Ray pose last year with two of the six Stevie Awards Jeunesse won for marketing, philanthropy and innovation.

Even while the company, based in Altamonte Springs, Florida, was working feverishly to develop its international infrastructure, the U.S. market has been thriving in its own right. Last year, though, is when explosive growth happened on home soil. During its Jeunesse University event in Orlando, Florida, attendees were treated to an on-stage demo of Instantly Ageless, an anti-wrinkle microcream that provides “over the top, dramatic results,” Scott says. Once the product was in the hands of representatives and their customers, they began posting demonstration videos online, which went viral—so much, in fact, that “Inside Edition” and the “Rachael Ray Show” reported on the product because it was creating a stir on the Internet.

At the same time, Jeunesse launched in the United States Zen Bodi, a trio of weight-management products designed to cut cravings, burn fat and build muscle through a holistic approach that supports the youth enhancement concept. A supporting “Zen Effect” contest encourages consumers to share their before-and-after photos and transformation stories for the opportunity to win prizes ranging from a vacation to a shopping spree to cash. Collectively, Instantly Ageless and Zen Bodi have proven to be a revenue-generating powerhouse for the company and its domestic distributors. Prior to the products’ launch in November, Jeunesse’s U.S. market was averaging about $2.5 million in revenue per month. In 120 days, revenue would increase to $15 million per month in the United States. This explosive growth could be a sign of things to come; the Instantly AgelessTM and Zen Bodi lines have begun rolling out to eager audiences in Jeunesse’s Asia Pacific markets.


Perhaps due to the founders’ expertise in the technology sector, distributors have access to tailor-made technology, including the “J-World” marketing system, comprised of back office, social and mobile components.


Given the company’s geographic reach, its distributor demographics are extremely diverse, though, like much of the industry, skewed toward the female population. Perhaps due in part to Wendy and Randy’s expertise in the technology sector, distributors have access to technology that was tailor-made for them, including the “J-World” marketing system, comprised of back office, social and mobile components. J-Social, part of this marketing platform, is more than a connection to Facebook and Twitter. This system allows Jeunesse to build a shopping cart and video widget within any social media environment around the world. For a global company, this can be invaluable when dealing with so many individual markets. Distributors can create promotional video campaigns, sync them to the contacts in their mobile phones, and send them via MMS. The videos contain tabs that allow the recipients to call or text their Jeunesse distributors with a single click. For training purposes, distributors also are given a “J-Drive,” a bracelet synced to the J-Cloud and preloaded with presentation videos and tools, making their education completely portable. Scott credits this emphasis on technological innovation, along with the company’s commitment to scientifically backed products and a family-oriented culture, for a recent uptick in Gen Y distributors in North America. “We’re a truly multigenerational company now,” he says. “We’ve broadened our reach, and now we’re able to tap into ages 25 to 60-plus.”


“As long as Wendy and I are in this industry, we’ll be focused on others—helping them improve their lot in life.”

—Randy Ray, CEO


Trips are among the primary means of recognition distributors enjoy. Having just arrived home from Cancún the night before, Wendy rattles off a few of the other destinations she’s visited with the salesforce over the years—an African safari, the Greek Isles, Tahiti, Dubai, Southeast Asia—“all of the things on my bucket list,” she says laughing. Randy adds, “We’re taking people places they’ve always wanted to go, but where they’d never treat themselves to a vacation.”


Through its charitable organization, Jeunesse Kids, Jeunesse has established a new collaboration with international nonprofit Free the Children.

Joining Forces to Help Children

“As long as Wendy and I are in this industry, we’ll be focused on others—helping them improve their lot in life,” Randy says. That compassion and spirit of family reaches well beyond the relationships between employees and distributors. Leveraging its worldwide network, the company’s own charitable organization, Jeunesse Kids, has a history of partnering with like-minded charities to deliver food and life-saving resources where they’re critically needed.

In September 2014, during the aforementioned EXPO in Macau, Jeunesse announced a new collaboration between Jeunesse Kids and international nonprofit Free The Children. Through this partnership, Jeunesse Kids is working to build infrastructure in some of the world’s most challenged regions, and relieve the burdens of poverty, exploitation and lack of access to education. Employees and distributors have contributed through monetary and in-kind donations to the Adopt a Village Program, which supports community development in eight countries. This support has led to the construction of more than 650 classrooms and provided clean water, health care and sanitation to approximately 1 million citizens worldwide. Construction was just completed on a school in rural China, and another project in Kenya is in the works. Distributors currently have the opportunity to earn an incentive trip to see the completed village in China, an exciting opportunity to witness and contribute to the company’s greater mission to serve children in need.

What’s the long-term plan for Jeunesse? The company’s goal is to continue nurturing its expansive roster of global markets, enabling Jeunesse to become more deeply entrenched in the regions in which it has spent the last six years working to make a name for itself. “We’ve established a good footprint around the world, and we’ll keep working to ensure the smooth delivery of products and a vast opportunity for those markets,” Randy says.

“We’re very much a company with a long-term vision,” Scott adds. “We’ve diversified in such a manner that we have a strong global platform, a world-class brand, a sustainable infrastructure. Jeunesse has a family culture with a lot of heart and passion. We’ve established our culture of Generation Young, which is defined by looking young, feeling great and living life to the fullest. We have room to grow 100 percent next year due to our diversification. I believe whole-heartedly that Jeunesse is going to be one of the great legacy companies in network marketing.”

September 01, 2015

Company Focus

FuXion Biotech: Bringing the Abundance of the Ancient Amazon to America

by Lin Grensing-Pophal


Company Profile

Founded: 2006
Headquarters: Lima, Peru
Founder: Álvaro Zúñiga Benavides, Chairman and CEO
Products: nutritional beverages made from Andean, Amazonian and Oriental fruit and vegetable extracts
2014 Net Sales: $80 million


Álvaro Zúñiga BenavidesÁlvaro Zúñiga Benavides
Rafael Zúñiga BenavidesRafael Zúñiga Benavides

FuXion Biotech is a small-to-mid-size company with origins in Peru that is poised to make a market push into the United States. Its products have gained traction in its current markets, and its tagline, “We Improve Your Life,” has resonated across Latin America. Will the company be able to leverage past experience and sell its commitment to “True Health” in a competitive North American consumer climate?

The Science and Passion behind FuXion

In 2006, driven by his passion for a healthy lifestyle, Álvaro Zúñiga Benavides founded FuXion. The company sells beverages, teas and shakes made from Andean, Amazonian and Oriental fruit and vegetable extracts, products that draw from his 10 years of experience in the functional foods industry, which is rooted in the conviction that certain foods can have an impact on health that goes beyond simple nutrition.

Álvaro has long been passionate about the potential that certain foods contain. That passion has led him to his current position as Chairman and CEO in the company he founded, a large and growing direct sales organization, which also manufactures its products. The initial funding of the company came from friends and family, most notably from Derek and Frank Mitchell, two of Álvaro’s childhood friends who grew into successful entrepreneurs, and from his brother, Rafael Zúñiga Benavides, who was an investment banker in Europe at the time, now serving as an Executive Board member.

Álvaro’s interest in nature, invention and innovation began at a young age. As Rafael explains, “His curiosity never ended. He was always trying to understand how to improve nature’s healing effects through homemade food recipes.” That passion evolved into FuXion’s business mission to help people improve their lives in a journey for True Health and the transformation such a focus could make. For FuXion, True Health involves three aspects of health: physical, emotional and financial.


FuXion concentrates on “True Health” and the transformation such a focus could make by leveraging three aspects of health to help people lead more fulfilling lives: physical, emotional and financial.


FuXion was founded on the strong belief that ancient knowledge of millenary cultures could be leveraged using modern biotechnology. The company’s products are made by merging more than 1,500 active ingredients extracted from natural foods and combining them in unique formulations with modern technology to multiply the benefits of each. Álvaro calls this process “nutraceutical fusion,” and it is based on his years of study in obtaining the active ingredients from specific foods and blending them with other food ingredients, enhancing them with micronutrients.

But, while ancient knowledge and modern biotechnology fuel the creation of FuXion’s products, it is the passion behind the personal transformation processes that really distinguishes the firm, Rafael stresses. The company’s corporate staff, their distributors and customers are part of a big family, he says. They embody “Latin passion,” a combination of passion, joy and above all love for family, which he notes is not a passion that resides only within Latin America, but that can be embodied in people from any nation and any culture.

A Commitment to Direct Sales

FuXion executives found direct sales to be the natural choice for reaching out, engaging and educating customers about the significant benefits of its products. Traditional advertising and sales simply didn’t offer the means to convey all of the information about the products without significant cost.

“It was logical that we should use word-of-mouth and grassroots person-to-person sales to really get the message out about our products,” says Beatriz Z. De Los Heros, Chief Marketing Officer. In addition, she notes, the traditional sales channel couldn’t address the emotional and financial health components necessary for True Health.


“We take our time to properly enroll people, to let them fall in love with our True Health promise and make sure they are ready to give the same vision to the people they bring into the business.”

—Renato Pastor, Chief Operations Officer


FuXion’s almost 50,000 active distributors, supported by a team of 600 FuXion staff members, share the company’s passion. “We have strong teams with dynamic leaders who recruit fast, but not so fast that they lose people along the way,” says Renato Pastor, Chief Operations Officer. “We take our time to properly enroll people, to let them fall in love with our True Health promise and make sure they are ready to give the same vision to the people they bring into the business.”

Training is a key area of focus for the company, including online training classes. But business basics are only a part of what’s covered in FuXion’s personal transformation program. In order to deliver on the company’s tagline “we improve your life,” Renato says the company’s training program—called SerFuXion (translated to BeingFuXion in English)—provides workshops, courses and life experiences that support the company’s vision. That vision is embodied, he says, “not only in our products, training and compensation plan, but also in our distributors and customers’ pursuit of an abundant and balanced lifestyle.”


Today, the company has sales of more than $100 million a year; Peru is the largest market, followed by Ecuador and Colombia.


Other business building enhancements include an in-process conversion of back office services that will allow distributors to better utilize the company’s online presence and will provide more powerful and flexible metrics to help them to better understand their businesses.

Each year distributors and other guests gather at an annual convention, which serves as a forum for celebration and learning. The most recent—Alumbra 2015—was held in Lima and was a “smashing success,” says Renato. “We had 10,000 distributors and guests from several countries,” he says. Numbers were almost double from the previous year and so high that FuXion had to erect a temporary building because no other venues, except sports stadiums, were large enough to host such a crowd.

Lina OrellanaLina Orellana

FuXion’s annual awards dinner—Cena de Gala—will be held in Hawaii in early 2016 and Alumbra 2016, the company’s annual convention, will be in Medellin, Colombia.

Renato’s passion is evident and clearly shared by his colleague Lina Orellana Zimbrón, the head of FuXion’s North American operations, who came to the company with experience gleaned from other large direct sales companies. Despite her experience with other successful firms, Lina says of FuXion: “It is incredible—this is a phenomenon for me.” She says she has never before seen the level of interest in, and excitement about, a company and its culture before, even while working with much larger direct sales organizations. Specifically, she points to attendance at FuXion’s recent Alumbra event in Peru. “It grows year by year,” she says.


More than 80 sales leaders and guests enjoy the rich culture and luxurious experience of Dubai as they recognize personal goals reached as well as company growth.

A Careful Yet Passionate Approach to Growth

Today, the company has sales of more than $100 million a year; Peru is the largest market, followed by Ecuador, Colombia and Costa Rica. Still, growth has been modulated and planned. The same approach will be used as FuXion expands into the U.S.—a move that bodes well for the company as executives expect a burgeoning interest in health and wellness, spurred to a large degree by an aging baby boomer population not as complacent about moving into their “golden years” as former generations. 


“We are really trying to get close to people. We are always trying to understand their needs to assess in which areas of life we can add value and help them improve.”

—Lina Orellana Zimbrón, Head of North American Operations


“We believed that we needed to develop our systems and our supply chain appropriately before really pushing into the U.S. market,” says Rafael. “And now we are poised to do just that.” The U.S. market is the most developed market in the world for direct sales, and he adds: “We believe the U.S. is primed and ready to create True Health.” FuXion established an office in Dallas at the end of July and will formally announce its entry into the U.S. market during the fourth quarter. “The entry into the U.S. is a major milestone for our firm as we expect our U.S. operations to grow within two to three years into our largest operation internationally,” says Rafael.

The company has taken its time to plan and prepare for this move, assembling and preparing teams and investing in human resources and IT platforms to support its growth.

“Since we had our team in place last year, we have invested significant time, effort and resources to renew our IT platform and computer systems, leveraging our original platform with the support of leading players in the software industry,” says Rafael. In July the company launched a new IT platform, which will allow real-time, online interactions with distributors and their customers. Improved back office systems and robust data, information and reports will make “running the business that much easier and fun,” Renato adds. “We are now in a position to help our distributors target the key positions within their organizations that need work, assess whether previous initiatives have borne fruit and define where their efforts will have the maximum payoff.”


“FuXion is merging the knowledge of ancient Andean, Amazonian, Mesoamerican and Asian cultures with the latest scientific advances in cell biology and human nutrition to provide products that achieve unique results.”

—Álvaro Zúñiga Benavides, Chairman and CEO


Lina agrees that patience is one of the drivers of FuXion’s success. “Obviously we want to grow—we want to grow as big as possible. But we are not in a rush.” At FuXion, she says, it’s not just about attracting distributors and customers to the company, but retaining them. “When we enroll new people we want to have time to talk to them and put them in the same state of mind that we are. We want to give them time to fall in love with the company, to adhere to our mission.” The goal, she says, is “not only to bring people into our movement, but to convert them into raving fans.”

Toward that end, the company trains distributors to work personally with their customers to assess where they are in terms of all three elements of True Health: physical, financial and emotional. “We are really trying to get close to people. We are always trying to understand their needs to assess in which areas of life we can add value and help them improve,” she says. That patient approach capitalizes on people and their ability to connect with and engage others, a philosophy that drew company leadership to the direct sales model in the first place.

The Future for FuXion

The company’s growth has been fueled by passion: the passion of Álvaro’s early interests in invention and innovation, the passion of those who helped to fund the company’s launch, the passion of distributors and staff and, perhaps most importantly, the passion of the growing number of customers who have embraced the health potential of FuXion’s uniquely crafted products. The success of the company’s recent annual event is evidence of this passion. To ensure ample space and a health and wellness-focused venue for future events, as FuXion expands exponentially, the company has purchased 75 acres of land in the Amazon, near Iquitos, with plans to build an “experience center” called FuXionLand. The project includes building a convention center that will serve as a gathering point for distributors and their customers from around the world, says Álvaro. FuXionLand will be comprised of four components:

  • A convention center where training will take place,
  • A lodge and spa where guests can focus on their emotional wellbeing, relaxation, meditation and massage;
  • A separate area devoted to fun and exercise, which will include activities as part of the Amazon adventure; and
  • A biotech lab that will be the focus of research and product development.

FuXion plans to grow its Research & Development organization significantly, says Rafael. “We have made a strategic alliance with the Universidad Nacional de la Amazonía Peruana (UNAP) to work together in a number of research initiatives, and we are also starting new relationships with universities in the U.S. and Spain to continue exploring new product initiatives to strengthen our portfolio for the whole family,” he says.

The company’s manufacturing and food-processing technology division also is expanding, with three major initiatives planned over the next three years:

  • A new automated manufacturing plant in the south of Lima (Lurín) that will allow increased capacity of 10 times in modular investments,
  • The expansion of production activities into Ecuador and Venezuela, and
  • Extraction capabilities with modern technologies in the Amazon.

In 2016, says Álvaro, “We will continue to grow following our customer base, and we plan to open Argentina and Brazil in South America and we will start our first inroads into Europe through Spain while starting to explore the Asian markets.”

Having reached a goal of $100 million in sales currently, the company’s next goal is $500 million in the next three years. If attained, Álvaro says, “We’re going to take our 100 top Leaders to a great place in Asia for an amazing adventure.”

September 01, 2015

Industry with Heart

Trades of Hope: A Sisterhood of Compassionate Entrepreneurs

by Jeremy Gregg

Photo: Trades of Hope co-founders and home office staff gather for fun and fellowship.


Company Profile

Founded: June 2010
Headquarters: Bunnell, Florida
Founders: Chelsie Antos, Elisabeth Huijskens, Gretchen Huijskens, Holly Wehde
Products: Ethically produced fashion accessories and home décor


Five years ago, two moms had an idea: What if we could work with our daughters to create a business that changed the lives of women around the world?

Both women were at a crossroads in their own lives. Holly Wehde was a pastor’s wife who had just survived a heart attack at the age of 40, and Gretchen Huijskens was struggling over the limited impact that she felt she was making through a nonprofit that she co-founded in Haiti. The two met in a home school co-op meeting and instantly bonded over their common faith and their shared commitment to service.

Soon thereafter, Wehde went to a home party sponsored by one of her friends. As she looked around at all of the people who were having fun eating and looking at jewelry, her thoughts turned to the women that Huijskens had described to her. Instantly, she had a vision for how she could build a home party business that could make a sustainable impact on Haitian women’s lives. She soon shared that vision with Huijskens, and they agreed to invite Wehde’s daughter Chelsie and Huijskens’s daughter Elisabeth to join them.

Trades of Hope launched in June 2010 with the mission to “empower women out of poverty through sustainable business.” The company utilizes home parties to sell handmade fashion accessories and home décor that are created by women artisans from around the globe. The company now has almost 2,000 distributors—called “Compassionate Entrepreneurs”—in 49 states throughout the country.

A Sisterhood Built on Social Media

The founders initially focused on their local market by hosting home parties in Palm Coast, Florida. The enthusiastic reception for the products, and the way that customers embraced the stories of the artisans, confirmed that the company was on the right path.

A simple step then allowed them to transform the future of their business: creating a Facebook page to promote Trades of Hope as a missional opportunity.

“The four founders were out shopping at a fair trade store to brainstorm ideas and discuss next steps. And suddenly, my husband starts texting me to say that his phone is blowing up because he is getting Facebook messages from people all over the country who found our page within two days of going online,” says Wehde. “And we looked at each other and just said, ‘Wow, we have a real business!’ ”


“The diversity of backgrounds, experiences, and ages are something that we really enjoy about our sisterhood. More than a certain age or demographic, we want people who have a heart for helping others.”

—Gretchen Huijskens, Co-Founder


Today, more than 11,000 people are following Trades of Hope on Facebook. The company typically posts several times per day, not only with updates on its products but also with stories about its artisans, links to articles related to the mission of lifting people out of poverty, and inspiring posts that carry messages about the founders’ faith. In fact, other than Facebook, the company’s only source of marketing has been word of mouth.

“We have a wide range of women who want to be a part of Trades of Hope,” says Huijskens. “The diversity of backgrounds, experiences, and ages are something that we really enjoy about our sisterhood. More than a certain age or demographic, we want people who have a heart for helping others.”


Erin, a top CE was provided the opportunity to meet with artisans in Haiti, including Gina and her baby, Christnelle (pictured).

A Global Vision for Women

The leaders of Trades of Hope are unabashed about the higher calling that drives them to grow their company.

“We believe that God called us to start this business,” says Huijskens. “There are hurting people around the world because they lack the same opportunities that we do simply because of where they were born. Charity is a bandage that sometimes makes situations worse for people in developing countries. We don’t want to be a bandage: We want to be a solution for struggling women and their children.”

Huijskens first traveled to Haiti about 13 years ago. Taken aback by the intense poverty she encountered, she decided to co-found a nonprofit that included an orphanage, school, and medical clinic. She ran the organization for eight years as its president but decided that she needed to do something else after the earthquake in 2010, when she realized that the depths of poverty in Haiti could not be addressed through charity alone.

Faces of Hope

Ya, a Cambodian artisan, shows the detail of her work.

Trades of Hope’s social media channels are filled with moving images and gripping videos about their artisans. In one video, Co-Founder Gretchen Huijskens interviews women in Cambodia who have survived acid attacks. As a result of the permanent disfiguration of their faces and bodies, these women are ostracized by society and even put out on the street by their own families.

“The women who are now Trades of Hope artisans have a way to earn money for themselves and their children where they are valued and treated with respect. They are regaining their self-confidence and feel purposeful about helping other survivors find hope for the future,” says Huijskens.

In Bangladesh, many of the artisans came to Trades of Hope after escaping the sex trade. The company engages them in making soap, which symbolizes a clean break from their old way of life. They imprint each bar with their thumbprint in wax to create a very clear symbol to the buyer of the connection between the purchase of the soap and the “hand up” that they have given to these women.

Artisans typically make far more selling through Trades of Hope than they would selling in their local market. Being able to make a fair wage allows them to take care of their families, send their children to school, and have real hope in a better future.

She explains, “I believed that sustainable business was the long-term solution to poverty. Through Trades of Hope, we offer sustainable incomes that have changed lives over the past 4.5 years. We very often hear stories of women who were able to own a bed for the first time. Women who are sending their children to school. Women who are building their own houses. These women motivate us every day.”

Trades of Hope offers women in developing countries a way to provide for their families by selling their handcrafted products through an army of direct selling consultants. The products are marketed as “ethically produced” using fair trade principles as outlined by the Fair Trade Federation and the World Fair Trade Organization (WFTO). The WFTO sets standards for organizations and also monitors and audits them to ensure compliance.

Currently, Trades of Hope works with groups of artisans in countries such as Guatemala, India, Uganda, Haiti, Costa Rica, Bangladesh, Cambodia, Peru, the Philippines, and Nepal. They also work with a group of artisans in the U.S. who are part of a nonprofit that supports women who have survived lives of violence, prostitution and addiction. Working in partnership with local artisan co-ops and nonprofits, Trades of Hope provides the artisans with a chance to earn a living wage that is estimated at six times the amount that they would otherwise make. For example, in Haiti more than 50 percent of the country earns less than $1 per day. The minimum wage is about $5 per day. The artisans in Haiti are able to earn around $15 per day—enough to provide adequate shelter and food, and put 2.5 children in school. Through Trades of Hope’s partner organizations, the artisans also have access to additional community outreach programs such as water purification systems, medical clinics, and assistance with educational expenses.


The company’s products are marketed as “ethically produced” using fair trade principles as outlined by the Fair Trade Federation and the World Fair Trade Organization.


The artisans are not employees of Trades of Hope, but they are independent artisans who are paid by the co-ops and nonprofits from whom Trades of Hope purchases the products. To work with a group, Trades of Hope requires that they have someone on the ground, preferably an English-speaking resident of the U.S., to organize the artisans and to facilitate product ordering and sales. The groups also are required to sign a Fair Trade Principles Agreement that guides all areas of their production and business practices, from how they treat artisans to how they protect the environment. Several of the groups also are able to provide health care to their artisans. All local operations are managed by the local contact with whom Trades of Hope maintains weekly communication to ensure that everything is running properly.

“Charity work, ministry and an entrepreneurial spirit, mixed with a strong desire to make a positive impact on others, lead to Trades of Hope,” says Huijskens.

A Solid Financial Opportunity

A Generational Impact

One of the most popular stories shared by distributors in Trades of Hope is the story of Gina, an artisan from Haiti.

Gina was originally found going door-to-door looking for an orphanage to take her baby girl, Christnelle. Gina loved her baby but simply could not afford to feed her. She eventually met a member of Trades of Hope’s local team, who gave her the opportunity to try making beads to earn an income.

Gina immediately accepted, and today both she and her baby are thriving. Gina now has a consistent, fair income and Christnelle spends her days in the safe environment of the organization’s day care. And each night, the two are able to go home together.

“They are the perfect example of the purpose of Trades of Hope and the successes of orphan prevention through job creation,” says Huijskens.

Last May, a team of Compassionate Entrepreneurs went on a Vision Trip to visit the artisans in Haiti. They were able to meet Gina and visit baby Christnelle in the nursery. The experience, Huijskens explains, allowed them to see first-hand the direct impact that they are facilitating by selling Trades of Hope products.

Along with its focus on lifting its artisans out of poverty, Trades of Hope offers its consultants a compensation plan that is competitive within the direct selling industry. These Compassionate Entrepreneurs (CEs) can earn up to 37 percent on their own personal retail sales in addition to what they can earn by building a team. Huijskens reports that the company already has identified women who have replaced their full-time salaries through Trades of Hope.

“Through the party plan model, Trades of Hope creates a dignified partnership between women in the United States and women in 15 developing countries around the world,” she says.

CEs purchase kits between $99 and $399, which provide them with an array of samples to market at home parties. The company does not require an auto-ship, as the items are intended to serve as display items so that CEs can take orders.

“Because of direct selling, our Compassionate Entrepreneurs are creating an end-to-end economically sustainable business and changing the world for thousands of families,” says Huijskens. Although the company does sell products directly to customers through its website, the vast majority of its sales are through the distributors themselves.


Trades of Hope has been growing at an average rate of 300 percent per year for each of the past three years. The company anticipates gross revenue of $8 million by year end.


One of the key incentives offered by Trades of Hope is called a Vision Trip. Several times a year, the leadership team takes groups of 12 to 16 CEs to Haiti, Guatemala, and Costa Rica. The trips provide them with opportunities to meet and spend time with some of the artisans who craft the products that the CEs sell in the U.S. This offers them a chance to hear directly from the artisans about how the partnership with Trades of Hope has positively changed their lives. These experiences frequently become life-changing moments that further fuel the CEs’ determination to build direct selling teams through purposeful recruiting.

Putting a Face to a Mission

To engage customers in supporting its broader mission of alleviating poverty, Trades of Hope produces videos that introduce the world to the artisans who create the company’s products. Several feature the company’s founders or their local partners in countries like Uganda or Haiti, but most are centered on the women who are at the heart of their mission: artisans like Florence.


Trades of Hope utilizes home parties to sell handmade fashion accessories and home décor that are created by women artisans from around the globe.


Sitting outside of a plain brown building, Florence is brightly dressed in a red-and-gold scarf while holding bracelets that she is crafting for Trades of Hope. As the video begins, one of her daughters cheerfully bounces in and out of the frame while wearing a huge smile. Florence, a 45-year-old Ugandan artisan who is also a former Sudanese refugee and a war survivor, beams with pride as she shares her story:

“I feel so happy about my business. I want to be really financially independent, for the welfare of my children and the orphans I take care of. It’s something which makes me become… so free. It’s my own money. I’m also one of the local leaders of the government. When I see the beauty of women putting on these things that I make, the jewelry and the bags, I feel so proud. I see the real beauty of the ladies out of the work of my hand. And when I see it all over, I really feel I am also a great woman in this nation.”

She shares how, thanks to Trades of Hope, she is able to put her children through school. Her only son is now attending college, and she also is able to take care of many of the orphans who are unfortunately prominent in her part of Uganda.


“I don’t want to be a beggar. I want to get money out of the work that I do and help other women in the community to have a job. …If they are earning money, there is peace in their home.”

—Florence, Ugandan artisan


“I don’t want to be a beggar,” she says. “I want to get money out of the work that I do and help other women in the community to have a job. I can now train them free of charge. If they are earning money, there is peace in their home. They are happy. Their husbands are also happy. And if there is peace in their family, there is peace in the community; and if there is peace in the community, that means that economically we are supporting our nation, Uganda.”

Through Trades of Hope, women like Florence are rewriting their stories. They are no longer victims or survivors: They are international designers and business women.

Planning for Growth

Trades of Hope has been growing at an average rate of 300 percent per year for each of the past three years, with 100 percent of its sales in the U.S. The company anticipates gross revenue of $8 million by year end.


“Charity is a bandage that sometimes makes situations worse for people in developing countries. We don’t want to be a bandage: We want to be a solution for struggling women and their children.”

—Gretchen Huijskens


Currently, the company’s four leaders share the same title of co-founder. Wehde and Huijskens serve in more of an executive capacity, allowing their daughters to focus on their own areas of expertise: Antos oversees operations, and Elisabeth Huijskens handles the graphic design and branding initiatives.

“We see that soon we will need more clear lines so we can be more effective. We are growing rapidly this year, and we completely expect this path of exponential growth to allow us to be a wave of change in villages around the globe,” says Huijskens. “We have a team of Compassionate Entrepreneurs who are passionate about empowering women around the world.”

September 01, 2015

Executive Announcements

Executive Announcements, September 2015


Top USANA Executives to Share CEO Role

Dave WentzDave Wentz
Kevin GuestKevin Guest

USANA Health Sciences Inc. announced that the board of directors has appointed Dave Wentz and Kevin Guest as Co-CEOs of the company. Wentz, the son of USANA’s Founder and Chairman Dr. Myron Wentz, will oversee USANA’s global operations, while Guest will lead USANA’s worldwide field development and sales efforts.

“As USANA approaches the $1 billion revenue milestone, the board is preparing for the next chapter of growth,” said Dr. Myron Wentz. “With USANA’s expanding global presence, and the demands on the chief executive position, the board determined that a division of responsibilities within the CEO role would maximize USANA’s potential.”

Wentz and Guest have both been with USANA for many years—Wentz since 1992 and Guest since 2003—where they have served in various executive roles.

Wentz, USANA’s current CEO, is fresh off a one-year leave from the company, which he took to recharge and spend time with his family. He continues to direct the vision of USANA and works closely with the company’s executive team and board of directors.

Guest most recently served as President of USANA, overseeing all of the operations, marketing, and recognition for the company worldwide.

USANA also reported that Paul Jones, Chief Financial Officer, has been appointed Chief Leadership Development Officer, where he will be responsible for the key role of overseeing USANA’s global executive development and succession planning program. Jones will continue his CFO responsibilities while the company initiates a search for a new Chief Financial Officer.


Richard T. Riley Joins Tupperware Brands Board of Directors

Name

Tupperware Brands Corp. announced that Richard T. Riley has been elected to the company’s board of directors, joining 11 other board members.

“We’re delighted to add Richard to our board,” said Rick Goings, Chairman and CEO. “His breadth of knowledge in global and emerging markets will contribute valuable expertise to our leadership team. This addition reflects our continuing goal to tap into emerging markets and we look forward to his contributions.”

Riley is a CEO with almost four decades of hands-on experience leading successful public and privately held businesses in a wide variety of industries.

He is currently the independent chairman of the board of Cimpress, N.V., an international market leader in personalized products and services for small businesses. He has served in senior executive positions with Lojack Corp., New England Business Service Inc. and Rapidforms Inc., after beginning his career at Arthur Andersen & Co.


4Life Makes Additions to C-Suite

David VollmerDavid Vollmer
Andrew WeeksAndrew Weeks

4Life has enhanced its leadership team with the appointments of David Vollmer, Ph.D., as the company’s Chief Scientific Officer and Andy Weeks as Chief Information Officer.

Vollmer joined 4Life in 2013 with more than 15 years of experience in quality control and analytical laboratory management, primarily in the pharmaceutical industry. Previously, Vollmer served as the company’s Vice President of Quality and Analytical Services. Since joining 4Life, Vollmer has been responsible for numerous quality processes, as well as the implementation of 4Life’s analytical laboratory, which validates the potency, purity, and quality of all 4Life products. 

Weeks has been with 4Life for 15 years and served in the areas of technical support, programming, and systems development. Most recently, he held the title of Vice President of Software Development. He holds a degree in Business Information Systems from Utah Valley University.


New Chief Sales Officer Joins LifeVantage Team

Justin RoseJustin Rose

Following the April appointment of Darren Jensen as CEO, wellness and anti-aging brand LifeVantage is making another change to its executive team. The Salt Lake City-based company recently introduced Justin Rose as its new Chief Sales Officer.

“Justin will play an integral role as a member of the new leadership team being assembled to stimulate the future growth of LifeVantage,” Jensen said of the brand’s new CSO.

Rose is no stranger to the industry, having spent the past two decades in sales and marketing roles at a series of direct selling companies. In his most recent position, Rose headed up regional sales development, sales incentives, distributor events and recognition, call center operations, and field training and support for North America.

“I look forward to enhancing the partnership between the Distributors in the field and the corporate office by implementing programs and incentives that better align field performance with corporate objectives, and stimulate the company’s long-term growth,” Rose said.


Mannatech’s Al Bala Takes on New Role as CEO

Al BalaAl Bala

Nutritional and wellness company Mannatech has promoted its President, Al Bala, to CEO.

Bala gives his passionate support to the company’s sales Associates and has been a key contributor to bringing Mannatech back to profitability. He has 35 years of experience working in the direct sales industry, with 28 of those spent as a field sales leader. He joined Mannatech in 2007 and rapidly increased his responsibilities at the company, ascending to the position of President in June of 2014. Bala also played a crucial role in Mannatech’s expansion into 15 countries since 2007, including South Africa, Mexico, Scandinavia and soon, Colombia.

“In Al Bala, Mannatech has a leader with a deep understanding of the daily effort it takes to succeed in the direct sales industry, as well as someone who knows how to build internationally,” said Stan Fredrick, Chairman of Mannatech’s Board of Directors. “We’re fortunate to have that person serving Mannatech as its President, and delighted to also have him now serve as CEO.”

In 1992, Bala left a position as manufacturing plant manager for Bose Corp. to launch a full-time direct selling career. Before joining Mannatech corporate, he was a field sales leader at a leading direct selling company, where his team launched operations in more than 65 countries.


iNovaLife Appoints Carlos Rey as Vice President Of Sales

Carlos ReyCarlos Rey

Carlos Rey has been hired as Vice President of Sales at iNovaLife, a Canada-based membership savings company. According to Founder and COO Martin LeBlanc, he will be integral in the consolidation of the company’s Canadian presence and execution of its international expansion.

“Connecting with Carlos Rey was very refreshing, and bringing someone in who understands and had success in the service industry was part of our growth strategy in Canada,” said LeBlanc.

Rey has created more than one large direct selling organization, having reached high levels in two of the industry’s largest companies.

An immigrant from Cuba, Rey learned to love entrepreneurship from his father who owned his own business. After Hurricane Andrew destroyed the family business, Rey found direct selling.

“Since then, we have helped thousands of people around the world to become financially independent and have found my real purpose in life, helping others succeed.”

iNovaLife, founded in 2014, has a mission to improve people’s quality of life through offering the consumers the opportunity to realize significant savings on a range of services, including insurances, mortgages, credit cards and home renovations.


LR Group Strengthens Management Team

Thomas StoffmehlThomas Stoffmehl

As part of its ongoing international growth strategy, LR Group decided to further reinforce the management team by appointing Thomas Stoffmehl as CEO. Through his leadership, LR will support its promise of “More quality for your life,” which focuses on brand development, innovation leadership, increased standardization of the business model, and digitalization as well as strengthening the company’s global presence.

As former CEO of bofrost*, a German distributor of high-quality frozen foods, Stoffmehl contributes his long-standing experience in direct sales as well as knowledge in managing an international company with gross revenue of more than 1 billion Euros.


Annique CEO Appointed South Africa DSA Chairman

Ernest du Toit, CEO of South African direct selling company, Annique Health and Beauty, was appointed Chairman of the Direct Selling Association of South Africa at a recent directors meeting in Johannesburg.  He will replace out-going chairman, Richard Clarke.

Du Toit’s career has seen him develop his skills in marketing, sales, strategy development and general management, over more than 20 years. In 2007 du Toit assumed management of and ultimately acquired Annique Health and Beauty, a company founded in 1971 that exports its products to 18 countries worldwide and has over 15,000 active Consultants.

He became a Director of the DSA in 2002 and has served as its vice chairman for the past five years. He was furthermore appointed as a board member of the World Federation of Direct Selling Association (WFDSA) in 2013.

September 01, 2015

Working Smart

A Board of Directors Brings a Fresh Perspective to Private and Public Companies Alike

by Nicholas Sakelaris

Even the most savvy entrepreneurs have their limitations.

They start out in familiar territory, doing what they do best, until the initial wave of success carries the company and its leadership team to uncharted waters. The great unknown can be a daunting challenge. Should they go public? Should they expand to new lines of business? Should they acquire a competitor? The array of potentially life-and-death decisions can seem endless.

“Many things are new even to management with great backgrounds,” says Don Kendall, Founder of Kenmont Capital, a Houston-based investment firm. “No management team knows everything.”

To fill that gap, some privately held direct selling companies lean heavily on boards of directors, including Dallas-based Stream, where Kendall is a board member. Unlike their publicly held counterparts, private companies voluntarily choose to have a board of outsiders help with everything from hiring C-level executives to the overall strategy of the company. These boards aren’t federally regulated; as a result, they can appear enigmatic to the business community at large. To gain more insight into this powerful tool for assisting private companies with corporate governance, Direct Selling News reached out to company executives, board members and other experts. Their input revealed the high value of having a strong, diverse sounding board of outsiders that regularly engages and challenges company management.

Boards in Action

Stream has had a board of directors since inception 10 years ago. CEO and President Mark “Bouncer” Schiro and CFO Renee Hornbaker are the two company representatives on the board. They sit alongside Kendall; Steve Glasgow, a partner at Austin-based RAM Investment; and Rob Snyder, Managing Director of Dallas-based SnyderCapital Corp. and the original founder of Stream. The company posted net sales of $918 million in 2014, up nearly 6 percent from the previous year, ranking it the 9th largest direct selling company in North America, according to Direct Selling News research.

Stream’s board played an important role in directing a new component of its growth strategy: venturing into the hyper-competitive wireless industry, selling phones and wireless plans. Unlike retail electricity sales, which are restricted to deregulated markets, wireless services can be sold practically anywhere, opening up new opportunities for the company and its independent contractors. But this also was a calculated risk with a million different possibilities. Should the company outsource aspects of the new business with which its team is less familiar or develop the expertise in-house? How many people should Stream hire? Is now the best time to do this? The board provided key counsel throughout the process.

“Any new business you go into takes a capital cost and a people cost, and obviously what you want to do is make sure it makes sense and vet it at the board level,” says Kendall, who was already an investor in Stream as an individual and through his own company when he joined the board five years ago. He brought years of experience from running a billion-dollar power generating company in addition to his investment experience. “Where could it go wrong? Anticipate things that could be more difficult.”


“Many things are new even to management with great backgrounds. No management team knows everything.”

—Don Kendall, Founder, Kenmont Capital


Stream’s board also was involved when the company hired Hornbaker in 2011. Corporate governance is a point of passion for Hornbaker, who currently serves as President of the Dallas chapter of the National Association of Corporate Directors.

“In many ways, we try to act like more of a public company board,” she says. “If the company should ever desire to go public at some point in the future we would already have the process in place and it would be a more seamless transition.”

All in the Family?

Many private companies in the direct selling industry are run by a small group of people, even family members. That’s where companies can run into trouble.

“You begin to be guilty of intellectual incest,” said Stan Fredrick, who has owned several direct-selling companies and is a past chairman of the U.S. Direct Selling Association. “You’re only thinking and rethinking the same thoughts. You need people who have a better perspective.”

Fredrick has extensive experience in the boardroom. In addition to having outside board members work with some of his privately held direct selling companies, he also currently serves as Chairman of the Board at publicly traded Mannatech Inc., a nutrition product company in which he is a significant shareholder. Outside direct selling, Fredrick also was a founding board member of the Professional Bank in Dallas, a boutique bank, and Co-Founder of the Texas-based commercial holding company Irving National Bank Shares.

Experts in finance, legal issues, information technology and compliance, not to mention ethics and public image, are needed for success in the marketplace today. Outside boards of directors can provide an additional level of corporate governance by looking at financial results, approving the budget and evaluating performance of the company on behalf of investors. For less-established companies, they also can provide new contacts and references that the management team couldn’t otherwise access. For more established businesses, a board of directors may assist management in positioning a company for an initial public stock offering, as an attractive merger partner or simply to help guide the team through a period of explosive growth.

“I think the private companies, they don’t have anybody looking over their shoulder. …If they have some outside board members who can give them straight advice, they’ll be better off,” Fredrick says.

Building a Board

No one tracks data on the boards of privately held direct selling companies, but a look at the boards of directors for publicly traded direct selling companies provides some insight into the diverse approaches available when creating a board. Equilar Inc., an executive compensation and corporate governance data firm, analyzed the most recent proxy statements for 19 direct selling companies. Among the companies included in the research, board size ranged from two directors at Youngevity International and Natural Health Trends to 15 directors at Herbalife. Total board compensation also spanned a wide range, from zero at ForeverGreen Worldwide to $7.7 million at Herbalife, with many board members receiving compensation through a mix of cash fees, stock and option awards, and other pay.


“If the company should ever desire to go public at some point in the future we would already have the process in place and it would be a more seamless transition.”

—Renee Hornbaker, CFO, Stream


Just like their publicly traded brethren, private companies need objective viewpoints, people who will really challenge management based on their business acumen, not whether it helps or hurts their investment. They make decisions that they believe are best for the company as a whole.

“You want a variance of opinion,” says Equilar Director of Content Dan Marcec. “You don’t want people all from the same background, all from the same line of thinking. I think that objective viewpoint is very important to help management look at their decisions from an external point of view.”

These board members can help private companies make the leap for an IPO or acquisition or even a possible takeover, Marcec says.

Though independent board members should be compensated for their work and have their travel expenses covered, establishing and maintaining a good board doesn’t have to be overly expensive. Quality business experts can cost as little as $1,000 a meeting, Fredrick says. Wineshop at Home, a private direct-sale company owned by Fredrick and his family, has one outside board member. That board member is an expert in compliance, a top issue facing direct selling companies today. But a formal board of directors isn’t the only option. Outside advisers also can be brought in with specific expertise and no ties to the company. In addition to its board of directors, Wineshop at Home uses an advisory board to provide guidance on legal and finance matters.

Thirty-One Gifts, a Columbus, Ohio-based women’s apparel and accessory company, utilizes a seven-member board of outside advisors. The privately held direct selling company was founded in 2003 and has grown increasingly complex in recent years, today boasting more than 100,000 sales consultants. In 2012, the company reached a fork in the road as it weighed a possible international expansion. That’s when management decided to add an advisory board that included expertise from a wide range of disciplines. 

“We felt like it was the right time in our life cycle that we wanted to have seasoned executives to help us,” CFO Jon Snyder said. The advisory board has provided guidance for the company’s expansion into Canada and helped Thirty-One Gifts make its first acquisition. Unlike a traditional board, these advisors don’t have voting rights and can’t make decisions for the company. They are compensated for their time and have their travel costs reimbursed.

“We leverage our advisors quite a bit for strategic planning and business planning,” Snyder says. “They are really a sounding board for the CEO.”


“Today, when there are so many challenges to our form of business model you want to make sure that your structure and the actual implementation of issues passes an outsider’s evaluation.”

—Stan Fredrick, Chairman of the Board, Mannatech Inc.


Value Proposition

Boards of directors play an invaluable role as outside observers working on behalf of investors or the company itself. Veterans of the direct selling industry have shown the benefits of enlisting the help of objective, independent voices for your company’s most important decisions. Outsiders aren’t there to make friends. They bring fresh perspective that stimulates new thought, challenges the status quo and takes on bad corporate governance. The return on investment could come from higher profits, avoiding devastating mistakes or growing the company in ways you never dreamed possible.

“Today, when there are so many challenges to our form of business model you want to make sure that your structure and the actual implementation of issues passes an outsider’s evaluation,” Fredrick says.

September 01, 2015

Top Desk

Equal Access to Equal Justice

by Jeff Bell

As I approach my first full year as Chief Executive Officer of LegalShield, I am awed by how quickly time has passed and how humbled I am to serve this great company and cause. While I am proud of the things I’ve done previously at Ford, Chrysler and Microsoft, I am truly inspired by our mission at LegalShield. We want to improve people’s lives—both our members and independent sale associates. 

We believe that to participate fully as U.S. and Canadian citizens, people must live freely under the law. We seek to help our members take control over their lives and to exercise their full rights. We want them to understand the laws under which they live and to seek the advice and counsel of a law firm whenever they need it so that they live in confidence and with peace of mind. We have a profound belief in free enterprise and entrepreneurship, and we desire more Canadians and U.S. citizens to start their own home-based businesses. In short, we believe in equal access to equal justice and in the North American promise of opportunity and liberty.

We are so committed to direct selling that we proudly strive to be the best direct selling company in North America. But given our mission, we also profoundly believe that we can do well while we do “good” for others. We believe it is what sets us apart. Because, while every age faces “the best of times and the worst of times,” the challenges we face as a society, especially in the United States, demand our service.

The LegalShield leadership team and the leaders of our network marketing and direct selling organization acknowledge that in the aftermath of several recent events that have involved violence and community unrest, some members of our society feel that they are not equally protected or represented under the law. Regardless of the reason that people feel disenfranchised, we embrace every citizen’s right to free speech and assembly, albeit peaceful. By the very definition of our existence as a company, we champion the rule of law.


We believe that to participate fully as U.S. and Canadian citizens, people must live freely under the law.


We accept that our judicial system is not perfect, but it is designed to constantly improve. Moreover, we advocate education and civic engagement. We promote conversation and dialog for progress and inclusion. The manner by which the Canadian and U.S. judicial systems were created necessitates that laws must change. A major force is the consistent pressure for the rule of the law to evolve towards greater transparency and accountability, and at all times the access to our judicial system must be open to everyone.

Faith in our justice system—that everyone is entitled to have their day in court—is so basic to our country that sometimes it seems like we litigate everything. The right to have our disputes, whether criminal or civil in nature, settled by an impartial judge or jury is more than important; it is at the very heart of the U.S. and Canadian constitutions and our national identities. If anything could be more fundamentally North American than the right to vote, this would be it: Every citizen, regardless of age, can become involved in a court decision, and no one has to register to be a juror, plaintiff, defendant, witness or victim.

Central to our concept of justice is impartiality. The figure of Justice is traditionally depicted as wearing a blindfold precisely because she cannot do her work if she favors (or fears) one party or another because of their appearance, their position in society, or any factor other than the specific facts of the case. No one wants to be prejudged as inherently dangerous, criminal, violent, dishonest, etc., solely based on their skin color, gender, the way they are dressed or their profession. We all want the opportunity to explain our actions. Only an impartial court of law affords us that opportunity.

At the same time, only competent counsel for all parties can enable a just outcome. Our system of justice is built around an adversarial process, where advocates represent their parties’ positions before an impartial judge or jury, who attempt to determine the truth of the case. In such a system, parties who lack access to an advocate cannot hope to obtain justice. This is true whether one is charged with a heinous crime or a misdemeanor, whether the legal action is criminal or civil. If access to counsel is a privilege of wealth, rather than a right for all, we will have injustice and a loss of faith in the system.


We must demand as citizens that the judicial system be held fully accountable to constantly improve its performance.


Perhaps, like many people, you sometimes watch news coverage of court decisions and ask yourself, “What was the jury thinking? I could have made a better decision!” But again, if you’re like many people, when that jury duty summons arrives, you get creative trying to find ways to get out of serving. Instead, view this as your chance to participate in the justice system, making it more perfect by your own actions. An active and informed citizenry is a benefit for all of us.

Our founding fathers understood well that as human beings in an imperfect world we might at times have to settle for justice that falls short of perfection, but it is justice nonetheless. As James Madison, the fourth president of the United States, said, “If men were angels, no government would be necessary.” The genius of our system is not that it’s perfect, but that we expect and strive for continuous improvement. Sometimes, that improvement comes through far-sighted reform, and sometimes it comes through painful experience.

Rather than separate groups circling their various wagons, let’s use this as an opportunity for engagement, education and transparency. For example, while they may feel criticized or embattled, police departments could take this opportunity to proactively engage with the communities they serve, helping them understand their policies and procedures.

More than anything else, we must demand as citizens that the judicial system be held fully accountable to constantly improve its performance. In a healthy republic, authority cannot be separated from accountability. As citizens, we need to know more about how our system should function, and how it actually functions. Get educated, especially in the area of civics, and serve your communities and nation to improve our system of government, including the judicial system.


Jeff BellJeff Bell is CEO of LegalShield.

September 01, 2015

DSA News

Building Our Brand With Policymakers

by Paul Skowronek


Smart companies that recognize the advantages of the direct selling channel in growing their businesses understand that building their brands around robust corporate social responsibility programs helps them establish legitimacy and trust with consumers, whose expectations continue to rise. 

To succeed at building the direct selling channel’s brand with a policymaker audience over time, however, DSA—in partnership with our members—must credibly demonstrate the value of the channel by injecting it into policy conversations of the day.

This is precisely what we did in late July when DSA played a key role in helping American Action Forum (AAF), a prestigious Washington, D.C., policy think tank, orchestrate an event about the rise of the independent worker and the proliferation of technology. This was to help policymakers better appreciate the value of direct selling, which, of course, is among the most established entrepreneurial opportunities.

Rodan + Fields President and CEO as well as DSA Vice Chair Lori Bush stated that the direct selling channel allowed her company and consultants to succeed by breaking out of the glass counter, allowing consultants to set their own hours, create their own business plan and determine how to best serve their customers. Rodan + Fields consultants found the business to be an attractive alternative to otherwise successful careers that did not afford the work-lifestyle balance they sought. 

Commissioner Maureen Ohlhausen of the Federal Trade Commission also delivered an important message: The still-nascent market for working independently in the 21st century needs to continue to develop before officials consider how to strike the right balance between encouraging entrepreneurial business opportunities and protecting customers.

So long as news stories about Uber, technology and the sharing economy continue to proliferate—raising questions around workplace fairness, the status of independent contractors and related issues—there will be a need for policymakers to better understand that direct selling is one example of working independently done right. 

Rodan + FieldsRodan + Fields President and CEO Lori Bush shares with policymakers how direct selling helped her company in ways retail could not.

DSA will continue to seek out opportunities for direct selling to be part of enlightened conversation in this and other areas. While we will always need to fight often difficult legislative battles in the states and here in Washington, D.C., that could diminish direct selling if lost, we also can bolster the image of the channel over time. We can accomplish this if we become more astute at explaining our value proactively, and most importantly, in a manner that isn’t overtly self-serving and that resonates with a policymaker audience.

To learn more about the July 30 AAF event, please visit: http://goo.gl/5sn4YX.


Paul SkowronekPaul Skowronek is the Senior Vice President, Public Affairs of the U.S. DSA.

September 01, 2015

New Perspectives

The Impact of Integrating the Code of Ethics into Your Company Message

by John Fleming

The U.S. DSA Code of Ethics, which first went into effect in 1970, is the backbone of the self-regulation that our industry imposes upon itself. The Code lays out the rules of the game for how companies and their independent contractors should conduct business. Some people, both within and outside of the industry, dispute the effectiveness of the Code. The most notable action was the withdrawal from DSA membership of a major company in September 2014, which used as part of its rationale a stance that the Code was weak and out of date. Others, however, view the Code as the correct tool to guide and regulate our industry.

The Code has been working for this industry for more than 50 years, and it has undergone changes and updates in order to stay relevant. Indeed, over the past year, the Ethics & Self-Regulation Committee of the DSA has placed a major priority on updating and strengthening this Code to stay in tune with current needs. It was reported that more than 60 companies participated in contributing thoughts. This process has raised a new question for us: What will it take to integrate a strong Code of Ethics into the reality of every direct selling company?

We know that a Code of Ethics is essential for every legitimate industry; however, we also know that reality is never truly about what is contained in the printed word. Reality and marketplace perception are determined by actual business practice and the interpretation of that practice by the public.

The answer to our question above also is complicated by the fact that bad news still travels faster than good news. This means that a few bad experiences can outweigh a greater number of positive experiences. It is a simple truth that remains a huge challenge to the entire direct selling industry.

So, what are we to do? As we are now headed toward the end of 2015, we are closing in on the effective date of the Code changes: Jan. 1, 2016. The DSA certainly will have new printed words that will explain the Code, but will those words actually change behavior or perception in the marketplace? From this viewpoint, the printed word is simply the guideline published for the benefit of an entire industry that uses the direct selling channel of distribution. Of course, DSA member companies are bound by the Code of Ethics; however, independent contractors are bound only to their individual company.

Because the direct selling channel is composed of many independent contractors who come from all walks of life, one easily can realize that the printed word will be only as impactful as the effectiveness of each direct selling company in integrating its own value system into all promotional efforts relative to the opportunity as well as the products and services that are sold. The DSA Code is a guide for all companies, but the effectiveness of any code of ethics lies in how each and every company promotes adherence among its independent contractors. Think about this: If all that your independent contractors know about your company’s adherence to a Code of Ethics is that you post the DSA logo on your website, what do they really know and understand about your commitment to that Code?

I believe that in order to impact the behaviors of independent contractors, the messaging and vernacular of a value system mirroring the DSA Code of Ethics will have to be integrated and woven into the marketing and promotional messages of every direct selling company.

Language and word choice are always important when crafting marketing messages, and we certainly realize that independent contractors may not respond with enthusiasm to a “code of ethics” and its detailed verbiage. Independent contractors do, however, respond to principles and values, the vision of the company they have chosen, and the opportunity to represent something of which they can be proud. Perhaps a more positive positioning that resonates with the language independent contractors respond to might get their attention and their buy-in more effectively. 

Consider embracing language such as “Our Way of Conducting Business” or “Making Lives Better,” and developing an active campaign to bring all independent contractors on board with the DSA’s more stringent ethical guidelines. Such a campaign might simply include the following tenants:

  1. We are committed to making the lives of our customers and independent contractors better as a result of their experience with us in any form or fashion.
  2. We do not tolerate misrepresentation of our products, services or opportunity.
  3. Violation of the above principles is a serious offense at our company.

The above three points of suggested positioning keep it simple and focused on the most relevant aspects of any code of ethics: treating others as you would wish to be treated. What if our industry—with more than 16 million independent contractors in the U.S. alone and close to 100 million worldwide—truly focused on what matters most?

DSAs throughout the world have always stressed a strong Code of Ethics by which their member companies must abide. We believe that by extending a very strong ethical code out through the independent contractor network, marketplace perception can and will shift to an emphasis on the very positive aspect of the direct selling method of selling and servicing consumers. We believe that if and when every direct selling company integrates this kind of campaign into their marketing and promotional messaging, we could become recognized as adhering to the highest level of ethics of any consumer-focused industry.


John FlemingFormerly Publisher and Editor in Chief, John Fleming currently serves as Ambassador for Direct Selling News magazine. His distinguished direct selling career includes selection as the DSEF Circle of Honor recipient in 1997.

August 31, 2015

U.S. News

The Carlyle Group to Acquire PartyLite Parent Blyth

Photo: PartyLite Market Fresh™ Scented Jar Candles on display.


The Carlyle Group has entered a $98 million deal to acquire PartyLite parent Blyth Inc., the New York-based private equity firm said Monday.

Carlyle, which manages $193 billion in assets globally, said it will pay $6 per share of Blyth, more than doubling the stock’s closing price of $2.92 on Friday. The offer has the backing of Blyth’s Chairman, Robert Georgen, and President and CEO, Robert Georgen Jr., who own a combined 38 percent of the company’s stock.

Candle and home décor brand PartyLite generated revenue of $347 million last year, placing it among the industry’s top 50 companies worldwide. Connecticut-based Blyth also markets consumer gifts and household products through Silver Star Brands, sold via catalogs and online.

“This is an important day in Blyth’s 40-year history,” Georgen Jr. said in a statement. “Carlyle understands what our team has accomplished and supports our vision for the future. Building on our strong consumer relationships, Carlyle, with its proven track record of growing companies, is the right partner to take PartyLite and Silver Star Brands to the next level of creativity and global growth.”

Carlyle Managing Director David Stonehill said the firm will focus on product innovation and global growth at Blyth. “We are particularly impressed with PartyLite’s network of 40,000 independent consultants who have remarkable passion for the company’s products. We are excited to support their efforts as we grow the company together.”

August 28, 2015

World News

After 20 Years, Reliv Kalogris Foundation Supplies Nutrition to 40,000 Daily

Photo: Children participating in a feeding program and school held at the RKF House in Cavite, Philippines.


During Reliv International’s annual salesforce conference in August, the nutrition company celebrated the 20th anniversary of the Reliv Kalogris Foundation (RKF), which currently provides free, daily nutritional supplements to 40,000 malnourished people in nine countries.

“I can best express my feeling about the last 20 years of the Reliv Kalogris Foundation in just two words: thank you,” RKF Chairman R. Scott Montgomery told the crowd gathered at America’s Center in downtown St. Louis. “The RKF’s 20th Anniversary is a celebration of the life-changing work made possible by the generosity of Reliv Distributors from around the world.”

In the past two decades, the charity has donated more than $42 million in product and established upwards of 250 feeding programs across the nine countries where it operates. The Reliv Kalogris Foundation—named for the creator of Reliv’s first product, the late Dr. Theodore Kalogris—has also supported relief efforts in the wake of natural disasters, such as the 2010 earthquake in Haiti and the typhoon that struck the Philippines in 2013.

August 28, 2015

U.S. News

FTC Shuts Down Vemma Pending Pyramid Scheme Decision

A federal court has temporarily halted operations at Vemma Nutrition Co., according to a statement released Wednesday by the U.S. Federal Trade Commission (FTC). The decision was handed down after the FTC filed a complaint alleging the Arizona-based company is an unlawful pyramid scheme.

The complaint states that Vemma depends on recruitment of members or “affiliates” rather than retail sales of its products to generate income. Consumer losses are inevitable, the FTC alleges, because the company rewards affiliates for recruiting participants rather than providing meaningful sales training and incentives to sell products.

“Rather than focusing on selling products, Vemma uses false promises of high income potential to convince consumers to pay money to join their organization,” Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said in a statement. “We are also alleging that Vemma is an illegal pyramid scheme.”

According to the complaint, which names Vemma and its holding company, as well as Founder and CEO BK Boreyko and top affiliate Tom Alkazin, Vemma has targeted young adults with marketing that depicts young people with luxury cars, jets, and yachts, alongside claims that affiliates can earn as much as $50,000 per week. The FTC also points to Vemma’s alleged claims that an affiliate’s earning potential is limited only by his or her effort, and that the business provides an opportunity for young adults to bypass college expenses.

On top of the pyramid scheme allegations, the FTC charged Vemma with making false earnings claims, failing to disclose that most affiliates will not earn substantial income through its business structure, and supplying false and misleading materials aimed at recruiting additional affiliates.

The FTC carried out its investigation with the cooperation of the Attorney General Offices of Arizona, South Carolina, and Michigan, the Tempe Police Department, and the nonprofit organization Truth in Advertising. FTC commissioners authorized the complaint for permanent injunction against Vemma in a 5-0 vote.

The Direct Selling Association, which counts Vemma as a member, on Wednesday issued a statement by DSA President Joseph Mariano addressing the allegations.

“Every member of our Association, including Vemma, is required to abide by our Code as a condition of membership. All companies which use the direct selling model must uphold the highest ethical business standards, including polices that protect consumers and members of the salesforce against unrealistic earnings, lifestyle and product claims,” said Mariano.

The independent administrator of the DSA’s Code of Ethics is launching its own review of Vemma and the FTC’s complaint against the company.

“The allegations against Vemma have yet to be proven, and the company is entitled to due process of law,” Mariano concluded. “Any consumers or salespeople who have concerns regarding any DSA member, including Vemma, should contact the Code Administrator.”

August 27, 2015

U.S. News

CVSL Rings Closing Bell at the New York Stock Exchange

Photo: Your Inspiration at Home Founder and CEO Colleen Walters (center) leads the bell-ringing ceremony.


CVSL (CVSL—NYSE) made company history Wednesday at the New York Stock Exchange, where executives and salespeople participated in the ceremonial ringing of the bell to signal the end of trading.

The Dallas-based direct selling conglomerate has built a portfolio of eight independent businesses—including The Longaberger Co., Tomboy Tools, Agel Enterprises, Paperly, and others—which benefit from combined back office expertise as well as centralized business operations and services. Shares in CVSL previously traded over the counter on the OTCQX, but the company uplisted to the NYSE MKT in December 2014.

“We’re proud to be listed on the NYSE and we want everyone who is part of every CVSL company, including our independent sales force, our employees and our shareholders, to feel part of this special moment,” CVSL Vice Chairman and CFO, John Rochon Jr., said in a statement.

Colleen Walters, Founder and CEO of CVSL-owned Your Inspiration at Home, an award-winning maker of gourmet spice blends, did the honor of ringing the bell at the close of trading. Top-performing salespeople from other CVSL brands qualified for a trip to New York City and joined Walters at the famed podium.

August 26, 2015

U.S. News

LifeVantage Continues Executive Overhaul with New CFO

Photo: LifeVantage’s Sandy, Utah, headquarters.


LifeVantage has announced another appointment to its executive team, under the leadership of CEO Darren Jensen, who joined the company in April. After bringing on a new Chief Sales Officer in July, the wellness and anti-aging brand this week introduced a new Chief Financial Officer, Mark Jaggi.

Since beginning his finance career at the Ford Motor Co., Jaggi has served as Chief Financial Officer at a succession of companies, including furniture maker O’Sullivan Industries; pharmaceutical, household and pet products company Summit Industries, where he also served as CEO; and health and wellness group TwinLab Consolidated Holdings. At TwinLab, Jaggi’s financial and operational leadership included heading up the company’s debt and equity financing.

“Mark Jaggi brings the perfect mix of business acumen and financial expertise to the company,” Jensen said in a statement. “His years of experience in the nutritional supplement industry as a finance and operations executive, and within growing, publicly traded companies gives Mark a clear understanding of what needs to be accomplished to successfully and responsibly position LifeVantage for long-term sustainable growth.”

August 26, 2015

U.S. News

Nerium Achieves Sales of $1B in Less Than Four Years

Nerium International today announced it has surpassed $1 billion in cumulative revenue in under four years of business. According to Direct Selling News research, the anti-aging company is one of the industry’s fastest ever to reach the billion-dollar milestone.

The announcement comes on the heels of Nerium’s ranking as the No. 1 consumer products and services company and the No. 12 company overall on this year’s Inc. 500, a list of the fastest-growing private companies in America.

“When we started this company almost four years ago, we knew we had something very special,” Jeff Olson, Nerium Founder and CEO, said in a statement. “That we’ve sold over $1 billion of product in four short years is a testament to the incredible products and opportunities Nerium has to offer. I’m extremely proud of what we’ve accomplished—we’ve changed thousands of lives for the better.”

Dallas-based Nerium launched in August 2011 with just one product in its portfolio. After topping sales of $100 million in its first year, the company began expanding its line of anti-aging products and opening international markets. Nerium now operates in Canada, Mexico and South Korea; however, 95 percent of total sales have come from the U.S.

“Nerium has been on the fast-track for growth since its launch,” said Direct Selling News Publisher and Editor-in-Chief Lauren Lawley Head. “The company is one of the youngest ever to break into the Top 40 of the DSN Global 100 list of the world’s largest direct selling companies, was among the fastest-growing of the Global 100 companies last year, with a net sales increase of 84 percent, and was one of only 16 companies to grow by $100 million or more.”

View the full release from Nerium.

August 25, 2015

World News

Spice Maker Aims to Simplify Meal Prep with Monthly Deliveries

Your Inspiration at Home is putting its own spin on the popular auto-ship program with The Flavour Stack, a new culinary offering slated to launch in September. The monthly delivery makes it easy for customers to sample the brand’s handcrafted spice blends, oils, vinegars and beverages.

CEO Colleen Walters introduced The Flavour Stack during Your Inspiration at Home’s August convention in Australia, where the CVSL-owned company got its start. Each shipment will include recipes and the requisite spices, measured and organized in plastic pods.

“This program is a fun and convenient way to sample a wide range of our newest and most popular flavours,” Walters said in a statement. “When customers are ready to order larger quantities of their favorite products, they’ll already know exactly how to use them.” 

Each recipe card includes a grocery list of items needed to supplement the brand’s award-winning spices. Your Inspiration at Home is crowdsourcing the recipes by tapping its Independent Sales Consultants for easy-to-make meal ideas. The company said it will also offer stacks for freezer meal parties, where customers can prepare meals to take home and eat later.

August 24, 2015

U.S. News

J.D. Power Survey Finds Ambit, Viridian Lead in Customer Satisfaction

Dallas-based Ambit Energy and Connecticut-based Viridian Energy are among the country’s top retail electric providers when it comes to customer satisfaction, according to a new survey by market research firm J.D. Power.

The J.D. Power 2015 Retail Electric Provider Residential Customer Satisfaction Study evaluates the performance of electric providers in nine states, where regulatory changes have given rise to competitive markets. The key factors measured are price, communications, corporate citizenship, enrollment/renewal and customer service.

Connecticut customers ranked Ambit Energy the leader in customer satisfaction, with a score of 689 on a 1,000-point scale. The company’s top ratings were in the price and enrollment/renewal factors. Ambit also ranked second overall in both New Jersey and Pennsylvania. In Massachusetts, renewable energy provider Viridian Energy ranked highest with a score of 682. Viridian performed best in the customer service factor.

The customer satisfaction study, now in its third year, is based on a survey of 21,744 residential customers of the 86 ranked retail electric providers. Key findings include a declining number of customers shopping for electricity, and the resultant need for providers to ensure an outstanding customer experience to attract and retain customers in an increasingly competitive marketplace.

August 21, 2015

World News

This Week: Avon Settlement, Building Strong Teams, Growth at It Works!

Catch up on this week’s industry chatter with these click-worthy links:

  • Writing for Fortune, Beautycounter Founder and CEO Gregg Renfrew shared her approach to building a strong team of employees. The top qualities she advocates are transparency and authenticity, whether in evaluating potential employees or setting expectations for current ones.
  • In the past three years, It Works! revenue soared 1,060 percent to $538 million, earning the company the No. 442 spot on this year’s Inc. 500. Tech Insider visited the brand’s new 50,000-square-foot headquarters in Palmetto, Florida, to learn what’s behind the company’s explosive growth.
  • Avon filed a proposed settlement in a U.S. lawsuit claiming former company executives covered up bribery of Chinese officials to build its business in the country. The New York-based company, which denies the charges, is offering a $62 million settlement to the party of shareholders led by two German investment funds.
  • At Entrepreneur, small-business expert Susan Solovic took a look at 10 largely recession-proof industries, in light of continued economic uncertainty. Solovic—whose titles include award-winning entrepreneur, New York Times bestseller, keynote speaker, media personality and attorney—points to the cosmetics industry, including direct selling opportunities, as a consistent source of income regardless of economic downturns.

August 21, 2015

Exclusive Interviews

Executive Connection with Charlie Orr, CEO, Immunotec


Charlie OrrCharlie Orr

In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief Lauren Lawley Head speaks with Charlie Orr, CEO of Canada-based Immunotec, about servant leadership, authenticity and being a lifelong learner. 

DSN: What is the one thing you enjoy most about being Immunotec’s CEO?

CO: Being with field consultants and our employee colleagues in all our markets.

DSN: What are the characteristics that make an Immunotec Consultant successful?

CO: While there is no single way to do the business, our top leaders tend to do certain things that lead to success. First, they tell their own unique, inspiring story regularly. Then, they focus on others daily—they’re servant leaders. Related to that, they build a team in order to help others, and they work the business system as a team. They keep it fun and simple so that it’s duplicable and shared every day. They’re genuine. They stay true to who they are. And finally, they’re lifelong learners who are committed to personal and organizational development.

DSN: What do you tell Immunotec Consultants to lead and inspire them?

CO: It starts with the home office team being present with them. There is no substitute for being in the marketplace. When you are in-market, fully engaged and being yourself, listening, having fun with your colleagues, these are the most important things you can do. I’m sure they remember what we say, but our physical and emotional support makes the most impact. There’s no such thing as spending too much time with the field.

DSN: What insight did you bring from your experience as the Executive Director of Direct Selling Education Foundation that has been most useful to you at Immunotec?

CO: I had so many wonderful experiences that it’s impossible to choose just one. When I was in the DSEF I had the privilege of meeting great executives and volunteers from many DSA member companies. Every day I encountered new ideas and insights, from coast to coast and around the world. I saw so many companies and people building their businesses really well, as well as companies working through a rough patch. It was like earning an additional master's degree in terms of understanding our business model and how dynamic and rapidly changing the environment can be when you’re inside a company.

DSN: What do you value most about the direct selling model?

CO: The fact that it’s people centric.

DSN: What is your vision for Immunotec?

CO: For Immunocal® to be the nutritional choice on a worldwide basis.

DSN: Is there one basic principle that governs your leadership at Immunotec?

CO: Everybody is treated fairly, with respect, with love.

DSN: What project or accomplishment do you consider to be the most significant in your career?

CO: I don’t think about what I have done; I think about what we do. When a company gets the partnership and collaboration really working well between home office and field, there’s nothing better that can happen to you in this business model. I see that as a collective accomplishment.

DSN: When you’re not at work, where are you most likely to be found?

CO: With my family.

August 21, 2015

U.S. News

Isagenix Raises $3M in 3 Years for Make-A-Wish

Photo: San Diego Make-A-Wish child Tanika Hahn and her family celebrate her wish reveal at Isagenix’s Celebration 2015.


During its Celebration 2015 salesforce convention this week, Isagenix International continued its annual tradition of raising funds for charitable partner Make-A-Wish. Associates and employees attending the San Diego event pledged more than $565,000 to grant wishes to children with life-threatening medical conditions.

Arizona-based Isagenix has been supporting children’s charities for the past 11 years, to the tune of $6.2 million. Since partnering with Make-A-Wish in 2012, the health and wellness company has donated more than $3 million to the charity, helping to grant more than 425 wishes. In 2013, Isagenix received Make-A-Wish America’s prestigious Cause Champion Award for its outstanding contributions.

At this year’s Celebration, the crowd of 15,000 witnessed firsthand a wish come true for Tanika Hahn, a 10-year-old battling leukemia. Isagenix and Make-A-Wish staged a wish reveal for the young girl, who requested a backyard makeover complete with a zipline, stage, foam pit, and other play areas to help her stay active while undergoing treatments.

August 20, 2015

U.S. News

4Life Promotes New Faces to C-Suite

Wellness company 4Life has promoted two of its vice presidents to top executive roles. Andy Weeks is taking on the role of Chief Information Officer, and David Vollmer, Ph. D., is now Chief Scientific Officer of the Salt Lake City-based company.

Weeks is a 15-year 4Life veteran whose responsibilities have included technical support, programming, and systems development. He most recently served as Vice President of Software Development.

Vollmer’s former role as Vice President of Quality and Analytical Services included implementation of the 4Life analytical laboratory, an in-house quality control facility. He also helped oversee CGMP (Current Good Manufacturing Practices) compliance, stability testing, product specifications, and a range of other quality processes.

The 4Life science team is currently anticipating the completion of a new, state-of-the-art manufacturing facility, slated to open this fall. The plant will allow 4Life to control every step of the manufacturing process—including the batching, blending, encapsulating and packaging of the company’s primary 4Life Transfer Factor products.

August 19, 2015

U.S. News

Corporate Compassion Award Honors Stella & Dot’s Autism Awareness Work

Photo: Actress Holly Robinson Peete and Stella & Dot CEO and Founder Jessica Herrin attend the HollyRod Foundation’s 17th annual DesignCare Gala. (Tiffany Rose/Getty Images for HollyRod Foundation)


Stella & Dot recently earned the 2015 HollyRod Corporate Compassion Award for its contributions to autism awareness. Since 2013, the fashion accessories brand has raised more than $270,000 in support of the HollyRod Foundation, which is dedicated to providing care for people living with autism and Parkinson’s disease.

Jessica Herrin, Founder and CEO of Stella & Dot, accepted the award on behalf of the brand’s Stylists and customers during the foundation’s 17th annual DesignCare Gala, a fashion benefit held Aug. 8 in Los Angeles.

Actress Holly Robinson Peete and her husband, former NFL quarterback Rodney Peete, established the HollyRod Foundation in 1997 in honor of Holly’s father, who battled Parkinson’s disease. The foundation’s mission expanded when the couple’s eldest son, RJ, received an autism diagnosis.

Stella & Dot has supported the cause—one of a handful advocated by The Stella & Dot Foundation—by launching a capsule collection during Autism Awareness month each April. All net proceeds from the accessories collection benefit the HollyRod Foundation.

The San Francisco-based brand has provided tablets to help non-verbal children with autism communicate, funded various summer camps and programs, and helped to open seven RJ’s Places across the U.S. and Canada. HollyRod installs RJ’s Place and technology rooms in hospitals and autism centers as a comfortable space for children accompanying a sibling to treatment.

August 18, 2015

World News

Amway eSpring Leads Global Home Water Treatment Category

Amway eSpring still holds sway as the world’s top-selling brand of home water treatment systems, according to a report on 2014 sales from market research firm Verify Markets. The research looked at water treatment systems sold across retail and direct selling channels.

Since Amway entered the water treatment business more than 30 years ago, the company’s independent salespeople, called Amway Business Owners, have sold more than 7.2 million units worldwide. The popular eSpring brand, introduced 15 years ago, features patented technology independently verified and certified by the NSF.

Water treatment is not the only category where Amway is leading on a global scale. According to research by Euromonitor International, Amway Nutrilite is the world’s No. 1 selling vitamins and dietary supplements brand, as well as the only global vitamin and mineral brand to grow, harvest, and process plants on its own certified organic farms. Artistry, the company’s beauty line, is among the world’s top five largest-selling, premium skincare brands.

In a Monday post on the Amway Insider blog, the company said fresh innovations on the eSpring system are in the works, but offered no further details.

August 18, 2015

World News

Q&A: Younique Opens for Business in Germany

Younique, the fast-growing beauty brand known for its virtual parties, is opening this month in Germany, its second European market. Outside the U.S., the company also operates in the U.K., Canada, Australia and New Zealand.

Founded in September 2012, Younique identifies as a mission-first beauty company dedicated to uplifting, empowering and validating women through its products and business opportunity. The Utah-based brand currently has more than 265,000 Presenters marketing its wares via social media. Younique’s Director of International Market Development, Jordan Meyer, spoke to DSN about bringing the virtual business to a new market.

DSN: What does launching a new market on social media look like? How do you get the momentum going?

JM: We have an army of women who are on Facebook, Instagram, Pinterest and Twitter. When we launch a new market, they’ve all got their various strategies, and they don’t let the barrier of a new country stop them from their business activities. Social media platforms are really conducive to cross-border growth.

DSN: What makes Germany a good fit for Younique?

JM: When we select markets, we choose places where our Presenters can be successful, where consumers in those markets use the same social media platforms our current Presenters use. We look at a variety of metrics, such as social media footprint, makeup market size, direct selling makeup market size, and especially how much e-commerce happens in the country. We also look for markets where our current presenters have relationships and business ties.

DSN: When it comes to international expansions, what is the most significant challenge you’ve encountered so far?

JM: International expansion is just hard. It’s hard when you’re talking about new languages, and as a company this year we’re entering Mexico and Germany. The whole organization has to adapt when we’re using a new language, and because we don’t know the language we feel like we lose some control. To sum it up in one word, localization is a big challenge.

DSN: Younique is in a pre-launch phase in Mexico, where you’ll officially open in October. Are there any other expansions on the horizon?

JM: Yes! At our recent convention, we announced that we will be opening in France next year. We’re looking at the first half of 2016.

August 14, 2015

World News

Avon, Mary Kay among Top Beauty Brands for Social Media Buzz

A newly released research report by social analytics firm NetBase captured social media conversations—more than 2 million of them—to see which brands consumers are talking about when they share their thoughts on beauty and skincare. Both Avon and Mary Kay were among the top 30 brand names, likely and unlikely, that surfaced in conversations about beauty.

To compile its Brand Passion Report: Beauty & Skincare, NetBase used a patented technology that sifts consumer emotions, behavior and usage towards the industry and select brands. The study looks at conversations that took place during the past two years in more than 100 countries. In addition to social networks, NetBase combed review sites, blogs, forums and news sites.

The 91-page report includes a list of the top recurring brands identified in the study. New York-based Avon ranked No. 13, down from No. 11 in the first-year period. Avon is also one of seven global beauty brands the report analyzes in greater depth. Over the two-year period, Dallas-based Mary Kay maintained its rank at No. 28. Non-traditional cosmetic retailers such as eBay, Etsy and Amazon ranked first, third and seventh place respectively.

In addition to looking at individual brands, NetBase gathered data on the wider beauty conversation, such as attributes that consumers associate with the brands they use. Five prominent mentions were great scent, natural looking, great moisturizer, value and anti-aging.

“Establishing a strong emotional connection with consumers is vital in today’s fast-paced, social-driven market,” NetBase Chief Marketing Officer, Pernille Bruun-Jensen, said in a statement. “It requires a deep understanding of how consumers interact with a product or brand, and social data offers a wealth of insight that helps brands understand their target consumer and what drives and influences them.”

August 14, 2015

World News

ASEA Opens First Office in Mexico, Appoints General Manager

A year after launching in Mexico, biotech company ASEA is opening its first office in the country and appointing a general manager to oversee the market’s rapid growth.

Salt Lake City-based ASEA opened Mexico in September 2014 with a three-city tour through Mexicali, Colima and La Paz. In just under a year, the market has become ASEA’s second largest behind the U.S. The company said it has signed on about 13,000 associates to date, and monthly sales of its liquid supplement and skincare gel are nearing $1 million.

To support its associates in the region, ASEA is opening an office in Guadalajara, Mexico. Duvan Botero, former Regional Sales Director of Mexico and U.S. Hispanic markets for ASEA, will head up operations as the newly appointed General Manager of Mexico.

“I’m looking forward to this exciting new opportunity to sustain and increase continued growth in this important market,” Botero said in a statement. “This in-market office will be instrumental for ASEA’s future expansion into all regions of Mexico.”

August 13, 2015

U.S. News

Mannatech President Al Bala Takes on CEO Role

Photo: Mannatech President & CEO Al Bala.


Mannatech Inc. announced Wednesday the promotion of company President Alfredo Bala, who will now serve as president and CEO of the nutrition company. According to Mannatech Chairman J. Stanley Fredrick, Bala’s appointment is part of an intentional shift of focus to the brand’s independent sales Associates and international growth.

“In Al Bala, Mannatech has a leader with a deep understanding of the daily effort it takes to succeed in the direct sales industry, as well as someone who knows how to build internationally,” Fredrick said in a statement. “We’re fortunate to have that person serving Mannatech as its President, and delighted to also have him now serve as CEO.”

In 1992, Bala left a position as manufacturing plant manager for Bose Corp. to launch a full-time direct selling career. Before joining Mannatech corporate in 2007, he was a field sales leader at a leading direct selling company, where his team launched operations in more than 65 countries. Bala’s expertise in building international markets has helped Mannatech expand into 15 countries in the past eight years.

“I am wholly focused on the success and care of our outstanding sales Associates around the globe,” Bala said of his new role, effective immediately. “Mannatech is already renowned for having some of the best technologies in the world in our nutritional supplements and skincare products, and it is my vision for Mannatech to also be known for having the best rewards, recognition, support, tools and training in the direct sales industry.”

August 12, 2015

U.S. News

Nerium Soars to No. 12 on Inc. 500|5000 List

Today, Inc. magazine announced its 34th annual Inc. 500|5000 List, and the exclusive ranking once again features several direct selling brands. The Inc. 5000 is a list of America’s fastest-growing private companies, with the Inc. 500 representing a special ranking of companies in the top 10 percent.

Nine direct selling companies are included in this year’s list, and they represent a wide variety of categories: consumer products, health, travel & hospitality and energy. The growth increase spans an even greater range, from a very respectable 125 percent (Beachbody) to a whopping 16,617 percent (Nerium). Nerium has only been in business since August 2011, making this percentage growth number even more impressive.

Limited to U.S.-based, privately held companies, the Inc. 5000 measures revenue growth from 2011–2014.

The top 500 companies on the list will be featured in the September issue of Inc.

To view the entire list, please visit www.inc.com/inc5000

12

Nerium International

16,617%

$403M

Consumer Products & Services

132

Plexus Worldwide

2,833%

$310.4M

Health

442

 It Works!

1,060%

$538M

Consumer Products & Services

564

Jeunesse

811%

$419.2M  

Consumer Products & Services

915

WorldVentures

491%

$315.5M

Travel & Hospitality

2210

Isagnenix

177%

$725M

Health

2814

Ambit Energy

128%

$1.5B

Energy

2864

Beachbody

125%

$938.9M

Health

4822

Stemtech International

49%

$66.5M

Health

August 07, 2015

U.S. News

Primerica Reports Increases in Sales and Membership

In reporting second quarter sales and earnings for 2015, Primerica Inc. (PRI—NYSE) highlighted a 14 percent growth in life insurance policies issued and 5 percent growth in life insurance licensed representatives to reach a total of 101,008. The company stated that second quarter operating revenue increased by 6 percent to $350.3 million compared with $330.3 million in the prior year period.

Glenn Williams, CEO, credited the company’s growth to a “solid core performance across business segments” and “ongoing efforts to drive organic growth.” With increases in both life-licensed sales members (5 percent growth) and recruitment of new members (20 percent growth), the company credits excitement generated by new incentives, technology, and product enhancements offered to the sales representatives and to customers.

To listen to a replay of the investor call held on Aug. 6, click here.

August 07, 2015

U.S. News

Herbalife’s Positive Trends Continue

Michael Johnson, Chairman and CEO of Herbalife (HLF—NYSE), says that the positive trends reported at the beginning of the year have continued on into the second quarter of 2015, again exceeding expectations. During the earnings call for investors on Aug. 5, Johnson commended the leadership of the company’s senior sales leaders, as well as the “resilience of all of our members and employees and their passion and determination” in support of the continuing positive trends.

Johnson went on to say that the company’s optimism is based upon the engagement and excitement of members and the recent changes to the marketing plan designed to “create a more consumer-focused and sustainable business.”

The company reported net sales of $1.2 billion. Though this represents an 11 percent decline from the prior-year period, it shows a net sales growth of 1 percent on a local currency basis. Second-quarter adjusted EPS was $1.24 per diluted share, which exceeded the hight end of the guidance of $1.15.

In July, the company had its largest attendance for a North American event in its history—22,000 members gathering in St. Louis. Other regions of the world also had record attendance.

To listen to the entire investor’s call or read the transcript, click here.

August 07, 2015

U.S. News

Blyth Reports Decline

Blyth Inc. (BTH—NYSE), a designer and marketer of candles and accessories as well as health, wellness and beauty products, today reported sales and earnings for the second quarter of 2015.

Net sales for the three months ended June 30, 2015, decreased approximately 16 percent to $88.0 million from $104.2 million for the comparable prior year period.

Commenting on the performance of PartyLite Worldwide, Robert B. Goergen Jr., CEO of Blyth and President, PartyLite Worldwide said, “In Europe, sales declined 15% in local currency while the Consultant base declined 6%, reflecting underperformance in many of our European markets. However, while total year-over-year Consultant count declined in our mature markets, the decline was at a lesser rate in every market when compared to 2014’s second quarter. This is the second consecutive quarter we’ve seen this positive trend.

“In addition, eCommerce sales experienced growth in the quarter. While European profits declined versus last year, the profits include one-time costs to close the Cumbria U.K. candle manufacturing plant and move all candle production to our Batavia, Illinois, Global Center of Manufacturing Excellence. Going forward we expect to show a reduction in costs and to build a platform for improving profitability worldwide.”

Read more about Blyth’s second quarter results here.

August 06, 2015

U.S. News

USANA Revises Outlook Upward on Record Sales

With the release of its second quarter results on Tuesday, USANA’s net sales increased to $233.2 million—up 23.9 percent compared to $188.3 million in the prior-year period. As a result, USANA has revised its outlook to include consolidated net sales between $900 million and $920 million, versus the previous outlook of between $870 million and $890 million. Earnings per share have been revised to between $6.90 and $7.20, versus the previous outlook of between $6.45 and $6.47.

The upswing in sales is attributed to a 40.3 percent growth in the number of active associates (to 397,000) and a 15.2 percent growth in the number of preferred customers. Additionally, $5 million in revenue that was deferred during the previous quarter was included in the Q2 amount.

Strong momentum in Greater China led the company’s increases. According to USANA’s Co-CEO Dave Wentz, in the Asia Pacific region, where USANA generated 72 percent of its sales last year, the Philippines and China are currently the nutrition company’s two hottest markets.

The company ended the quarter with a strong cash position—$150.9 million in cash and cash equivalents, along with zero debt and $132 million in net working capital. Notably, gross margins were reported to have improved 130 basis points year-over-year, due to changes in the marketing mix, price increases and higher net sales.

The webcast of the Q2 2015 Earnings Conference Call, which was held today at 11 a.m. EST, can be found here.

August 04, 2015

U.S. News

Tech Startup Legacy Republic Expands with Yarly Acquisition

Less than a year after signing on its first consultants, media digitization company Legacy Republic is expanding its footprint with the acquisition of Yarly, a startup photo management service.

Legacy Republic launched in October 2014 as a division of YesVideo, a service used by more than 8 million to digitize and share home videos. YesVideo offers its services through major retailers such as Wal-Mart, Costco and CVS, as well as online.

Utilizing a social selling model, Legacy Republic helps users preserve family memories by transferring videotapes, photos and even film reels to an online account, where they can easily organize and share their archive. The company has signed on hundreds of trained consultants, called Legacy Makers, across 40 states. Legacy Makers communicate the importance of digitizing old media and help clients through the process.

Competitor Yarly built its business on a similar model. CEO Allison Strouse, who will remain on board as Executive Advisor, founded the company in 2012 to combine high-tech photo storage technology with the skills of local, certified experts. The cross-platform service offers an outlet for creative entrepreneurs, who can sign on as Yarly Partners and assist clients in photo scanning, organization, editing and printing.

Yarly is the first acquisition for Legacy Republic, but company head Brian Knapp tells TechCrunch it won’t be the last. In a statement, Legacy Republic pointed to a survey by Frost and Sullivan, showing that 90 million households are storing videos and photos on old, less secure formats. The company is looking to grow its consultant base and capitalize on that $50 billion market opportunity with additional acquisitions in the future.

August 03, 2015

World News

USANA CEO Talks Fast-Growing Philippine Market

In the Asia Pacific region, where USANA generated 72 percent of its sales last year, the Philippines and China are currently the nutrition company’s two hottest markets.

Wrapping up an Asian tour in Manila this weekend, USANA CEO Dave Wentz told The Manila Times that the Philippines, where the company launched in January 2009, is outpacing all other markets in the region. In the first quarter of 2015, Southeast Asia Pacific revenue rose 10 percent to $45.3 million—a fifth of USANA’s quarterly revenue. Wentz was in the country to meet with up-and-coming leaders and share the company’s vision with a gathering of 13,000 Filipino distributors.

He was particularly excited to connect with the young entrepreneurs in attendance. As the son of USANA Founder Myron Wentz, the younger Wentz began working for the company in 1992. Before taking on the role of CEO in 2008, he held a series of executive positions within the company. That experience taught him lessons—including the importance of personal growth—that he hopes to pass on to the next generation of entrepreneurs.

The young CEO is fresh off a one-year leave from USANA, which he took to recharge and spend time with his family, including a South African safari trip.

“With 19 countries and traveling all the time, I do miss my children growing up,” Wentz told the Times. “And now the management team is so good, and I trust them completely, so Aug. 2 last year I took a leave and told management we’ve got great, capable people to run the business.”

August 03, 2015

Exclusive Interviews

Executive Connection with Kevin Adams, CEO, Isagenix International


In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief Lauren Lawley Head speaks with Kevin Adams, CEO of Isagenix International, about leadership, alignment, and transparency.

Kevin AdamsKevin Adams

DSN: What is the one thing you enjoy most about being Isagenix’ CEO?

KA: I really enjoy building a winning team. Through alignment, accountability, and communication, we can make everyone around us better.

DSN: How would you describe the ideal Isagenix Independent Associate?

KA: We have a great deal of diversity across our Associate base, but the common element is collaboration and a culture of family.

DSN: What do you tell Isagenix Independent Associates to lead and inspire them?

KA: We lead by demonstrating our core values every day. We are very transparent with our Associates and foster inclusion in our vision and mission.

DSN: You joined Isagenix from outside the direct selling industry. What surprised you most about the industry?

KA: I was impressed with the professionalism and drive of the leaders in the industry. Our top leaders not only have the expertise and skills to build successful businesses, but they also have a tremendous level of dedication and drive. I was amazed to see how much passion and integrity they demonstrate each and every day. That’s truly what makes Isagenix a direct selling leader.

DSN: Now that you’ve been in direct selling for about eight years, what have you come to value most about the direct selling model?

KA: I value the efficiency of the model. Prospective customers get to talk directly to satisfied customers and actually see the results of our products in person. We build loyalty through product experience, relationships and our culture.

DSN: What is your vision for Isagenix?

KA: Our mission is to become the largest health and wellness company in the world by helping people transform physically and financially. I personally see our company changing the world—making it a better place. We already are well on our way. Commitment to health is fundamental to who we are, and we have found a remarkable way to share our passion—through direct selling. My vision is to let our dedicated field do what they do best: share our high-quality products one person at a time, community to community, country to country, until we have fully realized our mission.

DSN: Is there one basic principle that governs your leadership at Isagenix?

KA: Alignment; if we can get everyone aligned to a common goal, I know we can achieve almost anything.

DSN: What project or accomplishment do you consider to be the most significant in your career?

KA: My most significant accomplishment is from a former employer, but most importantly that achievement guides my leadership as CEO here at Isagenix every day—I draw from it. It was an achievement from when I was Executive Vice President at ConAgra Foods prior to coming to Isagenix. I learned a lot about people, processes, and systems. I led a project that involved consolidating numerous independent companies into an operating company to leverage its size and scale.

DSN: What’s one piece of advice that you’ve found especially useful?

KA: I was always in athletics growing up, so when I started my business career I was very competitive. One of my mentors told me to turn my competitiveness into an advantage by competing against myself. It really changed my life.

DSN: When you’re not at work, where are you most likely to be found?

KA: I have two active boys ages 17 and 13, so I am either coaching their sports teams or being their No. 1 fan in every aspect of their lives.

August 01, 2015

Publisher's Note

Valuing Yourself and Your Team

by Lauren Lawley Head


Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


People are everything in direct selling. Their enthusiasm for sharing products and business opportunities fuels company growth, builds brands and creates lasting legacies. The importance of people in this business simply can’t be overstated.

How valuable, then, is investing in people’s personal development? Writer Courtney Roush takes a deep look at that question in this issue’s cover story, “How to Tap the Power of Personal Growth,” which begins on page 18. Top executives at Initials Inc., All’asta, It Works! and Traci Lynn Jewelry all weigh in on the transformative nature of personal development and explain how the concept has become central to their companies, and their own lives. Each one makes a tremendous commitment to providing personal development resources to their independent salesforces, and reaps the rewards. As ACN President and Co-Founder Greg Provenzano so beautifully put it in his Top Desk column on page 82, “The wrong kind of people can’t stand the right environment for too long. Your outer world will always catch up with your inner world.”

Of course, having a great relationship with your field is only one piece of the people puzzle. Fostering deep engagement among company employees is equally important; when a workplace is awesome, workers tend to deliver awesome performances. In recognition of that fact, we invite you to join us in a new project: Best Places to Work in Direct Selling. Direct Selling News has partnered with Quantum Workplace, an HR technology company that has been collecting Best Places to Work data for more than a decade and currently supports 40 programs across the U.S. Together, we will celebrate the important role direct selling companies play as employers in the marketplace and identify the best of the best when it comes to creating engaging work environments.

Here’s how it works:

Starting Aug. 17 and running through Oct. 23, human resource directors or other top executives within a company can complete the nomination for participation. The contest is open to direct selling companies with at least 50 employees based in North America. Simply head to directsellingnews.com/bestplacestowork and provide some basic information.

Once the nomination period closes, Quantum Workplace will ask the employees of these companies to complete an online survey designed to measure workplace engagement. The survey was developed by a panel of thought leaders in the field of employee experience and is validated annually against more than 1.5 million responses across 5,000 companies to continuously recognize trends in the evolution of engagement. It is available in English and Spanish.

Once the survey period is complete, Quantum Workplace will compile and evaluate the responses, assigning each company a composite score. Top achievers will be recognized in a special Direct Selling News publication.

There is no cost to participate. In addition, all companies that take part in the survey will receive a free, one-page overview report of their results and a more detailed report will be available for purchase. Companies also may work with Quantum Workplace to design additional, custom employee survey work.

With your participation, the Best Places to Work in Direct Selling program will celebrate the important role companies play as employers in the marketplace and highlight those companies that are setting the bar for establishing and nurturing work experiences and environments that bring out the very best in people. This will allow us to spotlight the direct selling channel as a positive job-creating engine, share best practices with the wider direct selling community, and provide valuable feedback and data that can assist you in measuring levels of employee satisfaction and engagement.

In addition to Best Places to Work in Direct Selling, I encourage you to take a look at another upcoming opportunity: the European Direct Selling Conference and Seldia Astra Awards Dinner, scheduled for Oct. 6 and 7 in Brussels. Our friends at Seldia report that several VIPs of the industry already have registered to the event, including Doug DeVos, Chairman of WFDSA and President of Amway. The conference will feature a panel discussion with Seldia Chairman Magnus Brännström (Oriflame), Samir Behl (Amway), Patrick Sostmann (LR Health & Beauty Systems) and Kathleen Mitchell (Stella & Dot) as well as several interactive workshops on various topics. How digital technologies affect direct selling businesses’ growth will be at the heart of the debates. More information can be found on the conference website at www.directsellingconference.eu or by sending an email to seldia@seldia.eu.

All the best,
Lauren Lawley Head
Publisher and Editor in Chief

August 01, 2015

News in Brief

News in Brief, August 2015


Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


Annual Report Shows Oriflame’s Comprehensive Approach to Sustainability

Oriflame

Throughout 2014, Luxembourg-based Oriflame made major strides toward sustainability in its core business operations. The beauty brand recently provided a window into its progress with the release of its annual Sustainability Report.

Environmental sustainability and corporate citizenship have been an integral part of Oriflame’s nearly 50-year history. The brand has laid out its current strategy in a five-year plan that specifies 14 goals and 36 commitments—all aimed at developing successful people, great products and a thriving planet.

In 2014, 67 percent of electricity used at Oriflame’s manufacturing sites came from renewable sources. Total CO2 emissions decreased by 5 percent, and the company obtained GreenPalm certificates covering 100 percent of its palm oil consumption. Product packaging was 93 percent certified by the Forest Stewardship Council, and 93 percent of all catalogue paper was also credibly certified.

As the No. 11 direct selling company in the world, according to the DSN Global 100, with annual revenue of $1.68 billion, Oriflame has drawn global recognition for its efforts. Last year, the company received the “Sustainable Standard Setter” award from the Rainforest Alliance, as well as a spot on the “A List” in the CDP Climate Performance Leadership Index 2014.

Oriflame’s products have also earned kudos, such as the 2014 Eco Beauty Award from the CEW Beauty Awards (Cosmetic Executive Women) for its pioneering Ecobeauty products. The cross-category range is the first of its kind in the industry focusing on sustainability in each step of the production process.


dōTERRA Completes Second Phase of Utah Headquarters

dōTERRA headquarters in Pleasant Grove, UtahdōTERRA headquarters in Pleasant Grove, Utah

Essential oil seller dōTERRA International has nearly doubled the size of its corporate headquarters with a newly completed Product Center. With the additional warehouse and office space, dōTERRA’s headquarters now covers 383,000 square feet and houses 1,400 employees.

The Utah campus, created with architectural firm VCBO and Jacobsen Construction, has already earned awards for both partners. Utah Construction and Design magazine recognized VCBO for Most Outstanding Project in the Commercial/Office category, and The Associated General Contractors awarded Jacobsen the Best Corporate Project prize for the State of Utah.

The completion of the facility brings all of dōTERRA’s departments together at one location. “This allows us to collaborate, work together, and increase productivity across multiple departments, and also allows us to continually build great relationships between departments,” said Director of Human Resources, Mark Ringger, who oversaw the project.

The innovative design and construction has increased efficiency for the company, with the Product Center currently processing more than 30,000 essential oil will call orders every month.


Department of Defense Recognizes Melaleuca as a Patriotic Employer

Melaleuca CEO Frank VanderSloot accepts the Patriotic Employer Award.Melaleuca CEO Frank VanderSloot accepts the Patriotic Employer Award.

The U.S. Department of Defense recently presented the Patriotic Employer Award to Melaleuca CEO Frank VanderSloot in appreciation of the company’s extraordinary support of American soldiers.

The Department of Defense’s Employer Support of the Guard and Reserve (ESGR) selected Melaleuca for the award after learning how the company supported Army Specialist Nathan Johnson while he served on active-duty orders for two years. Specialist Johnson, a nine-year Melaleuca employee who works as a senior web analyst, is returning to active-duty service again in August.

At the presentation of the award, Johnson praised Melaleuca’s military-friendly culture and patriotic values. He emphasized the connection he felt while he was away, the support he and his wife received, and the free Melaleuca products that came every month. Melaleuca also ensured that he experienced a smooth transition back to the company following his tour of duty.

“I didn’t have to worry about loads of paperwork or fight for hours to get things done,” said Johnson. “All those potential sources of stress were avoided, because Melaleuca took care of it for me.”


Nerium Hits the Ground in South Korea with New Brand Center

NeriumLeft to right: Nerium Chief Field Officer, Mark Smith; General Manager of Korea, BJ Choi; President of International, Roy Truett; and Chief Networking Officer, Dennis Windsor.

Nerium International has a new home in South Korea, where the anti-aging company opened its first Asian market in June. To support the region’s nascent salesforce, the company has established its newest Brand Center in the South Korean capital of Seoul. The Brand Center will showcase Nerium’s Optimera skincare line, which includes an Age-Defying Night Cream and Day Cream. In addition to serving consumers, the 8,500-square-foot space will offer training, tools and other resources for brand partners.

“Asia-Pacific is one of the most important regions for relationship marketing,” Nerium President of International, Roy Truett, said in a statement. “We have a large Korean base of Brand Partners in the U.S., and we are thrilled to bring our winning combination of opportunity and cutting-edge, proprietary products into a country that we feel is a leader in the skincare industry.”


Belcorp CEO Honored for Social Sustainability Work

Eduardo BelmontEduardo Belmont

During this year’s Latin Trade Symposium, Belcorp CEO Eduardo Belmont will be one of six corporate leaders to receive a 2015 BRAVO Business Award honoring excellence and leadership in Latin America and the Caribbean.

Latin Trade Group, the organization behind the symposium, has named Belmont the recipient of its Social Sustainability CEO of the Year award. According to the judges, the award honors Belcorp foremost “for improving the lives of hundreds of thousands of families through the support of more than 1 million female beauty consultants.” The panel commended the beauty and personal-care brand, which has reached $1.4 billion in annual revenue, for “committed action” on behalf of employees, consumers, suppliers, the community and the environment.

The BRAVO nomination process takes place through the group’s magazine, Latin Trade, where readers nominate individuals across the public and private sector. The magazine’s editorial team consults with past honorees, international business executives, and government and academic leaders to narrow the list of candidates.

Latin Trade Group is partnering with outlets such as CNN, The Financial Times and PR Newswire to present its annual one-day conference, followed by the 21st BRAVO Business Awards, a black-tie gala recognizing the BRAVO winners. This year’s event will take place Oct. 29 in Miami.


Avon Sells UK Skincare Brand to Walgreens

Liz EarleProducts on display at a Liz Earle store on England’s Isle of Wight.

Avon announced in July that pharmacy giant Walgreens Boots Alliance has acquired the Liz Earle retail brand for approximately $215 million.

In a statement, Avon CEO Sheri McCoy noted the transaction has “immediate benefits” for Avon and that “Liz Earle is the perfect fit for Walgreens Boots Alliance where it already has a strong presence in its retail stores.”

Avon acquired Liz Earle in 2010, just months before acquiring Silpada Designs, the direct selling jewelry brand that Avon divested in July 2013. Unlike Silpada, Liz Earle operated as a standalone business from Avon’s core direct selling business. Last year, the skincare brand accounted for 1 percent of Avon’s consolidated revenue and adjusted operating profit and 3 percent of its EMEA (Europe, Middle East & Africe) revenue and adjusted operating profit.

Avon’s latest turnaround measure follows a disappointing 2014, which reported a net loss of $331 million on an 11 percent revenue decrease for the year. The company said it will use the proceeds from the Liz Earle sale in its planned redemption of $250 million, 2.375 percent notes due in March 2016.


Stream Connects Soldiers to Loved Ones with a Million Free Minutes

Stream

Stream has jumpstarted its newest charitable partnership by donating more than 1 million minutes of free talk time through Cell Phones for Soldiers. The family-run nonprofit supplies calling cards and cell phones to active-duty military members and veterans.

The donation resulted from Stream’s first associate promotion in support of Cell Phones for Soldiers. After launching the partnership in May, the home services provider said it would donate 1,000 minutes of international talk time for each new mobile customer signed on throughout the month.

“Stream helps people get connected with its Mobile Services, and now they are helping our organization provide a lifeline for America’s bravest,” Robbie Bergquist, Co-Founder of Cell Phones for Soldiers, said in a statement. “We are extremely grateful to Stream and its Associates for their support.”

Bergquist and his sister, Brittany, founded the national nonprofit in 2004, when they were just 12 and 13 years old. Since then, Cell Phones for Soldiers has provided more than 200 million minutes of talk time and nearly 12 million recycled cell phones to service members. Dallas-based Stream said it plans to support the organization on an ongoing basis through various promotions with its associates.


Natural Health Trends Joins Russell Indexes

Personal-care and wellness company Natural Health Trends Corp. recently announced its inclusion on the Russell Global Index, the Russell 3000 Index and the Russell Microcap Index. The comprehensive set of equity indexes, reconstituted annually, captures the 3,000 largest U.S. stocks and ranks them by total market capitalization. Dallas-based NHTC joined the Russell indexes at the end of June.

“Inclusion in the Russell indexes is a significant milestone for us following our revenue and profit growth in the last few years,” Chris Sharng, Natural Health Trend Corp. President, said in a statement. “As we continue to execute on our growth strategy, we believe our membership will help facilitate efforts to raise our profile in the financial community, broaden our shareholder base and improve liquidity.”


US Market Boosts Quarterly Sales at Immunotec Inc.

Quebec-based Immunotec Inc. saw steady revenue growth in its second quarter, primarily on the strength of the company’s U.S. sales. For the quarter ended April 30, 2015, revenue was up 4.8 percent to $16.2 million. The nutrition company posted a net profit of $243,664, a 60 percent decrease from the second quarter of 2014. Adjusted EBITDA amounted to $1.1 million or 7 percent of revenue, compared to 7.4 percent a year ago.

“The recent volatility in currencies is causing businesses worldwide to review their supply chain strategies,” CFO Patrick Montpetit noted in the company’s release. “Subsequent to the end of April, we secured additional financing to support strengthening our supply chain.”


Judge Dismisses Solavei Case against Stream

Gavel

A Dallas District Court judge has dismissed Solavei’s trade-secrets case against Dallas-based competitor Stream. Judge Craig Smith of the 192nd District Court dismissed with prejudice the lawsuit alleging that Stream had launched its mobile services using proprietary technology and information from Seattle-based Solavei.

Stream, an energy company that has expanded into other everyday services, launched Mobile Services by Stream in January, six months after backing out of extended merger talks with Solavei. Pointing to a confidentiality agreement signed by both companies, Solavei claimed senior Stream executives had used knowledge of Solavei’s technology, social marketing strategies, go-to-market plan and customer lists to roll out its mobile direct selling business.

The day before Stream’s mobile launch in January, Solavei aired its grievances in an official statement, a move that prompted Stream to obtain a temporary restraining order prohibiting further disparaging remarks by Solavei.

Back in June 2014, while in talks with Stream, Solavei filed a Chapter 11 bankruptcy and announced that services would continue uninterrupted as its business underwent restructuring. After Stream terminated the transaction, Solavei went on to merge with Aspider, a Netherlands-based mobile infrastructure and services brand.

At the end of June this year, the court granted Stream’s request for a summary judgment, ordering a dismissal that prohibits Solavei from filing another lawsuit on the same grounds.


Herbalife to Bring 300 New Jobs to North Carolina

HerbalifeHerbalife’s Innovation and Manufacturing facility in Winston-Salem, North Carolina

Following the grand opening of its largest manufacturing facility in January, Herbalife has announced plans for further investments that will bring 300 new jobs to North Carolina. The nutrition company previously announced that its Winston-Salem Innovation and Manufacturing facility would employ 500 by the end of 2015. Herbalife is now investing an additional $3.5 million in infrastructure that will open 300 manufacturing and IT jobs at the 800,000-square-foot plant. The company expects to complete this latest phase of development by the close of 2018.

The NSF-certified facility is one of four Herbalife Innovation and Manufacturing facilities worldwide. In addition to manufacturing operations, its one-mile loop houses Herbalife’s Global Technical Operations Center and a state-of-the-art quality and testing lab.

August 01, 2015

DSA News

A Relentless Pursuit

by Joseph N. Mariano


Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


Earlier this year, I had an opportunity to discuss the Direct Selling Association’s (DSA’s) self-regulatory approach at a Direct Selling Education Foundation (DSEF) forum that examined best practices and ideas from various industries. At that time, I dedicated the association to building upon our strong commitment to consumer protection by suggesting we would consider enhancements to the transparency of enforcement in our Code of Ethics. 

I am extremely pleased to shed some additional light on what was already announced by Direct Selling News in early June—that effective Jan. 1, 2016, we are introducing some significant changes, recently approved by DSA’s Board of Directors, that make the enforcement actions of the independent Code Administrator more transparent. We are also strengthening policies governing claims by our member companies and their independent salespeople about their products and services and the opportunity to earn income. Finally, we are implementing even greater financial protections for independent salespeople against financial loss.

For those who may not have followed the work of DSA over the years, or are new to the direct selling community, it is important to recognize that this is not the first time we have acted to strengthen our Code, and it certainly won’t be the last. One of the great advantages of self-regulation is the ability to respond to the evolving expectations of consumers and government. The measures DSA will introduce in 2016 are recognition of such changes in the direct selling marketplace and represent a desire to lead all direct sellers—DSA members and non-members alike—to the highest ethical and consumer protection standards by example.

The paragraphs that follow are a summary of the enhancements to DSA’s Code of Ethics that we will introduce next year. DSA members are continuing to discuss implementation and will provide resources to help member companies educate various stakeholders, such as the independent salesforce and the public.

  • Product Claims. The modifications call for product claims made by members and their independent salespeople to be substantiated by competent and reliable evidence and not be misleading.
  • Earnings Claims. The modifications more clearly define earnings representation under the Code, including that which suggests lifestyle purchases are related to income earned. Claims by companies or independent salespeople must be truthful, accurate and presented in a manner that isn’t false, deceptive or misleading. They must also be documented and substantiated. Prospective salespeople must be given sufficient information to understand that earnings may vary significantly and to conduct a reasonable evaluation of the opportunity to earn income. .
  • Inventory Repurchase/Inventory Loading. The modifications prohibit false, misleading or deceptive recruiting practices, including requiring a salesperson to purchase unreasonable amounts of inventory or sales aides. The Code Administrator is empowered to employ any appropriate remedy to ensure that salespeople do not incur significant financial loss, including requiring DSA member companies to repurchase inventory or materials. .
  • Transparency. The modifications require member companies to publicize the process for filing a Code complaint, in addition to the Code itself. Furthermore, the Code Administrator is empowered to issue periodic compliance reports, including public reporting. .

As president of DSA, I am personally committed to ensuring that the association be recognized as having the most progressive consumer protection and ethical business practices in the marketplace. Continually examining our policies on ethics and consumer protection and making improvements that respect direct sellers and the marketplace is not only the right thing to do, it’s also a sound business strategy. When companies do the right thing by consumers, sales follow.

Are you interested in DSA’s Code of Ethics and how DSA membership can differentiate your company in the marketplace? Contact Joseph Aquilina at jaquilina@dsa.org to learn more.


Joseph N. MarianoJoseph N. Mariano is President of the U.S. Direct Selling Association.

August 01, 2015

Cover Story

How to Tap the Power of Personal Growth

by Courtney Roush

Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


“You must take personal responsibility. You cannot change the circumstances, the season, or the wind, but you can change yourself. That is something you have charge of.” —Jim Rohn

“The speed of the leader is the speed of the gang.” —Mary Kay Ash

In the direct selling industry, we’ve all had the extraordinary privilege of witnessing independent representatives command the stage during company events—leaders who, only years earlier, couldn’t have imagined possessing the confidence required to inspire an audience. Often, you’ll find their team members within arm’s reach on that stage, their very presence reflecting the interconnectedness of the entire group. 

We all know that the genuine direct selling success stories are based on a long, patient climb—a continual striving to reach a little further, to ask “what’s next?” Perhaps why we continue to run up against misconceptions of the industry is because we still keep company with some individuals who want to portray direct selling as a means to get rich quick. We all know it’s not—it’s never been, nor will it ever be. Taking that approach to direct selling is akin to the lottery winner who spends his windfall overnight, then files for bankruptcy. The instant gratification of rapid recruiting and frontloading builds a very shaky foundation that inevitably will crumble, and from which nobody benefits.

Slow and Steady Wins the Race

When approached correctly and according to its design, direct selling requires a keen focus on the objective directly in front of you—the potential customer, the team member, the next personal goal. Collectively, the accumulation of these individual wins is transformative not only for the initiator, but also for the beneficiaries of his or her actions. What the “get rich quickers” never grasp is that, in actuality, taking the slow road would have been far more lucrative, financially and personally. The foundation of the slow road is solid, the personal relationships deeper, the trust infinitely greater. And trust isn’t just the grease in the wheel of the direct selling industry; it’s the grease in the wheel of life.

The bottom line is that, in direct selling, your success is derived from helping others achieve their potential. What you give comes back to you—and then some. That’s what makes this industry unlike any other. You simply won’t get far if you don’t take others with you. Assuming a leadership role is mandatory. And therein lies the transformative power of direct selling. The leader on the stage didn’t start there. Her ultimate attainment of leadership probably had less to do with textbooks and college degrees than it did with an unceasing pursuit of personal development. Our very industry is built on this incredibly powerful concept.


“You can literally watch change happen. That’s the power of personal development—you get to see it come to life in every decision and choice you make.”
—Britney Vickery, CEO and Founder, Initials Inc.


When Did Personal Development Become a ‘Thing’?

Improving self-awareness, self-knowledge, self-leadership. Renewing identity and self-esteem. Becoming a self-leader. Fulfilling your calling and therefore your destiny. It’s easy to wave off personal development as just another movement that belongs on the self-help bandwagon, but its roots are deeper than that. The idea that realizing one’s potential enhances quality of life and contributes to the betterment of society was on the mind of ancient Chinese philosopher Lao Tzu in the 6th century B.C. “Knowing others is intelligence; knowing yourself is true wisdom. Mastering others is strength; mastering yourself is true power,” he said. Other ancient cultures, major religions and, yes, even New Age philosophers similarly have embraced the concept, although personal development really gained traction when it became linked to psychology in the late 1800s. It was the end of the Progressive Era. The Industrial Revolution was down to its last embers, but a tiny spark remained: the “rags-to-riches” dream inspired by such giants as Andrew Carnegie, Cornelius Vanderbilt, J.P. Morgan and John D. Rockefeller. The spark caught flame, setting forth the belief that our greatest resource as a nation didn’t lie with faster machines; it was within man himself.

In the 20th century, American psychologist and professor Abraham Maslow introduced the “hierarchy of needs,” with self-actualization at the top, a concept he defined as “the desire to become more and more what one is, to become everything that one is capable of becoming.” Further, Maslow believed that only an estimated 1 percent of people self-actualize. Over time, as companies grew and reached beyond international borders, it became clear that the weight of responsibility for personal development had shifted from the company to the individual, as management consultant Peter Drucker wrote in a 1999 issue of Harvard Business Journal:

“We live in an age of unprecedented opportunity: if you’ve got ambition and smarts, you can rise to the top of your chosen profession, regardless of where you started out. But with opportunity comes responsibility. Companies today aren’t managing their employees’ careers; knowledge workers must, effectively, be their own chief executive officers. It’s up to you to carve out your place, to know when to change course, and to keep yourself engaged and productive during a work life that may span some 50 years.”

While it’s true that personal development has to be self-directed, smart companies know it makes good business sense to make it as easy as possible for their people to pursue self-transformation. They offer their employees the tools to enhance their knowledge of such topics as diplomacy, holding effective meetings, overcoming rejection, negotiation and the like. Within the direct selling industry, independent business owners are out in the field, and it’s all too easy for them to slip through the cracks without a rallying cry to stretch for a cause larger than themselves. They need a mission-driven pursuit which ideally results in their own personal transformation while they shape the lives of customers and team members in a positive way.

Personal development isn’t intended to be a one-and-done crash course. Instead, it’s a higher calling that should introduce itself early, lead the procession of business training that follows and infiltrate the consciousness at every opportunity, ultimately transcending the confines of work and spilling over into everyday life.


While it’s true that personal development has to be self-directed, smart companies know it makes good business sense to make it as easy as possible for their people to pursue self-transformation.


Time to Rewrite the Textbook for Success?

Let’s imagine there was an official “route to success” in the United States. What would it look like? It’s likely that education would be on your itinerary. After all, the traditional path to achievement has been defined by such quantifiable skills as reading, writing, math and science—subjects that can be tested and measured. What about conflict management, confidence, time management, emotional intelligence, goal setting and other soft skills? We can’t quantify those, and yet they’re no less important. Arguably, such skills may be even more vital to our success.

We have many examples of independent sales representatives who took on the charge of personal development and have experienced nothing short of a complete transformation. But what about the employees within direct selling companies who serve those salesforce members?

“Personal development is so key to the field that if you don’t do it yourself, you won’t be able to mentor them,” says Kerry Shea Penland, President and Founder of All’asta. On the corporate side of direct selling, employees’ personal development might take place on the job, or it might not. Years of experience bring key learnings, of course, or one might have the occasional opportunity to attend a conference or seminar. Leaders who most frequently interact with the salesforce may receive more formal personal development opportunities than the middle management ranks. But there’s a gap, and that gap might just present an opportunity for direct selling. Given how people-oriented this industry is—and considering that employees throughout the entire organization interact with your salesforce on a daily basis—it may be time for companies to consider investing in personal development resources for a larger share of their employee base. But the fact of the matter is that the clock’s ticking, there’s work to be done, and personal development is often the first item to be sidelined in the wake of more urgent matters. Companies would be wise to hit the pause button and begin focusing resources on the personal development of their employees, if for no other reason than it makes good business sense, builds loyalty and increases productivity—and that’s good for everybody, employees and salesforce alike.

Those self-motivated individuals who continually work on developing themselves—and who subsequently are able to navigate the murky waters of interpersonal relationships, whether or not they have a college degree—in fact have enormous potential. Years of education and college degrees will only get you so far. When we’re given opportunities to tap into our inner strengths, capitalize on them and use them toward a higher purpose, that’s when the magic happens. 

In this sense, direct selling was truly ahead of its time, building the entire concept of personal development into its very foundation. In fact, the direct selling arena is one of the few places, if not the only place outside self-guided study, that a person can receive personal development training at little or no cost, and in fact, as a part of the “package” deal. For a direct selling brand to gain traction, expand into new markets and establish firm roots globally, it’s integral that its independent representatives reach their upmost potential, and inspire their respective team members to do the same. In perhaps no other industry are the futures of so many so intertwined.


Personal development is often the first item to be sidelined in the wake of more urgent matters.


Train the Basics, Inspire in Personal Development

Assimilation into this industry will always include training on such topics as compensation structures, salesforce promotions and goals. Learning the complexities of direct selling is challenging in and of itself, but for those who truly want to excel, adding personal development to the mix could move them closer to success—and faster. Companies who regard personal development as imperative to their success will offer the means and the methods for their employees and independent representatives to achieve it—and offer it to others. That means offering up resources in a variety of contexts to accommodate multiple ways of learning, whether through coaching groups, one-on-one mentoring sessions, book clubs, rotational opportunities, webinars and/or online courses. There’s no one way to do it, but the inspiration and the means have to be an omnipresent part of the culture. 

Despite an MBA and an impressive resume, Penland was brand-new to the direct selling industry when she founded All’asta in 2012. Knowing she had a lot to learn, she started working with industry mentors right away, and “the No. 1 thing they advised me to do was invest in personal development,” she says. “This is unlike any other industry, so I made a focused effort. I found a coach, I read books, I changed some of my management and life habits, and that put me in a position to be successful in a field-facing role. You have to want to be better, and you have to be honest with yourself. It’s hard, but if you stay focused, you can kick down your barriers and open the space in your mind for more. 

“I was a bit skeptical of this industry at first,” she admits, “but several things turned me around. I heard so many success stories due to personal development. These people had transformed their own lives and the lives of others. Their testimonials were a key factor that made me fall in love with this industry.”

Mark Pentecost, CEO and Founder of It Works!, says, “There isn’t a training guide or manual to build and run a multimillion dollar business, so I learned lessons from history and taught myself through the success of others. I made it a point to always be carrying a book. Whenever I had a spare moment, I would be reading.

“Throughout my life I’ve been drawn to watching people that are self-made,” he continues. “It’s always been in my nature to be better. From an early age, I saw my parents trying to better themselves. They taught me a lot about personal development and inspired me to include it in my daily life. In the United States, you aren’t born with a title—you can grow into it. That entrepreneurial spirit and desire to stretch myself to take things to an entirely new level—those have had the most significant impact on my business and my role as CEO.”


In the United States, you aren’t born with a title—you can grow into it. That entrepreneurial spirit and desire to stretch myself to take things to an entirely new level—those have had the most significant impact on my business and my role as CEO.”
—Mark Pentecost, CEO and Founder, It Works!


Soft Skills, Hard Dollars

Traci Lynn Burton, Founder and CEO of Traci Lynn Jewelry, shares an example of how focusing on personal development can make a profound difference on a company’s bottom-line results. Three years ago, she moved her offices from Delaware to Fort Lauderdale, Florida, and in the process, experienced a serious issue with her new fulfillment center. For three months—and during a peak holiday season, no less—the company was unable to fulfill orders. Keeping her motto of “motivate, inspire, change lives” in mind, Burton made the bold move to shift gears. She turned her monthly conference calls with the field into weekly calls. “During those calls, we began spending 90 percent of our time on motivation and 10 percent on other announcements,” she says. When the company resumed operations three months later, salesforce retention increased from 35 percent to a remarkable 75 percent. Traci Lynn Jewelry quickly recouped the season’s losses, and then some. For Burton, what at first seemed catastrophic turned out to be the best thing that ever happened to her company.

On her desk are emails from salesforce members who attest to the impact their businesses have had on their self-confidence and outlook in life; they’re filled with comments like “walking taller,” “smiling bigger” and “stepping out of my comfort zone.”

“In this industry, the sky’s the limit,” Burton says. “If we want our people to reach the moon, we’ve got to give them the tools to do it.


“You have to want to be better, and you have to be honest with yourself. It’s hard, but if you stay focused, you can kick down your barriers and open the space in your mind for more.”
—Kerry Shea Penland, President and Founder, All’asta


“You don’t know how far your reach is. You’re showing people you genuinely care about them,” she continues. “The field wants to see your vision, your power and your tenacity.” And, needless to say, those weekly calls have continued. She reinforces that connection with the field through such modern methods as the Periscope app, which enables her to share live video broadcasts via mobile devices. Her unrehearsed, “behind the scenes” videos offer a friendly dash of encouragement and have a bit of reality TV flavor, something representatives appreciate. To keep her own bucket full, Burton is committed to attending two spiritual conferences and four business conferences every year, commiserating with industry peers, comparing notes and returning home with the renewed confidence to lead and inspire.

Asma Ishaq, President of Jusuru International, reiterates this necessity as a leader to improve one’s self in order to help in the improvement of others. “Our goal is and should be to help people do more than they would have done on their own,” she says. Ishaq recalls one of her favorite quotes from leadership expert, speaker and author John Maxwell, in which he said that the two most important questions for leadership are: 1. What’s your game plan for personal growth? 2. What’s your game plan to develop others?

Business Skills = Life Skills

Over the last several decades, the most successful direct selling companies have proven to be the ones that include a wellspring of personal development with the ongoing product education, business training and general support and motivation they serve up to independent representatives at every stage of their respective career paths.

It’s no surprise, really, that companies savvy enough to encourage personal development have a leg up in the industry. Growing into a leader requires a shift in mindset; the student becomes the teacher, learning to coach others to success. It would stand to reason that the more emerging leaders you’re actively developing, the better, right? And, better still, as those leaders continue to grow and develop, they should have the appropriate resources to draw from the proverbial well on a continual basis. More confident leaders, in turn, have fewer reservations about sharing ideas, challenging the status quo, influencing others and rallying them behind a common mission.

These soft skills help representatives develop resilience to shrug off a “no” and move on to the next opportunity; steer a struggling team member back on track; or establish daily, weekly and monthly goals and a game plan to reach them. Once these skills become habit, they spill over into all areas of life; it’s impossible to contain them only within the confines of a direct selling business. The business becomes part of life, then larger than life itself. 

“I’ve always had a passion for personal growth and improvement, but I think it really crystalized for me when I had the opportunity for a private lunch with Zig Ziglar and his daughter, Julie, near his home in the Dallas area,” Ishaq says. “He said to me, ‘All people need is just a little encouragement.’ That’s when it truly hit home for me what this business is all about. The reasons for someone getting involved in our industry vary greatly, but encouragement will always be a motivator.”

Pentecost says the concepts associated with personal development are an integral part of the It Works! culture, both for employees and throughout the field. “We fight for it every single day. We don’t assume our employees are integrating personal development on their own, so we give them opportunities.” For example, the company has hosted four John Maxwell Leadership classes, each lasting between four and six months. The company’s executive team nominates managers and up-and-coming leaders to participate. “If we’re not growing through personal development, then we’re getting rusty—we’re moving backwards,” Pentecost says. “I believe we have to be intentional with personal development and encourage it. Our human resources director wasn’t trained in human resources; he was trained in our culture, in great leadership, and in developing more leaders.”

For the company’s top distributors, Pentecost hosts monthly calls that delve into personal and professional development. “We teach that it’s key to being a leader, being a good spouse, and being a good teammate. When we stretch ourselves, we’ll go further in all aspects of life.”

At Jusuru International, the company has made a concerted effort to apply throughout its employee base the culture of personal growth that flourishes in the field, including maintaining a multimedia personal development library for its support specialists. “By focusing on our ‘frontline,’ meaning those at our home office who answer the phones and interact with our field, we’ve embraced a philosophy that we should leave people better than we found them,” says Ishaq. “Our hope is that the skillsets and mindsets they develop at Jusuru International will benefit them not only within the walls of our offices, but in every facet of their lives.”

Penland adds, “Even if, ultimately, my company isn’t successful—and I know it will be—I’ll consider myself successful because of all of the personal development efforts I’ve made since getting into this industry. Personal development has opened my mind to doing and being more. And our consultants should feel the same way. No matter what happens with their businesses, if they take the time to invest in personal development, they’ll always have these skills, and they’ll be better for it.”

For Britney Vickery, CEO and Founder of Initials Inc., “Personal development means constantly grasping new principles and discovering how they help not only me, but the company as a whole. I’ve begun to see what’s possible for me and for our company. Each day is a fresh challenge. You can literally watch change happen. That’s the power of personal development—you get to see it come to life in every decision and choice you make.”


“In this industry, the sky’s the limit. If we want our people to reach the moon, we’ve got to give them the tools to do it.”
—Traci Lynn Burton, Founder and CEO, Traci Lynn Jewelry


The Journey Has No End

We represent an industry based on open-ended opportunities, and that’s why the quest to reach one’s fullest potential—so fundamental to our shared principles—has no limit, either. This ever-changing itinerary has no destination, but it’s filled with rich rewards. And the further we travel, the more company we keep, enabling us to draw on each other’s strengths. That’s not only an exciting prospect from a personal standpoint; it’s an exciting prospect for the growth potential of the direct selling industry.

“To get from where you are to where you want to be, there’s only one thing that will fill that gap. Personal development allows you to discover the highest and best version of yourself,” Vickery says. “It’s a deeply personal journey that never ends and always has more room to grow. The idea that it is never-ending is what gets me excited. And, much like our direct sales businesses, everyone starts out the same. In direct sales, everyone joins a company with a small investment, no customers, no parties, no appointments. Personal development is much the same. Everyone starts as a blank slate. Your actions and your choices impact the course of your journey. Everyone’s path is meant to be different—that’s what makes it beautiful. You simply have to choose your route.”

Ishaq says, “From a corporate perspective, what we know is that the studies behind millennials show that the 9-to-5 job may soon be a thing of the past. Sixty percent of millennials are leaving their companies in less than three years.” She continues, “If you want to develop a strong culture and home office team that is career-minded and focused on the overall mission and vision of the company, you must first prioritize the growth of the individual, and foster that growth in your work environment. I think when people understand this reality about our industry we do stand alone. We give hope. We give encouragement. And above all, we give opportunity that if not for direct sales, many would never have had.”

August 01, 2015

Company Spotlight

WorldVentures: Dreaming Up a Better Way to Travel

by Jeremy Gregg

Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 2005
Headquarters: Plano, Texas
Co-Founders: Wayne Nugent, Chief Visionary Officer; Mike Azcue
Top Executives: Dan Stammen, CEO; Eddie Head, President, WorldVentures Holdings; Jon McKillip, President, Global Sales, WorldVentures Marketing; and Roberto Canales, CFO.
Products: Vacation and entertainment club


 Dan Stammen and Wayne Nugent
 Dan Stammen and Wayne Nugent

From the start, WorldVentures founders Wayne Nugent and Mike Azcue set out to build a different kind of business. They dreamed of a vacation and entertainment club that would give members access to high-quality, yet affordable, travel experiences while also giving participants an opportunity to grow their own business by marketing the membership.

In the nearly 10 years since its founding, WorldVentures also has carved a unique position for itself in the direct selling space. Only 18 companies worldwide from the Direct Selling News Global 100 list increased revenue by more than $100 million last year, and WorldVentures was among them. Most of the other high-growth companies offer consumable products in the health, wellness or cosmetics industries. WorldVentures is one of just two that sells memberships, and it is the only one to focus exclusively on travel.

CEO Dan Stammen says the company is on track to join an even more elite group by the end of 2017: those posting annual revenue of $1 billion or more. WorldVentures increased its revenue by 80 percent last year, closing 2014 with revenue of $352 million, up from $195 million in 2013. It is on track to nearly double again to $650 million in 2015. In the past 12 months alone, new member sales have increased from 50,000 to more than 80,000 new enrollments per month.

What’s driving this growth? Company executives credit an innovative product offering coupled with key leadership strategies.

Established in 2005 by Wayne Nugent and Mike Azcue, WorldVentures’ primary offering is an annual membership that allows members to receive significant discounts on pre-arranged travel packages as well as the opportunity to earn points that can be applied to a variety of additional purchases, such as spa services at the destinations they visit. Stammen served as the company’s chief executive for its first three years, but then transitioned into the CMO position before stepping back from an active role so that he could primarily focus on his other business ventures. Azcue then stepped into the role to replace Stammen, and he led the company through an important period of growth over the next few years.

UNITED ConferenceWorldVentures’ UNITED conference this year in St. Louis

However, with many of the members of the executive team living outside of the company’s home state of Texas, WorldVentures felt it was not achieving its full potential. So, on Feb. 1 of this year, Stammen returned as CEO. One of Stammen’s primary goals is to leverage his 30-plus years of network marketing experience to build a stronger culture that is based on the industry’s best practices.

“My daily presence creates a whole new level of accountability in the office. If I am the first one in and the last one out, the other C-level execs see that and begin getting here earlier and staying later,” Stammen says. “We’ve also made some changes in the reporting and some internal moves within the executive team that have streamlined a lot of our processes. Decisions are being made faster, there are no bottlenecks in place, projects are getting completed faster, and morale is up.”

As part of the change, members of the executive team are no longer able to commute. Stammen explains: “We decided that if we are going to hire you as an exec and pay you this kind of money, you have to live in the Dallas area. That has made a huge impact on the team.”

As WorldVentures began to expand rapidly outside the U.S., the executive team developed a list of other direct selling travel companies that had failed to thrive. Stammen says, “Before we started WorldVentures we came up with almost 100 reasons other direct selling travel companies either failed or went out of business. Most of our predecessors were just trying to buck the system and did not choose to work in partnership with travel suppliers. We then analyzed what these companies did wrong, and made a commitment to avoid those practices.”

The result has been unparalleled growth in the travel industry. In a recent lunch meeting with the president of one of the largest cruise lines in the world, Stammen learned that WorldVentures was bringing them more guests than any other company with which they had worked in 30 years.

Making a Living by Giving

WorldVentures partners with Nancy Lieberman (far left) to build DreamCourts all over the U.S.

WorldVentures has three corporate pillars: “Build the world’s best vacation and entertainment club,” “Build a family of world-class direct sales people,” and “Leave the world a better place.” It is through support of this last pillar that the company’s corporate citizenship efforts are driven to undertake three signature initiatives:

  • WorldVentures Foundation: Incorporated within two years of the company’s launch, the foundation has funded the development of 62 schools in Guatemala as well as clean water projects all over the world. The Foundation also has raised enough money for Big Brothers Big Sisters that it’s enabled them to create over 1,200 sponsored matches thus far.
  • DreamCourts: Complementing the branding of the company’s “DreamTrips,” one of WorldVentures’ major philanthropic goals is to build over 1,000 DreamCourts in partnership with the Nancy Lieberman Foundation. To date WorldVentures representatives have already raised the money for and built 17 DreamCourts all over the U.S.; 12 courts were completed for the Boys & Girls Clubs of America of which WorldVentures is a National Partner. One recent sponsorship has provided a sports court in Long Beach, California, at a Boys & Girls Club at the very spot where a young man was shot and killed.
  • “Voluntourism.” Each year, WorldVentures’ members volunteer tens of thousands of hours to global causes. They volunteered 25,000 hours in 2014 and are on pace to give 40,000 hours in support in 2015. Each month, the company offers dozens of “voluntourism” trips through which travelers can visit a new country and spend some of their time serving the local community there. These efforts inspired CEO Dan Stammen to enhance one of the company’s internal slogans from “Make a Living Living” into “Make a Living Giving.”

To learn more about World Ventures’ charitable efforts, visit www.WorldVenturesFoundation.org.

Growing by Investing

Expansion into other countries added a significant improvement to the company’s bottom line, even though it took time to build the momentum. WorldVentures entered the Asian market about five years ago, but struggled for the first year and a half. As Stammen reports, “When we were launching in Asia, the pro was we were new, exciting and different… but the con was the same. People did not understand an MLM that did not require distributors to maintain a stock of [products]. We sell experiences.”

The company has since adapted to local needs by offering trips that are more conducive to the Asian culture. Today, nearly two-thirds of WorldVentures’ new starts and about half of its revenue are originating in the Asian market, particularly Singapore, Malaysia and Hong Kong. The company also recently entered Australia, which has rapidly grown into one of WorldVentures’ most important markets.

This success came as the result of tremendous persistence on the part of the field leaders that WorldVentures initially attracted. Stammen reports that WorldVentures’ top income earner in Asia only had 60 people in his downline after the first 15 months; but today, just a few years after he began, he has built it up to over 150,000 people.

President Eddie Head credits the company’s growth to its focus on supporting the field leadership. The “sweet spot” for new recruits, he explains, are people for whom an additional $300 to $500 per month makes a meaningful difference. To better attract distributors within this income range, the company began to adjust the compensation plan to incentivize the right behaviors within this target market. WorldVentures now pays out more than 60 cents per dollar directly to the field.

One of the most successful changes was a simple, volume-based monthly bonus, which expanded upon an already successful car promotion called “Wings & Wheels.” In 2012, the company lowered the qualifications on this program to only $5,000 in total monthly business volume. This paid a fixed monthly bonus of $600. The field responded enthusiastically and sales tripled globally.

In 2014, WorldVentures retooled this program and created two tiers at $3,000 and $5,000 total monthly business volume. Representatives were paid a fixed 10 percent until the second tier, when they could earn up to a $900 bonus per month. This effort increased the number of bonus-qualifying reps by a staggering 800 percent. Realizing that the company would need a sales increase of 6 percent (or 1.5 additional months of retention) to sustain this initiative, the executive team partnered with the top-tier leaders in the field to fund and promote the effort. The result was that sales once again doubled in the U.S. and tripled internationally.

Training by Entertaining

The rapid influx of so many representatives in different countries created a need for in-depth training. At the same time, the novelty of WorldVentures’ service in the Asian market demanded that these trainings remain high-quality so that representatives could learn how to effectively promote such a new concept in their region. To meet these dual challenges, WorldVentures opted to facilitate over 90 percent of its global training events directly through the corporate office.

Marc Accetta, the Director of Training, has developed an innovative approach that has made the trainings incredibly popular with the field. In a typical training, Accetta delivers as many as 20 performances as different famous people whose story can offer a strong lesson on personal development; American characters include George Washington, the Grim Reaper, and various sports figures such as Babe Ruth. WorldVentures has made significant financial investment in the costumes and sets to make these mini-plays and skits as professional and impactful as possible and can adapt and use various characters depending on the region of the world. Stammen describes the model as “edutainment—we educate you while we entertain you. That level of engagement helps you to remember about 10 times what you would otherwise.”

Stammen cites this training program as one of the company’s primary advantages in the areas where it is rapidly growing. The use of a consistent curriculum of high-quality content has allowed the training program to scale to include major themed events each quarter in 21 U.S. cities and in every major region across the globe, with participation reaching upwards of 2,500 per room. These events are complemented by an international convention in the U.S. every April as well as summer boot camps around the world, which have gathered upwards of 16,000 attendees.

“Controlling all of this through corporate, and having all of the trainers always together around the world, creates the sense of having one big team,” says Stammen.

WorldVentures HeadquartersThe company’s new 100,000-square-foot facility, which it moved into last year, features brand-new décor, large windows overlooking a stream and is adjacent to a 14-mile walking trail.

Focusing on Retention

Viral Marketing CampaignAs part of the company’s successful viral marketing campaign, members take photos of themselves with a “You Should Be Here” sign in locations all over the world.

For WorldVentures, there are two important moments that drive customer retention: immediately after people join the service, and the moment they step off the plane on their first trip.

The latter has been WorldVentures’ specialty since it was launched. While the service is offered as an effective way for committed travelers to save money, Stammen reports that the top value proposition reported through customer surveys is not the price savings but the convenience factor that “takes the guesswork out of travel.” Guests are picked up by uniformed staff right when they get off the plane, taken straight to their hotel (where they can bypass the registration and get their keys in two minutes), and then provided with an orientation that reviews all of the various activities from which they can choose over the course of their vacation. They are also introduced to many other WorldVentures members on the trip, many of whom remain friends afterwards.

“We have dozens of members who have been on over a 100 trips within the past several years,” says Stammen. The key, he believes, is getting customers to use the service more quickly and more often.

Currently, the average new member traveling takes about four months to take their first trip. Stammen and his team are focused on shortening this window by adding new benefits and features to membership. His vision is that a member “could sign up on Monday morning and by Monday night be realizing substantial savings and benefits that are available to them whether they are traveling or not.”

To drive this, WorldVentures is preparing to launch a new app that Stammen believes will revolutionize the company’s business model. Stating that he anticipates the app will “do to travel what Skype did to telecom,” one of its unique features is a customized member-based social community. The app is already available to existing members and reps, and by about the end of first quarter 2016 it will be available to share with non-members. Stammen expects at least 1 million downloads in the first 30 days of the release. To achieve this ambitious goal, the company has structured the app with a “freemium to premium” model in which users can download it without becoming members and then earn points for free travel by referring others and even by submitting pictures of themselves traveling around the world. This app will build on WorldVentures’ highly successful viral marketing campaign, in which members take photos of themselves with a “You Should Be Here” sign; members have successfully photographed themselves with over 100 celebrities, such as Katy Perry, holding this sign in locations around the world.

The Trip Ahead

WorldVentures has been able to leverage its low-cost structure to rapidly enter 30 countries in the past nine years.

As they enter uncharted waters, Stammen and his crew continue to direct all of their energy towards strengthening WorldVentures’ ship. The company invested $30 million in new products, systems and tools last year and is on pace to invest another $80 million in such long-term assets in 2015.

Head explains that “we’re committing our planning and resourcing to create a highly scalable, flexible, customer-centric e-commerce model that rewards consumers for sharing and adding value to the community. Our belief is that social commerce is the new model for marketplaces and we can help to define it. Our goal is to become a brand synonymous with great experiences the way that Disney is to family entertainment.”

WorldVentures is laying the groundwork to expand to six or seven more countries over the coming years. The company also is setting up regional offices in Singapore and the U.K., among others, to provide more support to the local markets in these areas. The company is investing millions of dollars in efforts to create additional revenue opportunities for its representatives and additional features that add value to the travel membership. This includes upgrades to WorldVentures’ own technology, apps, and systems as well as partnerships with strategic travel suppliers who continue to update their properties, resorts, and cruise lines for an improved experience for travelers.

These efforts are being taken to not only diversify the company’s revenue base, but to make it flexible enough to respond to any potential economic trend that could negatively impact the business.

Looking into the future, Stammen remains confident about WorldVentures’ prospects: “The travel industry is a multitrillion-dollar industry, more than oil or the entire direct selling industry combined. We are positioned to grow phenomenally over the coming years.”

August 01, 2015

Company Focus

Immunotec: Growth Driven by Alignment

by Barbara Seale

Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 1996
Headquarters: Vaudreuil-Dorion, Quebec, Canada
Executives: CEO Charlie Orr
Products: Nutritional and personal care


Charlie OrrCharlie Orr

Better. That’s the word that captures how Immunotec created a dramatic growth surge this past year. It got better at a wide variety of actions that drive its business. Collectively, all those improvements resulted in a 47.5 percent increase in 2014 total revenue, reaching CAN$80.8 million (US$72 million).

Sponsoring, which the wellness company defines as the number of new consultants and customers, got better, too. It increased 85.2 percent over 2013 to nearly 64,000 in Mexico, its largest market, while the rest of North America increased 26.7 percent to nearly 20,000. Since then, the numbers have continued to get better, reaching almost 100,000 in total. The company’s growth catapulted it into the 2015 Direct Selling News Global 100 for the first time in its 19-year history, coming in at No. 97.

Such inspiring growth doesn’t happen randomly. Great products are required, of course, and Immunotec can boast that its flagship product is backed by an ever-increasing number of impressive clinical studies. It’s even listed in the prestigious Physician’s Desk Reference, the comprehensive drug reference book used by doctors, nurses and pharmacists. But products don’t tell the whole story. Underlying the numbers is a critical concept: better alignment. CEO Charlie Orr credits the growth surge to the alignment through implementation of the company’s vision, mission and values keystones.

“This isn’t just about a number of years of great growth,” he says. “We already had everything we needed, but we were out of balance. Until we all got aligned in terms of how we thought about the business every single day, growth was destined to be elusive.”

Product Prodigy

Changing the thought process took years and required a paradigm shift. Immunotec was actually founded as Immunotec Research in 1996 specifically to sell Immunocal, so it was product-centric from the start. It was born out of the work of medical researcher Dr. Gustavo Bounous. In 1978, Bounous initiated a novel research program in conjunction with colleagues from the McGill University Faculty of Medicine in Montréal to search for a dietary protein source that would boost the immune system. The process took 15 years, but it led to the development of a high-quality, bioactive material given the name Immunocal. It was trademarked in 1993.

About the Science



One of Immunotec’s foundations is Immunocal—the product on which the company was launched. Immunocal is a patented natural protein that has been clinically demonstrated to help maintain users’ immune systems. It preceded Immunotec by more than three years, and ever since it was developed, it has accumulated scientific evidence of its effectiveness. Patented in 10 countries, the Immunocal family of products is supported by over 40 published articles and supporting science in medical and scientific literature.

“Research is part of our heritage, culture and identity, and it plays a very important role in terms of how we look at Immunocal now and in the future,” explains John Molson, Immunotec’s VP, Research and Development, as well as one of the company’s original investors.

Two studies, conducted years apart, stand out. The peer-reviewed, double-blind, randomized, placebo-controlled clinical trials demonstrated the diversity of people who can benefit from Immunocal. In 1999 the Montréal Children’s hospital explored Immunocal’s effect on muscular performance and published the results in the Journal of Applied Physiology. In its study Immunocal consumption was associated with an average increase of 13.5 percent in peak power and 30-second work capacity in 20-year-olds.

Then this year Institut de recherches cliniques de Montréal (IRCM) published the results of a study in the Journal of Nutrition Health and Aging. It showed that Immunocal contributes to increased muscle strength in elderly adults. The findings showed that consuming Immunocal results in a statistically significant performance benefit of approximately 10 percent in muscle strength in an elderly population of between 65 years to 88 years who participated in a regimen of resistance exercise.

As a result of those two studies, Health Canada, which is similar to the Food and Drug Administration in the United States, has granted a new health claim specific to Immunocal’s ability to help increase muscle strength and enhance performance when combined with regular exercise.

The health claim is the second granted to Immunocal. The first was acquired in 2007 for the health claim, “Immunocal is a natural source of the glutathione precursor cysteine for the maintenance of a strong immune system.”

“To be the first in Canada to obtain a performance claim for a stand-alone whey protein isolate reinforces our leadership position in the health and wellness industry, and when combined with our existing immunity claim, it gives the Immunocal brand unique positioning. These milestones are the fruition of over four decades of research at leading university hospitals in Canada and abroad,” Molson says. Putting a human face on research findings and supporting better product sales are unpaid testimonials by a wide range of individual athletes and teams. Their appearance at Immunotec events emphasizes the power of Immunocal Platinum, in particular, to support their performance.

Immunocal and its sibling product, Immunocal Platinum, are the company’s flagship products and represent the largest segment of revenue. Molson describes Immunocal Platinum as a premium version of standard Immunocal.

But the path to taking Immunocal to market was a six-degrees-of-separation story, only without Kevin Bacon. Bounous was searching for a location to rent for his lab when he met entrepreneur Dieter Beer, who owned a building that Bounous visited. When they started to discuss Bounous’ research, Beer became fascinated. He suggested that they look into the possibility of a business opportunity. Beer was acquainted with attorney Alex Konigsberg, who later became Chairman of Immunotec’s board of directors. He brought Beer together with direct selling company executive Chuck Roberts. It was a match made in business heaven. Beer and Roberts soon became the founders of Immunotec Research. In addition to funding, they provided a method—direct selling—to introduce Immunocal to the people it could benefit.

For years Immunotec was all about its products. Growth was steady, but not swift. From its launch in 1996 until 2007, Immunocal reached $35 million in revenue. The company went public in 2007 (IMM—TSX Venture Exchange), and by 2010 revenue had grown to $40 million, primarily through the power of its products. Over time its field and corporate leaders realized that Immunotec also had to be about the business opportunity and the company’s culture. But change took a long time. It took Orr—with, he emphasizes, the collaboration of other executives, employees and field leaders—to finally make the shift. With a direct selling career that spans 25 years, Orr became CEO in May 2013 after having served four years as Executive Director at the U.S.-based Direct Selling Education Foundation. Orr has served as a director of Immunotec since 2006.

The first step of this company shift: Carefully craft the words that capture Immunotec’s vision, mission and values (VMV). They acknowledge the importance of great products while expanding emphasis on the business opportunity and corporate culture. Here’s a summary of how Immunotec states them.

Vision: With our customers, consultants and employees at the heart of what we do, Immunocal will become the nutritional choice worldwide.

Mission: Our mission is to provide high-quality, scientifically based nutrition and wellness products which enhance quality of life and performance. We thrive by empowering people to share an exceptional network marketing opportunity accessible to everyone. We commit to continued growth and prosperity for our consultants, employees and shareholders.

Values: A fun atmosphere in all we undertake; a work environment grounded in teamwork and the achievement of shared goals; a commitment to service excellence, always seeking to exceed expectations; continuous improvement in all aspects of the Immunotec experience; and a culture that embodies integrity, generates respect and reinforces trust.

Walking the Talk

Words alone aren’t enough though, and Immunotec threw the weight of a comprehensive program behind the words, creating visible messaging reminders that help to cement the common goal of consultants, employees and the board of directors to grow the business. In the headquarters lobby, a floor-to-ceiling stone wall incorporates all the important words from the VMV for visitors and employees to see. Accompanying the wall are stone portraits of Bounous and his collaborator Patricia Kongshavn, Ph.D., who was a professor and fellow researcher in immunology at McGill University. Framed copies of the VMV were presented to employees, who now prominently display them in every office and department of Immunotec in Canada, the United States and Mexico. And events—the lifeblood of any direct selling company—always reflect the VMV. Consultants even refer to them during opportunity meetings. And every communications element, including incentives, promotions, the company’s bimonthly electronic newsletter, the website, the Immunotec Facebook page, and email signatures are designed and aligned to “live” the VMV.


“The better alignment that our Vision, Mission and Values created throughout the company has accelerated growth, and it will support reaching $100 million Canadian and beyond.”
—Charlie Orr, CEO


The VMV even inspired the creation of the Immunotec Children’s Fund, the company’s philanthropic flagship. Immunotec launched the fund at last year’s annual barbecue to continue Bounous’ lifelong dream of improving the lives of underserved and underprivileged children. The fund partners with consultants in their local communities to help support children’s academic, nutritional and physical needs.

“The better alignment that our Vision, Mission and Values created throughout the company has already accelerated growth, and it will support reaching $100 million Canadian and beyond,” Orr says. “The next thing that is foundational for us is consistent execution of our business rhythm throughout all of our markets.”

That rhythm pulsates through the power of corporate, regional and local events strategically scheduled throughout the year to reinforce the sponsoring, engagement and development of consultants. From smaller events in January that build excitement for the big sales convention every February, to regional conventions in each market, to the company barbecue in September, to the big sales incentive trip—or trips, depending on the market—something is always happening to deliver excitement, training and recognition.

“Executing against our business rhythm is as important as anything we do,” Orr says. “When you break that business rhythm, you confuse yourself and the field. You take something away that people have come to expect. We may tweak, update or change, but we always partner with the field to make everything we do an improvement over the last event, and always first class. But each event must have a high degree of predictability because our consultants are the folks who drive the business forward.”


Three years ago a senior leader could earn the annual travel incentive trip through personal performance. Today’s incentive qualifications require leaders to demonstrate both the ability to perform personally and to develop members of their teams.


Business Builders

Once the events are over, consultants take their knowledge and enthusiasm home. They work their business using recently developed training programs and better communications tools that create message alignment across the company.

“Our products have always been great, but we needed our distributors to open new doors,” says direct selling veteran Jean-Pierre (JP) Trottier, the company’s Vice President, Sales and Marketing. “Over the past two or three years we have provided them with training programs, communications to support the products and the business opportunity, a new field recognition program, and a business presentation template so that the presentation was easily duplicable and everyone spoke the same language. New people came into Immunotec because they wanted to live an active and productive lifestyle. We were able to position the product to attract a large segment of the population, and we supported business-building activities at the same time.”

ImmunotecImmunotech Research founders Chuck Roberts and Dieter Beer

They recrafted the compensation and incentives program for leaders and paired it with additional leadership-development initiatives, training leaders on their responsibilities at each leadership level. For example, three years ago a senior leader could earn the annual travel incentive trip through personal performance. Today’s incentive qualifications require leaders to demonstrate both the ability to perform personally and to develop members of their teams. Field leaders soon realized that focusing on their teams would bring even more income opportunities and satisfaction. The company also developed field task forces that enable the company’s headquarters staff to partner better with field leaders.

“Those who were given new responsibilities rose to fulfill the new expectations,” Trottier recalls. “People want to feel appreciated, and feel they can contribute. The system we created enabled them to feel better about their role and the impact they were creating. We’re still working on it, but it’s becoming part of the culture.”

Investing in Infrastructure

HeadquartersImmunotec headquarters in Vaudreuil-Dorion, Quebec, Canada

As sales and sponsoring ramp-up, Immunotec is supporting its field by investing in key infrastructure. Its new $500,000 technology platform will be faster and easier to use, and it will provide better access to information that consultants use to build their business. The online order system will be more user-friendly and will provide the opportunity for immediate product purchases. They expect to launch a program this fall to ramp up monthly orders and auto-ship with an eye toward improving consultant retention. At the same time, they will launch programs that reward auto-purchasers, such as greater discounts.


“Our products have always been great, but we needed our distributors to open new doors.”
—Jean-Pierre (JP) Trottier, Vice President, Sales and Marketing


“Our field puts in a lot of effort to recruit customers, so we try to over-deliver in customer satisfaction,” Trottier explains. “We’re developing special loyalty programs that reward users so that they order regularly. For some people it takes weeks or months before they feel the benefit of the products, so we put lots of effort into communicating to users to explain the benefits of the products and of staying on the products. This also benefits the field, as it helps them create long-term customers.”

The new state-of-the-art system will give Immunotec an improved ability to analyze data, as well. This year the company will also deploy new payment processing capabilities in selected markets that will better support commission payments.

Beyond technology, Immunotec opened a new sales office in October 2014, in Commerce, California, customizing it with meeting rooms and computer facilities to support business presentations and sponsoring. Trottier says the facility has been a big help in boosting U.S. sales. Orr notes that the investment in the facility recognized better sales in the U.S., especially in Southern California, which produces about 25 percent of the company’s U.S. sales.


Immunotec has Diamond Leadership, a major leadership level, in two-thirds of all states in Mexico, its largest market.


“Our Southern California-based folks demonstrated by their performance that it was time for us to open such a facility,” Orr explains. “Looking ahead, I think that model can be replicated in other parts of the country.”

As Orr looks to the future, he is both optimistic and patient. He envisions the company expanding into more international markets, especially in Central and South America, over time, but he also wants to increase penetration in current markets. He notes that the company has created a robust product development system that will provide ongoing new products and enhancements. Orr also envisions further developing Immunotec’s field leadership and notes that the company has Diamond Leadership, its first major leadership level, in two-thirds of all states in Mexico, its largest market. But as Immunotec approaches its 20th anniversary, he emphasizes that this is a moment in the company’s history that deserves to be saluted.

“Everyone should celebrate the fact that we entered the Direct Selling News Global 100 and the North America 50. But just like there’s a difference between achieving rank and holding rank, our goal is to hold our Top 100 ranking,” he says. “Overall, we could grow as much as 10 percent in 2015. But we’re taking time now to hold rank, to do all the right things and not force things that can’t be forced. I see a vast amount of potential if we follow the model we’ve put in place over the last few months for how we think about this business.”

August 01, 2015

Industry with Heart

Young Entrepreneurs Still Working the Summer Strategies: CUTCO and Southwestern Advantage

by Carol Brzozowski

Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profiles

CUTCO/Vector Marketing
Founded: CUTCO, 1949; Vector Marketing, 1985
Headquarters: Olean, New York
Executive: James E. Stitt, Chairman, CEO and President
Products: Home care, kitchenware and appliances

Southwestern Advantage
Founded: 1868
Headquarters: Nashville, Tennessee
Executive: Henry Bedford, Chairman and CEO
Products: Educational reference books and software


CUTCOVector Marketing representatives win CUTCO prizes during a “Crazy Clothes” contest.

College students are an attractive pool of potential recruits for direct selling companies. They tend to be open to new life experiences and eager to learn, which makes coaching easier than with groups that already have established more deeply rooted habits and beliefs. They are comfortable with new technology and are passionate about sharing their favorite things with others. And, particularly during the summer months, they are likely to have flexible schedules that lend themselves nicely to building a direct selling business.

The challenge, of course, is that the preferences of college students change perhaps more rapidly than in any other sector of the workforce. What’s in fashion this month may not be the case next month, whether it’s the latest sunglasses craze, a trendy new app or a business opportunity.

Staying nimble enough to appeal to this group year after year is no small feat. Yet, with very little fanfare, two direct selling companies have spent decades building their salesforces largely with this demographic group: Vector Marketing, the marketing arm for CUTCO knives, and Southwestern Advantage, which sells educational products. These two companies have developed methods for staying in tune with the likes and dislikes of young people, what motivates them and what keeps them engaged—all while consistently building teams of well-rounded, self-disciplined and hard-working independent sales representatives. A Direct Selling News analysis of the two companies revealed four common elements of their success.


“It’s the first job where you get to manage your time by yourself and one of the few jobs available that teaches you to become a professional.”
—Clayton Balistreri, former representative, Vector Marketing


1. Communicate the Bigger Picture

Joining Southwestern Advantage or Vector Marketing is, and always has been, about more than selling books or knives. Both companies offer an appealing income opportunity as well as programs to build important life skills, such as perseverance, integrity, keeping one’s word, and hard work—not to mention that ever important goal of employability.

Southwestern Advantage has been making this pitch the longest. Southwestern, its parent company, was founded by the Rev. James R. Graves in 1855 in Nashville, Tennessee, and began its direct selling program for college students in 1868, after the Civil War devastated the economy and Graves sought a way to help young people finance their schooling. That concept continues to resonate even today; students were hit hard during the recent recession, and many continue to struggle with the cost of tuition.

“Where there’s a need for people willing to work hard, follow a proven system, and use their best efforts at entrepreneurship, they can do really well with us,” says Dan Moore, Southwestern Advantage’s current President.

SouthwesternA Southwestern student dealer may start their business reaching out to family, and spread further out into their community as they become more comfortable.

Rebekah Hyde joined Southwestern Advantage as a University of Georgia student. As an athlete, Hyde says she was attracted to the program’s challenges, energy and competitiveness and sought to do something outside of her comfort zone. She made $15,000 the first year and relied on her belief that “there is a greater purpose out there—it’s not just about selling books, it’s about the character and principles I was forming. Every summer I would meet someone who bought the products in the past, and I saw how it had impacted them.” She now passes on the skills she learned as a Southwestern Advantage sales manager, working with students at eight colleges in five states doing event planning, hiring and training.

Like Hyde, Clayton Balistreri says he gained valuable sales experience selling CUTCO knives during his high school senior year. “CUTCO was a perfect job for me because I intend to be a salesman after college,” says Balistreri, now a Florida State University sophomore. He plans to join his family’s real estate business after graduation. “What’s funny is I started selling CUTCO because I wanted experience for the real estate and insurance business,” Balistreri says. “When I asked my father about making sales calls, he told me that in real estate, you have a phone list of names, follow a script, and ask people to buy. I realized all sales are the same, so I started making more calls.”

Balistreri advises students considering direct sales to “have fun with it and don’t get discouraged when people say no. It’s the first job where you get to manage your time by yourself and one of the few jobs available that teaches you to become a professional.”

2. Make It Fun

Another key to successfully recruiting and retaining young people is creating opportunities to have fun through work. For Vector Marketing, that means keeping office environments, training sessions and team meetings fun and laid back, says Ryan Long, Vector Marketing’s Content and Public Relations Manager, who herself sold CUTCO after college graduation. During the nighttime team meetings, especially, the group gets together for networking and fun—all in an environment that nurtures building relationships and bonding. That may entail playing miniature golf, bowling or having games in the office such as “CUTCO Jeopardy.”

“We’ve found that our young people are competitive and motivated by contests,” Long adds. “Students like to win. They like bragging rights. Sometimes they win things like CUTCO products and trips, but sometimes they do more fun things like pie-in-the-face contests.”


“Where there’s a need for people willing to work hard, follow a proven system, and use their best efforts at entrepreneurship, they can do really well.”
—Dan Moore, President, Southwestern Advantage


Making sales fun is a never-ending process for direct selling companies, as young people’s definition of fun shifts over time. Millennials, for example, have proven to be a service-minded and cause-oriented group, and it’s best to tap into that when recruiting them, says Trey Campbell, Southwestern Advantage Director of Communications. “They’re not always in it for themselves, so if you can have an aspect to what you’re doing that pulls on their heartstrings and emotions—something they care about—then they’re much more likely to be engaged,” he adds.

That’s why, Campbell says, Southwestern Advantage has found that value-added training, including life skills as well as sales lessons, is even more attractive to young salespeople.

“Young people don’t have habits established, so you have an opportunity to provide them with habits that will be good habits and will last a lifetime,” he says. “Millennials tend to be a lot more open to life experiences. They are a very coachable group. It makes training easier because they are eager to learn.”


“There is a greater purpose out there—it’s not just about selling books, it’s about the character and principles I was forming.”
—Rebekah Hyde, Sales Manager, Southwestern Advantage


3. Involve Parents and Other Community Adults

The rise of the so-called helicopter parent has made an impact in the direct selling space. Parents, Campbell says, express numerous concerns related to their children’s sales experiences. The best course of action: Go with the flow.

“They want to know their kids are going to be safe,” Campbell says. “They are very involved in their kids’ decisions and lives, which is great. Part of that comes from all of the things that parents get involved in, such as traveling and sports, when their kids are younger and it carries through to college. We respect that and that’s why we want them to be part of the program as well.”

SouthwesternA student representing Southwestern Advantage demonstrates products for a family interested in educational materials.

Southwestern Advantage reaches out to students through recommendations from other students. Those interested attend on-campus information sessions and follow-up meetings. The company rounds out the recruitment process by meeting with parents for their endorsement of the students in the program at a coffee meeting near campus. Such meetings have been a policy for many years in the interest of transparency, says Campbell, adding that parents sign an endorsement letter, even though the students are legally adults.

“We find the success rate is a lot greater when parents are supportive of the young people who participate in our program,” he says. Some of the parents had sold the product when they were in college as well. “Among the people the students trust the most are their parents. We want the parents to be fully informed to help them make an educated decision that this would be something right for the student.”

That level of partnership extends to the community as well. When Southwestern Advantage began marketing through social media, the company initially met resistance as people took to the platform to complain about college students. Now, students establish Facebook business pages, posting photographs of customers and their children with the company products and encouraging customers to share and tag them for greater exposure. Students also are encouraged to obtain permits from local law enforcement before the start of their sales program and to ask the police departments to post information about the program on their own websites.

That approach has had a dramatic impact on receptivity, sales and how college students feel about what they’re doing, says Moore. “We work with great young people who were out there doing their best, but there were some misperceptions creating this inaccurate flood of information on social media,” he says.


“Young people don’t have habits established, so you have an opportunity to provide them with habits that will be good habits and will last a lifetime.”
—Trey Campbell, Director of Communications, Southwestern Advantage


4. Don’t Re-invent the Wheel

CUTCO knives have been manufactured in the U.S. since 1949, and, while there have been technological changes, CUTCO’s training program looks very much like it did 30 years ago, says Long. The product is marketed primarily on an in-home basis by sales representatives, mostly college students, working for Vector Marketing. CUTCO also sells kitchen gadgets and hunting and fishing accessories, some from retail locations.

TEXTCUTCO reps have fun during a Fourth of July Team Night in San Jose, California.

Sales representatives request customer referrals at the end of the presentation and receive a base pay regardless of sales made. They start out making 10 percent commission on the first $1,000 of product sold, with graduated increases tied to sales.

Long notes that Vector Marketing recruits college students year-round. She finds them to be a demographic that does well at direct selling and is readily available to work in the summer time. But while college students seek work more during the summer than throughout the rest of the year, the job’s flexibility is a big draw and can work well for them during the school year too, she says.

“They can potentially get started with us during the summer and get the higher levels of commission by the end of the summer,” she adds.

Vector Marketing recruits primarily through direct mail invitations to high school graduates and college students and referrals from other student sales representatives. Other recruiting methods include on-campus visits, email blasts and community-based posters.

Following an interview, students attend a two- or three-day training in a local office, which involves role playing to help build confidence. During training, representatives learn about knives and competitors’ products. Although the company generates leads in the beginning, representatives learn to create a customer list, identify target customers and qualify leads. Students phone people with whom they are familiar, typically a parent or family friend, to set up initial appointments. All customer meetings are based on pre-set in-home appointments.


“As a direct selling representative, especially a college student, this is work they have probably never done before; we’re asking them to step outside of their comfort zone.”
—Ryan Long, Content and Public Relations Manager, Vector Marketing


“As a direct selling representative, especially a college student, this is work they have probably never done before; we’re asking them to step outside of their comfort zone,” says Long. “As their confidence improves, they expand their circle out to people they don’t really know.”

Technology has become increasingly incorporated into Vector Marketing’s sales approach. Paper orders are filled out with the customer, but the representative can also enter customer order information into a computer. The order is sent straight to the factory for immediate processing. A Rep Online Order enables representatives to instantly flag billing challenges.

Vector Marketing’s AEVA or All Encompassing Vector App enables representatives to load training information and to check on appointments, arrival times and sales statistics. The app allows the manager to communicate with the entire team and the team members to communicate with each other.

Also at Southwestern students have online resources to help them in product and sales knowledge. They use Skype and video conferencing to communicate with sales managers, manage their accounts on a proprietary website, and use tablet-based sales processing systems in which customers sign off on transactions through a touchscreen.


“The marketing strategy is to have a personal relationship with people. That’s what direct selling is.”
—Trey Campbell


Customers even benefit from technological advances: The educational products are offered in print and digital formats; the latter is refreshed for customers who buy a subscription.

While technology continues to change, the fundamentals also remain the same at Southwestern Advantage. Training includes product knowledge and presentation, prospecting, ethics, safety skills, self-discipline, time management, goal setting, running a business, teamwork, and customer service among others. Sales managers speak with students individually about how the skills will benefit them in their academics or in selling a brand and commodity in a workplace, Campbell says. “The marketing strategy is to have a personal relationship with people. That’s what direct selling is,” he says. “We build relationships, and through those relationships they decide what we have to offer is something that would benefit them.”

The success of these two companies is built upon values that do not change with the passing of time: hard work, commitment and ambition. By tapping into the natural enthusiasm of students, companies who focus on this population, such as Vemma with their Young People’s Revolution (YPR) and Isagenix with their START program, are joining Southwestern and CUTCO in gaining success and empowering young people with life skills.

August 01, 2015

Executive Announcements

Executive Announcements, August 2015


Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


Mary Young Transitions to CEO of Young Living

Mary Young Mary Young

Young Living Essential Oils has announced that its storied Co-Founder, Gary Young, is stepping down from his role as CEO. His wife, Mary, the brand’s Co-Founder and Executive Vice President, will take on leadership of the company.

Mary has served on Young Living’s corporate executive team for the past two decades. In a nod to her personal and professional work, Utah Business

“What started over two decades ago as a personal passion for both Gary and me has grown into a worldwide company committed to transforming the lives of millions,” Mary said in the company’s release. “Prior to launching Young Living with Gary, I established and grew my own successful direct selling business. This experience has led to a ‘member-first’ mindset for Young Living and continues to shape our culture and policies.”

In a statement, Young Living said Gary will continue his work in the wellness field as he writes books and shares his knowledge of essential oils. The 66-year-old is also looking to focus his time on family and various philanthropic and civic initiatives.


Youngevity Launches Outbound Sales and Retention Team

Alex Theis Alex Theis

Youngevity Essential Life Sciences announced the creation of an Outbound Sales and Retention Team along with an initiative to review and improve their overall customer and distributor experience.

Alex Theis, a veteran of the direct sales industry, has been brought on to spearhead both campaigns. Theis has worked with several companies in the industry and is a well-rounded executive with expertise in developing retention initiatives and outbound revenue generation teams. Additionally he brings executive-level experience in customer service, sales, marketing and field relations. Theis has an extensive international background as well, working with large groups in Asia, Australia, New Zealand, and Europe.

Youngevity’s Outbound Sales and Retention Team officially launched in March. The newly formed department contacts customers within Youngevity’s data base of consumers through a courtesy call program. The program’s mission is to further engage, educate, and grow Youngevity’s account base. As the Outbound Courtesy Calling Team expands they will also be working in a support role to assist in streamlining the integration process of Youngevity’s acquisition strategy.

“The implementation of these new programs provides another example of the investments that we are making to stay ahead of our growth curve…,” says CEO Steve Wallach. “We’re excited to have someone with the industry experience and proven record of success that Alex Theis brings to Youngevity.”


Rodan + Fields Taps Finance Expert for Board

Louis J. Lavigne Jr. Louis J. Lavigne Jr.

With an eye toward future growth, skincare company Rodan + Fields has appointed corporate finance consultant Louis J. Lavigne Jr. to its board of directors.

“Lou’s demonstrated financial expertise and broad leadership experience will prove critical to Rodan + Fields as we continue to globalize our business,” said Amnon Rodan, Chairman of the Board.

Lavigne, currently Managing Director of consulting firm Lavrite LLC, spent 23 years as Executive Vice President and CFO
at Genentech Inc., a leading biotech company. In addition to overseeing the company’s financial, corporate relations and information technology groups, Lavigne sat on the executive committee and chaired the company’s 401(k) plan committee.

“I look forward to working with Rodan + Fields to continue the company’s momentum and growth as we redefine the future of skincare and social commerce,” Lavigne said.


Tastefully Simple Appoints New President and COO

Nancy Dahl Nancy Dahl

In July, Tastefully Simple Inc. introduced a new product concept aimed at catering to today’s consumer and injecting fresh energy into the business. Coinciding with this transition, the tasting party company is bringing on a new President and Chief Operations Officer, Nancy Dahl.

Dahl hails from photography giant Lifetouch Inc., a $1.2 billion company based in Minneapolis. She held various management positions within the company before serving as President and COO for the Lifetouch National School Studios division. Dahl currently sits on the board of both corporate and nonprofit organizations, including the Greater Twin Cities United Way, Dunwoody College of Technology, and the Family, Career & Community Leaders of America (FCCLA).

“In addition to being an amazing culture fit, [Dahl] is an innovative catalyst who provides crystal clarity in identifying priorities and has high standards of excellence,” Tastefully Simple CEO Jill Blashack Strahan said in a statement.

Dahl will help lead the company in its new strategic direction, which focuses on simple-to-make, cost-effective and wholesome meal solutions. Vice President of Sales, Chet Seely, said Tastefully Simple is also equipping its consultants to grow their one-to-one sales alongside the traditional tasting parties.

Among the answers Tastefully Simple provides are 10- and 30-meal collections—including products, grocery lists, recipes and menu planners—and the brand-new TS to You subscription service, launched July 1, which brings recurring orders of meal collections to subscribers’ homes every other month,” Seely told DSN.


4Life Announces General Manager, Australia and New Zealand

Jim O’Reilly Jim O’Reilly

Jim O’Reilly has joined 4Life as General Manager in Australia and New Zealand.

In his new role, O’Reilly will be responsible for all aspects of 4Life’s business in the market, including operations, marketing, and field development. He comes to 4Life with several years of experience. Most recently, he served as General Manager over Australia, New Zealand, and the Pacific for another global direct selling company.

“Jim brings a diversity of experience to 4Life,” said Matt Lisonbee, International and Sales Manager. “First, he understands our business model. Second, he’s operationally proficient. Finally, he’s a marketer, communicator, and field developer.”

During his professional career, O’Reilly has lived and worked throughout Asia and the United States with a focus on creating sustainable and profitable relationships with distributors.


Former Industry CFO Joins Nu Skin Board of Directors

Edwina Woodbury Edwina Woodbury

Nu Skin’s newest board member is no stranger to the direct selling industry, despite her current position at the helm of a personal publishing company. Having spent more than 20 years at an iconic direct seller, Edwina Woodbury, President and CEO of The Chapel Hill Press, returns to the industry to serve on Nu Skin’s board of directors.

From 1977 to 1998, Woodbury held a series of finance and operations roles at one of the industry’s celebrated beauty brands, eventually serving as finance chief for the company. In addition to leading The Chapel Hill Press, Woodbury currently sits on the board of RadioShack and the nonprofit Medical Foundation of North Carolina.

“Edwina brings a wealth of experience in our industry,” Executive Chairman of the Board, Steven J. Lund, said in a statement. “Her extensive and in-depth understanding of the financial and operational issues associated with global companies will provide significant insights and another strong voice to our board.”


Zija International Introduces Product Advisory Council

Joshua Plant Joshua Plant
Daniel Pénöel Daniel Pénöel
Pierre Franchomme Pierre Franchomme
Doug Nelson Doug Nelson
Karen Jensen Karen Jensen

Zija International, a direct seller of natural health, wellness, nutrition and fitness products, has established the new Zija Product Advisory Council. The purpose of the council was to bring together an experienced and expert group of professionals to help the company maintain the highest quality of sourcing, validation, and delivery practices for their product lines.

Joshua Plant, Ph.D., Chairman of the Zija Product Advisory Council, graduated from Harvard Medical School first in his class and has a Ph.D. in biomedical sciences. He has been published across several scientific journals for his work on cellular growth, metabolism and other health-related topics.

Daniel Pénöel, M.D., is an essential oil expert and medical practitioner as well as a Doctor of Medicine and homeopathy. He supports the use of clinical-grade essential oils for normal body function and has used essential oils as a practitioner around the world. Pénöel has published several books and been a public speaker worldwide.

Pierre Franchomme is a phytopharmacologist with more than 15 years of pharmacological lab management experience. He is an expert in essential oil screening, with an emphasis in inflammation and neurosciences and is the product formulator for a number of well-known health, wellness and beauty brands, including Estée Lauder, Origins and Aveda. Franchomme is the author of several books, including L’Aromathérapie exactement, which he co-authored with Pénöel.

Doug Nelson, Ph.D., is a farming and sourcing expert and former associate professor of recreation management at Brigham Young University. He serves as a Global Farm Manager and Global Farm Operations Strategic Advisor in the essential oil industry and has overseen the production and distillation of essential oil farms in Utah, Idaho, France and Ecuador.

Karen Jensen, MH, CM, is a healthy living expert and master herbalist, as well as a midwife. She has published several books about herbal health and midwifery and developed and taught courses for the National Association of Certified Natural Health Professionals.


Zrii Hires New Regional VP of South America

Carlos Lopez Ortega Carlos Lopez Ortega

Carlos Lopez Ortega has been hired as Regional Vice President of South America at nutrition and weight-loss company Zrii and will be based in Colombia. Lopez Ortega brings to Zrii a wealth of experience working for a billion-dollar, multinational direct selling brand as well as at Redbull and Coca Cola.

“I am extremely excited to assume the role of Regional Vice President of South America for Zrii,” said Lopez Ortega. “This position will allow me to work closely with the region’s field leaders to help them achieve stellar results.”


Submissions: Please submit news of executive promotions and hires at your company to be included in the Executive Announcements section of Direct Selling News.
» pr@directsellingnews.com

August 01, 2015

Top Desk

Success: Built from the Inside Out

by Greg Provenzano

Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


As direct sellers, we have the opportunity—the privilege, really—to provide individuals with a vehicle that can drive incredible change in their lives, whether that definition of change is more time, more money or both. But in our “no experience necessary, all walks of life are welcome” world, what is it that sets the successful apart from the rest? Why is it that direct selling works so well for some but not for others?

Certainly there are the usual suspects like hard work and commitment level, but sometimes even people with an incredible work ethic and the best of intentions fall flat. In fact, have you ever met someone and immediately thought, Wow that guy is special—he is going to do great things in our business only to watch them quit before they ever got out of the gate? That’s because in order to be truly successful in our industry, individuals have to first change on the inside before success can ever be revealed on the outside. At ACN, we believe that if you aren’t growing as a person, there is no way for your business to grow. The two are absolutely interrelated. You can’t be a top leader long-term in ACN if you are at home screaming at your spouse and kids—it’s simply not possible. Our system will push you out. I’ve often said the wrong kind of people can’t stand the right environment for too long. Your outer world will always catch up with your inner world.

Because of what I’ve just mentioned, we don’t just talk about personal growth at ACN; we’ve created our entire culture around it. It’s a part of everything we teach and train. So how do you create a culture of personal development in your business? Here are some of my top tips:


At ACN, we believe that if you aren’t growing as a person, there is no way for your business to grow.


It Starts with You

Getting your organizations to commit to personal development, to being the best possible versions of themselves, starts with you. As owners and executives of our companies, we can’t expect our people to understand the value of personal growth if we don’t personally embody it. Remember, 90 percent of things are caught, not taught. I’m not the person I was 20 years ago. In order for ACN to grow, I had to take the first step and grow and evolve as a person and a leader. I had to make it a priority. We all know if it’s important enough we will find a way. And if it’s not, we will find an excuse. Be a constant student of becoming your very best self, and your people will naturally follow your lead.

Small Portions over Time Equal Big Results

For most people, the thought of adding another to-do item to the list is overwhelming. The key is to make personal development a part of your day, your lifestyle—and not just another thing added to the to-do list. The fact is you don’t have to pore over hundreds of pages in a single sitting or listen to hours of audios to get the big results. Instead set a goal to spend just 10 minutes a day on personal development, even if it’s only reading one chapter or listening to a portion of an audio on your car ride each morning. It’s a much more manageable dose, but in no time you will have absorbed some incredible content.

Content Absolutely Counts

Most of us are consumers of some sort of media every day, but just because we are spending time reading something doesn’t mean the content is beneficial. While guilty pleasures like gossip magazines and reality TV shows are fine in moderation, imagine if you replaced just one of those things a day with time spent on improving yourself. If you’re going to spend time consuming media, shouldn’t it be something that moves your business forward and improves your life?


Personal development forces us to look at ourselves in a completely different and new way, and it’s only then that the greatest versions of our companies and ourselves are revealed.


Embrace the Process

Personal growth isn’t just a one and done thing; it’s something that has to become a part of your business, and more importantly, your life. You can’t talk about it with your people once, never mention it again, and expect to see the lasting results. After all, we are never truly finished growing and evolving. I, for one, am a constant work in progress. Nothing worth doing comes easily. Personal development, like anything worthwhile, takes continuous effort and commitment, but over time it will become second nature. Have you ever noticed that the more junk food you eat, the more your body craves it? The same can be said about your mind. The more you feed your mind, the more it craves. I can’t imagine not eating for a long period of time. Can you? You must feel the same way about personal development.

Give Your People the Tools to Succeed

While talking about personal development is important, and it’s a start, it’s simply that: talking. You have to make the investment in your people if you expect them to make an investment in you. At ACN, we’ve implemented a robust personal development program that provides our independent business owners with articles, books, audios, videos and more. It’s millions of dollars in content that they can access online anytime.

I often encourage our leaders to “change the scenery” and to periodically spend time around people who aren’t impressed with them, because if you are always the smartest person in the group, you’re not growing. This is what personal development does for us; it provides a change in perspective, a reality check. It forces us to look at ourselves in a completely different and new way, and it’s only then that the greatest versions of our companies and ourselves are revealed.

We have a choice to make every day: We can choose to build our businesses on solid rock or sand. The only difference in the two is their foundations. By getting serious about personal and professional growth, you can lay a solid foundation for a future built upon solid rock. When the winds of change or adversity come your way—and they absolutely will—you can stand firm and win. More importantly, you can look back and be excited about the lifestyle you created for yourself, your family and countless others.


Greg ProvenzanoGreg Provenzano is the President and Co-Founder of ACN.

August 01, 2015

Working Smart

Call Center Impact: Tips for Setting Up, Optimizing or Outsourcing Your Call Center for Success

by Karen Danielson

Click here to order the August 2015 issue in which this article appeared or click here to download it to your mobile device.


During the startup phase of most direct sales companies, call centers are utilized to provide direct communications to both the organization’s field representatives and customers. However, what oftentimes goes unnoticed is that the call centers created during the startup phase of the business can end up controlling nearly 90 percent of those communications, directly impacting the overall credibility and perception of the organization, as well as influencing the purchase decisions of their consumers.

Call centers, whether internal or outsourced, are the front lines of your organization. They interact with your customers and distributors on a regular basis and can impact their loyalty to your organization. Making sure that your center is optimized, reliable, cost-effective, and a good representation of your brand are of the utmost importance.

Whether you are looking to provide a call center internally, currently have an existing call center or are looking to outsource, the below criteria can help serve as a checklist to ensure that your call center operations are efficient, reliable and cost-effective.

  1. Consider Hiring a Qualified Consultant. While this can be a big investment, the dividends often pay off in cost savings by capitalizing on the knowledge of an independent third-party analysis. Should you make this decision, be sure you:
    • Have a clear scope of the work that includes goals and duration for the consultant’s analysis.
    • Have clear expectations for both parties that highlight response times, fees, travel costs and timelines of when items will be completed and provided. Choose Key Performance Indicators (KPIs) that will allow you to measure the success, internal workings and productivity of the call center.
    • Outline a list of deliverables that you will be provided at the end of the analysis.

  2. Set Business Goals and Objectives. Determine what you want the call center to accomplish and develop a set of criteria for tracking and evaluating those goals.
  3. Define Key Performance Indicators (KPIs). Implementation of any service requires you to measure its success. Select important KPIs that will allow you to measure internal workings and productivity of your call center. Tracking of these metrics will allow you to gauge where you might be able to gain more revenue by increasing staffing, or identify cost-saving areas where you might be spending more money than necessary. Some of the most common include:
    • Service Level
    • Agent Utilization
    • Abandon Rate
    • Cost per Call

    When determining these KPIs, make sure you understand how they relate to one another, as well as what the impact could be to your bottom line. A general industry operating standard that maximizes your cost savings is 80 percent of calls answered in 30 seconds or less with a 5 percent abandon rate. Deviations from these metrics could increase or decrease each of your KPIs and budget, so make sure you understand how before agreeing to specific operating metrics.

  4. Set a Budget. Setting a budget is integral to any operation. If the decision is being made to set up an internal center over outsourcing due to cost, make sure to include any hidden costs associated with your center for a cost-for-cost comparison. These hidden costs oftentimes include the behind-the-scenes individuals and software programs necessary to monitor, oversee, and run your call center. They include training, quality assurance, human resources, supervisors, recruiters and workforce scheduling, to name a few. If the decision is being made to outsource, make sure you understand exactly what is and is not included in the cost prior to making any decisions.
  5. Discover and Determine Any Operational Parameters or Constraints. Evaluate your customer base to determine which communication platforms your customers use to interact with you. This will allow you to offer services that will make your team the most efficient. Some of the most common include:
    • Integrated Voice Response (IVR). This offering allows you flexibility to provide customers with information without interaction with an agent. It can also point users to a secondary platform for the information they are looking for, or simply provide informational messages to them while they are on hold.
    • Data Recognition Software. This matches the number or information provided by your customer and pulls up their account for the agent once the call has been answered.
    • Live Operator. This can be dedicated agents or shared, depending on your business model. Live agents enable your customers to interact with a live person during scheduled hours of operation. Workforce solutions exist that can help provide scheduling to include lunch breaks, rest periods and time-off requests, as well as optimize coverage to either your operating metrics, or to your budget.
    • Email Response. With technology being so prevalent, email is a widely used feature for many businesses. Providing scripted responses to your most commonly asked questions can enable your agents to provide fast, consistent responses to email inquiries.
    • Live Chat. Allow customers to interact with agents via a live chat feature on your website. Scripted responses enable your agents to provide consistent responses and handle three to four chat sessions at any given time. Like the live operator, the hours of operation and scheduling will need to be handled via a workforce solution.
    • Social Media. Many companies, especially direct selling organizations, are finding more and more of their customers and distributors communicating via social media platforms. Develop a content strategy for a regular posting schedule as well as management and listening tools to help gauge what is being said about your product and organization online.
    • SMS/Text Messaging. Provide order status updates, tracking updates, contests, campaigns or special deals to your most loyal customers. This service can be provided either through a live agent or via a software offering.

    Whether you are outsourcing or keeping your call center internal, make sure you have a plan in place that addresses problem escalation, disaster plans and outages.

  6. Understand the Technology Platforms Selected. Once you have selected your service offerings, it is important to understand the technology platforms that will be used to deliver those services and how they will integrate together as well as with any internal operating systems for compatibility. This includes any software you use for taking orders, billing, email and CRM, as well as others.
  7. Establish the Team. In addition to your agents, you will want to hire team supervisors, human resources, and analysts. These individuals will help you manage and monitor your ongoing program and evaluate your productivity based on your KPIs. You may also want to consider staffing a recruiter, depending on how quickly you need to scale.

    Other positions that will help with your program success include hiring individuals capable of workforce staffing and scheduling, quality assurance programs, training and monitoring, as well as trainers to develop your onboarding curriculum and ongoing training programs.

  8. Train Your Team. Developing the initial training program is the first step to any training curriculum. Start building your training program by identifying which training skills you want your staff to take away from the training. Some of the most common items include:
    • Product Training
    • Company/Brand Training
    • Soft Sales Skills
    • De-Escalation
    • Data Security and Protection

    Once you have established your initial training curriculum, build the modules around it and determine how it will be delivered to your agents. Make sure that you can test your agents’ retention of the material prior to making them live on the floor.

    We also suggest regular review periods with your trainers, quality assurance team, team supervisors, HR, analysts and IT team to determine any ongoing training that is needed. These ongoing trainings could be revisions to your existing programs, additions due to compliance, technology updates, or efficiency and quality improvements identified by your analysts and quality assurance teams. It is recommended that you review your training program once every six months internally and once per year with an independent third-party consultant.


  9. It is always a good idea to partner with an outsource call center ahead of time to determine their ability to be an effective partner to your organization without having time pressures forcing the decision.


  10. Develop an Outsource Plan. Even if you never use it, you will be prepared for outsourcing should the need arise at a moment’s notice. Determine how quickly you are able to scale and to what capacity. You also will want to set parameters that define when, within those boundaries, you will need to outsource, if at all.

    It is always a good idea to partner with an outsource call center ahead of time to determine their ability to be an effective partner to your organization without having time pressures forcing the decision. When discussing outsourcing with a firm, make sure you:

    • Choose a call center that understands your corporate goals and can work as a strategic partner to help you achieve those goals.
    • Choose a call center that can handle the volume of expected incoming and outgoing calls on an annual, monthly and daily basis.
    • Choose a call center that will not only allow but also encourage you to stop by for visits and interact with your agents.
    • Evaluate pricing based on your call volumes and understand completely what that pricing includes. Make sure you address quality assurance, training, training supervisors, etc., as well so you aren’t surprised with any hidden costs when the invoice comes.
    • Discuss KPIs and program goals.
    • Understand the center’s approach to quality monitoring and training programs to ensure they align with your company objectives.
    • Understand the center’s approach to initial and ongoing training curriculums related to your program.
    • Evaluate any disaster recovery plans, outage plans or escalation plans for the center and determine if they meet the needs of your organization.
    • Ask for references and check them.

By evaluating and partnering with an outsource call center ahead of time, you can be sure that should the need ever arise to utilize them at a moment’s notice, they can scale quickly and cost-effectively, and be able to provide reliable service that replicates the energy and service level of your brand.

Managing a call center is not an easy job. It takes constant evaluation and program management; but when done well it can have a huge impact on your business. Here’s to your call center success!


Author NameKaren Danielson is Director of Marketing for The Connection, an outsourced call center that provides customer and distributor support services as well as Tier I and Tier II technical support for direct sales organizations.

July 31, 2015

World News

This Week: Columbus Honors Thirty-One, E! Talks to Stella & Dot Creative Head

Catch up on this week’s industry chatter with these click-worthy links:

  • As part of its Trendsetters at Work series, E! spoke to Blythe Harris, the creative force behind Stella & Dot’s luxe jewelry designs. Harris shared her style inspirations, the most daring career risk she’s ever taken, and what her typical day looks like as Co-Founder and Chief Creative Officer of the California-based brand.
  • Thirty-One Gifts wrapped up its National Conference at Nationwide Arena in Columbus, Ohio, but the brand has left a permanent mark on the city. In honor of Thirty-One’s contributions—including the conference’s annual impact on the local economy and a #31Shares campaign that encourages random acts of kindness from consultants—Mayor Michael B. Coleman has renamed downtown thoroughfare Nationwide Boulevard as Thirty-One Way.
  • Discount shopping site Zulily featured fashion brand CAbi in one of its limited-time collections. In an accompanying Q&A, Zulily spoke to CAbi CEO Lynne Coté about the online partnership and leading the CAbi team.
  • Nutrition company Herbalife received another favorable ruling in a lawsuit led by the Oklahoma Firefighters Pension and Retirement System. The fund claims shareholders lost money after investor Bill Ackman accused Herbalife of being a pyramid scheme. After rejecting an earlier version of the suit, a Los Angeles district judge dismissed the fund’s complaint Tuesday, granting the applicants a month to submit a revised version.
  • A roundup at social forum theFashionSpot took a look at the industry’s “new generation” of beauty brands putting their own spin on the direct-to-consumer model.

July 31, 2015

U.S. News

Mary Kay Keeps Focus on Philanthropy at Annual Seminar

Mary Kay calls its anti-domestic violence initiative Don’t Look Away, and the company is taking its own advice by keeping the cause front and center during its 2015 Mary Kay Seminar. The annual event, which kicked off its fifth and final conference of the year on Friday, has been all about empowering women—including survivors of domestic violence.

As 27,000 Independent Beauty Consultants gathered in Dallas this month, they had the opportunity to prepare care kits for survivors, donate professional clothing to local women’s shelters, and see Mary Kay’s new, award-winning public service announcement series, One in Four. Additionally, Mary Kay recently announced $1.25 million in continued funding for loveisrespect, a text-for-help service launched as a tool for young people to help prevent dating abuse.

Seminar attendees, including more than 2,000 husbands who accompanied their wives, took part in assembling care kits filled with basic Mary Kay skincare products. Consultants are distributing the 2,000 kits to 20 women’s shelters across the country. One of those shelters is The Family Place in Dallas, where a Mary Kay pink Cadillac made a local delivery on Wednesday.

The Dallas Convention and Visitors Bureau estimates that, by its conclusion on Aug. 1, the Mary Kay Seminar will pump $30.4 million into the local economy. The event has taken place at the Kay Bailey Hutchison Convention Center Dallas since 1974 and is one of the city’s top 10 in terms of economic impact.

July 30, 2015

U.S. News

Avon North America Sees Rare Profit in Second Quarter

Sales at Avon Products Inc. (AVP—NYSE) continued to decline in the second quarter, but the beauty company’s lagging North America division posted its first quarterly profit in several years, Avon said Thursday.

Second-quarter revenue fell 17 percent to $1.8 billion, weighed down by currency pressures in several foreign markets. On a constant-dollar basis, overall sales remained flat, with growth in Russia and the Philippines offset by declines in Brazil, China and the U.S.

The New York-based company reported adjusted earnings of 11 cents a share, surpassing the 7 cents predicted by analysts but dropping 20 cents from a year ago.

Heavy cost-cutting initiatives are paying off for the company in North America, where it saw a modest profit for the first time since the first quarter of 2012. Despite an improving bottom line, the number of Avon sellers in North America fell 16 percent from the second quarter of 2014. Overall, the brand’s salesforce shrunk by 2 percent from a year ago.

Avon said its expectations for the full year remain the same. The company forecasted modest constant-dollar revenue growth, with continued negative effects from currency exchange rates.

July 30, 2015

U.S. News

Stream Awards First Batch of Teslas to Top Associates

Stream is taking its car bonus program to the next level with the creation of a new National Director position for top-performing Associates. This week, the home services provider presented an electric-powered Tesla Model S to each of its qualifying National Directors.

A brand-new vehicle is a popular recognition tool that appears in many forms across the industry, from LifeVantage’s Jeep Wrangler to Mary Kay’s signature pink Cadillac, which even has its own Twitter account. Dallas-based Stream is the first direct selling company to tap Silicon Valley automaker Tesla Motors—a fitting choice for a brand built on an innovative approach to marketing energy.

“We always strive to reward our Associates with phenomenal perks for their dedication and hard work,” Stream’s President and CEO, Mark “Bouncer” Schiro, said in a statement. “Like Tesla, Stream is committed to innovation and revolutionary ideas, so the decision to offer an all-electric Tesla was a perfect match.”

The seven-seat Model S sedan is the only model currently marketed by Tesla. Following its introduction in June 2012, the newcomer earned a slew of awards, such as Time’s Best Inventions of the Year 2012, 2013 Motor Trend Car of the Year, and the top score ever from Consumer Reports magazine. Tesla plans to introduce a new premium electric vehicle, the Model X crossover, this fall.

July 29, 2015

U.S. News

After 30 Years, Longaberger Convention Returns to Small Town Roots

Photo: Longaberger’s Newark, Ohio, headquarters building, modeled on the Longaberger Medium Market Basket.


Annual salesforce conventions are a common practice among direct selling companies, but the gatherings themselves are as diverse as the companies they represent. For Ohio-based basket maker The Longaberger Co., this year’s event was a literal return to the company’s roots and a celebration of its four-decade history.

Now a part of the CVSL family of brands, Longaberger got its start in the village of Dresden, home to the company’s manufacturing plant and a shopping, dining and entertainment destination known as the Longaberger Homestead. Dresden also hosted this year’s Longaberger convention, held July 23–25. Known as The Bee—think quilting or spelling—the meeting has taken place in Columbus for the past 30 years. The Bee’s symbolic return to Dresden was reinforced by the event’s theme, “Home Is Where the Heart Is.”

“Probably the most important factor was that we were really trying to get back to our roots and tell the story of the craft, as well as the small town in Ohio where all this was born,” Longaberger’s Director of Communications, Brenton Baker, told DSN. “We realized we were at odds with ourselves, talking about the charm of the Homestead and village but asking people to come to a cold convention hall in Columbus.”

In addition to visiting the Homestead and meeting the craftspeople behind Longaberger’s handmade baskets and home goods, the crowd of approximately 1,000 heard from Longaberger’s new CEO, CVSL Vice Chairman John Rochon Jr.  Rochon stepped in following Tami Longaberger’s exit in May, a less-than-clean break still disputed by the two parties. Longaberger is the daughter of Founder Dave Longaberger, who led the brand to nearly $1 billion in annual sales before his death in 1999. Last year, Longaberger recorded sales of about $100 million.

According to Baker, Rochon and the team at CVSL have a vision very much in keeping with Longaberger’s founding—a vision that includes the Longaberger family’s continued involvement in the company. “In fact, whether it’s because of his invitation to them to be present at this year’s festivities or the fact that it took place in their own backyard in Dresden, more Longaberger family members were present and active at this year’s Bee than we have seen in many, many years,” Baker noted.

Moving into the second half of 2015, the company’s top priority is equipping salespeople to share the product and bring new members into the organization. To that end, said Baker, Longaberger has refreshed its entire Home Consultant experience with tweaks that include a new business starter kit and updated technology.

July 27, 2015

U.S. News

$50K Primerica Grant Will Equip At-Risk Teens

During its 2015 Convention this month, Primerica brought home the event’s theme—“Freedom Redefined”—with the announcement of a $50,000 grant that will equip at-risk teens for future success.

CEO Glenn Williams presented the grant award to Sam Bracken, Co-Founder of The Orange Duffel Bag Initiative (ODBI), an organization Primerica has supported since 2013. ODBI helps Georgia teens who are homeless or aging out of the foster care system, often without the means or skills necessary to support themselves. ODBI’s team of certified life and executive coaches provides coaching, training and ongoing advocacy to these youth.

“It’s unimaginable that thousands of Georgia teens are homeless or will soon be too old to remain in the foster care system. These kids did not choose to be in this situation, and they deserve a chance for a better future,” Williams told the crowd of approximately 40,000 gathered in Atlanta’s Georgia Dome. “We applaud the exceptional work done by the ODBI and are proud to support this worthwhile organization.”

The Orange Duffel Bag Initiative grew largely from Bracken’s own experiences. Though he would later become a star football player for Georgia Tech and an executive with FranklinCovey, Bracken was once a homeless teen who could carry everything he owned in an orange duffel bag. He has shared his experiences in My Orange Duffel Bag: A Journey to Radical Change, a book he co-authored.

 

July 24, 2015

World News

This Week: Convention Happenings, Twitter Bullies and Working Women

Catch up on this week’s industry chatter with these click-worthy links:

  • Mary Kay’s annual Seminar—all five waves of it—is in full swing, and one of the speakers taking to the main stage is Abi Ferrin, who has partnered with the company in its cause to end domestic violence. The Dallas Morning News spoke to Ferrin, a fashion designer and domestic violence survivor, about her own story and what Mary Kay is doing to support the cause.
  • For the first time in its five-year history, Origami Owl is taking its annual convention outside the company’s home state of Arizona. On Thursday, the jewelry seller kicked off its O2 Experience in Chicago. Founder Bella Weems spoke to the Chicago Tribune about the milestone event and Origami Owl’s rapid growth.
  • Where does the line between career and family fall for today’s young working women? Cheryl Han, the 33-year-old Co-Founder and CEO of Keaton Row, shared her perspective in a New York Times piece on the increasing number of women planning pauses in their climb up the corporate ladder.
  • During Stella & Dot’s annual European conference in London, Founder and CEO Jessica Herrin sat down with The Telegraph to share how the business is helping women change their lives.
  • Following Avon’s divestiture of U.K. skincare brand Liz Earle—which the beauty brand sold to Walgreens earlier this month for $215 million—Forbes featured an analysis of Avon’s stock by the team at Trefis.
  • The Los Angeles Times reported that Herbalife is pushing back against an anonymous Twitter account propagating negative comments about its products. The nutrition company has petitioned a Chicago judge to expose the naysayer’s identity, an action that requires a court order per the site’s privacy policy.

July 24, 2015

U.S. News

Q&A: Herbalife VP Talks Member Meetings with Congress

Amid ongoing scrutiny from regulators and the press regarding its business practices, Herbalife is taking every opportunity to tell its own story to the public and policymakers.

This week, a dozen Herbalife members traveled from five states to Washington, D.C. Their mission: to meet with representatives in Congress and personally communicate their experiences with the nutrition company—the kind of legislative relationship building promoted by the Direct Selling Assocation. To learn more about Herbalife’s meetings with Congress, DSN reached out to Eric Rosen, Vice President of U.S. Government Relations at Herbalife.

DSN: What was the main takeaway these members hoped to communicate to their representatives?

ER: Our members visited their elected officials to talk about the real way Herbalife is helping them live healthier, more active lifestyles and supporting them to own their own business.

Each Herbalife member around the country works hard to have a healthier lifestyle, and in some cases, have their own businesses. Being in Washington, D.C., gives our members the opportunity to share their stories with elected officials and educate those in Washington about the important role Herbalife plays in their lives.

DSN: What was a highlight of the day?

ER: There were a lot of beautiful moments from our fly-in, but the conversation between Andres Gaspar, an Herbalife member from Alabama, and staff in the Office of Representative Palmer (R-AL) was particularly memorable. Andres was very emotional when he talked about his previous work doing manual labor to support his family, including seven children. It was hard work and never enough, but through Herbalife, dedication and discipline, he now has the means to provide a good home and education for his family while promoting a product that is helping his community live a healthier life. He went on to say that for an immigrant like himself, this was more than he could ever dream. It was clear that the congressional staffer understood the deep impact Herbalife has had on the entire Gaspar family and the high regard they have for the quality of the product.

DSN: Does Herbalife plan to coordinate these meetings on a regular basis?

ER: Our fly-in program has allowed people from around the country to come to Washington, D.C., and represent their fellow 550,000 Herbalife members in meetings with elected officials. Through our fly-ins, we have empowered our members by helping them speak directly to their congressional representatives. We plan on continuing this program going forth.

DSN: What else is Herbalife doing right now to educate lawmakers about its business model?

ER: Herbalife’s efforts to explain its role as a global nutrition leader to policymakers in Washington and around the world are ongoing. We visit with elected officials in their districts, in the halls of Congress, and at events around the country to make them aware of the opportunities Herbalife products offer people who are interested in living healthier lives and working towards personal financial goals. We will continue to seek creative ways to give lawmakers a chance to interact with our products and learn more about Herbalife.

July 23, 2015

U.S. News

New Chief Sales Officer Joins LifeVantage Team

Following the April appointment of Darren Jensen as CEO, wellness and anti-aging brand LifeVantage is making another change to its executive team. On Wednesday, the Salt Lake City-based company introduced Justin Rose as its new Chief Sales Officer.

“Although we followed different career paths within the direct selling industry, our paths have crossed throughout the years, and we are both excited about the opportunity to join forces,” Jensen said of the brand’s new CSO. “Justin will play an integral role as a member of the new leadership team being assembled to stimulate the future growth of LifeVantage.”

Rose is no stranger to the industry, having spent the past two decades in sales and marketing roles at a series of direct selling companies. In his most recent position, Rose headed up regional sales development, sales incentives, distributor events and recognition, call center operations, and field training and support for North America.

“LifeVantage is uniquely positioned as one of the leading product-driven business opportunities in the direct selling industry,” Rose said in the company’s release. “I look forward to enhancing the partnership between the Distributors in the field and the corporate office by implementing programs and incentives that better align field performance with corporate objectives, and stimulate the company’s long-term growth.”

 

July 22, 2015

U.S. News

Tupperware Tops Quarterly Estimates with $62M Profit

Tupperware Brands Corp. (TUP—NYSE) said Wednesday that second-quarter profit had exceeded expectations, despite revenue figures that dipped below Wall Street estimates.

Net income for the second quarter was $62 million, up 30 percent from a year ago. On a per-share basis, the Orlando, Florida-based company reported a profit of $1.23, versus 93 cents in the prior year. On average, analysts had forecasted earnings of $1.17 per share. Adjusted earnings were $1.21, down 18 percent in dollars but up 13 percent in local currency.

Quarterly revenue totaled $588.9 million, coming in just under the $589.8 million estimated by analysts. Emerging markets accounted for 67 percent of sales, with strong performances from Brazil, China, the Middle East and North Africa.

The kitchenware and cosmetics seller said its salesforce increased 3 percent versus a year ago to 3 million. In the U.S. and Canada, Tupperware recorded a 14 percent increase in new consultants.

For the current quarter, the company forecasts earnings of 69 cents to 74 cents per share. Full-year earnings expectations are in the range of $4.42 to $4.52 per share.

July 21, 2015

World News

Beachbody On Demand Now Streaming to a Device Near You

An Internet connection is now the only thing standing between Beachbody customers and the brand’s celebrity trainers, including names like Tony Horton, Shaun T and Autumn Calabrese. At its annual Coach Summit this weekend, the fitness giant introduced Beachbody On Demand, a new streaming service that instantly connects users to a broad selection of programs and workouts.

To celebrate the launch, Beachbody streamed a live Super Workout event led by a handful of its most popular trainers. The one-hour session took place on the streets of Nashville, Tennessee, the location of this year’s Coach Summit, with more than 20,000 people participating.

The California-based company initially offered Beachbody On Demand to its network of nearly 350,000 coaches, who provided feedback on the user experience. While the service is in its beta phase, Beachbody is offering all consumers an introductory 30-day free trial. Continued access to the fitness library—which the company values at more than $3,000—will cost users an introductory price that works out to $2.99 a week.

July 21, 2015

U.S. News

Usborne Books Sustains 2-Year Turnaround in Latest Earnings Report

Educational Development Corp. (EDUC—NASDAQ), parent of bookseller Usborne Books & More, is marking 24 consecutive months of growth following a nine-year decline, according to the company’s quarterly earnings report.

Oklahoma-based Educational Development Corp. (EDC) operates EDC Publishing as well as the larger Usborne direct selling division. For the first quarter of fiscal year 2016, the combined businesses recorded net revenue of $9.6 million, up 34 percent from a year ago. Net income for the quarter ended May 31 rose 35 percent to $324,600.

At Usborne Books & More, a 108 percent increase in new sales associates spurred 59 percent revenue growth in the first quarter. The marketer of educational children’s books, twice recognized by Forbes magazine as one of “The 200 Best Small Companies in America,” is in the midst of a turnaround that began in 2012. In a recent interview with DSN, CEO Randall White attributed Usborne’s growth to a number of factors, including the decision to cancel an account with one of the brand’s primary wholesalers, thereby boxing out competition from Amazon.

White sees plenty of opportunity for Usborne’s continued growth, particularly via social media, where an increasing number of transactions are taking place. “We are a debt-free company; the last few months have been spectacular, and so I think there’s a huge market we can tap,” he told DSN.

July 20, 2015

World News

ARIIX Announces Merger with Nutrition Brand Voluxa

ARIIX, a Utah-based business that markets wellness and personal-care products, is bringing another brand under its umbrella in a recently announced merger with Voluxa. As a result, the two companies have combined their product portfolios and sales networks under ARIIX’s patent-pending compensation plan.

After three years in business, ARIIX joined the top direct selling companies in the world on the 2015 DSN Global 100. The Utah-based brand ranked No. 95, based on 2014 revenue of $73 million. Prior to the merger with Maine-based Voluxa, ARIIX’s representative count had topped 35,000.

“Even though I never originally imagined Voluxa joining forces with another company, after meeting with the ARIIX executives, I realized they are one of the most impressive teams I’ve met,” Voluxa’s Founder and CEO, Sue Pollard, said in a statement. “I’m excited to work with the ARIIX team and believe it’s the perfect solution for providing our Representatives with unprecedented growth opportunities.”

The partnership introduces Voluxa’s antioxidant-rich nutrition products into the 12 international markets where ARIIX currently operates. ARIIX has expanded its business through a series of mergers with smaller health-focused brands, including Trivani Intl., ZENVEI, HAVVN and RevvNRG.

July 17, 2015

World News

This Week: Beautycounter, ViSalus, Ambit and Mary Kay

Catch up on this week’s industry chatter with these click-worthy links:

  • In a televised interview, Beautycounter Founder Gregg Renfrew shared lessons learned from her experience as a serial entrepreneur, a journey that began with the launch of her own cleaning service in college.
  • Canada’s first ViSalus Challenge Center opened in Ontario, offering a space designed around the brand’s 90-day fitness and weight loss program. Six-time Ontario Boxing Champion and Vi Promoter Claudia Renkwitz opened the center, building on a relatively new model for the company.
  • Looking at the core competencies of today’s IT chiefs, CIO magazine shared an anecdote from Ambit Energy CIO John Burke, who helped the company tackle a major application problem by borrowing a page from Amazon.
  • What do Mary Kay and the NFL have in common? Both are partnering with the National Domestic Violence Hotline to provide services for domestic violence victims in Washington, D.C., and across the country. A donation from the NFL is funding a new D.C. office for the Hotline. Among other services, the facility will house a pilot program enabling survivors to contact the hotline through a live chat service, an initiative sponsored by Mary Kay’s Don’t Look Away campaign.

July 17, 2015

U.S. News

ACN’s New 4G Service to Benefit Users and Children in Need

Essential services provider ACN is upgrading its Flash Wireless service with a new 4G offering that will not only bring more options to consumers, but also provide meals through the company’s Project Feeding Kids campaign.

After rolling out wireless services in 2007 through a third-party vendor, ACN decided to develop its own platform and launched Flash Wireless in 2011. By 2014, ACN had transferred all of its mobile capabilities to the new platform.

The North Carolina-based company targets value-conscious consumers, offering their pick of the nation’s top two wireless networks, contract or no-contract options, use of an existing or upgraded device—and now the latest 4G technology. ACN Independent Business Owners (IBOs) can nab free Flash Wireless by signing up five new customers for the service—a deal the company is also extending to customers who refer five friends or family members.

In a statement, ACN said that for each new wireless customer it will donate a meal through Project Feeding Kids, a partnership launched earlier this year with Feeding America. The company will make an additional donation each time the customer pays their monthly bill.

July 16, 2015

U.S. News

Mannatech Million Dollar Club Tops 200 Associates

Dallas-based Mannatech is marking a growth milestone with the latest addition to its Million Dollar Club, made up of associates whose earnings have topped $1 million. The social entrepreneurship brand said Thursday that its Million Dollar Club has now reached 200 members.

Though North America accounts for nearly half of Mannatech’s revenue, some of the company’s newest million-dollar achievers reflect its growth in international markets, where total revenue increased nearly 4 percent in 2014. The skincare and nutrition brand, which ties its business to fighting childhood malnutrition through the Mission 5 Million (M5M) program, said that recent additions to the Million Dollar Club hail from Australia, Japan and Korea, as well as the U.S.

“Very few companies in our industry have ever generated 200 millionaires,” Mannatech President Al Bala said in a statement. “We have a commitment to providing the best products and support to help our Associates build businesses that last.”

The company’s current power products include the Generation Uth Skin Care System and the detoxifying Refresh and Rejuvenate Purification Program, which unite multiple products in a targeted regimen. Mannatech also reported the successful introduction of its MannaBOOM Slimsticks immune supplement into the brand’s emerging markets.

July 15, 2015

U.S. News

Primerica Reports Record Q2 Leading into Annual Convention

Photo: An estimated 40,000 attendees gather at the Georgia Dome in Atlanta for Primerica’s 2015 Convention.


Primerica Inc. (PRI—NYSE) released a preview of its second quarter earnings today as the company kicked off its 2015 Convention in Atlanta. The financial services provider said quarterly sales and distribution results were the best since its IPO in 2010.

An expanding salesforce powered much of the company’s recent growth. According to a statement from Glenn Williams, presiding over his first convention as CEO, Primerica recorded a 15 percent uptick in newly licensed representatives compared to a year ago, bringing its total licensed salesforce to 101,000. New recruits increased by 20 percent, and policies issued in the Term Life segment increased 14 percent.

Not to be outdone, Primerica’s Investment and Savings Product business has also grown steadily in the past five years. “During this year’s second quarter, our ISP sales grew by 9 percent over what was a record-setting performance during the same period in 2014,” Williams noted.

Primerica is hosting an estimated 40,000 at the Georgia Dome for its 2015 Convention, held July 15–18. As the city’s largest corporate meeting, it will have an estimated $34 million impact on the local economy.

July 14, 2015

World News

Former Avon Bidder Scoops up 43 P&G Brands

Photo: P&G Headquarters in Cincinatti.


The beauty industry is undergoing one of its biggest shake-ups in recent history with the announcement of a deal between Procter & Gamble Co. and Coty. Following weeks of speculation, the two beauty conglomerates have confirmed that Coty is buying 43 beauty brands from consumer products giant P&G.

The $13 billion deal—which includes leading brands such as CoverGirl cosmetics, Clairol hair color, and Hugo Boss and Dolce & Gabbana fragrances—is part of P&G’s strategy to streamline its sprawling business and focus on marketing everyday staples like its Tide laundry soap and Crest toothpaste.

P&G said it will transfer the brands into a separate company that will then merge with New York-based Coty, whose beauty and fragrance brands include Calvin Klein, OPI, Sally Hansen and Marc Jacobs. P&G has shed about 15 percent of its portfolio of brands, with the latest round accounting for annual sales of $5.9 billion.

In early 2012, Coty made a similar $10.7 billion offer for Avon’s business as the larger company faced lagging sales that continue to affect its bottom line. After two months of back-and-forth, Coty withdrew its bid, citing a “lack of engagement” on Avon’s part.

The P&G merger will position Coty as a global leader in fragrances and boost its share of the color cosmetics market. In a statement, the company said it is looking to build its presence in major beauty markets like Japan and Brazil, where Coty partnered with Avon last year to sell its fragrances through Avon’s 1.5 million Brazilian representatives.

July 13, 2015

U.S. News

Herbalife Members Give Blood, Give Back with Red Cross Partnership

The 25,000 members who attended Herbalife’s North America Extravaganza in St. Louis this weekend helped the company kick off a new partnership with the American Red Cross. Herbalife held a two-day blood drive during the annual meeting, which had an estimated $18 million impact on the local economy.

As anyone who has donated blood can attest, proper nutrition is an important part of the process. That’s why Los Angeles-based Herbalife has partnered with the American Red Cross to supply post-donation snacks to blood and platelet donors across the country. The company announced it is donating 280,000 Herbalife protein bars, which will be available at select blood drives and blood donation centers by September.

“We appreciate Herbalife’s efforts to help raise awareness about the constant need for blood,” said Donna Morrissey, Director of National Partnerships for the Red Cross Biomedical Services. “The generous donation from Herbalife is a wonderful addition to our blood drives—these nourishing protein bars will be a great way to thank blood donors for rolling up a sleeve to help save lives.”

In addition to sponsoring a blood drive, Herbalife has announced plans to launch a grassroots social media campaign this fall to raise funds for the American Red Cross. The company’s employees and members will also host blood drives and education sessions at various Herbalife facilities.

July 10, 2015

World News

Global Humanitarian Work Draws Accolades for Nu Skin

Photo: Nu Skin opens its 16th Nu Hope Library in South Korea’s Gyeongbuk province in April 2015.


The Direct Selling Association recently honored Nu Skin’s corporate social responsibility efforts with the 2015 Vision for Tomorrow ETHOS Award, but U.S. peers are not the only ones taking note of the Nu Skin’s humanitarian work.

The personal-care and wellness brand recently earned honors in Asia for its contributions through the Nu Skin Force for Good Foundation. The foundation aims to help children by supplying healthcare, nutrition, education and economic opportunity. By the close of 2014, Nu Skin’s Nourish the Children initiative had donated more than 400 million meals to impoverished children. The company also contributes to disaster relief efforts around the world.

For the sixth consecutive year, national newspaper China Philanthropy Times has named Nu Skin Greater China one of the country’s Top 10 Charity Enterprises. Additional recognition came from the China Foundation for Disabled Persons, which presented Nu Skin its highest honor, the Charity Diamond Award, for the company’s support of the disabled.

In Korea, Nu Skin earned a Silver Stevie Award in the Corporate Social Responsibility category for its Nu Hope Libraries initiative. Since 2008, the company has remodeled 16 libraries in rural areas and stocked them with educational supplies to further children’s education.

July 09, 2015

World News

Avon Sells UK Skincare Brand to Walgreens

Photo: Products on display at a Liz Earle store on England’s Isle of Wight. (Liz Earle photo)


Natural skincare brand Liz Earle is not commonly associated with Avon, which might have influenced the company’s decision to divest the U.K.-based business. Avon Products Inc. announced Wednesday that pharmacy giant Walgreens Boots Alliance has acquired the retail brand for approximately $215 million.

In a statement, Avon CEO Sheri McCoy said the divestiture allows Avon to focus on promoting its own skincare and beauty portfolio. “This transaction enables Avon to realize immediate benefits while continuing to strengthen our balance sheet,” McCoy noted. “Liz Earle is the perfect fit for Walgreens Boots Alliance where it already has a strong presence in its retail stores.”

Avon acquired Liz Earle in 2010, just months before acquiring Silpada Designs, the direct selling jewelry brand that Avon divested in July 2013. Unlike Silpada, Liz Earle operated as a standalone business from Avon’s core direct selling business. Last year, the skincare brand accounted for 1 percent of Avon’s consolidated revenue and adjusted operating profit and 3 percent of its EMEA (Europe, Middle East & Africe) revenue and adjusted operating profit.

Avon’s latest turnaround measure follows a disappointing 2014 for the beauty brand, which reported a net loss of $331 million on an 11 percent revenue decrease for the year. The company said it will use the proceeds from the Liz Earle sale in its planned redemption of $250 million, 2.375 percent notes due in March 2016.

July 09, 2015

U.S. News

Rodan + Fields, Tupperware Announce Board Appointments

Kitchenware seller Tupperware Brands and skincare company Rodan + Fields have both made recent board appointments with an eye toward future growth.

Corporate finance consultant Louis J. Lavigne Jr. is the newest member of the board at Rodan + Fields. Lavigne, currently Managing Director of consulting firm Lavrite LLC, spent 23 years as Executive Vice President and CFO at Genentech Inc., a leading biotech company. In addition to overseeing the company’s financial, corporate relations and information technology groups, Lavigne sat on the executive committee and chaired the company’s 401(k) plan committee.

“Lou’s demonstrated financial expertise and broad leadership experience will prove critical to Rodan + Fields as we continue to globalize our business,” said Amnon Rodan, Chairman of the Board.

Tupperware has tapped corporate executive Richard T. Riley as its 12th board member. Riley’s leadership experience spans several industries, but he is currently independent Chairman of the Board of Cimpress, N.V., an international market leader in personalized products and services for small businesses. He previously held senior executive positions at Lojack Corp., New England Business Service Inc., and Rapidforms Inc., after beginning his career at Arthur Andersen & Co.

“We’re delighted to add Richard to our board,” said Tupperware Chairman and CEO Rick Goings. “His breadth of knowledge in global and emerging markets will contribute valuable expertise to our leadership team.”

July 08, 2015

World News

Natural Health Trends Joins Russell Indexes

Personal-care and wellness company Natural Health Trends Corp. recently announced its inclusion on the Russell Global Index, the Russell 3000 Index and the Russell Microcap Index. The comprehensive set of equity indexes, reconstituted annually, features companies primarily on the basis of objective rankings and style attributes.

NHTC is one of the 3,000 largest U.S. stocks, which FTSE Russell captures and ranks by total market capitalization. The Dallas-based brand joined the Russell indexes at the end of June.

“Inclusion in the Russell indexes is a significant milestone for us following our revenue and profit growth in the last few years,” Chris Sharng, Natural Health Trend Corp. President, said in a statement. “As we continue to execute on our growth strategy, we believe our membership will help facilitate efforts to raise our profile in the financial community, broaden our shareholder base and improve liquidity.”

This year, the fast-growing company made its debut on the DSN Global 100 at No. 82, with revenue of $125 million in 2014. Also based on annual revenue, NHTC is the No. 44 direct selling brand in North America.

July 08, 2015

U.S. News

Avon Foundation Grants $500K to Domestic Violence Programs

Following a #GivingTuesday campaign to raise funds and awareness for local and national domestic violence hotlines, the Avon Foundation for Women and the National Domestic Violence Hotline have partnered to grant $500,000 to 25 local advocacy programs in cities across the U.S.

Each of the selected programs will receive a $20,000 grant to continue operating 24-hour hotlines that provide direct services and support for survivors. A recent census funded by the foundation found that shelters often lack the resources to meet housing and other basic needs.

“The generous dollars received from our partners at the Avon Foundation for Women will enable more victims to get the help they need whether it is for counseling, shelter, legal services or compassionate support as they try to live a life free from violence,” Katie Ray-Jones, CEO of the National Domestic Violence Hotline, said in a statement. “The funds will also serve as a critical resource for nonprofits facing the end of the fiscal year on June 30.”

Last year, the Avon Foundation participated in #GivingTuesday with a matching gift of $500,000 to help raise $1 million for the Hotline. The partnership is part of the foundation’s Speak Out Against Domestic Violence initiative to build awareness and improve services for survivors.

July 07, 2015

U.S. News

Herbalife to Bring 300 New Jobs to NC Plant

Following the grand opening of its largest manufacturing facility in January, Herbalife has announced plans for further investments that will bring 300 new jobs to North Carolina.

The nutrition company previously announced that its Winston-Salem Innovation and Manufacturing facility would employ 500 by the end of 2015. Herbalife is now investing an additional $3.5 million in infrastructure that will open 300 manufacturing and IT jobs at the 800,000-square-foot plant. The company expects to complete this latest phase of development by the close of 2018.

The NSF-certified facility is one of four Herbalife Innovation and Manufacturing facilities worldwide. In addition to manufacturing operations, its one-mile loop houses Herbalife’s Global Technical Operations Center and a state-of-the-art quality and testing lab.

July 06, 2015

World News

World Cup MVP Carli Lloyd: ‘I Can’t Live without My USANA’

Photo: U.S. Women’s National Team midfielder and Women’s World Cup MVP Carli Lloyd. (Nike photo)


Fans of women’s soccer witnessed history in the making during Sunday’s World Cup finals as midfielder Carli Lloyd delivered three goals for the U.S. Women’s National Team on its way to victory over Japan. According to Lloyd, who joined Team USANA as an Ambassador last year, the brand’s nutrition products and a lot of hard work are what fuels her game.

“Success doesn’t come to you. You have to go out there and work and get things done,” the two-time Olympic gold medalist said in a video for USANA. “That’s all I’ve been trying to do is go after it each and every day—and good things happen.”

Accomplished in just 16 minutes, Lloyd’s hat trick was the fastest in World Cup history—for either men or women—and the first in a Women’s World Cup final. She scored her final goal from midfield, driving the ball home from 60 yards away. The U.S. team went on to claim the title in a 5-2 triumph over Japan, the defending Women’s World Cup champions.

Salt Lake City-based USANA is continually looking to build third-party credibility for its products, which garnered 112 awards in 2014. Team USANA currently sponsors more than 700 elite athletes around the world with its nutrition and performance products.

 

July 06, 2015

Incentives/Recognition

BENCHMARK INCENTIVES


July 06, 2015

Credit Card/Payment Processing

Allied Wallet


July 02, 2015

World News

UK Shoppers Say Avon Leads in Customer Satisfaction

U.K. customers voted Avon the Best Health & Beauty Retailer in an annual customer satisfaction survey by market research firm Verdict. The social selling brand beat out competition from Boots, a U.K. subsidiary of Walgreens, and online retailer Amazon, who ranked second and third in Verdict’s 2015 Retailer Customer Satisfaction Awards.

“This award clearly shows that face-to-face relationships remain vital even in today’s fast-paced world of technology and speed purchasing,” Avon Independent Sales Leader Louise Carter said in a statement. “My customers still appreciate quality and want to know what they are buying from a trusted source.”

Verdict surveyed 22,000 shoppers to decide the leaders in customer satisfaction. Avon’s social selling model also earned it the top Health & Beauty spot in 2013. The company accepted this year’s award during an event at London’s Banking Hall on June 18.

July 02, 2015

U.S. News

PartyLite Employees Fight Cancer at Hometown Relay for Life

PartyLite brought its support of the American Cancer Society to the local level in June during the organization’s annual Relay for Life. A team of employees from the Massachusetts-based brand joined the event and brought in donations of $44,411, nearly one-third of the total raised by the Greater Plymouth Relay.

The candle seller has been a national partner of the American Cancer Society since 1997, and a supporter of the local Relay for Life for 14 years. The walking team, known as the PartyLite Hometown Walkers, has now raised more than $878,000 for the cause. Altogether, ParyLite has contributed more than $15 million to the American Cancer Society, an organization dedicated to preventing and eliminating cancer.

“This company is made up of people who are committed to keeping the flame of hope burning for as long as it takes to win the battle over cancer,” President of PartyLite Worldwide, Rob Goergen, said in a statement. “I’m truly proud of each and every one of our people here in Plymouth and across PartyLite who have a heart for helping those in need.”

July 01, 2015

World News

Is Your Brand Mobile Ready? Take a Cue from Facebook

(Christophe Tauziet / Twitter)


Facebook updated its look on Tuesday—no need to check your news feed; this was not one of the platform’s routine overhauls. This time the social media behemoth made a subtle tweak to its logo, paying homage to two factors that should inform any brand strategy—namely approachability and mobility.

“Now that we are established, we set out to modernize the logo to make it feel more friendly and approachable,” Facebook Creative Director Josh Higgins told The Wall Street Journal.

In the updated logo, pictured above, the double-story “a” has been dropped in favor of a streamlined, single-story version. Thinner, more pronounced letters make it easier on the eye. The overall effect barely prompts a double-take.

Old Facebook LogoOld Facebook logo

Where the pared down design will have the greatest impact is on mobile devices. The social network reported that in 2014 mobile users increased from 79 percent to 87 percent of its monthly active users. With 1.44 billion people visiting Facebook every month, that 8 percent jump in mobile activity is a flashing sign for companies everywhere—pay attention to what your brand says about you.

The pros and cons of Facebook’s new look aside, U.N. research has shown that more people on the planet now have access to mobile phones than to toilets. Even for relational direct selling companies, mobile devices are the place to meet customers these days, and as the saying goes, brands only have one chance to make a first impression.

July 01, 2015

Company Spotlight

Isagenix: Sprinting toward $1 Billion

by Barbara Seale


Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 2002
Headquarters: Chandler, Arizona
Top Executives: Founders Kathy and Jim Coover and CEO Kevin Adams
Products: Nutritional and personal care


Kathy CooverKathy Coover
Jim CooverJim Coover
Kevin AdamsKevin Adams
Travis GarzaTravis Garza
Erik CooverErik Coover

Health and wellness company Isagenix hopes 2015 will be Lucky No. 13—its 13th year in business, and more important, the year it strives to reach a cool $1 billion in revenue.

The hopeful achievement was barely a glimmer on the horizon even two years ago. The company’s 2013 sales were a respectable $448 million. But since then, Isagenix’s focus on communications, promotions and tools, plus the launch of a simple system that benefits everyone from leaders to newbies, has yielded double-digit growth each year. And with its fastest-growing distributor demographic being 18- to 35-year-olds, the company’s future looks just as bright as its past.

Fast growth has been an Isagenix International tradition. Founders John Anderson and Jim and Kathy Coover came out of a financially secure retirement because they had a vision: to impact world health and free people from physical and financial pain, and through that goal, create the largest health and wellness company in the world. Their product category, nutritional cleansing, gave them a solid start. Growth was brisk for a few years and then it settled into a pattern of low but steady increases.

But growth skyrocketed when Anderson created the Isagenix Cleansing and Fat Burning System and the company teamed it with the IsaBody Challenge. The result: It achieved 2011 net sales of $262 million; climbed to $334 million in 2012; ascended to $448 million in 2013; and jumped to $725 million last year.

The trajectory of distributor growth has been at least as impressive. Since 2011 the company has had an average of more than 40 percent growth each year in its distributors, which it calls independent associates. This year that number is expected to exceed more than half a million active associates. Last year that total reached 426,000. International growth contributed to those numbers—Isagenix now does business in 13 countries around the world—but its success is mostly made in America. Some 79 percent of its business is still in North America.

New ConstructionConstruction is underway for Isagenix’s new headquarters. The company plans to move in by early 2016.

Positioning for Growth

When it opened its doors in 2002, Isagenix quickly became known for its cleansing and weight-loss products. While it offers effective weight-loss solutions such as IsaLean Shakes, it has also developed a line of nutritionals that appeal to professional athletes, such as IsaPro whey protein; and to baby boomers, such as the Ageless Essentials Daily Pak of vitamins and minerals; as well as to those who want to get leaner.

“In 2012 we celebrated our 10-year anniversary by launching two significant initiatives that were focused on our product users and our associates,” explains CEO Kevin Adams. “First, we repositioned our product line from World Leader in Nutritional Cleansing to Solutions to Transform Lives. We realized that we were much more than a nutritional cleansing leader, and as we looked ahead to the next 10 years, this new positioning allowed us to both expand our customer base and also provide the next solution for those who achieve their weight-loss goals. We began to focus more on helping our product users become product sharers. We created new tools and promotions to not only activate their customer base but also build strong leadership within their teams. By strengthening our product line and product positioning while empowering our associate leaders, we knew we were better able to realize our mission.”


Isagenix now does business in 13 countries around the world—but its success is mostly made in America. Some 79 percent of its business is still in North America.


At its annual Celebration gathering in August, Isagenix will introduce a new product line of premium and organic slow-roasted coffee. Before making the decision to offer a line of coffee, the company’s research and science team followed the studies on the benefits of natural caffeine and coffee consumption as well as determined how coffee could be incorporated with existing Isagenix nutrition systems.

Products have always been the foundation for expanding the army of Isa-lovers. With the expansion of the product line came the ability to create greater income opportunities for distributors.

Chief Sales Officer Travis Garza notes, “That includes weight loss, energy and performance, healthy aging and wealth creation. Today we have more than 450 people who have lost more than 100 pounds, and thousands who have lost smaller amounts of weight. But we also have a growing number of pro athletes using our products for energy and performance, as well as baby boomers looking for ways to feel great and look years younger. The expanded product line has been a great win for us.”

To add even more life-changing fuel to expanding the product line, Isagenix supported product sales and its distributors with the 90 Day Game Plan. Garza says the 90-day concept has been around for years, but about three years ago the company introduced a simplified version that spells out exactly what a new associate needs to do each week for 90 days. The result: an aligned field leadership team that can confidently coach new recruits to success by using a consistent method worldwide. It includes techniques on how to effectively communicate through social media, phone calls and three-way calls, as well as individual conversations. Garza says the plan has resulted in more recruiting, more leaders being developed, greater retention, and even greater product awareness than at any point in the company’s history. He calls its influence the catalyst to record growth. The top 20 sales days in Isagenix history have been in the last two years, partly due to the 90 Day Game Plan. And while Isagenix doesn’t release retention figures, Garza notes that for a company its size, “even a 1 percent retention increase is tremendous. We see even stronger retention in the future.”

IsaGenerosity

Transforming lives isn’t just a marketing message at Isagenix. It’s a key component of the company culture that extends into its philanthropic initiatives.

Isagenix and its distributors around the world support several causes. But its ongoing, heartfelt outreach goes to the Make-A-Wish Foundation, which helps grant the wishes of children battling life-threatening illnesses. It has raised more than $2.43 million globally, and in partnership with the foundation the company has granted more than 317 wishes worldwide. In May the company ran its annual monthlong campaign to raise money and awareness for Make-A-Wish. Its goal was to make Isagenix history by having all of its distributors contribute. Distributors could support the cause through product purchases, automatic donations on each order, or one-time or weekly commission donations. Last year Isagenix and its distributors donated more than $150,000 during the month of May. In 2013 the company received Make-A-Wish America’s 2013 Cause Champion Award in recognition of its cash contributions, employee support and outstanding partnership internationally.

In addition to Make-A-Wish, the company has donated some $3 million to Childhelp, an organization that exists to meet the physical, emotional, educational and spiritual needs of abused and neglected children. Additionally, it springs into action during natural disasters, having donated more than 1 million meals to families in Haiti and 50,000 meals to victims of Hurricane Sandy during their recent natural disasters.

Giving back goes beyond financial donations. For example, the Isagenix initiative for millennials, the START Your Life movement, often gets involved with boots-on-the-ground charitable projects.

“I am so proud of how they come together to support one another and use their successes to contribute by volunteering and giving back to their communities,” says CEO Kevin Adams. “Just last year at the conclusion of our flagship event, Celebration, when most of our members were boarding planes to leave San Diego, our START members converged at the St. Vincent de Paul kitchen in San Diego with boxes of Isagenix IsaLean Shakes and IsaLean Bars (meal replacements) to donate, while volunteering to serve food to at-risk men, women and children who have no other means of getting a nutritious meal for the day. I am so deeply touched and grateful to be CEO of a company where the people care so much.”

MAWPartnering with the Make-A-Wish Foundation, Isagenix helps grant the wishes of children battling life-threatening diseases.
MAWIsagenix has raised more than $2.43 million globally, and through the Make-A-Wish Foundation, the company has granted more than 317 wishes.

 

START Me Up!

The fastest-growing segment of those distributors is millennials—more than 42,000 of them. They’re joining through the START Your Life movement led by Erik Coover, 28, Vice President of Global Field Development and the son of founders Jim and Kathy Coover. One day Erik looked around the room at an Isagenix event and asked himself, Where are all the young people? Then he realized that he was looking at a new opportunity. Erik grew the START movement organically from a small Facebook group he started in 2012. Since then he has built a community that has expanded throughout the U.S., Canada, Australia, Mexico, Colombia and all of Isagenix’s Southeast Asia markets. Its vision: to ignite all young people to own their lives physically and financially, and through their contributions, create freedom and a lasting legacy.


The 90 Day Game Plan has resulted in more recruiting, more leaders being developed, greater retention, and even greater product awareness than at any point in the company’s history.


When Isagenix executives talked with Direct Selling News in May, Erik and the START team had just completed a 10-city tour to gather with START leaders and members around the world. Like many START gatherings, those meetings didn’t take place in the traditional hotels or homes where direct sellers typically hold large meetings. Instead, they’re held on building rooftops, in warehouses, or even on the beach. The conversation at those gatherings is often not about money alone. Millennials, who face a weak job market rife with insecurity, often complete college with tens of thousands of dollars in student-loan debt. They can see direct selling as their path away from a 9-to-5 life. The START movement speaks their language. It focuses on changing lives.

Isagenix fuels the enthusiasm and success of START members through continuous, specialized training. Garza notes that the positioning and language in the training is different than in traditional training, and reflects young people’s lives.

“It’s not about retiring early, for example,” Garza explains. “It’s about finding your way to freedom. We teach that failure is OK because it can lead to better habits. It’s about taking risks and moving forward.” He adds, “Because of START, our company culture has become younger, and not just because of age. There’s a new energy in the air at events, whether it’s a START event or a traditional meeting. It’s brought a new life I’ve never seen before. Whether you’re 18 or 75, the energy is dynamic. Our No. 1 lifetime earner is 87 years old—he started his business at 74—and when you see him with START members, it’s like he’s one of them.”

All About Results

Isagenix fuels that energy by investing in the 16-week IsaBody Challenge, technology improvements, promotions and infrastructure expansion, just to name a few. For example, it invests hundreds of thousands of dollars in cash and prizes in the IsaBody Challenge, including $25,000 to the winner; 15 cruises; training-travel dollars; and even $200 in free products when participants complete their challenge. Its START Your Life phone app, which won a DSA ETHOS Award this year, carries a digital magazine that doubles as a recruiting tool. It allows distributors to share articles with prospects and get notifications when the prospect opens and reads the article so that they can then follow up. Last year it completed the ETHOS Award-winning 500 Million Together We Will promotion that helped push the company over the $500 million revenue mark. The promotion challenged associates to reach certain targets. Those who achieved the goal were rewarded with an all-expenses-paid weeklong trip to Paris, plus spending money. The promotion provided a focal point for communication and created alignment throughout the company.

“For 12 months everything we communicated as we worked with leaders was about achieving that $500 million goal,” Garza recalls. “More than 120 people went with us to Paris for a week as we celebrated that achievement. It was extremely exciting for us. That incentive let us connect to the field in a whole new way.”

This year the company built on that success by looking toward the next milestone and inviting Isagenix associates to join the company as it strives to reach a Billion and Beyond. The incentive encourages leaders to set a personal goal and then use the 90 Day Game Plan with their teams to reach it. The reward: a trip to the French Riviera for the distributor and a guest. Valued at over $25,000, the lavish getaway includes upgraded international airfare, dining at the area’s most exquisite restaurants, posh hotel accommodations, $2,000 in spending money, transportation and more.


“Because of START [the company’s millennial movement], our company culture has become younger, and not just because of age. …It’s brought a new life I’ve never seen before.”

—Travis Garza, Chief Sales Officer


Future Focus

All that growth has meant that Isagenix’s physical infrastructure needed to grow, too. So it has begun construction on a new 150,000-square-foot, three-story, state-of-the-art headquarters building in the heart of Gilbert, Arizona. Located 10 minutes from its current location, the new building will unite more than 450 Isagenix employees, who currently work in four different buildings. Built to accommodate growth, the new building will have enough room for almost 900 employees. The sleek architectural design will feature floor-to-ceiling windows showcasing panoramic views of the San Tan Mountains and will include amenities such as a large indoor/outdoor ballroom, a training center, an Isagenix museum, a visitors’ center, a lounge for business leaders, and a full cafeteria, complete with Isagenix shake blenders. The building is located next door to a major fitness facility, where Isagenix has negotiated special employee rates. Executives expect to be fully moved in by early 2016.


The fastest-growing segment of Isagenix distributors is millennials—more than 42,000 of them.


Building the new headquarters is one of many actions that Isagenix plans years in advance. In the future it will continue to grow internationally—always a major decision, because Isagenix establishes a corporate office and local distribution center in each country where it does business.

Global expansion is just one of the things that make both Adams and Garza bullish on Isagenix’s future. “In the next five to 10 years I can see Isagenix can become a multibillion-dollar company because of our product and technology innovations,” Garza predicts. “The quality of our product line excites me, and we’ll be developing new apps that support the way people communicate and do business on social media, both today and in the future.”

Adams looks forward to continuing to do all the things Isagenix already does so well, but on an increasingly larger scale. He points out that the company always looks for international communities that would benefit from its solutions.

“No matter what their goals are, we are helping people across the globe reach them,” he observes. “From losing a few extra pounds to earning extra money, making a car payment or building a six-figure business, Isagenix associates and product users are reaching their goals at all levels.”

July 01, 2015

Company Focus

CVSL: The Gift of Second Chances Gives Companies a Fresh Start

by Andrea Tortora


Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 2012
Headquarters: Dallas, Texas
Executives: Chairman John Rochon Sr.
Products: Cosmetics, personal care, food and beverage, home décor, kitchenware, home care, wellness


John Rochon Sr.John Rochon Sr.
 John Rochon Jr.John Rochon Jr.

Well-known business strategist John Rochon Sr. led innovative growth strategies as CEO and Chairman at Mary Kay Inc. and as a prime investor in Avon Products Inc. Now the Founder of Dallas-based private investment firm Richmont Holdings is returning to the direct selling world with a new model: CVSL Inc.


“As an industry, we sell the things that are in short supply in the world.”

—John Rochon Sr.


CVSL is a growing holding company of eight brands that sell into a global network. Its brands include: The Longaberger Company (baskets and home products), Your Inspiration at Home (spice blends and beverages), Project Home (home improvement products), Agel Enterprises (nutritional supplements and skin care), My Secret Kitchen (food products), Paperly (custom stationery) and Uppercase Living (decorative lettering). Kleeneze is the most recent acquisition, finalized in March. Kleeneze is a U.K.-based distributor of household, health and beauty products.

CVSL is expected to announce the planned acquisition of a ninth company by June 19.

Today 60 percent of sales among all CVSL companies come from outside the U.S. As a parent entity, CVSL acquires healthy firms and loss-making companies that Rochon believes can be turned around and made into profitmaking powerhouses. CVSL provides back-office, manufacturing and distribution support so that entrepreneurs can focus on developing and selling their products.

“We save companies that would otherwise not make it,” says Rochon, CVSL’s Chairman. “The combined portfolio helps even things out and makes it a more stable investment. And by eliminating redundancies we give shareholders a bigger return.”


“We save companies that would otherwise not make it. The combined portfolio helps even things out and makes it a more stable investment. And by eliminating redundancies we give shareholders a bigger return.”

—John Rochon Sr., Chairman, CVSL Inc.


Industry Overripe for Investment

CVSL’s executives see any direct-to-consumer company as a possible add to their $16.4 billion deal funnel. Rochon says the direct selling label is limiting and does not encompass all of the different approaches one can use to reach consumers. Direct-to-consumer sales refer to companies selling something outside of a traditional retail store and through a fully commissioned salesforce, whether the method is TV ads or direct mail used to get leads, or a virtual home party. Those sales also might be for services such as energy, which can generate continuous income.

Any firm using one of those methods is a potential acquisition for CVSL. Here’s why: Rochon sees a landscape filled with oversupply and undersupply. He says recent economic changes resulted in an oversupply of labor and capital and an undersupply of opportunities for people to earn supplemental income.

The direct selling industry makes earning extra income more efficient by using the Internet and demanding very little of a person’s time. You can sign up, sell to friends and relatives, and get paid for that. As a society, Rochon says we are short on good health, short on beauty and short on time.

CVSL BuildingIn October, CVSL will move its headquarters to the top floor of a new building in downtown Dallas.

“As an industry, we sell the things that are in short supply in the world,” Rochon says.

To that end, the CVSL acquisitions team has identified about 60 companies across different geographies and product categories for its pipeline. Michael Rindos, Managing Director of Equity Research at New York-based Aegis Capital Corp., says the companies in CVSL’s deal funnel have the following breakdown:

  • 34 percent are in the health and wellness category
  • 24 percent are in the home category
  • 14 percent are in the service category
  • 14 percent are in beauty
  • 8 percent are in accessories
  • 3 percent are business-to-business firms
  • 3 percent are in the food industry

“Given that the company’s current mix of portfolio companies favors housewares and the health and wellness category in the United States, we would expect CVSL to move into other categories and geographies—should a situation arise where the proper terms could be struck,” Rindos says.

What Aegis likes about CVSL is its ability to consolidate a highly fragmented direct-to-consumer market and its general philosophy of keeping much of the acquired company structure in place.

That includes retaining company founders and leaders should they wish to remain under the new structure. When executives do choose to leave, CVSL works to ensure the right people are in place so that business can continue without missing a beat.

Rochon says he is working hard to grow new leaders that can replace company founders when they exit. He says he is “hiring everyone he can and teaching them how we work,” because in the past 15 years no one has stocked the industry with people “who are ready to come in and take over, like they did when I was at Mary Kay’s knee.”

In 2015, CVSL has seen the departures of the co-founders of Paperly (January) and Project Home (April) and of Longberger Co. CEO Tami Longaberger (May).

At press time, Tami Longaberger and CVSL were embroiled in a legal dispute surrounding the circumstances of her departure, how she was replaced and management of the company at the time of her exit.

At Longaberger, CVSL Vice Chairman John Rochon Jr. was immediately appointed Chairman, President and CEO to replace Tami Longaberger. Rochon Jr. also leads Project Home. He travels to Newark often and leads monthly calls with the Longaberger field.

Rochon Jr.’s dual roles with the holding company and at Longaberger speak to a leadership style that is engaged with the salesforce. CVSL says Longaberger’s May results reveal a large swing upward. (CVSL does not report specific sales figures for its individual portfolio companies.)

CVSL’s Portfolio

Dallas-based CVSL plans to continue acquiring several companies each year. At press time, its portfolio included eight, described below:

The Longaberger Company

The Longaberger Co., based in Newark, Ohio, sells handcrafted baskets and home products, including pottery, cookware, wrought iron and home décor items. Founded in 1973, Longaberger operates in the U.S. and Canada. Its 16,000 consultants use a direct-to-consumer and party plan strategy. CVSL acquired a 51.7 percent controlling interest in March 2013, through a convertible note and an unsecured promissory note. The convertible note was exchanged for 1.6 million shares of CVSL common stock in June 2013. In total, CVSL paid $10.5 million for its 51.7 percent controlling interest, valuing the company at $20.3 million.

Your Inspiration at Home

Your Inspiration at Home sells handcrafted spice blends, oils, vinegars and beverages through a party plan model. Founded in 2011 in Gold Coast, Australia, the company joined CVSL in August 2013. CVSL purchased the assets of Your Inspiration at Home for $1.2 million. The company now operates a U.S. headquarters in Newark, Ohio, and its 6,000 consultants sell its products in Australia, New Zealand, the U.S., Canada and the United Kingdom.

Project Home

Formerly Tomboy Tools Inc., Project Home sells and manufactures home improvement and personal safety products for women. The company uses a party plan model. The firm launched in 2000 and is headquartered in Denver. CVSL acquired Project Home’s assets in October 2013, valuing the company at $565,000.

Agel Enterprises

Agel Enterprises is a direct seller of nutritional gels, nutritional supplement products and skincare products sold in more than 40 countries. Agel was founded in 2005 in Utah. With 23,000 consultants, the company uses a multi-level compensation structure. CVSL acquired Agel in October 2013 in exchange for 372,330 shares of CVSL common stock, a purchase money note for $1.7 million, and the assumption of certain liabilities. In total, CVSL paid $3.6 million for Agel.

My Secret Kitchen

My Secret Kitchen is a food and drink company that sells its products through home-based tasting events and online. Offerings include ready-to-use and easy-to-make food products, such as cheese balls, beer bread mixes, chili jams, and spiced sea salt, dressings, and sweets such as toffee hot chocolate. The company started in 2006 and sells in the United Kingdom. CVSL acquired a 90 percent controlling interest in December 2013 for $149,368 and will pay an earn-out of 5 percent of EBITDA from 2014 to 2016.

Paperly

Paperly is a direct seller with consultants that work with customers to design and create custom stationery at home parties, events and individual appointments. Paperly was founded in 2006 and operates in the U.S., with a headquarters in Chicago. CVSL purchased the company in December 2013 for $75,000. It will also pay an earn-out of 10 percent of EBITDA for 2014 to 2016.

Uppercase Living

Uppercase Living manufactures decorative vinyl lettering products for display on walls in homes and businesses. It uses the party plan model, and customers can design their own word art. Founded in 2006, Uppercase Living is based in Salt Lake City and operates in the U.S. and Canada. CVSL bought the firm in March 2014 for $250,000. It also will pay an earn-out equal to 10 percent of EBITDA for 2014 to 2016.

Kleeneze

Kleeneze is one of the U.K.’s largest direct-to-consumer businesses selling household, health and beauty products. Kleeneze’s 7,000 distributors serve customers in the U.K. and Ireland. CVSL purchased the business for $3.8 million in March 2015.

Formulas for Success

The senior Rochon is all about diversity. He wants CVSL portfolio companies to vary in their location, product and sales models, as well as in their appeal to people in different age groups and ethnic backgrounds.

By bringing in-house the common business operations and services for each of its portfolio companies, CVSL reaps several benefits. Human resources, IT, marketing, accounting and even manufacturing are centralized to drive efficiency and garner more control over operations and profits.

Rochon says the direct-to-consumer industry is one where it is best to control your own supply chain. “If your suppliers have control of what you are selling, they can squeeze you out of business,” he says.

CVSL invested millions to build a centralized distribution structure and a centralized manufacturing relationship with a sister company so that formulas for cosmetics and skincare products, as well as spice and gel production, are under CVSL’s development and control.

This strategy also delivers another edge, by letting the company “take a few percentage points out of it as well,” Rochon says.

Rochon and his executive team at CVSL employ a pretty simple equation for operating their direct sales businesses. Each portfolio company should be posting operating objectives that break down like this:

  • 10 to 12 percent—program costs and discounts
  • 26 to 28 percent—cost of goods sold
  • 60 to 64 percent—gross profits
  • 29 to 31 percent—commissions and incentives
  • 15 to 17 percent—SG&A (the selling, general and administrative operating expenses) required to promote, sell and deliver products and services as well as manage a company overall
  • 12 to 20 percent—cash operating EBITDA (earnings before the deduction of interest, taxes, depreciation and amortization expenses)

CVSL believes that if its businesses successfully follow this formula, it will lead to EBITDA margins of 13 percent to 17 percent.

When CVSL is researching potential acquisitions, it specifically looks for businesses that are missing the margins described above because they didn’t achieve scale or they hit scale and then lost momentum. When operational needs are centralized “loss-making companies can be transformed into positive free-flow generators,” Rochon says.

Your Inspiration at Home

Sometimes, CVSL is the perfect partner for a company that needs assistance to keep the growth going. At just 5 years old, Your Inspiration at Home is already an award-winning maker of hand-blended spices, oils, vinegars and beverages. It’s also the fastest-growing firm in the CVSL group.

When Colleen Walters launched her business, she anticipated selling at the five-year mark. “My thinking was it would get so big and we would not be able to handle it,” Walters says. “We knew we would need backup and support.”

Walters is no stranger to direct selling. Her career began in Canada, and she has spent more than 20 years working in the field, at the corporate level and as a consultant. When she started Your Inspiration at Home in Gold Coast, Australia (where she lives with her Aussie husband), Walters was very deliberate in her planning and strategy. Still, she was a bit surprised by her success.

In her first year in business, Walters saw $2 million (Australian dollars) in revenue. Sales grew so fast the second year that Your Inspiration at Home started to find it tough to keep up with the volume of orders coming in. After just two and a half years, she needed more support. Walters went looking for investors with a direct selling background and found Rochon. CVSL purchased the assets of Your Inspiration at Home for $1.2 million in August 2013.

“When we went to CVSL we had the brakes on,” Walters says. “We took the brakes off and got to $10 million. Now that we have all the systems in place, I can put my foot on the gas pedal. I can’t wait to see what happens.”

Joining CVSL gave Your Inspiration at Home an extensive back-office network, new manufacturing space in Sherman, Texas, and a U.S. home office in Newark, Ohio. Walters says she now has the strength that comes with strong analytics and the support to “manage our load in order to grow as fast as we are.”

The deal also meant Walters could focus on what she truly loves about the business—creating new spice blends and other products, traveling the world for inspiration and interacting with her field.

The year Walters joined CVSL, her company revenue jumped to $4 million, and in 2014 they hit the $10 million mark. Today, Your Inspiration at Home is growing even faster. The company is now active in the U.K., U.S. and Canada, and more than 4,000 consultants have signed up since January.


“When we went to CVSL we had the brakes on. We took the brakes off and got to $10 million. Now that we have all the systems in place, I can put my foot on the gas pedal. I can’t wait to see what happens.”

—Colleen Walters, Founder and Global Spice Curator, Your Inspiration at Home


Generating Wealth

As CVSL’s stable of companies grows, so does the potential to generate profits. But this is a long-term play for Rochon, his investors and stockholders. Analysts who follow CVSL like the potential they see so far.

Brent Rystrom, an analyst at Feltl and Company Securities and Investment Banking in Minneapolis, initiated coverage of CVSL in March with a strong buy rating. Prior to the close of the Kleeneze sale, Rystrom predicted CVSL’s companies would generate between $100 million and $105 million in revenue in 2015. When Kleeneze is factored in, CVSL could see EBITDA between $11 million and $13 million in 2015 and EBITDA between $17 million and $20 million in 2016.

CVSL is an intriguing investment with lots of potential, Rystrom says. Management is financially adept. For example, CVSL has paid $12.5 million (cash, promissory notes, and shares) for the seven businesses it acquired in its first two years (not including Kleeneze). CVSL also assumed assets and liabilities. In that time, the sale of real estate owned by the Longaberger Co. in Newark, Ohio, generated $11.4 million in cash through a sale, which more than offsets all of the investment CVSL made in buying its first seven firms.

While assets of the Longaberger Co. helped to finance CVSL’s growth, it is not the largest company in the fold. Kleeneze holds that honor.

However, CVSL distribution and office facilities at Longaberger’s Ohio center also are used by Project Home and Your Inspiration at Home.

Aegis Capital Corp.’s Rindos predicts gross revenue of $158 million in 2015, up 45 percent from $109 million in 2014. A 3 percent growth rate and a full year of Kleeneze could deliver a 2016 top line of $176 million in 2016 and adjusted EBITDA of $23 million.

The Kleeneze deal showcases how CVSL spots a turnaround candidate and highlights the potential for big returns. Both Rystrom and Rindos note that adding Kleeneze to the CVSL portfolio may greatly boost revenue and EBITDA over time.

Kleeneze claims more than 7,000 sales representatives in the U.K. selling cleaning, kitchen, home, outdoor, health and beauty, and clothing products. For the fiscal year ended March 2014, Kleeneze had revenue of $60 million. CVSL bought the company for $3.8 million. So far, CVSL’s acquisitions see a modest decline to flat sales in the first two years after purchase as management focuses on cost of goods sold and SG&A. In 2016, if Kleeneze posts sales of $60 million and EBITDA of $6 million, CVSL will generate close to a 100 percent return on its investment of between $5 million and $7.5 million.


For each company, human resources, IT, marketing, accounting, and even manufacturing are centralized under CVSL to drive efficiency and garner more control over operations and profits.


Money for Acquisitions

CVSL plans to acquire a new company every three months on average. Ownership of CVSL is consolidated among the Rochon family, and John Rochon controls 74 percent. While this leaves limited float to trade in the public market, Rindos says investors can take comfort knowing their interests are aligned with those of management.

A stock offering made by CVSL in March was designed to generate enough capital to manage the firm’s deal funnel. Rochon does not like where the stock is trading now—hovering around $2 a share. He says when compared to average performers, CVSL should be at $8 to $10 a share. But Rochon notes that CVSL is a complicated merger and acquisitions shop that simultaneously completes turnarounds, which he says can be difficult to value, because positive reported results can lag behind the actual progress being made toward generating positive free cash flow at the turnaround companies.

The CVSL stock was offered as a “share plus warrant” deal. This means that investors received a cash-exercise warrant along with each share of stock they purchased in the offering. A warrant is like a carrot used to get more investors on board. The warrant does not trade on an exchange, but it helps a company generate more investment capital in the event it is exercised during its five-year life. When investors exercise the cash warrant, it brings in additional funds for the company.

CVSL raised $20 million with its stock offering in March, and Rochon expects the entire deal to yield $45 million in cash in the end, assuming all of the warrants are eventually exercised at their $3.75 per share price. Given that there are 6.67 million warrants, that would provide proceeds of an additional $25 million to CVSL.

“We want the stock to recover, and we believe it will as we do more deals with modest income that we will turn around over time,” Rochon says. “Our investors now have an option on a firm that we believe should trade in the $30 to $40 range long-term if we execute on the plan.”


CVSL has a vision to create what it calls the “consumer cloud,” a community of customers, sales agents and distributors from every CVSL company who can interact and engage with each other regarding opportunities to cross-market CVSL products.


Building a Brain Trust

One of the big benefits of a holding company like CVSL is that the executives from each portfolio firm get to share best practices and interact with one another. There are quarterly meetings and more frequent phone conferences.

When Your Inspiration at Home joined the group, Walters attended a conference with her CVSL peers and has done so each year. One tip she learned about planning conventions from a sister company yielded big dividends for Your Inspiration at Home: By pre-selling convention tickets, Walters boosted her attendance from 180 to 500 in three hours. And now she is looking at attendance of close to 1,000 people for her next convention.

“That was huge for us,” Walters says. “The sharing is fabulous.”

Tomboy ToolsProject Home’s Tomboy Tools home improvement products

The ability to access strategy across CVSL companies also is appealing to investors. CVSL has a vision to create what it calls the “consumer cloud.” This is a community of customers, sales agents and distributors from every CVSL company who can interact and engage with each other regarding opportunities to cross-market CVSL products. By using social media, email and other avenues, CVSL can build a huge customer community that could potentially leverage big discounts for rewards such as rental cars, office supplies and credit card offerings. Aegis Capital’s Rindos says, “The strategy of building a customer community may be a promising way to stimulate organic growth, as it may cultivate a ‘sticky’ customer base.”

July 01, 2015

Industry with Heart

Creating a Rigorous Compliance Culture: A Mannatech Case Study

by DSN Staff

Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


About eight years ago, Texas-based Mannatech Inc. was in a fight for its survival. The nutritional products company, which had built its reputation on the effectiveness of its plant-based supplements, was facing serious charges—in both courtrooms and the court of public opinion—that the products were being deceptively marketed as treatments or cures for diseases. Sales plummeted, and company executives were faced with the enormous challenge of stabilizing the business and restoring a path for growth.

Robert SinnottRobert Sinnott

The management team succeeded. After five years of losses, Mannatech (MTEX—NASDAQ) returned to profitability in 2013 and showed significant improvement in 2014, with net sales growing 7.1 percent from $177.4 million in 2013 to $190.1 million in 2014 and net income more than doubling for the same period.

During the long road to recovery, Mannatech CEO and Chief Science Officer Robert Sinnott, Ph.D., oversaw the development of a rigorous compliance culture. The company works diligently to make sure that everyone—from the chairman down to the newest independent associate—markets its nutritional products as supplements to promote overall health and wellness, rather than targeting any specific illness or ailment. In a series of recent interviews, Mannatech executives shared their journey with Direct Selling News, offering lessons learned and strategies to help other direct selling companies navigate the challenges inherent in managing an independent salesforce.

Situational Analysis

Mannatech was founded in November 1993 and held its initial public stock offering in February 1999. In 2001, J. Stanley Fredrick, an experienced direct selling company owner and a past chairman of the U.S. Direct Selling Association, became one of the company’s largest beneficial shareholders and joined the board of directors. Sales grew steadily, and in 2006, Mannatech ranked No. 5 on Forbes’ list of the 200 Best Small Companies. A year later, BusinessWeek ranked it No. 12 on its list of 100 Best Small Companies to Watch.

Al BalaAl Bala

“If the promise of the direct selling business model is some form of long-term income, it has to be based on a foundation of compliance, which ensures the long-term viability of a business.”

—Al Bala, President


Legal challenges brought that growth curve to a screeching halt. In 2005, a group of shareholders filed a class action lawsuit accusing the company of violating securities laws by knowingly allowing members of the independent salesforce to misrepresent the efficacy of Mannatech products and, in doing so, artificially inflating the value of the company’s stock. In July 2007, the Texas Attorney General charged the company with violating the state’s Deceptive Trade Practices Act by making unsubstantiated claims that Mannatech products could treat and cure various ailments, such as cancer. The situation drew the attention of national media organizations, including The Wall Street Journal and the TV show 20/20, generating a raft of negative publicity. The Great Recession that hit the U.S. and global economies in 2008 served as a double whammy. Many consumers found themselves with significantly reduced disposable income, and many others were fearful they would be the next to fall victim to the market turmoil.

The challenges were real and severe. Although Mannatech reached an agreement with the Texas Attorney General’s office, settling the enforcement action without admitting any wrongdoing, the lawsuit was a blow to the company’s reputation. The number of active associates and members began to decline in 2008, and with that, net sales dropped 58 percent from $412.7 million in 2007 to $173.4 million in 2012.

“The numbers were a real wakeup call,” Fredrick, now Chairman of Mannatech’s board, says.


Success meant finding a way to keep the sales messages simple and clear without overreaching on the product claims.


Tackling Compliance

The first order of business was to tighten up sales and marketing guidelines and to ensure that everyone consistently complied with the standards. As every direct selling company executive knows, this was no small task. Mannatech closed 2007 with 575,000 associates and active members selling a portfolio of sophisticated nutritional products. Success meant finding a way to keep the sales messages simple and clear without overreaching on the product claims, permanently removing any discussion of the products being able to cure, mitigate or prevent any disease.

In 2007, Mannatech eliminated the practice of allowing third-party vendors to sell or distribute materials to share Mannatech products. Today, the company offers standardized personal web pages for associates, and associates can use only corporate-approved marketing materials, which are available through a resource library. They also have access to recurring training on compliant marketing and advertising. “The goal is to create compelling, compliant and consistent messaging across the board,” says Sinnott.

Mannatech also actively monitors the marketing messages surrounding the company and its products. Associates are required to report their websites to the legal and compliance department, and the company conducts random checks of other online communications, such as Facebook, Twitter and blogs. The company employs a third-party web crawler to pick up references linking Mannatech and its products to disease claims, as well as potential trademark infringement and other adverse materials. The legal and compliance team receives regular reports from the service and contacts associates to go through a compliance review process when needed. The tool also provides reports regarding unauthorized online sales and issues cease-and-desist letters on Mannatech’s behalf for potential trademark infringement cases.

Mannatech headquarters in Coppell, TexasMannatech headquarters in Coppell, Texas

Associates also play a key role in ensuring compliance. In 2005, Mannatech began contracting with Ethicspoint, an independent company that maintains a hotline-style service where people can anonymously report possible violations of the company’s Business Code of Conduct, Code of Ethics and Associate Policies & Procedures.

“We do everything we can to provide our associates with a strong, safe and compliant foundation on which they can build their business,” says President Al Bala. “However, we have specific rules, and consequences for breaking those rules, including having to move on from individuals who endanger the company by straying from the right path. We stress that compliance is both a corporate and field responsibility in our goal toward creating a long-term, sustainable business.”


After five years of losses, Mannatech returned to profitability in 2013 and showed significant improvement in 2014, with net sales growing 7.1 percent from $177.4 million in 2013 to $190.1 million in 2014.


With the business back in growth mode, Mannatech is not letting up on its compliance work. In late 2014, Mannatech added Linda Ferrell, Ph.D., a marketing and business ethics expert, to its board of directors. Ferrell recently completed nine years on the faculty of the University of New Mexico and is joining the Jack C. Massey School of Business at Belmont University this fall. She is a member of the Direct Selling Education Foundation’s board of directors and serves as President of the Academy of Marketing Science. At Mannatech, she chairs the board’s subcommittee on Associate Compliance, a group that she describes as supporting ways for Mannatech to partner with associates to help build successful and sustainable businesses in a safe, compliant environment.

“Mannatech’s membership in the Direct Selling Association and adherence to one of the best industry codes of ethics demonstrates their commitment to upholding the highest integrity of business conduct,” Ferrell says. “Their commitment to their customers, associates, and the industry (through the DSA and DSEF) is significant and impactful.

Linda FerrellLinda Ferrell

“[Mannatech’s] commitment to their customers, associates, and the industry (through the DSA and DSEF) is significant and impactful.”

—Linda Ferrell, a marketing and business ethics expert and Mannatech board member


“I also admire Mannatech’s commitment to social entrepreneurship and the impact this has on a global basis in the health and well-being of children. Their products are making a difference in people’s lives globally.”

Managing Expenses

Mannatech’s executive team knew from the outset that resolving the company’s regulatory challenges would not be enough to restore its financial health. Cost-cutting became a matter of survival.

Payroll was one of the key categories. Mannatech had 610 employees at the end of 2007. In July 2008, the company eliminated 60 positions, 15 percent of its U.S. workforce; six months later, it cut another 25 permanent and contract positions. Headcount has gone down every year since then, even as the company has added new international markets and introduced new products. At the end of 2014, Mannatech employed 270 people.

Mannatech also outsources its manufacturing, which has helped the company stay nimble, and Vice President, Global Operations Landen Fredrick spearheaded a process of controlling raw material costs.

By the end of 2010, expense control efforts were in line with the sales decline, and Mannatech was again generating positive cash flow, which could be used to grow the business. In the second quarter of 2011, Mannatech began aggressively working to reduce its operational expenses. In 2012, for example, it cut selling and administrative expenses by more than $10 million and other operating expenses by more than $8 million.

“In the past several years we’ve had to make some difficult decisions; but, in the end, the choices we made have created a stronger Mannatech that serves our customers, associates, employees and shareholders better than ever,” Fredrick says. “We adjusted staffing to align with our global expansion efforts and outsourced some of our services to reduce costs and increase efficiencies. These efforts enabled us to grow and have brought us back to profitability. Today, we are expanding and are building our teams up around the world.”

J. Stanley FredrickJ. Stanley Fredrick

“In the past several years we’ve had to make some difficult decisions; but, in the end, the choices we made have created a stronger Mannatech that serves our customers, associates, employees and shareholders better than ever.”

—J. Stanley Fredrick, Chairman


Building the Top Line

The third part of Mannatech’s recovery story is ongoing: rejuvenating sales.

Bringing value to end consumers in the form of unique products based in nutritional glycobiology is a key to the company’s strategy, and from the outset of its financial trouble, the executive team was careful not to let cost-cutting measures deter the company from continuing to develop new products. In 2012, it launched NutriVerus, a unique multivitamin powder that combines several core Mannatech technologies. In 2013, it followed up with Uth, a glyconutrient-based skincare system. And in 2014, the company introduced GlycoBOOM, a potent immune system booster.

The commitment to research and development continues today. Over the years, Mannatech has committed tens of millions of dollars to perfecting and validating its nutritional glycobiology technology. Some of its product formulations are protected by more than 100 patents. The company even deployed an open innovation system that allows associates to vote on ideas in the product development pipeline. “I think we have the corner on different,” Bala says.

MannatechThrough social entrepreneurship, a donation to nutritional feeding programs is made for each and every sale of a Mannatech product.

New products were just part of the sales strategy. Mannatech also continued to expand into new international markets, even as it worked to decrease the size of its corporate staff. Since 2007, the company has opened 15 additional international markets. Hong Kong and Spain were the most recent additions, in 2014, and plans call for Colombia to open in the third quarter of 2015.

In addition, Mannatech created a new story for associates to share when it introduced its social entrepreneurship model. It is through this model that the company donates its nutritional supplement powder PhytoBlend to a nonprofit organization, Mission 5 Million (M5M), for each order. This charitable work reflects Mannatech’s goal of providing assistance to 5 million malnourished children and allowed the salesforce to rebrand themselves as social entrepreneurs.

“It is so important to our associates and customers to know that the purchase of many of Mannatech’s products triggers a donation,” Fredrick says. “We believe that our products change lives, and the M5M program extends that chain of wellness to children around the world. What does social entrepreneurship mean? It starts with fighting a social problem, such as malnutrition, and creating a business opportunity for those who want to join the fight; thus improving ourselves, our community and the world. Thanks to the M5M program, our associates feel that they are not just selling, but also changing lives through giving.”


Over the years, Mannatech has committed tens of millions of dollars to perfecting and validating its nutritional glycobiology technology. Some of its product formulations are protected by more than 100 patents.


Conclusions

There’s no doubt that Mannatech’s story is a cautionary tale of what can happen when a company runs afoul of government regulators. But its successful recovery offers a road map that savvy executives can use to create a culture of compliance and fiscal prudence throughout their home office staff and their field.

Unsubstantiated product claims hurt everyone involved. Honest marketing is a cornerstone of consumer protection. Without it, a company’s reputation—and that of its independent sales associates—rests on an unstable foundation. But with that cornerstone firmly in place, a direct selling business can provide a powerful, sustainable opportunity for entrepreneurship. As Sinnott says: “The direct selling industry needs to take compliance seriously, because each time a wild claim is made, our industry’s reputation takes a hit…. Starting from the office and extending to our associates in the field, we know that there is no corner that can be cut or detail overlooked. Our message is that Mannatech’s compliance culture creates opportunities for our associates to build strong, safe, long-term businesses.”

July 01, 2015

New Perspectives

2015 DSA Annual Meeting

by DSN Staff


Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


DSA Annual Meeting: Celebrating the Future

by DSN Staff

The U.S. Direct Selling Association had a packed agenda for its Annual Meeting, which was held May 31 to June 2 in San Antonio.

The theme for 2015 was “Opportunity,” and the speakers and activities were designed to highlight opportunities direct selling companies have to shine, lead, inspire and achieve. In keeping with that theme, DSA President Joseph Mariano kicked off the opening general session by giving the audience a first look at the results of the association’s 2014 growth and outlook research, which illustrate the size of the opportunities ahead. More than 18 million Americans were involved in direct selling in 2014, with retail sales volume growing 5.5 percent to $34.47 billion. (For more results, see Page 88.) “The opportunities of the 21st century lie in this room,” Mariano said during his opening remarks. “There is no reason that direct selling cannot be and will not be the next great engine of personal and corporate success.”

The bulk of the meeting was devoted to informative and inspirational presentations from the main stage and a series of targeted workshops that offered a deeper dive into topics important to growing a direct selling company. Four company executives shared their stories with general session presentations: Initials Inc. Founder and CEO Britney Vickery, Stream Energy President and CEO Mark “Bouncer” Schiro, Zurvita Founder and Co-CEO Mark Jarvis and Isagenix International Co-Founder and Executive Vice President Kathy Coover. A panel of DSA and DSEF leadership shared their perspectives on the opportunities in the channel, and a panel of chief marketing officers discussed strategies for engaging with their salesforces and customers. Capping off the general sessions were keynote addresses from speakers outside the direct selling space: author and former advertising executive Sally Hogshead, who took the audience through the personality brand analysis detailed in her book How the World Sees You, and artist Allison Massari, who shared her story of perseverance and finding happiness in the wake of a traumatic accident.

The business agenda included strengthening the DSA Code of Ethics as well as electing new board leadership for the association and the Direct Selling Education Foundation. The meeting concluded with the DSA’s Awards Gala Dinner and a live auction supporting the DSEF.

Blue Jean Bash The opening night event included a Blue Jeans Bash with a Texas theme.

A record number of suppliers supported the Annual Meeting, with 135 booths in the exhibit hall. Many offered mini-workshops called Express Learning Sessions that gave participants a look at some of the cutting-edge developments in field recognition, technology implementation, brand expression and other important aspects of the business. The exhibit hall also was home to the Partners Make It Possible Scavenger Hunt, the opening night Blue Jeans Bash and great networking opportunities throughout the meeting. “I really thought it was a fantastic meeting,” said Al Wakefield, outgoing Chairman of the DSA Supplier Committee. “Seeing suppliers and members getting together and people responding to the programs that were put on was extremely exciting.”



Past DSA Chairman Truman Hunt (center) hands off the ceremonial gavel to incoming Chairman David Holl.

Mary Kay’s David Holl Takes Helm of DSA Board of Directors

As part of its business during the Annual Meeting in San Antonio, the board of the U.S. Direct Selling Association (DSA) officially selected its new Chairman: David Holl. Currently the President and CEO of Mary Kay Inc., Holl succeeds Nu Skin Enterprises President and CEO Truman Hunt, who completed his one-year term as board chairman at the association’s annual business meeting May 31. In an interview with Direct Selling News, Holl said he plans to build on Hunt’s priorities and accomplishments, with particular focus on continuing to foster collaboration between companies and enforcing the association’s newly revised Code of Ethics.

Revising the Code of Ethics was the signature achievement of Hunt’s term as chairman. The changes were the result of extensive committee and subcommittee work and included stronger requirements related to substantiating product and earnings claims, enhancing the existing “buy back” provision and introducing a new level of transparency to the code complaint process. Holl said companies can expect to see the board continue its work on compliance, enforcement and transparency. “It’s not easy to get the whole industry behind the same code,” he said. “…Now the proof is in the pudding.”

Holl takes the helm of a diverse organization of direct selling companies, including newly established companies, those in fast-growth mode and established brands that have become icons of the channel. In his role as President and CEO of Texas-based Mary Kay Inc., he brings a unique perspective to the position. Mary Kay is the world’s fourth-largest direct selling company and one of the most recognizable brands using the channel today, but it also is in a significant growth mode, with sales increasing $400 million—from $3.6 billion in 2013 to $4 billion in 2014.

Like many of the large U.S. DSA member companies, international growth will continue to play a significant role for Mary Kay. China and Brazil are the company’s top growth markets, Holl said, with China now its largest market and Brazil the market with the greatest percentage growth. Mary Kay moved into its newest market, Colombia, on March 13. By March 31, it had signed up 3,000 consultants—it’s goal for all of 2015. Two months later, there were 10,000 Mary Kay consultants in Colombia.

In the U.S., Holl said Mary Kay has been seeing its consultant and customer base get younger. The company has invested heavily in social media and ramped up its promotions and advertising. So far, the company has seen growth in the number of consultants but domestic sales remain relatively flat. There is a huge opportunity, Holl added, in introducing a new generation to direct selling. “I know that we’re pretty optimistic because of just what we’ve spent in the last 18 month and some of the metrics that we see on the advertising and what we’ve seen on the digital media side. It’s got to start showing up in our numbers,” he said. “I’m willing to be patient.”

That excitement carries over to his outlook for the channel as a whole. “The direct selling industry is alive and well,” Holl said at the conclusion of the interview. “I also think that in another year we’ll have one more year of beating retail sales growth and beating GDP growth, and that’s the proof of how well our industry is doing. And, we’ll do it against a better code of ethics.”


DSA 2015 Committee and Council Chairs

The U.S. Direct Selling Association’s Board of Directors appointed the following members to committees and council chairmanships:

  • Annual Meeting Committee: Lori Bush, Rodan + Fields
  • DSA Awards Committee: Pam Dean, Thirty-One Gifts
  • Communications Committee: Crayton Webb, May Kay Inc.
  • Diversity & Empowerment Council: Mona Ameli, Take Shape For Life Inc. – Medifast
  • Education Committee: Dr. Traci Lynn Burton, Traci Lynn Fashion Jewelry
  • Ethics & Self-Regulation Committee: Heather Chastain, Arbonne International LLC
  • Executive Committee: David Holl, Mary Kay Inc.
  • Finance Committee: Matt Blok, Amway
  • General Counsel Committee: Allison E. Levy, AdvoCare International LP
  • Government Relations Committee: Theresa Flores, Mary Kay Inc.
  • Industry Research Committee: Pammie Strickland, Ambit Energy
  • International Council: Richard M. Hartvigsen, Nu Skin Enterprises
  • Member Services Committee: Chuck L. Thompson, Scentsy Inc.
  • Nominating Committee: Truman Hunt, Nu Skin Enterprises
  • Strategic Planning Committee: Marjorie L. Fine, Shaklee Corp.
  • Supplier Advisory Committee: Robert Cavitt, Jenkon

DSEF Fundraisers: Live and Silent Auctions

Truman Hunt Past DSA Chairman Truman Hunt, President and CEO of Nu Skin Enterprises, bids during the DSEF silent auction.

For the second year in a row, the Direct Selling Education Foundation (DSEF) held an auction at the DSA Annual Meeting on June 2 in San Antonio, during the Gala event. Called “The Experience of a Lifetime Auction,” this year’s event had two components: a live auction and a silent auction. The silent auction portion of the event opened prior to the Annual Meeting and ran through the last day of the conference. Attendees (and executives back home) could bid through an app on a smart phone or tablet. Items donated by DSA member and supplier companies included such things as cookware sets, an HDTV, a case of wine and Apple watches, among others.

The live auction included six packages offering ultimate experiences to the bidders, such as two deluxe accommodation nights at Meritage Resort in Napa Valley, California, VIP arena access and sports tickets, and a four-day experience at a ranch adjacent to an exclusive Texas winery. The big winners of the evening were Orville and Heidi Thompson, owners of Scentsy, who took home the “Big Apple Homerun: New York Yankees Luxury Suite” experience for a $40,000 donation.

The Foundation’s efforts during the Annual Meeting raised more than $140,000 towards its 2015 Operating Fund. DSEF relies on contributions and volunteer service to operate programs that advance understanding of direct selling and promote the industry’s commitment to ethics, consumer protection and self-regulation.

In other news, a new slate of Officers and Directors for the DSEF was approved during the Annual Meeting. The following Officers were approved for a one-year term: Chair – John Parker, Chief Sales Officer, Amway; Vice-Chair – Kerry Tassopoulos, VP, Public Affairs, Compliance and Risk Management, Mary Kay Inc.; Secretary – Adolfo Franco, Executive Vice President and Chief Operating Officer, DSA; and Treasurer – Matt Blok, Director, Functional Financial Planning and Analysis, Amway.

The Foundation also elected the following Directors to three-year terms: Traci Lynn Burton, Founder and CEO, Traci Lynn Fashion Jewelry; Heather Chastain, Senior Vice President and Chief Sales Officer, Arbonne International LLC; Mike Collins, President, LifeWave; Greg Probert, Chairman and CEO, Nature’s Sunshine Products Inc.; Britney Vickery, CEO and Founder, Initials Inc.; and Dave Wentz, CEO, USANA.


Honors Bestowed at Awards Gala

Joseph Mariano DSA President Joseph Mariano hosted the Annual Gala event.

Seven companies received industry-wide recognition on June 3 at the Awards Gala, which capped the Direct Selling Association’s (DSA) Annual Meeting. Held in San Antonio, the event revealed the winners of this year’s ETHOS Awards, as well as a new inductee into the DSA Hall of Fame.

In May, the DSA announced the ETHOS sub-category winners across seven categories. From those finalists, a panel of industry leaders and outside experts narrowed the selections on the criteria of excellence, creativity and innovation.

In addition to taking home the ETHOS Award for its marketing campaign with Lifetime’s TV series Project Runway, cosmetics giant Mary Kay saw Senior Vice President Michael Lunceford join other direct selling luminaries in the DSA Hall of Fame. The award honors Lunceford’s longstanding support and leadership of the DSA, where he serves as Chairman of the Government Relations Committee, and the entire industry.


2015 ETHOS Awards

Marketing & Sales Campaigns:

Mary Kay Inc.
Project Runway/Lifetime
TV sponsorship

As the Official Beauty Sponsor of the popular TV show Project Runway, Mary Kay sought to increase brand awareness and purchase consideration among viewers, as well as empower the salesforce with a fun way to talk about the brand with new and existing customers. The promotion increased traffic to the website, and 75 percent of Consultants reported in a survey that the promotion increased sales.

DSEF live auction The crowd reacts during the DSEF live auction at the Awards Gala.

Product Innovation:

LifeWave Inc.
Theta One and Theta Active

Desiring to produce a product with fast results, LifeWave Inc. developed a nutritional drink supplement with a specific nutrient delivery system that was designed to produce results in minutes. The introduction of ThetaOne and ThetaActive has increased distributorships and elevated the company’s product mix.

Excellence in Salesforce Development:

Scentsy Inc.
Idea Share

In order to capture and leverage the ideas in the field, Scentsy implemented a website that allows Consultants to submit ideas, and to vote on the submissions. When an idea receives sufficient votes, the home office considers when and how to implement the idea, doing what it can to bring the idea to life.

Connie Tang Princess House CEO Connie Tang gets the crowd excited about the New York Yankees live auction package.

Technology Innovation:

Rodan + Fields
Self-checkout point-of-sale

Avoiding the traditional congested check-out lines at their annual salesforce convention, Rodan + Fields launched a self-service checkout system that allowed 1,000 Consultants to shop simultaneously and to only wait in line a maximum of 10 minutes. The system performed flawlessly during the convention and is being repurposed for other events.

Vision for Tomorrow:

Nu Skin Enterprises, Creating Smiles

In more than 50 countries around the world, children are smiling every day because Nu Skin is committed to philanthropic work through providing help and food to an impoverished world. Utilizing a corporate social responsibility model that involves the sales field, their customers and corporate employees, Nu Skin engages in innovative efforts to help those less fortunate.

Rising Star:

All’asta

With a twist on the traditional in-home party, All’asta brings together people and their “once-loved” items in a silent, in-home auction. Also offering eclectic local and global items in a catalog, the company has generated growing Consultant and customer interest in its unique approach.

Partnership Award:

Step Into Success

Belinda Ellsworth has assisted more than 100 direct selling companies to find strategies and programs that work for them. From research on industry trends to facilitating focus groups to offering advice, Ellsworth has served the industry for nearly 20 years.



DSA President Joseph Mariano provides an optimistic outlook for direct selling to the crowd at the Annual Meeting.

Another Milestone for Direct Selling

by Ben Gamse, DSA

DSA President Joseph Mariano delivered some good news at our Annual Meeting last month in San Antonio: New data from the 2015 Growth & Outlook Survey (2014 data) indicates that direct selling in the U.S. has risen to record highs in both estimated retail sales ($34.47 billion) and number of people involved in direct selling (18.2 million). These figures represent increases of 5.5 percent and 8.3 percent, respectively, over 2013.

As the U.S. economy carries on its recovery from the last recession, direct selling continues to experience steady gains, outperforming the retail sector overall and GDP. Specifically, the three-year compound annual growth rate (CAGR) from 2011-2014 for direct selling retail sales of 4.89 percent is about a full percentage point higher than both U.S. retail growth (3.8 percent) and U.S. GDP growth during the same period (3.90 percent).

Based on the continued strength of the business model and market opportunities ahead, direct selling is poised for even more growth in the next three years—approximately 3 to 5 percent by our estimation. A number of factors help explain why 2014 was a record year.

First, e-commerce, social media, and mobile technologies continue to improve dramatically, creating opportunities for direct selling companies to broaden their reach, increase their efficiency and complement in-person sales. Kerry Brown, Chief Marketing Officer of Stream Energy, recently noted that we will witness an increase in technology-focused tools that allow consultants to run their businesses anywhere and anytime, thanks to new mobile technologies. Second, consumers’ appetite for wellness products continues to increase, as baby boomers age and new generations of Americans grow up more health aware and engaged than those who came before them. As the national interest in wellness continues to explode, so too does the direct selling channel, whose focus on personal demonstration is a great approach for marketing supplements, shakes, snacks and other products designed to enhance health, nutrition and performance.

Finally, U.S. unemployment has been on a downward trend since 2011 and is nearing pre-recession levels. However, the number of people that are underemployed (discouraged, marginally attached, and part-time workers) has decreased at a slower rate and is still above pre-recession levels. According to a recent Economist story, “The Economy Doesn’t Matter,” full-time jobs have declined but part-time positions are on the rise since the recession. As people look for low-risk, low-cost and flexible entrepreneurial opportunities, direct selling continues to be an ever-popular option.

Also notable is the ethnic and racial profile of direct sellers in 2014, which closely mirrors the profile of all Americans—another powerful indicator that in direct selling, opportunity doesn’t discriminate. Everyone who is willing to put in the effort associated with building their own business has a chance to succeed.


Code of Ethics: Updates Reflect a Community United by Purpose

After months of work at the committee and subcommittee level, the board of the U.S. Direct Selling Association (DSA) approved a series of revisions to its Code of Ethics during the 2015 Annual Meeting. The revisions tighten the Code’s rules governing product claims and earnings claims, enhance the Code’s inventory buy-back provision and create a more transparent system for reporting on Code compliance complaints and their resolutions. (For a complete copy of the Code of Ethics, visit www.dsa.org.)

The DSA Code of Ethics first went into effect in 1970. Throughout its history, the Code has been the foundation for the association’s role as an effective self-regulatory organization committed to consumer protection. While the Code has been modified numerous times in its more than 50-year history, this new set of changes is particularly significant. Together, the updates reflect the voice of the direct selling community, redoubling its commitment to being a force for good throughout the world by offering high-quality products and a flexible path to entrepreneurship to people from all walks of life.

In times such as these, when the direct selling channel is under frequent attack, speaking with one voice is critical. The companies and individuals involved in bringing about these Code updates deserve tremendous praise for their commitment to the project and the high level of collaboration required. It’s no small task to steer an organization as large and diverse as the DSA toward consensus on policy changes of any kind. When you’re dealing with policies that shape some of the core business functions of member companies, change can be understandably daunting. But the Ethics & Self-Regulation Committee tackled the project methodically, gathering input and support from a large number of member companies and providing regular updates on progress to the entire board. They consistently demonstrated a strong sense of mission: to update the Code in such a way that the document fully reflects the organization’s long-standing commitment to consumer protection and ethical business practices.

The changes to the Code go into effect Jan. 1, 2016. Between now and then, look for the DSA to create and distribute materials designed to help member companies educate their salesforces and customers about the updated Code. In addition, the Ethics & Self-Regulation Committee will be finalizing details related to the public reports the Code Administrator will make regarding company complaints and their resolution.

The Code itself is only one piece of the puzzle. To complete the picture of direct selling as an entrepreneurially minded community dedicated to adhering to the highest standard of business ethics in the world, each individual company must examine their own level of passion and commitment to this standard. We challenge all companies, DSA and non-DSA members alike, to seize this moment in time as the perfect opportunity to raise the bar even higher. The goal is for everyone who touches a direct selling business—customers, prospects, employees and independent sales associates alike—to leave better than they were when they arrived.

The latest DSA research shows that 18.2 million Americans were involved in direct selling last year with retail sales totaling more than $34 billion, so delivering on that mission requires a systematic approach to consistently achieving excellence in a huge number of transactions and interactions.

As the noted speaker, author and personal development thought leader Jim Rohn, whose work continues to positively impact direct sellers around the world, once said: “You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself.” Rohn’s profound thought triggered for us a few ideas about how to leverage the Code changes:

  • Conduct a thorough self-assessment. Is your company living up to the highest standards of business ethics and consumer protection in the world? Are you leaving everyone you touch better than you found them? Make sure your company practices are following the spirit, and not just the letter, of your ethics platform.
  • Commit to a culture of continuous improvement. Use the results of your self-assessment to identify areas in which your company has room for improvement. Prioritize those areas and establish specific action items, complete with task leaders and deadlines. Once you’ve completed the list, go back and conduct another round of assessment.
  • Elevate business ethics to a cornerstone of your corporate strategic plan. Selling, recruiting, training, development and retention are likely major components of this plan already, and they no doubt are supported by a robust marketing plan and top-notch product innovation and research. By devoting similar strategic effort to ethics, your company can ensure that the highest ethical standards are woven into every aspect of the company’s focus, including the support and development of employees and members of the field.
  • Make business ethics training a focal point of all events and training programs. Use these forums to weave the Code of Ethics as well as your own company policies and procedures into the fabric of your company culture. Consistent, frequent messaging and training will make business ethics as fundamental as selling.
  • Share your commitment to the world. Since its earliest days, direct selling has stood as an opportunity for distributing high-quality goods and services and for giving people an opportunity to earn additional income or build a part-time or even full-time business. When your company is committed to delivering on those fundamentals, that’s a well-earned point of pride for your distributors. The field can become a legion of voices for good business practices, sharing their pride in your company’s position on this important issue.

Direct selling continues to face challenges from those who attack the business model, often with financial motives of their own. But while we can, and should, continue to defend the channel from those attacks, lasting change in the public’s perception of direct selling will only come through change from within.

July 01, 2015

Publisher's Note

Looking forward to the Second Half of 2015

by Lauren Lawley Head


Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


Lauren Lawley Head

Can you believe it’s July already? It’s the zenith of summer vacations, with plenty of empty desks and the sunshine and great outdoors calling alluringly to those remaining in the office. But it’s also the midway point for the year, when we have just six more months to make all of our new year’s resolutions come true.

This month’s cover story tackles one of the resolutions that likely was on your list: hiring well. Across all business sectors, many companies are struggling to attract and retain the right talent, especially in upper levels of company leadership. Generation X, a small cohort to begin with, spent the early part of its career working under much flatter management structures than baby boomers experienced, leaving a relatively small pool of talent with key middle management experience. Writer Courtney Roush examines the trends and offers insightful suggestions from company executives on finding the right candidates, both inside and outside the direct selling community.

Also inside this issue of Direct Selling News, you’ll find in-depth coverage of three companies at different stages of development. In our Company Spotlight, writer Barbara Seale takes us inside one of the fastest-growing companies in direct selling today: Arizona-based Isagenix International. The company grew from $448 million in net sales in 2013 to $725 million in 2014 and is currently tracking to join the exclusive club of $1 billion companies by year’s end. Readers who are interested in attracting more millennials to their brands will find this of particular interest: Isagenix has grown its millennial movement from a small Facebook group in 2012 to the fastest-growing segment in the company’s distributor base today.

In our Company Focus story, writer Andrea Tortora offers an in-depth look at the business strategy behind CVSL Inc., the growing holding company helmed by John Rochon Sr. that has purchased such notable direct selling brands as the Longaberger Co. and Kleeneze. In his interview with DSN, Rochon outlines a long-range plan for expansion, including plans to acquire a new company on average of once each quarter. He also explains why he continues to be bullish on direct selling: “As an industry, we sell the things that are in short supply in the world,” including health, beauty and time. Last but not least, our Case Study story offers a deep dive into how executives at Mannatech Inc. built a rigorous compliance culture while executing a financial turnaround.

We’ve also included several pages of coverage on the happenings from the DSA Annual Meeting, held May 31 to June 2 in San Antonio. The coverage includes announcements and new board members, along with ETHOS Award winners and descriptions of the Gala Celebration and the DSEF auction.

We hope that you find these stories informative and inspiring as you work to execute the second half of your 2015 game plan.

All the best,

Lauren Lawley Head
Publisher and Editor in Chief

July 01, 2015

News in Brief

News in Brief, July 2015


Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


ViSalus Co-Founder Endows $200K to Entrepreneurial Program

Ashley and Nick Sarnicola Ashley and Nick Sarnicola

A recent donation from ViSalus Co-Founder Nick Sarnicola and his wife, Ashley, will support up-and-coming entrepreneurs in Nick’s native Michigan. Through their Next Generation Entrepreneurs (NextGEn) Foundation, the philanthropic couple has provided a $200,000 permanent endowment to the Muskegon Community College Entrepreneurial Studies program.

The gift goes hand-in-hand with a contribution from longtime friend and local real estate developer Jonathan Rooks, who donated the downtown Muskegon Masonic Temple building for the program’s use. The facility is slated to reopen by fall 2017 as the Rooks Sarnicola Center for Entrepreneurial Studies.

“Jon and Nick are making history at MCC with these incredibly generous gifts,” Tina Dee, Director of the Foundation for Muskegon Community College, said in a statement. “The total value of $550,000 is larger than any other single past contribution and will have an enduring and positive impact on our students and the greater community we serve.”

The Sarnicolas, who travel the world as Global Ambassadors for ViSalus, set up the NextGEn Foundation to provide scholarships, seed capital and mentoring for budding entrepreneurs. Their donation will supply a $10,000 annual award to graduates of the Entrepreneurial Studies program.


Big Brothers Big Sisters Presents Top Partnership Award to Nerium

Big Brothers Big Sisters of America recognized its leading corporate partners during its recent National Conference in Philadelphia. The organization’s highest honor, the President’s Award, went to Nerium International for its wide-ranging contributions to BBBS over the past four years.

The organization pairs adult volunteers, or Bigs, with children at risk, or Littles, in a one-to-one mentoring relationship. The children generally come from poor or single-parent families, or have an incarcerated parent. BBBS asks a minimum one-year commitment of its volunteers.

In its four years as a corporate partner, Nerium has recruited Bigs among its employees and brand partners and raised more than $2 million for BBBS. The award also recognizes Nerium’s participation in spearheading new programs and ramping up funding through a variety of brand partner
giving options.


WFDSA Reports Positive Trends as Direct Selling Hits Global Highs

The World Federation of Direct Selling Associations (WFDSA) has published its 2015 Annual Report, supplying the most comprehensive data on the state of direct selling worldwide. In transactions that took place one-to-one, in retail shops, and online via e-commerce and social media, the industry continued its steady growth curve in 2014, seeing unprecedented sales and engagement.

Total retail sales climbed 6.4 percent last year to $182.8 billion, setting an industry record. Asia continues to outpace other markets, accounting for 45 percent of global retail sales. The Americas follow at 37 percent and Europe at 17 percent, with Africa and the Middle East representing the final 1 percent. In the past three years, the industry has seen a compound annual growth rate of 6.5 percent.

Behind direct selling’s positive growth trend are millions of entrepreneurs marketing an array of products and services. In 2014, their numbers swelled to a record 99.7 million, up 3.4 percent from 2013. Asia Pacific accounts for 51.1 million direct sellers, more than any other region, but the most significant growth took place in the Americas, where the salesforce increased 5.7 percent to 33.1 million.

“People today want to be able to determine their own hours, where they work, their level of commitment and effort, and their own goals,” WFDSA Chairman Doug DeVos, President of Amway, wrote in an introduction to the report. “This is what direct selling has been offering people for more than a century. And it’s why our industry is more compelling today than ever.”

DeVos also called on direct selling leaders to strengthen the industry’s image by proactively and transparently telling that story, as well as advocating for better consumer protections and legal definitions of the business model.


Utah Force for Good Day Honors Nu Skin Humanitarian Efforts

Former Direct Selling Association Chairman Truman Hunt, President and CEO of Nu Skin, has passed the gavel to Chairman David Holl, CEO of Mary Kay, but Hunt’s work to advance the industry as a force for good continues at Nu Skin’s Utah headquarters, where the Governor’s Office declared June 4, 2015, Utah Force for Good Day.

The observance is a nod to Nu Skin’s annual Force for Good Day, now in its 12th year. The company’s employees and distributors celebrate the day by participating in service projects that benefit children. This year, local participants supported the work of the Nu Skin Force for Good Foundation by assembling 10,000 kids’ care bags and making 200 fleece quilts for children confined to a hospital stay. Globally, projects included donating and distributing education kits, serving children in orphanages, and sponsoring clothing drives.


Avon Unveils New Strategic Direction with ‘Beauty for a Purpose’

Avon is touching up its brand with the launch of a multimedia campaign aimed at sharing the Avon story with a new generation of women.

As its business has undergone a steep decline in recent years, Avon has been the subject of countless headlines portending the future of the brand. Now, the direct selling giant is looking to tell its own story with the launch of a new brand platform, Beauty for a Purpose. The attendant website, social sharing campaigns and rebranding will showcase Avon’s legacy, as well as its contemporary efforts to empower women.

“Beauty for a Purpose is a guiding vision for Avon’s future and is rooted in our rich history of empowering women,” said CEO Sheri McCoy, calling Avon an authentically purpose-driven company. “Financial independence is the most important driver of women’s empowerment, and for over 125 years Avon has provided women with an earning opportunity. Our commitment to women is also reflected in substantial work we have done in breast cancer and domestic violence as we work to help women live healthy lives, free of violence.”

The Beauty for a Purpose content site spotlights Avon distributors, executives and products. The brand is also tapping its lineup of celebrity partners—including names like Maria Sharapova, Olivia Wilde, and Fergie—for exclusive coverage. Of course, the site also prompts engagement from distributors, who can add their photos to the #BeautyforaPurpose gallery and share posts across social media platforms.

Avon said it plans to integrate its new messaging across the business by the end of the year. The company is collaborating with Santo/JWT Group, as well as creative partner Badger & Winters, on its new branding and advertising.


SimplyFun Donates Brand-New Belongings to Rescued Children

Children removed from their homes as a result of abuse or neglect often have nothing but the clothes on their back, but Washington-based SimplyFun LLC is working to change that through its partnership with the My Stuff Bags Foundation. The educational board game developer has announced a $100,000 product donation that will help to fill duffel bags with new belongings for children entering crisis shelters and foster care. The contribution marks the latest effort in SimplyFun’s eight-year partnership with My Stuff Bags.


ASEA Achieves Major Product Certifications and Launches Foundation

CEO Charles FunkeCEO Charles Funke
EVP Kurt RichardsEVP Kurt Richards

In its fifth year of business, ASEA LLC posted revenue of $70 million and joined the world’s largest direct selling companies on the 2015 DSN Global 100. ASEA recently adopted the tagline “Cellular Health,” a minor change that signals some major developments for the young biotech company. At its May convention, the brand unveiled new third-party certifications and scientific research, as well as a newly formed scientific advisory council. ASEA markets a liquid supplement and skincare gel containing redox signaling molecules, which signal the cells to activate antioxidants. With a technology largely unknown outside the scientific world, the company is pursuing a strategic research agenda to educate associates and consumers about its products.

DSN spoke to CEO Charles Funke and EVP Kurt Richards about some of the latest developments at ASEA.

DSN: ASEA’s production facility has obtained NSF Certification for Good Manufacturing Practices. What does that entail?
Richards: We operate our own production facility, and so this certification and registration was about three years in the making. Because we run our entire process from start to finish, as part of the intellectual property ASEA has, we actually had to build out a new facility and make sure it met the basic requirements. From there on, it takes a lot to get this certification done; it’s a fairly stringent process… The nice thing is that all our consumers and associates and those outside looking in can know that we run a very tight ship and are meeting or are above the FDA and GMP requirements.

DSN: You also obtained certification from BioAgilytix Labs. What is the significance of having the BioAgilytix seal on your products? Richards: The main part of our product, on the redox signaling side, is a unique active that helps to address the basic health of the cell. These molecules are fundamental to the way the cells work; they communicate internally with the tissues…The base of the product is salt and water, which then goes through a multi-day process, and then through the patented technology to create these molecules. One of the things we’ve wanted to do is find a partner—a third party—that could not only validate our internal testing to prove the molecules and the concentrations are there, but also certify that our product contains the molecules… BioAgilytix, which has partnered with eight of the top 10 global biotech and pharmaceutical companies, did two things for us. One, they validated our internal quality testing… And two, they tested both the ASEA Redox Supplement and the Renu 28 to say, yes, these contain the redox signaling molecules. Then we went a step further and entered into a partnership with them where they test our products regularly.

DSN: What is the story behind the new ASEA Advancing Life Foundation? Funke: We knew that it was time, particularly given our five-year history and the fact that we just this year broke into the DSN Global 100, to formally organize a charitable foundation. We were using the descriptor “Advancing Life” as a tagline for the company. As we’ve taken a fairly aggressive look at our branding and strategy, we felt it wasn’t really the right descriptor for ASEA, but it had a lot of name recognition and source credibility with our distributors. We’ve replaced it with the tagline “Cellular Health,” but we didn’t want to lose that “Advancing Life” concept…That’s why we established the ASEA Advancing Life Foundation, which is designed to help those in need, and we aren’t defining that too restrictively… At our convention, Founder Tyler Norton introduced the foundation and announced that, as a company, we would be donating $10,000 to CHOICE Humanitarian for their direct relief efforts in Nepal… Within the course of about a week and a half, our distributors had contributed an additional $20,000 for CHOICE Humanitarian.

DSN: You’ve expanded into Europe, Canada, Mexico, Australia and New Zealand—25 total markets. Do you have any forthcoming expansions to share? Funke: We’ve actually tried to slow down a bit and be more strategic about our international expansions. Europe is a bit of a domino effect once you get there; you tend to move from country to country. I think what you’ll see in the future is more targeted markets that have more homogenous populations and larger population bases.


ACN Celebrity Tournament Raises Record Funds for Ronald McDonald House


Raised since the first ACN Celebrity Golf Tournament in 2011

Following its Ronald McDonald House Celebrity Golf Tournament in May, ACN Inc. announced that the fifth annual competition raised record funds for the local Ronald McDonald House, which provides a home for families of seriously ill or injured children as they navigate a hospital stay. The telecommunications and energy provider hosted more than 140 golfers at North Carolina’s Trump National Golf Club. The lineup of celebrity captains included sports stars such as Carolina Panthers kicker Graham Gano, Charlotte Hornets player Gerald Henderson, and former NFL player Donnie Shell. Presenting sponsor Dish Network and 75 corporate sponsors helped to raise $287,560 for Ronald McDonald House of Charlotte, located near ACN’s headquarters in Concord, North Carolina. Contributions from last year’s tournament totaled $228,000. “We are so fortunate to have the support of ACN!” said Mona Johnson-Gibson, Executive Director of the Ronald McDonald House of Charlotte. “We always have a blast at the events they host for us throughout the year, but the best thing about them is that they are focused on the families we serve.”


Southwestern Advantage Receives BBB Award for Business Ethics

Southwestern Advantage’s Trey Campbell (left) and Southwestern subsidiary ThinkingAhead’s Greg Boucher

Southwestern Advantage was recently recognized for its ethical business practices by the Better Business Bureau of Middle Tennessee (BBB), where the company has operated since its founding in 1868. The Nashville-based brand was one of two large companies to receive the 2015 Torch Award for Ethical Commerce, based on a unanimous vote by a panel of judges.

“We believe in building people. We also know that we are not what is important—what we do is important,” Southwestern Chairman and CEO Henry Bedford said in a statement. “Integrity and ethics are a very important part of our mission to help people develop the skills and character they need to reach their goals in life.”

The educational brand markets a learning system to help children build knowledge and life skills outside the classroom. The company is known for selling its products through college students enrolled in the Southwestern Advantage Sales & Leadership Program. Each summer, the company signs on nearly 2,500 students across North America and Europe and trains them to run their own Southwestern Advantage businesses.


LifeVantage and Real Salt Lake Unveil World-Class Testing Lab

Now in the second year of its Real Salt Lake jersey sponsorship, LifeVantage has announced the creation of a performance testing facility in partnership with the Major League Soccer club. The LifeVantage Sport Science Lab will apply advanced science and technology to help players improve their on-field performance.

The joint venture will hone in on each player’s response to training stress. With the data collected, the Real Salt Lake Sports Science Department will measure the cellular stress profile—including factors such as oxidation and inflammation—of each athlete and create tailored workout regimens and nutrition plans.


Direct Selling Companies Gain Ground in the Second Quarter

July 01, 2015

Top Desk

Staying True to Core Values While Embracing Change

Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


Years ago I heard Amway Co-Founder Rich DeVos say, “Never forget today is someone’s first day in business.” That is at the heart of my decision-making, and it has helped us grow despite inevitable changes in our corporate and sales field teams.

I’m reminded of this when I look at my two daughters. I have a 10-month-old baby and an 11-year-old, and they have different needs. Our representatives are like that; some are “babies,” some are “toddlers” and some are “teenagers.” You can’t treat them the same way or assume that they have the same needs or that they want to use the same tools. And you can’t forget the new people coming into the business every day, even when you have an established brand and lifelong leaders.

At times we were treating a new person and a seasoned person the same way, but they are very different from each other, whether due to age, race, gender, business experience or goal. This realization has helped us grow. We recognize their different needs while staying true to our foundation of helping others and sticking to our system regardless of their age or background.

Several years ago we recognized this and embraced it, and we have had more steady growth in all age groups in the last three years. Currently we have equal amounts of representatives who are in their 20s, 30s, 40s and 50s; that is a significant shift for us and has helped us have year-over-year, double-digit growth for the past three years.

We have always believed we were a company for all ages, races and backgrounds. Today, I’m proud to say that our field is more diverse than ever before, and we are attracting new leaders all the time.

The interesting part is that we haven’t focused on any one group. Instead, we have focused on being a company that helps all people and inspires their entrepreneurial spirit. We also have focused more on attracting good people, and welcoming people of all groups.

I believe that as a company we are more comfortable with who we are and what we do, and it shows. It is easy to get caught up in the next shiny object or company launch, and to want to be like that new company or have what they have. Yet, often what they have is unique to them and doesn’t fit the culture of the company you are in, so it doesn’t give you the same growth or results. Years ago we chased the fads and realized it wasn’t us. We are better equipped to take care of our company and our people by being the best Team National we can be. We believe in family, future and freedom. We are proud to offer a savings membership with an optional earnings program that helps people of all ages and backgrounds. Staying true to our core has helped our representatives be their best as well.

By being open to different needs but also staying consistent to our system we have attracted and grown leaders of various ages. For example, our millennial leaders still use the same system that other generations use, but they do it with technology and they move through the system faster to keep the attention of other millennials.

We have recruiting options and tools that fit people’s needs and meet them where they are. Each person chooses what is best for them but still uses our system to keep it consistent and duplicable, no matter where they live throughout the U.S.


The interesting part is that we haven’t focused on any one group. Instead, we have focused on being a company that helps all people and inspires their entrepreneurial spirit.


Being open to change while maintaining consistency has served us well. As pastor, author and thought leader Andy Stanley suggests, “Write plans in pencil, write your vision in ink.” We’ve done just that. Our vision and foundation have remained the same; our plans have changed as needed.

I also took a cue from Andy Stanley and started asking a question of my corporate team as well as my top Team National leaders: “How can I serve you?” It is a great question that can help you grow in a variety of ways. When you openly ask your inside and outside teams how you can help them, you will hear great ideas that can give you ways to grow and improve. That question has helped us improve our customer service in the last six months because we wanted to serve our sales field better, and a leader shared where we could improve. We have often found that our top leaders love our company so much that they don’t want to make a suggestion for fear it sounds like complaining, but this question has helped us
help them.

We have shifted how we measure our growth when talking with our sales field. Instead of talking about how much revenue we brought in we have started talking about how many leaders we have at our top level and how we are growing this important aspect of our business. This shift is more of who we are, and it gets the sales field excited—it’s about them, not just a sales number.

We also have focused on working in our strength zone as a corporate team and as a company. There are areas of our business we have outsourced recently, such as our apparel line because we aren’t an apparel company and it’s not in our strength zone. This allows us to do what we do best, and this philosophy has really helped our corporate team as well. We have moved people around so they can focus on what they are great at, and it has made a difference in all aspects of our business.

Last but not least, we continue to focus on intentional personal growth for our company and our sales field. We do internal personal growth training monthly with our staff, we have weekly calls with our leaders, and we have videos, audios, social media content and more that help with personal development. This growth starts at the top. I quote the books I read and discuss the newsletters and subscriptions I’m reviewing with my team and on social media. I consider personal growth to be one of the most important aspects of what I do; if I am not growing then my team is less likely to grow. As the leader I must set the pace and be the example for the sales field and the corporate team. I believe if I want my team to run, then I need to run and cheer them on to join me. Personal growth has helped me overcome the ups and downs of business and life. It has made me a better person, friend, leader and mom. It is the extra ingredient that takes the ordinary to the extraordinary, and it has helped Team National grow in all areas.

Wishing you extraordinary results in 2015 that help you and your company be your best.


Angela Loehr ChryslerAngela Loehr Chrysler is President and CEO of Team National.

July 01, 2015

Working Smart

Five Reasons Why “Simply Hire the Best” Is Not a Winning Strategy for Your Organization

by Greg Long and Butler Newman

Reflect on your last conversation with your human resources leader about your company’s need to do a better job of finding great people. How did that go? In all likelihood, the conversation quickly devolved into a series of questions similar to these: What level of experience are you looking for? What is your salary range? Will you pay for relocation? What specific roles do you need to fill, and how would you describe those roles?

These are obviously good and relevant questions. They also hint at the challenges presented by a strategy that relies only on “hiring the best.” A hiring-only strategy gets derailed by the realities of today’s workplace. Five of these new realities are presented below:

There Aren’t Enough of the “Best” People to Go Around

Who can argue with hiring only the best people—in theory? But this approach quickly bogs down when the math hits reality: the laws of statistics dictate that only so many people fall within the top 10 percent. As more companies vie to hire those few people, the cost of hiring them becomes prohibitive. This reality leaves organizations to hire as many of the best that they can find and afford, and thus “settling” for the many merely “good” people available in reasonable numbers and at affordable costs.

Results Aren’t Certain

What if you were able to hire only the best? The results might be stunning, as was the case in 1992 when the U.S. Olympic team was first allowed to include NBA stars. The 1992 Dream Team dominated the Olympics with an average margin of victory of 43.8 points. The United States ruled Olympic basketball after that.

However, in 2004 another Olympic Dream Team was assembled, a team that clearly demonstrated that results are not certain, even with the best talent.

According to an August 2014 article by Julian Kimball on Triangle Offence, “[The United States’] lofty status was demolished during the 2004 Olympic games in Athens as Team USA sputtered to a bronze medal, suffering humiliating losses in the process. It was an eye-opening moment, as the team was defeated an unfathomable three times—one more loss than they had suffered in all previous Olympic competitions.”

In response, a new director of USA basketball and a new head coach were appointed, and a new philosophy that demanded a three-year commitment from players so they could gel as a team was adopted. With many of the same players, the “Redeem Team” took the gold medal at the 2008 Olympics, finishing with a perfect record. More proof that results cannot be guaranteed by talent alone.

Worker Expectations Have Changed

Work has changed. Roles are more dynamic than ever. People in those roles have new expectations of how long they plan to stay in a role, how quickly they want to advance in their careers and what they expect from organizations in return for their contributions.

According to Jeanne Meister, a Partner with executive development firm Future Workplace, their recent “Multiple Generations @ Work” survey showed that “91 percent of millennials (born 1977–1997) expect to stay in a job for less than three years.”

The new generation of workers are impatient. They want to make a difference, and they want to make that difference now. And they want to be rewarded when they succeed. If they are not rewarded, they quickly look to find another organization they hope will be more appreciative of their efforts. Even if they are rewarded, their focus turns to the next challenge, which often means the next role, whether in the current organization or a new one.

Those factors combined result in an increasingly transient workforce, one that is always in some low-level state of flux demanding clear focus and a systematic way to reach competence.


What we really want are people who consistently produce results that matter to the organization.


Talent Isn’t Everything

In the movie Moneyball, Peter Brand convinces the manager of the Oakland A’s, Billy Beane, that he doesn’t really want to select players based on their physical talents, their potential or even their competencies. Instead he should focus on selecting players who produce the specific outcomes needed to win baseball games. Outcomes, such as getting on base, preventing base runners from scoring, getting batters out (especially in critical innings), and so forth, are what win games and are what managers should evaluate.

Every game, whether in sports or business, has its own critical set of outcomes that, if produced well, result in a winning performance. For the teams in your organization to win, you must understand and identify those critical outcomes. Only once the critical outcomes are mapped can candidates be selected who will be able to produce those outcomes at a consistently high standard of excellence.

In the sales arena, we often hear managers say, “I want people with the ‘it’ factor” or “Just keep the people who are the best producers and get rid of the rest.” But we all know scores of people who seem to have the potential to succeed but just don’t live up to their potential.

What we really want are people who consistently produce results that matter to the organization. So start by first identifying the focus areas, or outcomes, that matter.

Good Coaching Is Often Lacking

An old adage says that people don’t leave their jobs; they leave their bosses. This holds true for top talent as well as poor performers. People look to their supervisor to help them focus on the right things and improve their skills and ultimately their job performance. But today’s supervisors’ ability to engage and develop their people is too often sorely lacking. Supervisors spend their time simply managing the schedule of their teams rather than helping them achieve success.

Successful coaching strategy starts with the assumption that people want to succeed in their roles, that they come to work each day hoping to make a difference for the team, and that their team will win against the competition. But if that assumption proves false, their motivation quickly dwindles. The supervisor’s key role is to not only nurture that assumption but build on it through focused, effective coaching efforts designed to help each person on their team fulfill his or her specific role. When that happens, people are more successful and become more loyal. Who doesn’t want to play a critical role that contributes to a winning team?

A Consistent Way to Win

If “simply hire the best” is an ill-fated strategy, what else can be done to create the type of organizational success that all companies strive to achieve? Fortunately, a clear path can be initiated immediately to begin the journey required to build a reliable and predictably high-performing organization.

Step 1: Identify the critical roles in your organization.

Identifying critical roles begins with formulating and relaying a clear business or sales strategy. Critical roles emerge from pondering the question, “What roles in our organization must be successful and high performing for this strategy to be effective?” The roles that are individually or collectively responsible for a particular aspect of the strategy, and therefore the business results, are the critical roles for your organization. For example, in the sales arena, the critical roles may be:

  • Product manager
  • Field support and customer service
  • Sales leaders

When identifying critical roles, don’t forget support roles that have a direct impact on customer satisfaction, such as finance and customer service. Too many organizations focus on winning new customers at the front door while poor post-sales support is escorting existing customers out the back door.

Step 2: Establish clarity around the five to seven outcomes each of these roles must produce.


The best way to do this is to study the work of the most-respected and top-performing people in the role today. What do they produce on a regular basis that sets them apart from others? What is their mental model of the role? Conducting such a study is not difficult but does require a structured approach and lots of curiosity because most top performers are unconsciously competent. This simply means they have internalized what it takes to be successful in their role, and thus can’t exactly tell you what it is they do differently.

Expressing the results of this study in the form of explicit outcomes creates tremendous focus for the role and produces a clear framework for equipping others to be successful in the role.

Step 3: Create a purposeful program for equipping incumbents and new hires to consistently produce these outcomes.

Equipping people to produce the specific outcomes necessary for the success of critical roles is unfortunately a business practice that is often lacking in today’s fast-paced organizations. Many factors contribute to this common condition. Whatever the cause, understanding and focusing on equipping people to produce outcomes that matter is the key approach to successfully linking business strategies and people into a powerful partnership that can produce exceptional business results.

For example, in a recent case, a business felt the need for more new-hire training, as customer issues were surfacing due to poor performance by new hires. By refocusing the business to understand which outcomes were important to the role, the amount of time spent in new-hire training was reduced by 30 percent rather than lengthened; at the same time new hires were able to demonstrate competence in the role much quicker than was previously the norm. Being intentional in creating programs that relentlessly focus on the specific outcomes desired makes this possible. Such successful programs typically include an outcomes-based coaching program to help managers continue to develop the performance and confidence of the new hires. The benefits of quickly and effectively equipping those in critical roles are obvious.

Summary

Leaving the people side of your organization to chance or relying solely on a hire-only-the-best approach to consistently execute your business strategy creates undue and unacceptable risks. As business management expert Tom Peters said in a 2013 online post, “ ‘High potentials’ will take care of themselves. The great productivity ‘secret’ is improving the performance of the 60 percent in the middle of the distribution.”

Peters’ observation is right. Though at first glance it might seem easier to direct the recruiting function to hire only the best, the realities of today’s workplace reveal a better path: hire good people and be purposeful in equipping them to produce great results.


Greg Long and Butler Newman are both vice presidents of organizational excellence at global performance improvement company GP Strategies Corporation and co-authors of The New Game Changers: Driving Performance by Focusing on What Matters.

July 01, 2015

Executive Announcements

Executive Announcements, July 2015


Amway Names New CFO

Mark Stevens Mark Stevens

Amway, the largest direct seller in the world and a nutrition, beauty and home products brand, has appointed Mark Stevens as its Chief Financial Officer. Stevens will be responsible for leading Amway’s worldwide financial functions including accounting, financial planning and reporting, forecasting, insurance, internal audit, treasury and tax.

Most recently, Stevens served as Vice President of Worldwide Sales Finance for Apple. Under his direction, the team managed a $153 billion portfolio, representing 90 percent of the company’s revenue outside of Apple stores.

Stevens spent 21 years of his career living in Asia, including Singapore, China, Malaysia and Japan. While working at Motorola, he served as the finance lead on the team establishing the company’s first sales representation in the Asia Pacific region. He later moved to Dell where he served as
Vice President of Finance for the Asia Pacific region.

Stevens has strong ties to West Michigan, having graduated from Hope College in Holland, Michigan. He is a Certified Public Accountant and holds an MBA from DePaul University.

Stevens replaces Mike Cazer, who was appointed to the role of Chief Operating Officer in 2014.


Herbalife Appoints Former Assistant Secretary of the Air Force to Board

Michael MontelongoMichael Montelongo
Ric HobbyRic Hobby

Global nutrition company Herbalife has appointed Michael Montelongo to the company’s board of directors. Montelongo has a career spanning both the public and private sectors, and will bring his leadership skills and experience in strategy and policymaking across multinational enterprises to the board.

“Having spent a lifetime of service in business, government, and civil society—and navigating this increasingly interdependent global terrain—I believe Herbalife’s purpose-driven and selfless focus is refreshing, longed-for, and essential in today’s crowded marketplace,” said Montelongo. “I am eager to get started and contribute to Herbalife’s future success.”

The Honorable Michael Montelongo is Chief Administrative Officer and Senior Vice President, Public Policy and Corporate Affairs for Sodexo Inc., a $9 billion, 133,000-person quality of life services enterprise.

Before Sodexo, Montelongo was a Pentagon appointee during the President George W. Bush administration. As the 19th Assistant Secretary of the Air Force for Financial Management and Comptroller, he served as its Chief Financial Officer responsible for managing a budget of over $120 billion and financing two major combat operations. He was the first Latino appointed to that position, the most senior-ranking Hispanic-American in the Air Force, and concluded his tenure at the Pentagon as acting Secretary of the Air Force.

Herbalife also announced new additions to its corporate affairs teams. The Los Angeles-based brand welcomed a new Senior Vice President for Global Government Relations, Ric Hobby; Senior Vice President for Global Corporate Communications, Megan Jordan; and Vice President, Government and Industry Affairs, Randall Popelka.

Hobby formerly served as Herbalife Vice President, Worldwide Regulatory, Government and Industry Affairs. Jordan most recently headed up communications for prominent utilities provider Southern California Edison. Popelka hails from Washington, D.C., where he worked with global leaders in the administration of President George W. Bush and later in the private sector.

The restructuring also adds new responsibilities for Herbalife’s Vice President of Global Corporate Communications, Julian Cacchioli, who will now coordinate the brand’s public policy strategy and corporate social responsibility program. Another department veteran, Elaine Pacheco, has taken on the role of Strategic Project Manager in the office of EVP for Global Corporate Affairs.


Gold Canyon Taps Tom Kelly to Fill CEO Vacancy

Tom KellyTom Kelly

After a year under the leadership of two managing directors, candlemaker Gold Canyon is bringing on a CEO to lead its executive team. The Arizona-based company announced that it has tapped industry veteran Tom Kelly to fill the position.

The appointment follows a year of strategic turnaround efforts aimed at reviving the brand’s lagging sales and morale. Since taking on leadership in 2014, Managing Directors Lynae Parrott and Gail Gioffredi have focused on conveying Gold Canyon’s mission and values through new branding as well as a reworked compensation structure and sales strategy.

Kelly’s three decades of leadership within the industry include publicly and privately held companies spanning several product categories, most recently accessories. He sat on the board of the Direct Selling Association from 2005 to 2012, concluding with a term as Chairman of the Board of the Direct Selling Education Foundation.

“Throughout his impressive career in global direct sales leadership roles, Tom has excelled at motivating and mentoring teams while generating results for both public and private companies,” said Joseph Phillips, Managing Director of Unique Investment Corporation. “We are thrilled to tap into Tom’s global experience driving productivity and growth, and look forward to his long-term future contributions as CEO.”


XANGO Names Company Veteran as New President

Leslie GallacherLeslie Gallacher

Health and wellness company XANGO LLC has appointed a new president from its own ranks. General Counsel Leslie Gallacher, a XANGO veteran whom Chairman and CEO Aaron Garrity described as groomed for leadership, stepped into the role in May.

“Leslie’s appointment is one that our board, executives and distributor leaders have anticipated for some time,” said Garrity. “From her earliest days at XANGO, Leslie has fulfilled several key strategic roles within our organization and been instrumental in our growth and advancement as a company now in its second decade of global expansion.”

Since joining the Utah-based brand 11 years ago, Gallacher has played a key role in opening the majority of XANGO’s 55 markets. She has also been a leader in the company’s women’s empowerment efforts, such as the Women Building Bridges global training initiative, at both the corporate and distributor levels. In addition to managing departmental functions, Gallacher will initially oversee preparations for XANGO’s international convention, slated for September in Las Vegas.


New VP of Corporate Relations Joins dōTERRA

Kirk JowersKirk Jowers

Essential oils direct seller dōTERRA announced that Kirk Jowers is joining the company as Vice President of Corporate Relations. For the past 10 years Jowers has been the Director of the Hinckley Institute of Politics at the University of Utah, in addition to serving as the University’s Director of Federal Relations, Chief Strategist for the Office of Global Engagement, and Co-Interim Director of the University’s Middle East Center.

“We are very pleased that Kirk has chosen to join dōTERRA,” said David Stirling, dōTERRA’s President and CEO. “As the company continues its remarkable growth, someone with Kirk’s international, economic and regulatory experience will play a vital role in helping dōTERRA manage the associated challenges and opportunities.”

As Vice President of Corporate Relations, Jowers will oversee dōTERRA’s government and media relations. Having already connected to a network of global government and business leaders, Jowers will also provide guidance to the company’s international development and relationships.


Origami Owl Names Brett Blake CEO

Newly minted Direct Selling Association member Origami Owl has appointed Brett Blake to serve as its new CEO with a focus on innovation and ongoing growth.

The position has remained vacant since former chief executive Robin Crossman exited Origami Owl a year ago. In the interim, the customizable jewelry brand made its international debut with the launch of its Canadian business.

With more than 20 years of experience in strategic business planning and marketing, the Harvard educated executive has a history of helping companies discover and implement organic growth strategies. Blake’s diverse career has included 16 years in direct selling with leadership roles at several companies. He currently serves on the board of directors for Beachbody LLC, where he formerly led the brand’s Team Beachbody direct selling division. “Blake brings a wealth of knowledge and is a highly accomplished executive with more than twenty years of experience in diverse industries including jewelry and fashion,” Origami Owl Co-Founder Chrissy Weems said in a statement. “With an incredible field of Designers, an exceptional sales team and a new CEO, we have a solid foundation in place and we are well-positioned for growth and success.”

“Origami Owl has been the talk of the industry since it burst on to the scene a few years ago,” said Blake. “While this company has accomplished so much in such a short period of time, I believe the story is just getting started.”


Regeneca Worldwide Announces New President

Utah-based cellular health company Regeneca Worldwide has concluded their search for a new President having chosen Trent Staggs to lead the company in this role.

“We are thrilled to have Trent Staggs join the Regeneca team and lead the company’s operations,” said Chairman Matt Nicosia. “Mr. Staggs has over 10 years of experience in the direct sales industry and will be a key resource in directing the growth of the company domestically and guide the company as we commence international expansion.”

Staggs has demonstrated leadership in running both successful startup and Fortune 500 organizations in the direct sales, finance and technology industries. Prior to becoming Regeneca’s President, he was on the executive team of another direct sales company that operates in over 30 markets, serving as their VP Technology. In that role, he was responsible for providing strategic direction and leadership of global integrated systems, software and IT infrastructure, which included the creation of mobile and web applications for their distributors worldwide.


YOR Health Adds Hattie Boydle to Its Athletic Advisory Board

Hattie BoydleHattie Boydle

YOR Health, an Irvine, California-based nutritional company, has selected performance coach and international sports model Hattie Boydle to join its Athletic Advisory Board. Through her positive outlook and leadership Boydle encourages people worldwide to realize their full potential for health and happiness through proper nutrition and exercise.

A few of her achievements include 2014 WBFF Pro (World Bodybuilding Fitness and Fashion), 2013 Miss Bikini Universe & Musclemania Model Champion, first place in the 2013 Australian Natural Bodybuilding (ANB) Fitness Model Competition, second place in the 2013 International Natural Bodybuilding Association (INBA) Fitness Model Competition, and a crown for the INBA Sports Model Champion in 2011.

July 01, 2015

Cover Story

Find, Attract, Hire: The Executive Challenge

by Courtney Roush

Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


In the midst of sales forecasts, product development, salesforce retention efforts and quarterly planning, there’s another matter bearing down on direct selling industry leadership these days, and its prominence on radar screens is increasing as more baby boomers sail off into retirement.

While finding and acquiring top talent, especially at the executive level, is universally challenging throughout every industry, it can be especially tricky in the direct selling industry. Direct selling companies have a tendency to steer away from “outsiders” (those with no prior industry experience), a preference which inevitably shrinks the pool of available candidates.

That “hire from within” predisposition is accompanied by the exodus of baby boomers into retirement, a shrinking population of Gen X middle managers without the leadership skills required to step up to the plate, and a sharp increase in the workforce population of Gen Ys, some of whom are starting to make their way into the management ranks.

Many direct selling companies are still operating under a flattened management structure imposed during the height of the recession. Life has gotten meaner for middle management, as they caught the windfall of additional responsibilities. That often meant inheriting larger teams and devoting more of their time to people management. At the same time, thanks to strained budgets, middle managers haven’t necessarily been receiving the commensurate leadership training required to articulate shared goals and to inspire and motivate others.

The result? A gap. And while that’s by no means unique to direct selling, other industries generally cast a wider net for hires because they’re willing to consider a broader base of candidates.


Companies must master the fine art of finding, attracting and hiring executives in their 30s and 40s who have the potential to fill tomorrow’s C-suites—while keeping in mind the generational differences that shape candidates’ career goals.


Succession Planning: Not Just a Nice-to-Have

Consider just a few of the competitive advantages associated with a carefully considered, dynamic succession plan: a deep and well-trained pipeline of available talent who know your company inside and out; a stream of people who continually analyze, question and refine your processes and procedures, making you more effective within and outside company walls; and an enhanced reputation as a great place to work, which ultimately helps send more gifted candidates your way.

In order to create a strong pipeline, companies must master the fine art of finding, attracting and hiring executives in their 30s and 40s who have the potential to fill tomorrow’s C-suites—while keeping in mind the generational differences that shape candidates’ career goals.

It’s important to note that the best succession programs target leaders at all levels. “Leadership needs today are far broader and deeper than merely developing the next CEO or even building the C-suite pipeline,” according to the 2014 Deloitte Global Human Capital Trends report. “Companies face leadership gaps at every level of the organization. These gaps can only be filled through… a systemic commitment to leadership development that identifies potential leaders earlier, brings young leaders online faster, develops senior leaders later in their careers and keeps them on the job longer, and builds new leadership pipelines at every level of the company.” That report included the findings of a survey in which only 13 percent of companies rated themselves “excellent” in providing leadership programs at all levels—new leaders, next-generation leaders and senior leaders.

Too many companies are stuck in reactive mode when a member of their leadership team retires or moves to greener pastures. The approach is “She left, so we need to find someone to replace her.” By then, unfortunately, you’re well behind the eight ball. The process of identifying, grooming and training talent who ultimately will fill leadership positions requires sustained investment. It’s a never-ending cycle that always should be in motion, filling and backfilling with strong candidates who are likely to be found at the middle-management level.


“Leadership needs today are far broader and deeper than merely developing the next CEO or even building the C-suite pipeline. Companies face leadership gaps at every level of the organization.”

2014 Deloitte Global Human Capital Trends report


“It’s virtually impossible to successfully promote someone unless there’s a trained person to take over the position being vacated,” says M. Dana Baldwin of the Center for Simplified Strategic Planning. He suggests that, to effectively implement a succession plan, companies should consider how the concept of succession planning fits into their strategies, and whether they’re concentrating their efforts in the areas where returns will be highest. He recommends companies identify the career paths that their most talented employees should be following. Those paths shouldn’t be “one size fits all,” but rather be customized to fit their respective abilities and talents. Further, “Should you wait for openings to appear before promoting someone, or should you make opportunities for each individual as they grow and mature, so that you can keep them challenged and stimulated, and not lose them to other, possibly faster-moving companies?” he asks. “Your plan should be proactive, with people moving into different areas for experience and training before they are needed in critical positions, rather than reactive—waiting for openings to occur, then scurrying around to find an appropriate candidate at the last second.”

The Social Security Administration predicted two years ago that by 2015, more than one-third of our workforce would be retiring. The baby boomer generation of 77 million, now in their 50s and 60s, is retiring at a rate of 10,000 every single day, taking with them decades of invaluable knowledge and experience critical to their companies’ success. According to Pew Research Center’s analysis of U.S. Census data, more than 1 in 3 American workers today are millennials (adults ages 18 to 34), and, this year, they’ve surpassed Generation X to become the largest share of the American workforce.


Boomers and millennials may be where the media focuses the lion’s share of attention, but it’s the Gen Xers—to whom Pew Research has referred as the “Neglected Middle Child”—who hold the key to our future as an industry.


It used to be that you would hire someone who would one day replace you, or you would attempt to hire someone who was better than you—who would make you look good. Both of those practices in theory could build a pipeline of potential leaders. And then the recession occurred. If you were hiring at all, you certainly didn’t want to bring in someone who could very well replace you before you were ready. Reduced training budgets were spread out among midlevel managers, leaving them with fewer opportunities for professional development. Perhaps even more important, those managers simply didn’t have the time to leave the office for a multiday offsite conference; they were already doing much more with much less, and their plates were overflowing. All of these insecurities, along with hiring freezes and the general reluctance of anyone who then was employed to be crazy enough to consider jumping ship, exacerbated the succession planning problem.

A 2013 report issued by Harvard Business School Publishing, Danger in the Middle: Why Midlevel Managers Aren’t Ready to Lead, reveals that many organizations have invested heavily in training for senior executives and new managers, while paying little attention to the midlevel managerial corps. “This ‘barbell’ approach—heavy on the ends, light in the middle—has exacted a heavy price…. Unless organizations tackle this problem now, they will likely face bigger problems down the road at the senior leadership level,” say authors Robert McKinney, Michele McMahon and Peter Walsh. “With stronger midlevel management development programs in place, companies can improve morale in the managerial ranks, thereby increasing retention of top talent and enriching their leadership pipeline.”

Boomers and millennials may be where the media focuses the lion’s share of attention, but it’s the Gen Xers—to whom Pew Research has referred as the “Neglected Middle Child”—who hold the key to our future as an industry. Jill Pearson, Principal at Pearson Partners International, a global executive search and leadership consulting firm, says that companies whose succession plans are focused on moving Gen Xers into leadership roles are likely to have an edge over their competitors. And there’s a lot to be learned from our 34- to 49-year-olds. Having been raised by boomers, they tend to value hard work. They want a trusting employer who will give them freedom and autonomy to get the job done, and the flexibility to take personal time for their families. Like millennials, they want to be part of something bigger than a paycheck, representing an organization that makes a positive imprint on the world.


“If you’re trying to do something you’ve never done before, an outsider can bring fresh ideas.… If you want to build something organic over time, a direct selling veteran might be a better choice.”

—Jill Pearson, Principal, Pearson Partners International


Though we’re not completely out of the woods yet, times have improved for many companies, and job boards are active once again. Flattened management structures and their associated challenges are still the norm at many companies, though. And that means ambitious midlevel managers may be less reluctant to look for greener pastures if they aren’t receiving adequate opportunities for growth. Companies who want to groom future leaders effectively would be wise to get them out in the field, let them learn through direct experience, and develop a deep understanding of your sales plan—not just how it works, but how it motivates the salesforce.

Investing in resources that offer ambitious employees the opportunity to take on expatriate assignments delivers on-the-job training that can broaden their scope and prepare them for the leadership functions of the C-suite. It’s also worth noting that the half-life of skills is much shorter these days, a fact that demands continuous learning and improvement among all of your employees. That said, online/mobile learning and mentorship programs are both relatively low-cost, employee-driven ways to increase future leaders’ preparedness.

Outsiders: the Pros, the Cons

Let’s say that, at a functional level, your company is humming along just fine. But what if the position you’re filling now demands something more—a leader well-versed in a particular discipline that you just can’t find within your walls? Here comes the age-old debate: Do you take your search to the outside? It’s often tough to reach a consensus among your executives on this topic.

So why do so many executives and boards shy away from outsiders, anyway? After all, we’ve got plenty of examples of accomplished leaders who came into direct selling from other industries and made great things happen.

First of all, regardless of industry, it’s somewhat human nature to hire what’s familiar, especially at companies where tenures tend to be longer. Whether inside or outside, either route has merit, but the decision really should boil down to a company’s goals, says Pearson. “If you’re trying to do something you’ve never done before, an outsider can bring fresh ideas. Maybe he or she has experience in developing overseas markets or rolling out a Customer Relationship Management system, for example.” On the other hand, “If you want to build something organic over time, a direct selling veteran might be a better choice.”

As we all know, direct selling is a different animal. Some sharp executives can walk in, learn your language and business model and become acclimated with time, while others just never seem to “get it.”

“Direct selling is not an easy thing to understand,” says Arbonne CEO Kay Napier, who spent years at Procter & Gamble and McDonald’s before coming into the industry. “You’re dealing with a complicated compensation structure and a robust product portfolio that’s always changing. But the decision to promote from within or go outside isn’t cut-and-dry; there are risks on both sides.”


“[When hiring for our executive team] our ideal ratio is about 70 to 80 percent internal, 20 to 30 percent external… [because] our competition isn’t necessarily coming from inside direct selling.”

—Kelly Savage, Chief Human Resource Officer, Amway


There’s no denying that direct selling requires a shift in mindset. After all, it’s represented by an army of volunteers who share your products; and their success—your success—is largely dependent on how motivated they are. Napier says that her experience working in U.S. and European operations for McDonald’s was a great precursor to direct selling. “Eighty percent of stores were run by independent operators,” she says, “so they had significant skin in the game, and they were the smartest people in the room without question. I learned from them.”

Nerium International Co-CEO Jeff Dahl, who’s a great example of an outsider-turned-success-story, says, “It’s especially hard for those coming out of the CPG [consumer packaged goods] industry. The brand, the product strategy, carries the day. Now you’ve got a volunteer army carrying your story. They’re independent. You can have the best products, the best advertising in the world, but if you can’t motivate your salesforce, you won’t get very far.”

And, speaking of motivation, those direct selling events and all of their grandeur are known to produce a bit of culture shock among the uninitiated. Firing up the salesforce is top priority, with the assumption that the sales will follow. Dahl, who came to Nerium in 2014, recalls his first few months with Amway, where he served as President of the Latin America region after an extensive career with Coca-Cola and Lufthansa. “I went to events, and all I saw were tuxedos on stage. I kept asking ‘Where are the products?’ It was all about the business opportunity.”


“A lot of folks started in this industry and don’t know anything else. They don’t have the functional skills, like IT, finance or product marketing…. You need a balance of insiders and outsiders.”

—Jeff Dahl, Co-CEO, Nerium International


Wooing outsiders to the direct selling industry can be challenging in and of itself. “When I onboarded with Amway,” Dahl recalls, “close friends tried to talk me out of it. The reputation of the industry as a whole wasn’t as good as it is today. For the first six months, I had one foot out the door.” Then the light bulb went on. He was on stage at an Amway event in Brazil, presenting a $22,000 check to a woman who had worked her way out of the country’s worst slums and into an apartment, paying for her children’s private school tuition with her direct sales income. “That was my epiphany,” he says. “You don’t need to invest thousands in a franchise or be born into the right family to be a successful business owner. We have to help outsiders understand the philosophy of what our companies are trying to do. So many direct selling companies out there are sincerely interested in helping people get better.”

The fact is that we’re still combating misconceptions about the industry. Significant opportunities remain to educate more people about the power of direct selling.

When Is It Time to Go Outside?

Amway’s Chief Human Resource Officer, Kelly Savage, names three instances in which it may be better to go outside:

  • You have a major change in strategic direction, or you’re planning a major change in strategic direction. It’s time to look for candidates who have had direct experience with the challenges you’re about to encounter.
  • You’re going through a period of fast growth. Sometimes your internal pipeline isn’t robust enough.
  • You’re initiating an organizational redesign. For example, when Amway established four global regions, due to the sheer size of each and the expertise they would demand, the company hired two outsiders and promoted two employees from within. Collectively, these leaders brought the kinds of experiences that were absolutely imperative for the company’s success.

Within Amway’s executive team, where the newest member, Chief Financial Officer Mark Stevens, joined Amway from Apple just two weeks ago, “our ideal ratio is about 70 to 80 percent internal, 20 to 30 percent external,” Savage says. That mix is something she considers an absolute must; after all, “our competition isn’t necessarily coming from inside direct selling.”

There’s a definite place for outsiders in direct selling, Dahl says, pointing to his own company as a model. He calls Nerium the “perfect marriage of yin and yang,” with two CEOs at the helm. Dahl is joined by Jeff Olson, an industry insider who founded the company with a wealth of direct selling knowledge and experience. These two leaders deliver a combination of functional skills honed outside the industry, and years of on-the-job experience in the field—a keen understanding of what it takes to keep the salesforce motivated and excited. That blend of skill sets—especially when a similar hiring philosophy is incorporated throughout all levels of the organization—can take direct selling companies to the next level.

“A lot of folks started in this industry and don’t know anything else,” Dahl adds. “They don’t have the functional skills, like IT, finance or product marketing. They’re salespeople. Being articulate onstage is different than having these core functional skills. This industry is littered with salespeople trying to fill those functional roles. There are a lot of direct selling companies currently at the $200 million to $400 million range. Talent and technology are holding them back from reaching the $1 billion range. You need a balance of insiders and outsiders.”


“[No matter the candidate] consultants are very shrewd entrepreneurs—they can spot a disingenuous person quickly. This industry demands that you be a connector. You’ve got to be direct, honest and diplomatic with the field.”

—Kay Napier, CEO, Arbonne


What Separates Those Who ‘Get It’ from Those Who Don’t?

Savage can spot it the minute she sees it: the spirit of entrepreneurship. She recalls her interview with now-Regional President Candace Matthews. As the two spoke about Amway’s culture, its business model and its salesforce, “her face lit up. She immediately embraced it. She understood in that moment that we have a captive audience of entrepreneurs to work through. How powerful is that?”

One attribute that simply can’t be negotiable for any candidate? Innate respect, Napier says. “Consultants are very shrewd entrepreneurs—they can spot a disingenuous person quickly. This industry demands that you be a connector. You’ve got to be direct, honest and diplomatic with the field. It’s not a democracy, but we have to listen to the field and understand not just their words, but their intent.

“Increasingly, this business is about building and developing long-term brands, driving revenue—and a really bright person can learn anything,” she continues. “But, even with all of that, if you don’t have the ability to lead people from the top all the way to the bottom—treating everyone the same, regardless of title or status—you’ll fail. You have to create relationships. It’s not about just being chummy, though; you also have to make tough choices.”

Assuming that your outside candidate accepts the opportunity, how do you onboard him or her with your company’s vision? At Amway, new executives are encouraged to take the pressure off themselves and just listen—while they dive in with both feet, that is. “We get them in the field as soon as possible so they can begin to understand the business,” Savage says. We’ve all heard the expression that people don’t leave companies; they leave managers. With that in mind, you can be more confident hiring leaders from the outside if you know that your CEO and long-tenured executives will continually engage, guide and keep them in the fold. Amway’s retention rate among executives hired externally is 85 percent, and that’s in large part due to executives, like President Doug DeVos, who “provide that strategic umbrella and shepherd the values” to help welcome and acclimate newcomers, define the mission ahead and join them on the path.

“Companies have to be loyal to their employees and work to retain them. It’s a two-way street,” Napier says. “The best part of being a CEO is seeing employees grow and develop—watching them do things they never thought they could accomplish, and then do them better than I could.”

Regardless of where you find your next leader, it’s a seller’s market out there. It’s clear that the direct sellers who will lead this industry into the future are those who never stop attracting, developing and nurturing their pipeline of talent, both inside and outside the C-suite. That not only makes good business sense, but it’s also what this industry is all about.

July 01, 2015

Stock Watch

Stock Watch, July 2015


July 01, 2015

DSA News

Michael Lunceford Inducted into the DSA Hall of Fame

Click here to order the July 2015 issue in which this article appeared or click here to download it to your mobile device.


Photo above: Mary Kay’s Michael Lunceford receives the DSA Hall of Fame award with the support of his family.


As the rich cream rises to the top of a barrel of milk and is valued for its delightful taste, so too do the valuable and outstanding leaders of an industry rise to be recognized as prized and appreciated contributors. Over 50 years ago, the U.S. Direct Selling Association (DSA) began awarding these individuals by inducting them into the DSA Hall of Fame. This collection of people represents those who have been judged as outstanding contributors and have advanced the cause and mission of our particular channel of distribution and its business opportunity.

To be considered worthy of admittance into the DSA Hall of Fame, an individual must have devoted years of service to the industry, as well as made “considerable contributions” to the DSA and to the Direct Selling Education Foundation (DSEF) in time, effort and advancement of the cause.

The 2015 inductee, Michael Lunceford, Senior Vice President of Public Affairs for Mary Kay Inc., demonstrates all of the attributes of a “Hall of Famer.” DSA President Joseph Mariano says, “Michael Lunceford understands better than anyone how to build and leverage lasting relationships that support direct sellers’ advocacy objectives over many years.  I’ve been privileged to work alongside Michael in the trenches, in the states and nationally, over more than three decades. In typical Michael fashion, he credited everyone around him during his acceptance speech except himself. His dedication to our sales channel, humility, leadership and most of all, his abilities in the areas of government relations and public affairs are truly exceptional. No one is more deserving of this honor, and I’m pleased it was bestowed upon my great mentor and friend.”

Already a member of the DSEF Circle of Honor (2003), Lunceford is actually the fourth executive from Mary Kay to be inducted into the Hall of Fame. Past inductees include Mary Kay Ash, Founder of Mary Kay Inc., in 1976; Monty Barber in 1988; and former Mary Kay Vice Chairman Richard Bartlett in 1994.

Lunceford has served the industry throughout his career, spanning more than 30 years, and has held numerous leadership positions on the boards of directors and executive committees at DSA and DSEF. He is currently President of the Board for The Mary Kay FoundationSM, leading the Foundation’s two-fold mission to end cancers affecting women and domestic abuse.

Through a video shared at the award ceremony, Lunceford’s accomplishments and contributions were lauded by U.S. Sen. John Cornyn, U.S. Reps. Eddie Bernice Johnson and Marc Veasey, Ambassador Ron Kirk, former Dallas Mayor Laura Miller and Mary Kay President and CEO David Holl, who all commended Lunceford on his tenacious and passionate work.

“The Direct Selling Association has humbled me with this recognition,” says Lunceford. “I share this honor with all of my colleagues, both at Mary Kay and throughout the industry, who together, have supported, collaborated and advocated to advance the interests of the millions of people involved in direct selling around the world.”

Lunceford received his BBA in finance and economics from Texas A&M University-Commerce and has a master’s in public administration from Southern Methodist University. A noted civic leader and political advisor to local and national-elected officials, he resides in Dallas with his wife and two daughters.

 

June 30, 2015

U.S. News

dōTERRA Completes Second Phase of Utah Headquarters

Photo: dōTERRA headquarters in Pleasant Grove, Utah.


Essential oil seller dōTERRA International has nearly doubled the size of its corporate headquarters with a newly completed Product Center. With the additional warehouse and office space, dōTERRA’s headquarters covers 383,000 square feet and houses 1,400 employees.

The Utah campus, created with architectural firm VCBO and Jacobsen Construction, has already earned awards for both partners. Utah Construction and Design magazine recognized VCBO for Most Outstanding Project in the Commercial/Office category, and The Associated General Contractors awarded Jacobsen the Best Corporate Project prize for the State of Utah.

The innovative design and construction has increased efficiency for the company, with the Product Center currently processing more than 30,000 essential oil orders every month.

“We are thrilled to have all of our departments together at one location,” said dōTERRA’s Director of Human Resources, Mark Ringger, who oversaw the project. “This allows us to collaborate, work together, and increase productivity across multiple departments, and also allows us to continually build great relationships between departments.”

June 29, 2015

U.S. News

Mary Young Transitions to CEO of Young Living

Photo: Young Living Founders Gary and Mary Young.


Young Living Essential Oils has announced that its storied Co-Founder, Gary Young, is stepping down from his role as CEO. His wife, Mary, the brand’s Co-Founder and Executive Vice President, will take on leadership of the company.

Mary has served on Young Living’s corporate executive team for the past two decades. In a nod to her personal and professional work, Utah Business magazine recently named Mary one of 30 Women to Watch. Her promotion positions Young Living as the largest female owned and operated company in Utah.

“What started over two decades ago as a personal passion for both Gary and me has grown into a worldwide company committed to transforming the lives of millions,” Mary said in the company’s release. “Prior to launching Young Living with Gary, I established and grew my own successful direct selling business. This experience has led to a ‘member-first’ mindset for Young Living and continues to shape our culture and policies.”

In a statement, Young Living said Gary will continue his work in the wellness field as he writes books and shares his knowledge of essential oils. The 66-year-old is also looking to focus his time on family and various philanthropic and civic initiatives.

June 26, 2015

U.S. News

This Week: Oriflame Exec Talks Africa, AdvoCare Invitational Coming to Disney

Catch up on this week’s industry chatter with these click-worthy links:

  • How does a Swedish cosmetics company make it in Africa? Oriflame Managing Director for East Africa, Piyush Chandra, shared several factors that present a growth opportunity for the brand and other direct selling companies in the region.
  • What do Father’s Day and female empowerment have in common? Avon shows us in its Father’s Day ad, which Bustle featured in a round-up of tear-jerking commercials celebrating dads. The ad is an early indicator of what to expect from Avon’s new Beauty for a Purpose brand messaging.
  • ViSalus Co-Founder and CEO Ryan Blair has a tip for his fellow leaders: take a hike. The millionaire told Business Insider he regularly invites business associates to hit the trail for morning meetings, paving the way for in-depth, creative conversations.
  • AdvoCare is helping basketball dreams come true as the title sponsor of the former Orlando Classic, a college basketball tournament hosted by ESPN Events. The 12-game AdvoCare Invitational will take place on Thanksgiving weekend at the ESPN Wide World of Sports Complex located at the Walt Disney World Resort near Orlando.
  • Over at Yahoo!, one beauty editor shared her transition to clean beauty products and what she learned from Beautycounter and the brand’s Head of Creative Design, Christy Coleman.

June 26, 2015

U.S. News

District Judge Dismisses Solavei Case against Stream

A Dallas District Court judge has ordered a resounding dismissal of Solavei’s trade-secrets case against Dallas-based competitor Stream. Judge Craig Smith of the 192nd District Court dismissed with prejudice the lawsuit alleging that Stream had launched its mobile services using proprietary technology and information from Seattle-based Solavei.

Stream, an energy company that has expanded into other everyday services, launched Mobile Services by Stream in January, six months after backing out of extended merger talks with Solavei. Pointing to a confidentiality agreement signed by both companies, Solavei claimed senior Stream executives had used knowledge of Solavei’s technology, social marketing strategies, go-to-market plan and customer lists to roll out its mobile direct selling business.

Solavei aired its grievances in a statement issued the day before Stream’s mobile launch in January, prompting the company to obtain a temporary restraining order prohibiting further disparaging remarks by Solavei.
 
Back in June 2014, while in talks with Stream, Solavei filed a Chapter 11 bankruptcy and announced that services would continue uninterrupted as its business underwent restructuring. After Stream terminated the transaction, Solavei went on to merge with Aspider, a Netherlands-based mobile infrastructure and services brand.
 
The court granted Stream’s request for a summary judgment on Wednesday, ordering a dismissal that prohibits Solavei from filing another lawsuit on the same grounds. In a statement, Stream said it will pursue counterclaims against the mobile brand and two of its top executives, CEO Ryan Wuerch and General Counsel Rick White, for defamation and tortious interference with Stream’s business.

June 26, 2015

U.S. News

Former Industry CFO Joins Nu Skin Board of Directors

Nu Skin’s newest board member is no stranger to the direct selling industry, despite her current position at the helm of a personal publishing company. The Utah-based brand has announced that Edwina D. Woodbury, President and CEO of The Chapel Hill Press, is joining its board of directors.

From 1977 to 1998, Woodbury held a series of finance and operations roles at an iconic direct selling brand, eventually serving as finance chief for the personal-care company. In addition to leading The Chapel Hill Press, Woodbury currently sits on the board of RadioShack and the nonprofit Medical Foundation of North Carolina.

“Edwina brings a wealth of experience in our industry,” Executive Chairman of the Board, Steven J. Lund, said in a statement. “Her extensive and in-depth understanding of the financial and operational issues associated with global companies will provide significant insights and another strong voice to our board.”

June 25, 2015

World News

Nerium Hits the Ground in South Korea with New Brand Center

Photo: Nerium Chief Field Officer, Mark Smith; General Manager of Korea, BJ Choi; President of International, Roy Truett; and Chief Networking Officer, Dennis Windsor, lead a ribbon cutting at the Korean Brand Center.


Nerium International has a new home in South Korea, where the company opened its first Asian market in June. To support the region’s nascent salesforce, the anti-aging company has established its newest Brand Center in the South Korean capital of Seoul.

The Brand Center will be open to consumers looking to learn more about the company’s offerings. In addition to featuring Nerium products, the 8,500-square-foot space will offer training, tools and other resources for brand partners.

“Asia-Pacific is one of the most important regions for relationship marketing,” Nerium President of International, Roy Truett, said in a statement. “We have a large Korean base of Brand Partners in the U.S., and we are thrilled to bring our winning combination of opportunity and cutting-edge, proprietary products into a country that we feel is a leader in the skincare industry.”

Beginning July 16, the Korean Brand Center will offer Nerium’s Optimera skincare line, which includes an Age-Defying Night Cream and Day Cream.

June 25, 2015

U.S. News

Herbalife Launches Casa Herbalife in Michigan

(Photo courtesy of Herbalife Family Foundation)


The Herbalife Family Foundation is once again making it possible for children to have daily access to nutritious meals through its Casa Herbalife program. On Wednesday, the foundation launched its first program in the state of Michigan with a $37,500 donation to Lily Missions Center.

The nonprofit center serves the city of Jackson, where 40 percent of residents live at or below the national poverty level and the graduation rate falls well below the state average. Additionally, 73 percent of public school students receive free or reduced lunches.

“We understand that in order for our children to focus on academic performance, they must have their basic needs fulfilled,” Rev. James Hines, Lily Missions Center’s President and CEO, said in a statement. “Thanks to this donation, we can now offer our children a nutritious meal every day—something that is critical but not always possible in this part of the state. We are also able to educate the children on proper nutrition so that they can carry those skills throughout their lifetime.”

The Herbalife Family Foundation launched Casa Herbalife in 2005. In the past 10 years, the program has expanded to supply nutritious meals to more than 100,000 children in 50 countries on a daily basis. The company’s members also provide volunteer support to their local Casa Herbalife organizations.

June 24, 2015

U.S. News

Tupperware CEO Shares Best Advice He’s Ever Received

Photo: Rick Goings, CEO of Tupperware Brands. (Tupperware Brands)


As CEO of Tupperware Brands, the No. 8 direct selling company in the world, Rick Goings has learned a thing or two about leadership. Speaking to Business Insider this week, Goings shared the piece of advice that has proven most helpful in his career and leadership of the $2.6 billion company.

“The higher you go in any organization, the nicer the people should become,” Goings said, passing along wisdom he received from a Navy officer.

“Even from a business perspective, all a company ever is is a collection of people,” Goings elaborated. “If you’re working with a high percentage of people who are all trying to be the best versions of themselves, you can’t avoid success.”

Quality leaders are key to any organization, but their impact on company culture is amplified at direct selling businesses like Tupperware, which currently employs 13,500 and has a salesforce of 2.6 million.