March 03, 2015

U.S. News

Nature’s Sunshine Posts Flat Earnings, Launches New Research Center

Photo: (from left) Gene Hughes, Nature’s Sunshine Founder; Kristine Hughes, Founder and Vice Chairman of the Board of Directors; Utah Gov. Gary Herbert; Pauline Hughes, Founder; Dr. Matthew Tripp, Chief Scientific Officer.


Nature’s Sunshine Products Inc. (NATR—Nasdaq) is shrugging off a rocky fourth quarter with the launch of a multimillion-dollar research center and its forthcoming entry into China.

The company’s nutrition and personal-care products generated $86.7 million in fourth quarter revenue. Earnings were 5 cents per share, coming in 18 cents below the consensus estimate of 23 cents a share. Like many companies operating in Russia and Eastern Europe, Nature’s Sunshine felt the adverse effects of an increasingly strong dollar underscored by geopolitical challenges in the region.

Strong sales in Korea, Japan and Europe boosted the company’s Synergy WorldWide subsidiary, which accounted for $30.8 million in quarterly revenue, an increase of 8.3 percent over the prior-year period. The results represent a 13.0 percent increase in local currencies, impacted by declining sales at Synergy North America.

Nature’s Sunshine reported full-year revenue of $366.4 million, down 0.9 percent from 2013, or a 0.5 percent decrease in local currencies. Operating income fell 19.2 percent to $19.0 million, compared to $23.6 million in 2013. In November, Nature’s Sunshine pulled out of Venezuela due to economic uncertainties stemming from import controls and inflation.

The supplement firm is forging ahead with its plan to enter China in 2015 through a joint venture with Fosun Pharma, which accounted for $2.2 million in startup costs. The brand has brought on Paul Noack, an industry executive with experience in the Asia Pacific region, to serve as President of China and New Markets, as well as additional recruits to its China leadership team.

Nature’s Sunshine followed up its earnings report with the grand opening of the Hughes Center for Research and Innovation, a new state-of-the-art facility located at its corporate headquarters in Lehi, Utah. Utah Gov. Gary Herbert was on hand to officially open the 5,400-square-foot center, where the Nature’s Sunshine R&D team will research how nutritional supplements interact with the body at the molecular level.

“The Hughes Center for Research and Innovation incorporates some of the most advanced technology in the industry,” said Dr. Matthew Tripp, Chief Scientific Officer. “For example, the Flexmap3D can analyze 500 analytes, such as genes and proteins, from a single human sample, such as a drop of blood.”

The center’s research will combat health mega-trends driven by diet and lifestyle choices through natural, nutritionally therapeutic products, said Chairman and CEO Gregory Probert. The new facility features labs and clinical space, as well as exam rooms for consultations and clinical studies.

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March 02, 2015

U.S. News

Herbalife Tops Expectations but Lowers 2015 Guidance

Photo: REUTERS/Lucy Nicholson


Herbalife Ltd. (HLF—NYSE) beat Wall Street expectations as well as its own consensus Thursday when the company reported adjusted earnings of $121 million in the fourth quarter 2014, or $1.41 per share. Consensus estimates for the nutritional company had been $1.16 per share, with Herbalife’s own outlook range being $1.30 to $1.40. Fourth quarter earnings rose 10 percent from the same period in 2013, when the company earned $1.28 per share.

Earnings were overshadowed by a drop in quarterly revenue, which totaled $1.1 billion, down 11 percent from the comparable period a year ago—and the worst result since early 2009. The drop compares to a 20 percent revenue increase in the fourth quarter of 2013.

The company’s updated 2015 guidance was also lower than anticipated and includes an unfavorable impact from currency rates in Venezuela, which has already affected fourth quarter 2014 net sales. Herbalife expects a sales decline of 12.5 percent to 15.5 percent in the first quarter 2015, and 6 percent to 9 percent for the year. The Los Angeles-based company forecasts adjusted earnings of $1.30 to $1.40 a share for the first quarter and $5.30 to $5.70 for the year.

Also significantly impacting the company’s growth was its adoption of a new sales program called the “Gold Standard” initiative. The new compensation plan initiative takes a more conservative financial approach to sales and gives new distributors more time to qualify for certain financial incentives, so they can buy a particular amount of product, even later in the period, and still qualify for the same rewards.

“2014 was a record year in terms of net sales, volume and sales leader retention,” Johnson stated in the company’s earnings release. “It was also a year of transition, as we continue to implement changes that we believe will create a stronger company with the ideal combination of growth and sustainability. We have seen the success of these changes in early adopter markets and remain confident that our other markets will follow a similar pattern through 2015 and beyond.”

For the full year, the company reported net sales of $5.0 billion, a 3 percent increase compared to 2013. The company also reported net income of $308.7 million, or $3.40 per diluted share. On an adjusted basis, net income of $538.5 million decreased 7 percent versus adjusted net income of $577.4 million for the same period in 2013. Adjusted EPS of $5.93 increased by 10 percent versus $5.37 for 2013.

March 02, 2015

U.S. News

Creative Memories Finds a New Home and New Backing

After undergoing two bankruptcies within five years only to close its doors in 2014, the iconic Creative Memories (CM) brand has reopened with new ownership and a streamlined direct sales strategy.

The company reemerged from its second bankruptcy with a new name—Ahni & Zoe by Creative Memories—before again closing its doors in late summer 2014. That’s when an unexpected twist occurred: Caleb Hayhoe, Chairman of Flowerdale Group Ltd., and previously, Founder and CEO of RT Sourcing, made a decision to buy the Creative Memories Japan business and in North America the Creative Memories® and Ahni & Zoe™ brands, patents, artwork, products and manufacturing equipment—and reopen once again as a direct selling company. Now debt-free and backed financially, CM is looking to carve a new path.

Hayhoe became involved with Creative Memories in 1997 when the company approached his product design and sourcing company—which then was operating with over 300 employees in Asia—to add to their product line. Hayhoe himself attended many CM events, workshops and even parties, inspired by the passion of the consultants. So when he learned the company was for sale, it was natural for him to consider the purchase. He personally knew many consultants as well as the staff at the home office in St. Cloud, Minnesota, and was convinced that with the right adjustments, the company could once again be successful for consultants and consumers.

The new business is operating just around the corner from the old Creative Memories building in St. Cloud. A small, dedicated team of employees, whose average tenure with Creative Memories is 10 to 12 years, has stayed on to work with CM Group Holdings. DSN staff spoke with Hayhoe about his strategy and vision for the company. 

DSN: What factors led to your decision to reopen as a direct selling company?  

Hayhoe: Among the thousands of decisions involved in a startup, having a direct sales element was never a question. With many tens of thousands of former Consultants who loved the products, mission and the difference the opportunity made in their own families, our leadership team was united in offering a compelling earnings plan. There was also much learning from the past, which included a deep understanding of our audience and their preferences. We wanted to support the former leaders who relied on Creative Memories and/or Ahni & Zoe for a substantial income, as well as those who joined to work occasionally and be part of a warm community. 

With our unique hybrid model we put quite a few traditional direct sales sacred cows out to pasture. Like minimums, titles and leadership requirements, to name a few. All Advisors are welcome, valued and equal, with equal earnings opportunities, whether they joined during our November launch in 2014 or join five years from now. We’re just a few months in, and there’s already a group earning more than they had before, with many leaping up the levels of the plan. There’s also a whole group who’s happy to work at their own pace and share with friends and family. We’re thrilled to be able to help people share and earn as they choose. 

DSN: Creative Memories underwent two bankruptcies before reopening as Ahni & Zoe, only to close again. What strategies are you putting in place to revive these struggling brands? 

Hayhoe: It’s important to separate the former companies’ financial difficulties from the brands. The Creative Memories® brand has enormous recognition and respect worldwide for its quality products and caring Consultants. Beyond North America, there is also considerable interest in large international markets like Australia and Germany, and the 14-year-old Japan business is thriving.

The Ahni & Zoe™ brand had less time to gain traction, but in its six months of life Consultants were able to reach an entirely new group of busy people who found Fast2Fab albums the ideal way to enjoy beautiful finished albums in no time.

We believe that what CM Group is offering now is the best of both brands, with a flexibility and modern e-commerce platform neither prior company offered. CM Advisors can sell the products they like (most sell both brands) and run their businesses as entrepreneurs. Our strategy is to offer exceptional products, service and a unique earnings plan that allows for some of the most generous profit-sharing in the industry, while maintaining a lean, relentlessly efficient operation.

The new CM annual Advisor Earnings Plan had to pass the “easy to explain, easy to share, easy to earn” test. Basically, Advisors achieve a higher profit rate on the products they sell, and higher commission rate on their downline group sales, based on the sales balance in their own account. Each consultant pays a $49 annual fee to stay in the program. It’s very basic and simple.

DSN: In response to the CM launch, what kind of feedback have you gotten from former Ahni & Zoe representatives? 

Hayhoe: The reaction from former Consultants has exceeded our wildest expectations. Ahni & Zoe Consultants were quick to join, and there’s also been a huge revival of Creative Memories Consultants who missed the products and mission and like the simplicity and flexibility of the new business. With the simple, welcoming plan and freedom to sell one or both lines, they’re able to serve new people who are after fast albums that look good as well as those who love scrapbooking. It’s been great fun hearing from former Consultants who have reactivated their networks and are gathering people for workshops and retreats with a whole new level of energy. 

DSN: Will you utilize online sales apart from direct sales through Advisors? How will the two channels work together? 

Hayhoe: CM’s in the interesting position of having a 30-year legacy brand while also being a startup. We encourage Advisors to cultivate direct relationships with their customers and sell in person or via their personalized link. Our desire to protect that relationship is behind us encouraging Advisors to use one of the many excellent free/cheap, email/contact management systems available, as well as providing an Advisor locator, so long-lost customers can connect with their Advisor of choice. Customers also have the choice to shop and/or sign up directly with CM if they wish. 

DSN: Forever Inc. announced last month that it had acquired the Creative Memories digital catalog. Does CM plan to focus solely on physical scrapbooking products? 

Hayhoe: Currently, yes. As part of the Creative Memories closure in 2014, the software was transferred back to its developers. The latest announcement was the last piece of that deal, which is not connected to CM. Though the digital market is highly commoditized, our team believes there is potential to differentiate and offer something that is uniquely CM. It’s part of our plan to explore in 2015. 

DSN: Is CM looking to expand into additional categories in the near future? 

Hayhoe: Our near future will be focused on continuing to support our CM Advisors, offering exceptional service and quality and rounding out the product line. As a memory-keeping company, there’s potential for all sorts of interesting new directions in the future, though this will be done thoughtfully and carefully. Our focus is on simplicity, maintaining our reputation for exceptional quality, staying true to our Advisor community and mission, and running a lean, profitable, sustainable business.

March 02, 2015

Company Spotlight

Equal Access, Equal Adaptability: LegalShield’s Moral Imperative to Grow

by Beth Douglass Silcox


Company Profile

Founded: 1972
Headquarters: Ada, Oklahoma with Executive Offices in Dallas, Texas
Executives: Jeff Bell, CEO; Kathy Pinson, COO; Steve Williamson, CFO; Alan Fearnley, President of Consumer Marketing and Brand and Chief Commercial Officer; James Rosseau, President of LegalShield Business Solutions; and Darnell Self, Executive Vice President of Network and Business Development.
Product Categories: Legal and Identity Theft Services for individuals, families, and businesses


Jeff BellJeff Bell
 Kathy Pinson Kathy Pinson
 Steve Williamson Steve Williamson
 Alan Fearnley Alan Fearnley
 James Rosseau James Rosseau
 Darnell Self Darnell Self

When LegalShield brought on a new CEO with consumer marketing and corporate leadership credentials the likes of Microsoft, Chrysler, Ford and NBCUniversal last summer, they once again affirmed the company’s adaptable nature. This pioneering, service-focused direct selling company has a long history in meeting the changing needs of the consumer marketplace with innovations like 24/7 legal counsel and identity theft protection, as well as rising to broader corporate and industry challenges.

CEO Jeff Bell’s goal, as he sees it, is to make LegalShield a household name, much like direct selling giants Mary Kay, Avon and Tupperware did for their product categories. Admittedly, skincare, cosmetics and food storage are more easily understood concepts than the disruptive business model that powers LegalShield’s mission of equal access to equal justice for all, but Bell and his team aim to change that. In fact, he says, “I believe our growth is not just a business imperative, it’s also a moral imperative.”

Today, the 43-year-old company offers individual and family pre-paid legal and identity theft plans, as well as products for home businesses, small businesses up to 100 employees, and larger companies that elect to provide a LegalShield option within employee benefits packages. LegalShield’s memberships number 1.4 million covering 3.7 million lives, and its call center fielded 2 million member calls for legal assistance in 2014.

One Car Accident Away

LegalShield, originally incorporated as Pre-Paid Legal, arose from the rolling hills of Ada, Oklahoma, following Founder Harland Stonecipher’s head-on automobile collision in 1969. Despite insurance coverage for life, auto, and health, life insurance agent Stonecipher realized his family’s vulnerability to unexpected legal fees after being sued for an accident that was not his fault.

As he recovered, Stonecipher mulled over the fate of his family and the hundreds of thousands of other families who could fall into this gap at a moment’s notice. Surely something existed to provide assurance to everyday people needing legal counsel, but research proved otherwise.

So in 1972, he forged ahead on his own from a one-room office in a local mini-mall. Within seven years, the company offered connectivity to legal services in six states, and by 1982 had become the conduit between a membership network of people who needed access to legal help and an attorney provider base that could deliver it. COO Kathy Pinson, who has spent 35 years with the company, says, “The provider attorney system is our key competitive advantage today.”


“I believe our growth is not just a business imperative, it’s also a moral imperative.”

—Jeff Bell, CEO


Competitive Advantage

LegalShield’s provider attorney system hinges on extensive vetting and long-term contracting with a single, large and established law firm within each U.S. state and Canadian province in which they do business. Average length of service for a LegalShield firm is 14 years with attorney experience levels averaging 20 years.

Because that firm represents all LegalShield members in that state or province, LegalShield’s business can comprise a big part of the firm’s overall business. According to Alan Fearnley, President of Consumer Marketing and Brand, this creates a scenario whereby attorneys become “almost evangelical” in their support of the business model, which in turn generates fantastic customer support for members, assures LegalShield members receive legal guidance from experienced professionals, and establishes vital connectivity between law firms and the field, which makes LegalShield’s various services easier to sell.


“The provider attorney system is our key competitive advantage today.”

—Kathy Pinson, Chief Operating Officer


“The very way that we’re set up allows us to have additional quality measures over those attorneys that no one else has,” Pinson says.

LegalShield quantifies member experiences with attorney providers, effectively putting a number to their “bedside manner” and holds lawyers accountable for the service they render. LegalShield has experienced a considerable rise in their Net Promoter Score® (NPS), a customer loyalty scale used to measure overall satisfaction with a brand or product. The scale ranges from -100 (everyone is a detractor of the company or product) to +100 (everyone is a supporter of the brand or product). Attained by survey, any score above zero is somewhat positive; a score of 50+ is excellent. Fearnley happily reports that Legalshield’s score, which ranged in the mid-40s a few years ago, now stand at 57. He says, “By allowing attorneys to see that score and by training around it, our service levels are really terrific and that’s helped the quality of the business.”

From the view of LegalShield’s associate field, where Darnell Self, Executive Vice President of Network and Business Development, spent 15 years, the attorney provider network is something competitors just don’t have. Decades in the making, the time and resources necessary to put the right law firms and communications in place, Self says, makes it unlikely to be duplicated. That’s a highly sought after attribute for those seeking direct selling opportunities.

LegalSheild

A Mission for All

“We deliver products that promote peace of mind,” Bell says. “We believe that our mission applies both to our members and our sales associates. We want to improve their lives by teaching them life-transforming skills, giving them peace of mind and confidence in a world oftentimes uncaring and selfish.”

In fact, Harland and Shirley Stonecipher’s founding mission centered on equal access to justice for all people. “That doesn’t mean that we’re here to guarantee that people who break the law aren’t held accountable—far from it. We just want to make sure that every citizen in every community in the United States is able to exercise their rights of living under the law, that they are able to have representation in all circumstances and that it is not only available to those with higher incomes,” Bell says.

Leveling the legal playing field, righting the wrongs that exist in North America, providing equity where there is inequity—those messages resonate with everyone associated with LegalShield. “It’s an entire eco-system that we have. Whether it’s the employees, the members, the associates or the provider attorneys, they are all very passionate about that cause,” Chief Financial Officer Steve Williamson says.

Congregating that shared passion is a huge part of LegalShield’s business strategy, which is driven by intimate gatherings of 20, galvanizing affairs numbering 15,000 and everything in between.


Representing roughly 30 percent of the company’s overall business, some 47,000 small businesses used LegalShield services in 2014, and 34,000 larger companies offered LegalShield legal and identity theft plans to their employees.


“I can’t tell you what the next product’s going to look like. I can’t tell you what’s going to be half price next week. But what I have is a passion and conviction for what we are doing and for people who feel the same way. People need to be there because they want to renew their vows and see people who are involved in the cause,” Fearnley says.

It was a Las Vegas event last summer that convinced Bell to venture into this, his first foray into the direct selling industry. He was very, very moved to hear the testimonies from lawyers who worked on behalf of members who faced criminal warrants or warrants for money they didn’t owe, as well as from people whose identities were stolen and reclaimed through the investigative efforts of LegalShield’s Identity Theft partnership with Kroll.

“With this particular initiative, because of the very nature of our mission, this is a chance for people to work hard, but also to feel like they are making a contribution,” Bell says. “I believe this is bigger than me. I think this is bigger than any selling associate or any individual or entrepreneur who decides to take up a LegalShield business opportunity.”


“Our mission is to help people improve their lives by teaching life-transforming skills and to deliver exceptional products and services that promote peace of mind and confidence in a world oftentimes uncaring and selfish.”

—Jeff Bell


Changing of the Guard

Bell’s words reflect Stonecipher’s principles when he founded Pre-Paid Legal, originally named the Sportsman’s Motor Club, in 1972. In 1976, the company changed its name and incorporated as Pre-Paid Legal Services, Inc. The next evolution was a public offering in 1984. Stonecipher served as CEO until 2010.

In 2011, a change in corporate leadership and a transition back to private hands occurred when MidOcean Partners, a New York-based private equity firm, purchased the company for $650 million. Later that year, the company refreshed its brand and took the name of one of its most popular products—LegalShield.

In the end, Bell says, “We went private because private equity was looking to invest. Quite frankly, the business is phenomenally robust. This business generates a lot of cash and has one thing that they really want, which is the opportunity to grow.” That growth potential is eventually what brought Bell into the fold in 2014.

Today, LegalShield’s associate field consistently reflects a simple set of values that threads throughout the entire organization: Believe in the good in all people; do the right thing when no one is looking; give clarity to everybody’s purpose; and empower people’s passions. And Bell says, “We’re growing our associate base for the first time in several years, and we’re doing it for the right reasons and with the right people.”

Adaptable Sales Opportunity

LegalShield is not a hobbyist direct selling opportunity. “You really join the company to learn the skills, to network with other people, and to interact and to sell to other people,” Fearnley says.

LegalShield’s associate demographic skews a bit older, yet is gender-balanced. Associates tend to be business-oriented people like insurance brokers, sales professionals who have built networks before, those looking for a second career to transition into retirement, and even retired attorneys who understand the need for and value of LegalShield’s products.

“When people have got something to lose, then that’s when they want to protect it,” Fearnley says. It’s also when they want to share it with others, and LegalShield offers an adaptable business opportunity depending upon associate needs and goals. “We want them to operate our business in any way that’s a potential opportunity,” he says.

The intangible nature of LegalShield’s products and the varied audiences to whom associates must sell, however, present a specific training challenge. “We’re not training people how to demonstrate products. I can’t let people feel the texture of something. So it’s really important to get people talking and sharing and going about it in a way that normal sales people talk about things. In other words, relationships and good, essential selling,” Fearnley says.

Basic associate training includes online coursework and live training with interaction and role-playing, and then LegalShield scales it up at larger events where top income earners and rising stars inspire associates looking for more. “They should come out better than when they arrived. They’re more equipped for the world in general. You don’t just sell our products, you pick up selling skills,” Fearnley says.

While some LegalShield members enroll and earn money by selling memberships without any intention of recruiting or building an organization, others enter into the business with networking as a focus, and some eventually matriculate to LegalShield Business Solutions sales.

James Rosseau, President of LegalShield Business Solutions, says before associates can graduate to new levels of LegalShield sales, deeper levels of training for not only product sales but also business-to-business sales, and the intricacies involved, are required.

Rosseau’s business sector offers a lucrative space in which to grow LegalShield’s overall business. “Today, only about 6% of employers offer legal plans as part of voluntary benefits packages, so we have a lot of upside opportunity,” he says. Some 47,000 small businesses used LegalShield services in 2014, and 34,000 larger companies offered LegalShield legal and identity theft plans to their employees. This segment represents roughly 30 percent of the company’s overall business, which was estimated at $400 million last year.


“When people have got something to lose, then that’s when they want to protect it.”

—Alan Fearnley, President of Consumer Marketing and Brand and Chief Commercial Officer


The Way Forward

Making an intangible service more tangible to consumers was an ongoing dilemma for LegalShield until the simple click of a mobile app opened the door to adaptability once again. “You push a button and up pops a screen. You can do one of four things: call your law firm, call your identity theft/credit advisor, call member services, or 24/7, 365 days a year push the red button if you’re being arrested or have a crisis. We’ll get a lawyer on the phone in 15 minutes,” Bell says. “Nobody in this business makes that promise.”

Fearnley adds, “New technology is going to make this product shine even more brightly than ever before. Believe me, it’s no secret that we’re going after that technology in terms of support and the opportunity and the dollars. The brighter that technology shines and the brighter that product shines, the brighter that opportunity shines.”

March 02, 2015

Company Focus

Guts Lead to Glory at Usborne Books & More

by Barbara Seale


Company Profile

Founded: 1989
Headquarters: Tulsa, Oklahoma
Executives: Founder and CEO Randall White and Vice President Heather Cobb
Products: Educational children’s books



 Randall White and Heather Cobb Randall White and Heather Cobb

It was a David and Goliath decision—one that would make any direct seller proud. More importantly, it set the stage for growth for Usborne Books & More, one of the direct selling industry’s few book sellers.

Usborne Books & More (UBAM) is the direct selling division of Educational Development Corp. (EDC), which has been in business in the United States since 1978. It sells children’s educational books primarily at parties, and some of the consultants also sell at book fairs, as well as to libraries and schools. UBAM has always been a bit of a rebel-with-a-cause, gaining its first steady market of home schoolers and being led by outspoken EDC CEO and Usborne Books & More Founder Randall White. The thorn in its side: Amazon.com.

Amazon was buying EDC’s books primarily from a wholesaler and slashing the retail price to the bone, including large orders sold to libraries and schools. If you’ve ever thumbed through a book at a retail store but then purchased it online at Amazon to save a couple of bucks, you have done what some Usborne Books & More customers have also done—much to the chagrin of UBAM consultants.

When the Usborne Books & More consultants who sold to schools and libraries—about 20 percent of the company’s business—encountered the practice, it didn’t just frustrate them. It threatened their business. The consultant might have gone through layers and layers of administration, making repeated presentations on book collections, getting enthusiastic, positive feedback, only to have the library make its final purchase through Amazon. It’s not a situation that leads to consultant retention. By 2012 the practice hit the company hard. Consultants started quitting, and sales dropped 20 percent.

By early 2012 White had had enough. He asked the wholesaler, which at the time accounted for 20 percent of EDC’s sales, to stop selling the company’s books through the online retailer. The wholesaler refused, but White was determined. He cancelled its account, all but eliminating the sale of EDC’s books directly from Amazon.com.


Usborne Books & More has now recorded 19 consecutive months of growth, with the past six months each posting monthly gains in excess of 40 percent over the same months in 2013.


Growth Genesis

The action was bold, and it spoke loudly to UBAM’s consultants. They loved it. It told them that White had their backs. Even though slinging a stone at giant Amazon was a risky move, as White told The New York Times in his characteristic style, “You never have the chance to make 7,000 women happy in one day.”

White calls it the most important action he, as the company’s founder, has ever taken. Consultants were energized to hold more parties and approach more schools and libraries, knowing that consumers would purchase from them, rather than online. That confidence led to recruiting, as well. Fueled by additional incentives from Usborne Books & More, selling and recruiting have increased, creating a snowball effect. Growth has hit an all-time high. Since its low point in 2012, the company more than doubled its number of active consultants by the end of 2014 and now has 8,000 active consultants. More importantly, growth has continued.

From February to June 2014 revenue grew more than 22 percent. Then from June through December the rate exceeded 50 percent. EDC’s earnings release for the third quarter ended Nov. 30, 2014, said that Usborne Books & More had recorded 19 consecutive months of growth, with the past six months each posting monthly gains in excess of 40 percent over the same months in 2013.

Usborne Books & More Vice President Heather Cobb says that growth was caused by a perfect storm that brewed for two years.  “It started with Amazon,” she reflects. “Plus, our new branding has been in place long enough to have taken effect. Our graphics have continued to get better—more on target—and our books continue to be the best. In addition, we’re offering the right type of incentives to consultants, such as a trip to Ireland. One of the things we do from the home office is set the bar of expectation. The higher we set it, the higher they reach.”

From Lukewarm to Life-Changing

Usborne Books & More, a division of Educational Development Corporation (trading as EDUC on Nasdaq), was created to concentrate exclusively on selling U.K.-based Usborne children’s books. According to its website, EDC has twice been recognized by Forbes magazine as one of “The 200 Best Small Companies in America” and three times by Fortune magazine as one of “America’s 100 Fastest Growing Small Companies.” In 2014, Usborne Books & More marked its 25-year anniversary.

CEO Randall White launched the company’s direct selling division in 1989 at the suggestion of the head of Usborne Books, but he wasn’t enthusiastic about the idea.

“Peter Usborne told me that his company, which is our supplier, had a home sales division in England and suggested that I should start one,” White recalls. “I wasn’t crazy about the idea, but he talked me into it. I thought, I’ll do it as long as we don’t mess up our real business: selling to stores. Then someone talked me into going to a DSA national convention, and oh, my gosh, it was life-changing for me. After they scraped me off the ceiling, I knew we had to do this.”

He appreciated that as he prepared to launch his new division, industry icons such as Doris Christopher and Dave Longaberger freely offered their expertise and advice. He held his organizational convention, knowing that he had to reach out to everyone who had expressed interest. About 30 attended, including a woman who became the company’s top producer.

In late 2008, EDC acquired Kane Miller Publishing, an internationally known publisher of award-winning children’s books with more than 20 years in the industry, and added it to the lineup of books its consultants could offer. By late 2014 the company’s sales library had grown to 2,000 titles.

Growth has been a roller coaster for the company. Initially it grew steadily, but hit a financial rough patch when EDC struggled through nine years of declining revenues. It turned the corner in 2012. By December 2014 EDC reported that Usborne Books & More had achieved 19 consecutive months of growth. In October TheStreet.com recognized its strong dividends, rating it third in its short list of buy-rated dividend stocks.

Today, White’s reluctant creation, Usborne Books & More, is EDC’s largest division, and his definition of his “real business” has turned around along with company revenue. Usborne Books & More is now a $20 million company.

Luggage Love


“One of the things we do from the home office is set the bar of expectation. The higher we set it, the higher they reach.”

—Heather Cobb, Vice President, Usborne Books & More


Setting a high bar isn’t just about trips. Smaller incentives have had a big impact, too. For example, at its last convention in June 2014 the company introduced a simple incentive that has netted stellar results. They offered a two-piece, hard-sided, 360-degree rotation, customizable, branded suitcase set from Spot My Bag. The crowd gasped. To earn the set, consultants had to sell $5,000 of books—wholesale—in any one month from July through December. That equates to $7,000 in retail sales in a single month. It would be a stretch for distributors in many companies, but especially for Usborne Books & More consultants. The average price of a book is less than $10. The outcome? More than three times the number of consultants reached the monthly goal than in the previous year.

When White first heard the suitcase idea, he wasn’t sold. “I was skeptical,” he freely admits. “I was wrong.” Cobb believes that the effect of the incentive was psychological. “We had enough faith in them to say that we would give them a prize to reach that level,” she notes. “They knew that we wouldn’t give them the challenge if we didn’t think they could do it. So many have thanked us for stretching them. The biggest benefit has been that they learned so much in the process.”

Randall WhiteFounder and CEO Randall White reinforces the company’s culture of accessibility by writing daily personal notes on outgoing packages at the company’s distribution center.

Return Customers

Repeat sales are relatively easy, according to White. Once a customer attends a party and experiences Usborne Books & More’s high-quality books, they welcome an opportunity to buy more, he says. He notes that some of his customers become fanatics—Usborne and Kane Miller “freaks,” as White calls them. The Kane Miller brand is an internationally known publisher of award-winning children’s books, which EDC acquired in 2008.

Those Usborne and Kane Miller freaks return for more books, which are often offered as a series. When parents buy the first book of a series and see how much their children love it, they come back for more. Plus, as Cobb notes, “New babies are born every day who need to learn their 1-2-3s and A-B-Cs.”

Most consultants and customers are young moms—a built-in millennial market—or grandmothers who have experienced the books’ benefits and want to share the educational wealth. Usborne Books & More is flexible about party presentations. Some consultants do presentations that focus on the books’ educational and developmental features. Others get creative with a fun demonstration. Usborne provides plenty of statistics supporting the importance of reading aloud to small children and the effects of lifetime literacy.

TiarasNew leaders are crowned like princesses at Usborne’s annual convention.

The improved branding and communication that Cobb introduced when she joined the company in February 2011 guide consultants to recruit during their presentations, as well. For example, consultant training in addition to catalogs now lead with Five Ways to Save: collections of similar types of books; monthly customer specials at a reduced rate; combined volumes, which include two or three books under one binding; hosting to earn free books; and joining the team, which offers a lifetime book discount, plus a starter kit stocked with books. The idea was developed years before, but with her background as a direct selling consultant, Cobb put it front and center.

Cobb says that the consultant demographic is gradually becoming younger and younger because of the branding, programming and incentives. In addition, White notes that Facebook is changing the company’s traditional sales model. He says that consultants began holding Facebook “home parties” that produced $800 in sales. Facebook created new dynamics for the consultants holding them. Prospective customers and recruits may be less intimated to attend an online party, and the consultant can even momentarily “leave” the party, click into another group online to ask a quick question while guests browse, and return to the party almost without being missed. And online parties are typically over in 30 to 40 minutes. The experience results in sales and also entices prospective recruits with its simplicity.

“It opened up a whole new avenue for people to recruit,” Cobb notes. But having that first new recruit or two in another state challenges most consultants’ comfort level. “Most people don’t know how to work with someone who lives across the country. They can’t be there for their launch party to help them and to cheer them on in person.”

At the same time, though, that person could sign up in the afternoon, have their e-commerce site and consultant ID instantly, and hold their own Facebook party that night, even before their physical starter kit has time to reach them. Facebook lets the sponsor “attend” the party online and provide the benefit of her experience.


“Literacy is so important. It’s the key to everything.”

—Randall White, EDC CEO and UBAM Founder


Sales that Lead to Savings

But when online sales were to consumers in multiple states, Usborne Books & More’s cost structure for shipping had to change. The company had spent as much as $9 to ship an order through UPS—Usborne Books & More is the largest UPS shipper in its Tulsa, Oklahoma, hometown—so it started exploring more options. It asked the U.S. Postal Service to make a proposal. Their pitch was so attractive that the company now uses Priority Mail to ship small orders, especially to Alaska and Hawaii, as well as UPS. The impact was great enough that in its December earnings release the company noted that improved shipping rates negotiated during the quarter would materially affect the earnings for that quarter and future quarters.

Usborne Books & More continues to invest in technology that supports its consultants’ business. In early January it announced at its leadership conference that it would launch new financial and direct-selling software, which rolls out this year. Some of the features of the software have been available cafeteria-style to consultants in technologies that UBAM built in-house, but the new outsourced software—made financially feasible by recent growth—consolidates and simplifies their use. It will also be available for about $100 a year, compared to the $20 a month subscription consultants currently use. White believes it will help drive growth.


Facebook is changing the company’s traditional sales model by letting them hold Facebook “home parties,” thus creating new dynamics for the consultants holding them.


“We’re finding that the new people joining—young people 25 to 30—have grown up in the smart phone generation,” White notes. “They’re impatient with anything that’s not quick and slick. Growth has allowed us to invest significant money to have the latest thing available to consultants.”

White is bullish about the future. “We are a debt-free company; the last few months have been spectacular; so I think there’s a huge market we can tap,” he emphasizes. “I think we can hit $100 million in four or five years.” He adds, “Literacy is so important. It’s the key to everything.”

High Touch and Tiaras

Every woman should get to feel like a princess. At least, that’s the philosophy Usborne Books & More executives adopt at convention time.

Along with motivating music, training and incentives, the company has one more flagship tradition. Everyone who reaches the company’s leadership level is brought onstage and crowned with the company’s trademark tiara, which they proudly wear for the rest of the convention.

“People want that tiara!” says company Founder Randall White. “It’s the recognition, and you can never have too much of it. It’s the outward sign that you’ve reached the leadership level. We give it as early in the convention as possible. It’s a status symbol to wear it at the convention. People walk up and ask how you did it, how long it took.”

The tiara is just one symbol of the company’s unique culture. Accessibility is another. Executives are so approachable that when White travels on business, consultants often invite him to stay in their homes. And he does. He also talks personally with any consultant who calls the home office and asks to speak to him. He reinforces the culture by making a daily visit to the company’s distribution center, selects several outgoing packages and writes on them: Hi! (smiley face) Randall White. He also writes personal notes to the top 50 salespeople each month, and he “friends” his consultants on their Facebook pages. Each month he personally writes “Randall’s Ramblings” for the consultant newsletter, often describing personal events and connecting them to some element of the Usborne Books & More business.

“We’ve tried to create a culture of family and fun,” he emphasizes. “Doing these things shows that I care about each one of them and wouldn’t do anything that was harmful to them because I know them and their families.”

While White acknowledges that some of those practices will be hard to maintain as the company grows, he wants to do it.

“It’s my life,” he says, “and I love it.”

March 02, 2015

Industry with Heart

Rodan + Fields: A Prescription for Change

by Karyn Reagan

Left: Student participants in buildOn, an inner-city education and service program, speak during a “Jobstacle Course” led by employees at Rodan + Fields’ headquarters.

Right: BuildOn students from an Oakland, California, high school were treated to a day of learning with workshops on resume writing as well as mock interviews to help them prep for job opportunities.


At Rodan + Fields, transformation is not just skin deep as they support programs helping educate underprivileged youth.


Company Profile

Founded: 2008
Headquarters: San Francisco
Executives: President and CEO Lori Bush; Co-Founder and Chairman Amnon Rodan
Products: Cosmetics and personal care


Amnon Rodan Amnon Rodan
Lori BushLori Bush

While at Stanford University Medical Center in the early 1980s, Dr. Katie Rodan and Dr. Kathy Fields forged a friendship for the same reasons most girls do, but they were also drawn to each other for a practical reason—there just weren’t too many women in the program. After graduation, they each started their own thriving dermatology practices, but the friendship proved lasting and together they have become recognized experts in their field, co-authored two books, and created products and companies that are now household names. “Their goal is to create products that bring the dermatological experience out of medical practice and into the hands of consumers,” says Amnon Rodan, Co-Founder and Chairman of Rodan + Fields as well as Katie’s husband.

The women’s first experience with selling products was the creation of the highly successful acne treatment product, Proactiv Solution™. Since that time, the anti-aging skincare market has grown exponentially, and Katie and Kathy researched and developed a line of products they now market through their company, Rodan + Fields. “In 2002, we created the brand and started selling the skincare line through high-end department stores,” says Rodan. “Within six months, our products caught the eye of Estée Lauder, who offered to purchase our company, so we sold it to them. But in 2007 we felt it was time to buy it back and offer the products through a different channel. Our vision was so much bigger than what traditional retail could offer.”

After studying the various marketing methods available that best served the skincare industry, the distribution channel that rose to the top was direct selling. “We bought the company back in 2007, reopened it in 2008 as a direct selling company, and it has been the best decision we’ve ever made,” says Rodan. “In our first year we did $3 million in business, and now, just six years later, we finished 2014 with $329 million in sales and 75,000 Consultants.” Rodan + Fields also has accumulated five DSA awards since 2008, including the ETHOS award for product innovation in 2014.



Seventy-five high school students from Oakland, California, affiliated with buildOn, took part in Rodan + Fields’ Jobstacle Course, a day of learning their way through the obstacle of job hunting.


A Better Way

Rodan explains that the main reason they chose direct selling was because it was, in their opinion, the best way to connect the brand with consumers. “We looked around and concluded that retail selling is about selling today and yesterday—the numbers we sold yesterday compared to the product that moved off the shelves today. But the way forward is about the combination of offline and online selling, which is social commerce,” says Rodan. “Taking that thought further, the best way to attain product exposure is through social networking. Combine that with e-commerce and the result is what we call social commerce. It is the way of the future.” 

Rodan + Fields was built in the digital age as a digital company with the added consumer benefit of personal contact with a consultant from the company. “The result is a much more heartwarming experience than buying a product off the shelf,” says Rodan.

An added benefit is that most of the consultant’s activities are done online, allowing Rodan + Fields to closely track who is buying what and when. “In the retail channel, there is no efficient way of knowing who is buying product, when they are buying or how often they are purchasing,” Rodan says. “Market research and studies would have to be conducted in order to have a somewhat accurate assessment.”

“Consultants are the stars at Rodan + Fields,” he says. In tandem with the desire of the founders to change skin, they equally desire to help their consultants to build their businesses, develop personally and change lives. Rodan + Fields’ salesforce development team is led by regional and area managers, who are employees. These individuals work directly with the field, and are a vital part of the organization. Rodan says, “They are a great support to the Consultants and keep a finger on the pulse of what is happening in the field. They assist with events, training, opportunity meetings and skincare education.” Support is also offered at the most anticipated event, the annual convention, where active consultants receive product introduction, training, motivation and recognition.

To keep up with the growth of the company and advances in skin care, Rodan + Fields also employs a large team of product developers who leave no stone unturned to find the most innovative formulas possible. “To get the best efficiency out of our new products, we must search all over the globe for the highest quality and most cutting-edge ingredients,” says Rodan. “And although the team creates most of them, Katie and Kathy still approve every product that is added to our line.”

The driving force behind creating the highest quality and most efficient product line possible is the desire to help people feel better about the way they look—ultimately making a difference. “We are motivated by the necessity for our lives to matter, to make a difference in the lives of others in the brief time we are on this planet. On a physical level, the business is about improving the appearance of people’s skin, which leads to feeling better about themselves on the inside,” says Rodan. “The next level of influencing change is in our communities and being involved in the responsibility of helping others in need.”


Rodan + Fields was built in the digital age as a digital company with the added consumer benefit of personal contact with a consultant from the company.


Offering a Hand Up

buildOnSeventy-five high school students from Oakland, California, affiliated with buildOn, took part in Rodan + Fields’ Jobstacle Course, a day of learning their way through the obstacle of job hunting.

As a practical response to the desire to impact communities, Rodan + Fields formed a foundation at the same time they launched the company into the direct selling arena. They named the foundation Prescription for Change (PFC), and the focus is to encourage people to align with a greater purpose and with the idea of being involved in something bigger than they are.

“In September of 2014 at our annual convention we announced that the new focus of our foundation is education—it’s the great equalizer. The mission statement for the foundation is: The PFC Foundation supports students in need on their journey to becoming a prescription for change in their communities by fostering belief in themselves. At PFC we believe if you can educate people you are giving them a hand up, not just a hand out,” says Rodan. “High school dropout rates have become a national crisis. That lack of education often leads young people into a dark funnel swirling them into the prison systems. The need is most acute in poverty-stricken neighborhoods in large cities across the United States.” Rodan explains that they are very excited to have found the perfect organization with which to partner in order to make the greatest impact—buildOn. 

Founded in 1992, buildOn works to break the cycle of poverty, illiteracy and low expectations through service and education. Across the nation in 62 urban high schools in seven regions, the organization runs intensive afterschool programs that support education, community service and international school-building. Kari Hayden Pendoley—the PFC’s Senior Manager, hired specifically to oversee the work of the growing Foundation—says, “The size and philosophy of the organization mirrors our own allowing us to grow together.”

“With a 92% high school graduation rate, and many going on to college, these students exemplify doing well by doing good,” she says. “To date, Rodan + Fields has supported over 71,411 buildOn program days for students in need.” A buildOn program day is measured by the dollar amount it costs for a student to be part of buildOn for one day. The current rate is $4.


We are motivated by the necessity for our lives to matter, to make a difference in the lives of others in the brief time we are on this planet.”

—Amnon Rodan, Co-Founder and Chairman of Rodan + Fields


Pendoley also emphasizes that the consultants are a very important part of the Foundation’s growth. “Most of our Consultants are natural social influencers, and we want them to be able to incorporate that giving aspect of themselves into their business and be celebrated for it,” she says. According to Pendoley, in the last 18 months, the Foundation has more than doubled efforts across all categories of giving, including staff, grants, donor contributions and monetary donations by Consultants. “The total grants given for 2014,” she says, “including cash and non-cash grants, exceeded $350,000.”

Fundraising in Action

In July 2014, PFC invited consultants to participate in a simple social media fundraising initiative known as Go Naked Day. “For each no-makeup selfie tweeted during that particular day, $1 was donated to buildOn,” says Pendoley. “It was a huge success and $30,000 went to support students traveling to build a school abroad.”

Another outreach event coordinated by the Foundation was what they called a Jobstacle Course. Seventy five high school students from Oakland, California, affiliated with buildOn were treated to a day of learning their way through the obstacle of job hunting. “The students were given an in-depth tour of our headquarters in San Francisco learning about the various positions that exist within a company. We also exposed them to résumé writing and held mock interviews, providing feedback on what to say, how to say it, etc., in order to help them prepare for future job opportunities,” says Pendoley. “The students thoroughly enjoyed it and were extremely appreciative.”

Five buildOn alumni, now in college, were invited to attend the annual Rodan + Fields convention for the purpose of building brand awareness for the partnership while helping the students to gain exposure to the direct selling industry along with the training and excitement that comes with such an event. Their interest was piqued and they wanted to learn more about the industry. “We put them in front of about 100 Consultant leaders. They fielded questions about buildOn and shared the impact buildOn has made in their lives,” says Pendoley. “Since the students were from five different cities, it also showcased the success buildOn has had across the country.”


Rodan + Fields partners with nonprofit organization buildOn, which works with urban high school students to break the cycle of poverty, illiteracy and low expectations through service and education.


At the conference, consultants also filled 800 trendy backpacks filled with supplies to give to high school students as a thank you for joining one of the buildOn programs available throughout the country. “Sometimes students require some extra motivation to attend buildOn programs. Perhaps this is due to a lack of understanding of the benefits of the program or the lure of other things vying for their time that might not be the best choice,” says Pendoley. “We had feedback from buildOn across the country about the great success of the program. We will be looking to do more to support these types of efforts on a larger scale in the future.”

The Prescription for Change Foundation has committed to partner with buildOn. “They have a presence in Canada and Rodan + Fields expanded into that country in February of this year, allowing for a seamless transition into our new market,” says Pendoley. “Education is our global platform, so as our company expands, we will continue to look for like-minded organizations to support this vision in new regions.”

Commitment to education is a priority, and if a consultant has already established a relationship with an education-based charity or discovers one in his or her community, the Foundation has a product donation and check-matching program. “Once a year eligible Consultants can support a charity that fits within the parameters we have established,” says Pendoley. “This also allows Consultants to showcase our mission through their local organizations.”

As an incentive for involvement in their communities, PFC chooses one consultant each year to receive the prestigious Prescription for Change Foundation Award. It shines a light on the work the consultants do to improve their communities and help those in need. Consultants nominate their peers, with each nominee and the award winner recognized on stage at the annual Convention Award Gala, and a donation is made in their name to support students in need.

When Pendoley discusses the many life-changing activities in which the Foundation is involved, she can’t contain her excitement. “I love our new tagline—Believe in More. Empower Change,” she says. “As the company grows, so will our commitment to impact hundreds of thousands of young lives, enabling a better legacy for them while also building one for ourselves.”


“As the company grows, so will our commitment to impact hundreds of thousands of young lives, enabling a better legacy for them while also building one for ourselves.”

—Kari Hayden Pendoley, Senior Manager, Prescription for Change


As the company and the foundation move hand in hand toward the future, Rodan says that their commitment is five-fold:

  • to keep the consultants the No. 1 focus by doing the right thing in every situation the company faces;
  • to never compromise the principles of integrity in business;
  • to educate consultants that Rodan + Fields is not a money-making scheme but a true and honest brand;
  • to make it clear that consultants are invited to join the company in order to improve their lives on every level and not just win a car or trip;
  • and to let everyone know that it is never too late to change one’s life for the better.

“The heart of the brand is giving back, not just to neighboring communities, but also to our own Consultants and employees,” says Rodan. “Our desire has always been to provide education, not just a product, and that education includes whatever we can share that will improve the lives of those around us.”

March 02, 2015

Working Smart

It’s That Time of Year

by William W. Olsen

Do New IBOs Know What to Do with Their 1099?

When a new independent business owner (IBO) gets recruited to a new opportunity, the “business owner” part of the term IBO doesn’t always sink in at first or with the breadth of what that status means to them. Even if they are aware that they are now a business owner, most do nothing about it until they get their first 1099. By then, the tax year is over and it’s too late to take full advantage of the opportunities available to them. 

For some, it’s “old hat” and they know what and how to track for tax purposes. But for most, who are used to receiving a W-2 from an employer, getting involved in their own business is as unfamiliar as going to a foreign country where everyone is speaking a different language. It’s fun and exciting at first because it’s new and different. But soon—very soon for some—they get frustrated in this “foreign” environment and quit before they see any benefit from it. 

Receiving a 1099 from a company is very different than receiving a W-2. We all know how employers withhold FICA, Medicare, Social Security, federal income tax and (if applicable) state income tax. A net paycheck is called “take home pay” because the employer takes out all of the taxes and remits them to the respective government entities on behalf of the employee. However, a 1099 is different. It’s for the full amount received, and many don’t realize the multiple levels of taxes owed, including self-employment tax and income tax. They can no longer rely on the fact that the “employer” took care of the taxes on their behalf; they are forced to take matters into their own hands, or pay more than they should in taxes. 

The good news is that if they are presented with the right training up front, from a positive and proactive perspective, new IBOs can be shown that business ownership has advantages in the form of special tax treatment. The amount of the 1099 income becomes the top line revenue on a Schedule C (filed as part of the Form 1040) from which deductions can be taken. If the net result from a profit-motivated endeavor is a loss to the IBO, that loss can offset other income on their return, including W-2 income and it can reduce their overall tax bill. This can make their “investment” into this new venture a little easier to swallow, until they start making more money.


If they are presented with the right training up front, new IBOs can be shown that business ownership has advantages in the form of special tax treatment.


When success comes and they have a net profit in their business, their tax perspective changes from the tax benefit of the losses to the tax savings from every deduction. Depending on their tax circumstances, most IBOs will save anywhere from 25 cents to 50 cents or more for every dollar of deduction on their Schedule C. Either way, losses or profits, tracking tax deductions should be one of the highest priorities for all IBOs. 

The following are some of the typical concepts or deductions IBOs should be aware of:

Start Date

Determining the business start date is important because of the timing of expenses incurred. Technically, any business-related expenses paid before the official start of the business are considered “startup expenses” and are treated differently. Even though the net effect of these “expenses” will be treated the same as if they happened after the official start date in most cases, having them separated out and having an official “start date” is a good idea and will arm a tax preparer with the correct information.

Automobile Expenses

For tax purposes, a specific vehicle should be established as a “business use” vehicle. At the very least, on the day the business starts the IBO should record the odometer reading of the vehicle and then keep a business mileage log to track each time the vehicle is used for business. Each log entry should have three things: the date, miles driven, and the business purpose. 

Business Use of Home (or Home Office)

The IBO may already be using part of their home as an office or work space. Most of the deductions related to the business use of the home are calculated from documents that are sent to the IBO after the end of the tax year, such as year-end mortgage interest statements, including total payments for insurance, as well as real estate taxes. However, planning to take a deduction for the business use of the home requires some forethought. 

To take this deduction, the Business-Use portion of the home cannot be for casual and occasional business use. IBOs must use that area of their home regularly and exclusively for business. If they have an office at home, or even a place to store business products, the square footage of that area—in relation to the total square footage of the home—is the percentage used for all the home office deductions. Making sure the use of the area is managed properly is the key to being able to take this deduction. 

Cell Phone

If IBOs have a cell phone used for business they can deduct a portion of those expenses. Technically, they write off the portion of business use calculated as the portion of minutes used for business calls vs. minutes used for personal calls. (An experienced tax preparer should be able to offer alternative methods of determining the deductible portion of cell phone expenses.)

Meals and Entertainment

This is a special category of expenses that only qualify for 50 percent of the amount spent. IBOs also should keep in mind that these expenses only qualify if they are entertaining someone for business purposes. When treating a prospect, a client or customer, or an employee to lunch, IBOs should record the name of the person treated and a brief description of the business discussion or business purpose. 

When treating a business prospect to some form of entertainment just before or after an event in which business was conducted, make sure records document who was involved and the business purpose.

Meals for the IBO while traveling for business are deductible but have the same 50 percent limit. 


Once your IBOs are engaged in the “business practice” of consistently tracking deductible expenses and mileage, and in turn reap the rewards of their newfound consistency, their entire mindset will experience a shift.


Travel

When traveling overnight for business and there are more travel days than personal days, IBOs can deduct the cost of transportation as well as other costs associated with their travel. A business day is defined as one in which more than four hours of business is conducted. If the IBO has more business days than personal days, the travel costs to get there and back are considered business days. (This is for domestic travel only. Consult a tax professional for the rules that apply to foreign travel.)

There is a reward for taking a proactive approach and helping your IBOs understand and commit to this important part of their business.

Once your IBOs are engaged in the “business practice” of consistently tracking deductible expenses and mileage, and in turn reap the rewards of their newfound consistency by saving hundreds if not thousands of dollars on their tax bill, their entire mindset will experience a shift. 


To take the deduction for business use of the home, this portion of the home must be used regularly and exclusively for business.


They will move from a perspective of experimentation to one of entrepreneurship. They will see their business as a business rather than a short-term endeavor undertaken to try to earn some extra money. 

Your reward is multiplied. You gain a business owner who is more dedicated to your company’s opportunity and more willing to keep going in months two, three, and four, even if profits haven’t yet surpassed expenses because they understand that the monetary gains in tax savings can be greater than the monthly cost of their autoship. And that IBO will now teach the importance of this “business practice” to his or her organization.

This is where true retention begins. 

Disclaimer: This information is being shared as examples of what to track and is in no way intended to be a complete or comprehensive list of deductions available to business owners, nor is it intended to be tax advice. It is recommended that IBOs consult their tax professional for further clarification of all tax rules and how each applies to their circumstances before filing a tax return.


Willaim W. OlsenWilliam W. Olsen, CPA, CVA, MAFF, is Co-Founder of Deductr, a provider of tax-related software services for businesses. He has been in public accounting for over 20 years.

March 01, 2015

Stock Watch

Stock Watch, March 2015


March 01, 2015

DSA News

Sharpening Our Focus; Securing Your Future

by Gary Huggins


Six months ago, I joined the Direct Selling Education Foundation (DSEF) as Executive Director, pledging to raise our visibility within the direct selling community to reinvigorate our effort to educate external constituencies about the value of the entrepreneurial opportunity associated with direct selling.

As we move forward with this work, it is important to note that our close-knit and collaborative community already understands and appreciates the direct selling business opportunity and how it empowers millions of Americans and many more millions around the world. DSEF’s role must go well beyond preaching to an already-committed choir. 

Our longstanding mission is to engage and educate the public about how direct selling empowers individuals, supports communities and strengthens economies. The key question is better defining which audiences DSEF engages within the general public. Every organization, even nonprofits like ours, must prioritize their stakeholders and target audiences. To be as effective as we can be in carrying out our mission, DSEF must hone in on the constituencies that offer the greatest opportunities to move the needle.

It is essential that the Foundation educate and partner with leaders beyond our industry that can be most effective in correcting and ultimately changing false perceptions about direct selling over time. Compelling academic research, public discussion and education will go a long way in helping us address the lack of understanding, and even misinformation, which continues to cast a shadow over direct selling. Ours is a different role than the Direct Selling Association (DSA), but complements the Association’s critical work to advance industry interests on many other fronts.

We are committed to continuing to cultivate and strengthen the partnerships with academics for which the Foundation is best known. For example, we are creating a new Academic Advisory Council that will collaborate with us to bring consistent attention and thought leadership to key issues as they publish research and articles as well as engage in public commentary to grow the discourse and advance understanding about direct selling, helping our community communicate a positive story.

We will also expand the reach of DSEF partnerships with consumer organizations to touch those at the state level, particularly in states with high concentrations of direct sellers, and pursue new organizations, such as those focused on economic opportunity, women and Hispanic Americans that can help our stakeholders appreciate that direct selling is an entrepreneurial opportunity for all.

The opportunities that this long-term, focused engagement presents are many and include advancing awareness among DSEF stakeholders about what direct selling is and isn’t, as well as demystifying our business model and explaining how it adds value to the entrepreneurial landscape. Income generation potential is only one aspect of direct selling’s value proposition. Factors such as work satisfaction, life balance for families and a compelling business opportunity are important in attracting the millions to join our industry.

In furthering the Foundation’s role in serving the public interest, we will expand efforts to advance knowledge among important constituencies about consumer protection and ethical business practices. One aspect of that work will be to demonstrate how direct sellers are held to the highest standards of ethics as we seek to broaden public understanding about how self-regulatory instruments, including DSA’s own Code of Ethics, protect consumers. 

You will hear from us as we commemorate the Federal Trade Commission’s National Consumer Protection Week (NCPW) this month. The Foundation’s longtime support of this annual event serves as a reminder to the entire direct selling community about the important role that education plays in helping consumers—as well as policymakers and other stakeholders—understand and appreciate our enterprise.  I’m excited by what I see on the horizon and hope you will join with us on this important journey.


Author NameGary Huggins is Executive Director of the Direct Selling Education Foundation. Find out more at DSEF.org.

March 01, 2015

Publisher's Note

On the Move

by Lauren Lawley Head

I’m thrilled to announce that a significant change is coming to Direct Selling News later this year: We’re moving into a fantastic new headquarters building!

The new facility, approximately 20 miles from our current home in Lake Dallas, Texas, will make us neighbors with some of the biggest corporations in North Texas, including Dr Pepper/Snapple, Frito Lay, JC Penney and Toyota. We’ll also be once again back under the same roof as our parent company, SUCCESS Partners, the leading producer of marketing tools, videos and personal development materials in the direct sales industry as well as the publisher of SUCCESS magazine and Success from Home. The company’s warehouse, manufacturing and fulfillment operations will remain at SUCCESS Partners’ Lake Dallas facility. In all, about 150 employees will make the move.

“We are thrilled to be moving into this new world-class home that will better serve us and our partners in the direct sales industry as we continue to expand and build a platform for the future,” said SUCCESS Partners Founder and CEO Stuart Johnson. Johnson hired architectural firm Corgan Associates Inc. to design the renovation of the building and expects the work to be completed in time for a late-summer move. Plans call for an open, inviting atmosphere designed to support creativity and teamwork.

The new building represents a significant moment in the life of the organizations involved. For our parent company, SUCCESS Partners, the move marks a milestone in the company’s growth. When it acquired its current headquarters in 1990, the company had just 13 employees providing communication tools and services for the direct selling space. Nearly 25 years later, that nondescript building on Swisher Road is packed to the gills, housing more than 200 people in warehouse, manufacturing, fulfillment, sales, service and creative operations. In fact, Direct Selling News moved out of that building in June 2011 and into its own office space to make room for more growth at both organizations.

“The new headquarters will be a great reflection of who we are and who we will be in the future,” said SUCCESS Partners Senior Vice President of Strategic Marketing Paul Adams. “It will give us the space and the ability to interact better and collaborate more, and we will be a better organization because of it.”

For DSN, the move signals our commitment to continuing to grow our brand, bringing direct selling executives more news and information that will support your business, and telling the story of direct selling to the world. The new building will give us the space we need to expand and improve our print and digital offerings, and it also will give our staff members more opportunities for collaboration and professional development. Some of our new officemates will be our colleagues at SUCCESS magazine, and I am looking forward to seeing that fantastic team every day. With 80,000 square feet of space spread over two stories, there will be plenty of room for growth all around.

Our parent company, with its visionary leadership and commitment to the direct selling industry, always has enabled Direct Selling News the opportunity to serve the community in a unique manner. Our commitment to journalistic relevance will be even more effective in the new space, as we will be able to add to the tremendous talent we have already attracted. To our advertisers, we will always be grateful for the honor to spread your message, and to the leaders of the direct selling industry, I can only envision a bigger, bolder, more research-focused journalistic resource to serve the future of this most incredible channel of distribution we love to write about.

I’ll share more details as we get closer to moving day. Until then, it’s back to business. In this edition of Direct Selling News, you’ll learn what’s new in the competitive world of sports sponsorships, what happened when one direct selling CEO stood up to Amazon and much more. We’re also making one final call for submissions to the 2015 Global 100 list. If your company has not yet updated its information, or submitted the Revenue Certification Form (RCF) for this important ranking, please visit directsellingnews.com today.

In closing, I’ll leave you with this quote from Rodan + Fields Co-Founder and Chairman Amnon Rodan about the evolution of direct selling and how his company is growing right along with it:

“We looked around and concluded that retail selling is about selling today and yesterday—the numbers we sold yesterday compared to the product that moved off the shelves today. But the way forward is about the combination of offline and online selling, which is social commerce. Taking that thought further, the best way to attain product exposure is through social networking. Combine that with e-commerce and the result is what we call social commerce. It is the way of the future.”

May your future be filled with success,

Lauren Lawley Head
General Manager

March 01, 2015

News in Brief

News in Brief, March 2015

Creative Memories: A Respected Brand Finds a New Home and New Backing

The iconic brand of Creative Memories (CM) has undergone its share of struggles in the past, including two bankruptcies in the last seven years. The second bankruptcy saw the emergence of a new company name—Ahni & Zoe by Creative Memories—which also closed its doors in late summer 2014. That’s when an unexpected twist occurred: Caleb Hayhoe, Chairman of Flowerdale Group Ltd., and previously, Founder and CEO of RT Sourcing, made a decision to buy the Creative Memories Japan business and in North America the Creative Memories® and Ahni & Zoe™ brands, patents, artwork, products and manufacturing equipment—and reopen once again as a direct selling company. Now debt-free and backed financially, CM is ready to carve a new path. 

Hayhoe became involved with Creative Memories in 1997 when the company approached his product design and sourcing company—which then was operating with over 300 employees in Asia—to add to their product line. Hayhoe himself attended many CM events, workshops and even parties, inspired by the passion of the consultants. So when he learned the company was for sale, it was natural for him to consider the purchase. He personally knew many consultants as well as the staff at the home office in St. Cloud, Minnesota, and was convinced that with the right adjustments, the company could once again be successful for consultants and consumers. The new business is operating just around the corner from the old Creative Memories building in St. Cloud. A small, dedicated team of employees, whose average tenure with Creative Memories is 10 to 12 years, has stayed on to work with CM Group Holdings.

DSN staff spoke with Hayhoe about his strategy and vision for the company. 

DSN: What factors led to your decision to reopen as a direct selling company?  

Hayhoe: Among the thousands of decisions involved in a startup, having a direct sales element was never a question. With many tens of thousands of former Consultants who loved the products, mission and the difference the opportunity made in their own families, our leadership team was united in offering a compelling earnings plan. There was also much learning from the past, which included a deep understanding of our audience and their preferences. We wanted to support the former leaders who relied on Creative Memories and/or Ahni & Zoe for a substantial income, as well as those who joined to work occasionally and be part of a warm community. 

Caleb HayhoeCaleb Hayhoe

With our unique hybrid model we put quite a few traditional direct sales sacred cows out to pasture. Like minimums, titles and leadership requirements, to name a few. All Advisors are welcome, valued and equal, with equal earnings opportunities, whether they joined during our November launch in 2014 or join five years from now. We’re just a few months in, and there’s already a group earning more than they had before with many leaping up the levels of the plan. There’s also a whole group who’s happy to work at their own pace and share with friends and family. We’re thrilled to be able to help people share and earn as they choose. 

DSN: Creative Memories underwent two bankruptcies before reopening as Ahni & Zoe, only to close again. What strategies are you putting in place to revive these struggling brands? 

Hayhoe: It’s important to separate the former companies’ financial difficulties from the brands. The Creative Memories® brand has enormous recognition and respect worldwide for its quality products and caring Consultants. Beyond North America, there is also considerable interest in large international markets like Australia and Germany, and the 14-year-old Japan business is thriving.

The Ahni & Zoe™ brand had less time to gain traction, but in its six months of life Consultants were able to reach an entirely new group of busy people who found Fast2Fab albums the ideal way to enjoy beautiful finished albums in no time.

We believe that what CM Group is offering now is the best of both brands, with a flexibility and modern e-commerce platform neither prior company offered. CM Advisors can sell the products they like (most sell both brands) and run their businesses as entrepreneurs. Our strategy is to offer exceptional products, service and a unique earnings plan that allows for some of the most generous profit-sharing in the industry, while maintaining a lean, relentlessly efficient operation.

The new CM annual Advisor Earnings Plan had to pass the “easy to explain, easy to share, easy to earn” test. Basically, Advisors achieve a higher profit rate on the products they sell, and higher commission rate on their downline group sales, based on the sales balance in their own account. Each consultant pays a $49 annual fee to stay in the program. It’s very basic and simple.

DSN: In response to the CM launch, what kind of feedback have you gotten from former Ahni & Zoe representatives? 

Hayhoe: The reaction from former Consultants has exceeded our wildest expectations. Ahni & Zoe Consultants were quick to join, and there’s also been a huge revival of Creative Memories Consultants who missed the products and mission and like the simplicity and flexibility of the new business. With the simple, welcoming plan and freedom to sell one or both lines, they’re able to serve new people who are after fast albums that look good as well as those who love scrapbooking. It’s been great fun hearing from former Consultants who have reactivated their networks and are gathering people for workshops and retreats with a whole new level of energy. 

DSN: Will you utilize online sales apart from direct sales through Advisors? How will the two channels work together? 

Hayhoe: CM’s in the interesting position of having a 30-year legacy brand while also being a startup. We encourage Advisors to cultivate direct relationships with their customers and sell in person or via their personalized link. Our desire to protect that relationship is behind us encouraging Advisors to use one of the many excellent free/cheap, email/contact management systems available, as well as providing an Advisor locator, so long-lost customers can connect with their Advisor of choice. Customers also have the choice to shop and/or sign up directly with CM if they wish. 

DSN: Forever Inc. announced last month that it had acquired the Creative Memories digital catalog. Does CM plan to focus solely on physical scrapbooking products? 

Hayhoe: Currently, yes. As part of the Creative Memories closure in 2014, the software was transferred back to its developers. The latest announcement was the last piece of that deal, which is not connected to CM. Though the digital market is highly commoditized, our team believes there is potential to differentiate and offer something that is uniquely CM. It’s part of our plan to explore in 2015. 

DSN: Is CM looking to expand into additional categories in the near future? 

Hayhoe: Our near future will be focused on continuing to support our CM Advisors, offering exceptional service and quality and rounding out the product line. As a memory-keeping company, there’s potential for all sorts of interesting new directions in the future, though this will be done thoughtfully and carefully. Our focus is on simplicity, maintaining our reputation for exceptional quality, staying true to our Advisor community and mission, and running a lean, profitable, sustainable business.


Herbalife’s $100M Plant Brings Hundreds of Jobs to N.C.

Herbalife is marking a company milestone two years in the making. The global nutrition company recently celebrated the grand opening of its fourth and largest Herbalife Innovation and Manufacturing (HIM) facility. The Winston-Salem, North Carolina, location will produce an estimated 150 million units of made-in-the-U.S.A. product each year.

In 2012, Herbalife announced plans to convert an existing, 800,000-square-foot building in Winston-Salem, an investment of $130 million. The NSF-certified facility came online in 2014 and currently houses approximately 350 employees. That number will top 500 when the site reaches full production capacity later this year.

“The economic impact of this facility will be felt throughout the Winston-Salem area, particularly for the hundreds of talented workers who will contribute to its success,” said Rep. Virginia Foxx (R-N.C.), on hand with other officials and business leaders to celebrate the grand opening. “It gives me great pride to see national companies like Herbalife recognize all North Carolina has to offer, and I believe today’s event is another sign that our best days are ahead of us.”

With a sister site in California and two in China, HIM Winston-Salem is the largest facility ever built by Herbalife. The company will distribute nutrition powders, liquids and teas from the plant to more than 50 countries worldwide. Within its one-mile loop, HIM Winston-Salem also houses Herbalife’s Global Technical Operations Center and a state-of-the-art quality and testing lab.

“This is an incredibly important project for Herbalife as we strengthen our influence throughout our supply chain—from seed to feed—and increase capacity to meet the growing demand for our nutrition products,” said Michael O. Johnson, Herbalife Chairman and CEO.


Amway Boosts Business with XS Energy Acquisition

Industry giant Amway has acquired XS Energy, the brand behind its popular line of nutritious, sugar-free energy drinks. Amway says the move is part of its strategy to connect with young entrepreneurs, who represent a growing number of Amway business owners.

“According to our research, no demographic is more positive about entrepreneurship than those younger than 35, which is the precise target group for the XS brand,” Chairman Steve Van Andel shared in the company’s release. “Bringing Amway and XS together will strengthen our efforts in the years ahead and create more opportunities for aspiring business people.”

Former Amway business owner David Vanderveen co-founded XS Energy in 2001, and Amway became the exclusive distributor of the company’s products in 2003. Available in 38 of Amway’s international markets, XS Energy has now topped $150 million in annual sales. With the help of Vanderveen, who has signed on as Vice President and General Manager for the XS brand, Amway is looking to build upon its success in the $27.5 billion energy drink market.


It Works! Founders Donate $3 Million to Michigan State Athletics

A $3 million gift from It Works! Founders Mark and Cindy Pentecost will fund improvements to the men’s basketball program at Michigan State University. The donation supports MSU’s ongoing Empower Extraordinary campaign, which launched publicly in October 2014. Running through 2018, the campaign aims to raise $1.5 billion for the university. The Pentecosts support Empower Extraordinary alongside more than 30 other leaders and volunteers on the Athletic Director’s Campaign Leadership Council.

Mark Pentecost, It Works! President and CEO, grew up among Spartans fans in MSU’s hometown of East Lansing. As a former basketball coach, he has also witnessed firsthand how athletics can impact an individual’s life. The Pentecosts’ gift will help MSU extend that impact with updates to the men’s basketball offices and practice facilities at its Alfred Berkowitz Basketball Complex. The donation also establishes an endowment for further facility improvements in the future.

“Prior to entering the direct selling industry, I was a teacher and high school basketball coach trying to help kids accomplish their goals. I still feel like I get to be a coach every day, but now on a larger scale with thousands of It Works! team members around the world,” Mark Pentecost told DSN. “Giving back to the student athletes at MSU is something we’ve always wanted to do, and we hope it’ll help them continue to perform at the highest level and reach their dreams.”


USANA Sees Sales Surge in Fourth Quarter

Strong salesforce incentives contributed significantly to USANA’s (USNA—NYSE) positive results for fourth quarter 2014, not only in customer sales but also associate growth. USANA’s revenue was up 22.3 percent at $227.9 million for the quarter, while earnings were $21.3 million, or $1.65 per share, an increase of 17.0 percent, though lower than the Capital IQ Consensus Estimate of $1.92.

Sales incentives introduced in the quarter drove the number of active Associates up 31.7 percent, particularly in the company’s Asia Pacific region, which contributed to a sales surge of 34.1 percent to $163.3 million in the region, compared with $121.8 million for the fourth quarter of the prior year. Net sales also increased by 25.4 percent on a sequential quarter basis.

Full-year results included a profit of $76.6 million, or $5.60 per share, with revenue of $790.5 million, compared with $718.2 million the previous year. Earnings per share for the year increased by 0.7 percent to $5.60, compared with $5.56 in the prior year.


North American Power Terminates Direct Selling Enterprise

North American Power recently brought its direct selling operations to an unexpected halt. In a statement posted to its representative site, the U.S. energy supplier announced the termination of its North American Power and Thrive customer referral programs, although it will continue to operate through its other business channels.

Veteran energy executives Kerry Breitbart and Carey Turnbull founded the Connecticut-based company in 2009, and by 2013 North American Power had reported $256 million in revenue, earning it the No. 47 spot on the DSN Global 100. The company will continue to grow its direct-to-consumer channels, enroll new customers, and serve its existing customer base, North American Power’s Director of Corporate Communications, Chad Klein, told DSN in an email.

“Although we are no longer accepting new enrollments through our referral network, our Independent Representatives will continue to receive residual commissions on customers that have been referred to date,” said Klein. “We are truly grateful for all of our Representatives’ efforts throughout this memorable journey, and wish them the very best of luck in the future.”


UK-based Kleeneze to Join CVSL’s Family of Companies

CVSL Inc. is adding another direct seller to its line-up of brands. The Dallas-based company has signed an agreement to purchase health and household company Kleeneze from Findel PLC of the United Kingdom for $5.5 million.

Upon completion of the acquisition, CVSL will own one of the U.K.’s longest-operating and best-known direct selling businesses, which is also a founding member of the U.K. Direct Selling Association. Established in 1923, Kleeneze originally sold products through catalog. The company now offers household cleaning, health and beauty, home, and outdoor products through a network of more than 7,000 independent representatives in the U.K. and Ireland.

By joining the CVSL family of companies, Kleeneze will retain its own separate brand identity, salesforce and compensation plan but operate under the support of a growing portfolio of companies that include The Longaberger Company, Your Inspiration At Home, Agel Enterprises and Uppercase Living.


Nu Skin Reports 2014 Financial Results

Nu Skin’s (NUS—NYSE) regulatory review last year in Greater China has had a significant impact on the company’s recently posted 2014 fourth-quarter and year-end results. In response to the revenue drop in the company’s largest market to $213 million in Q4 from $482 million in the prior-year period, Nu Skin’s overall profit fell almost 63 percent for the quarter to $46.5 million, or 77 cents per share.

Despite the year-long decline in the region, according to President and CEO Truman Hunt, revenue began to stabilize there earlier in the year and has continued. Results were also negatively impacted by the strengthening of the U.S. dollar bringing revenue down by more than $100 million in 2014, and by $24 million consecutively from the third to the fourth quarter.

Total revenue for the quarter was $609.6 million, at the high end of the company’s guidance, compared to $1.06 billion in the prior-year period, but according to Hunt, the $550 million TR90 launch—the company’s largest product introduction—in the second half of 2013 accounts for the uneven year-over-year comparison. Nu Skin reported profit of $189.2 million, or $3.11 per share, for the year with revenue of $2.57 billion, compared to $3.18 billion the previous year.


Team 4Life Welcomes Olympic Gold Medalist

Australian professional snowboarder Torah Bright, who was a stand-out competitor and medalist in the 2014 Winter Olympics, has joined Team 4Life. Already a fan of the health and wellness company’s products, she will endorse 4Life’s Transfer Factor line.

Bright was a Silver medalist in the Half-pipe competition of the most recent Winter Olympics in Sochi, where she won Australia its first medal of that year’s Games. Adding to the Gold she had won in the same category in the previous Olympics in 2010, Bright became Australia’s most successful Winter Olympics athlete. She’s also won two Gold and two Silver medals for her performance in the Snowboard SuperPipe competition at the Winter X Games in Aspen, Colorado, and in 2013 took first place at the Sprint U.S. Grand Prix at Copper Mountain, Colorado.

Growing up in Cooma, New South Wales, Australia, Bright was first introduced to 4Life products in 2013 through her mother, Marion, who was already a long-time distributor for the company. Team 4Life gains another world-renowned athlete in Bright, who won Bronze in the Women’s Snowboard SuperPipe competition for the 2015 Winter X Games in Aspen in January.


Avon Losses Widen as Quarterly Earnings Drop

An increasingly strong dollar weakened fourth quarter sales at Avon Products Inc., and the beauty company expects to feel continued negative effects in 2015. The global brand projected that 2015 revenue will decline by 12 percentage points due to currency rates. Fourth quarter revenue decreased 12 percent to $2.34 billion; however, Avon reported modest 5 percent growth in constant dollars.

North America continues to pose the greatest challenge for Avon. The New York-based company saw regional sales fall 12 percent in the quarter and 17 percent for the full year. Avon posted global revenue of $8.85 billion for 2014, an 11 percent decrease versus the prior year, or relatively unchanged in constant dollars. The company reported a net loss of $331 million, or 75 cents a share, broadening its $69 million loss in 2013. Excluding one-time costs, operating profit totaled $734 million.

The company also reported declining sales outside the U.S., where it generates 88 percent of its sales. Revenue fell 7 percent in both EMEA (Europe, Middle East & Africa) and Asia Pacific. Latin America, Avon’s most profitable market, posted revenue of $4.24 billion for the year, a 12 percent decrease versus 2013.


Stella & Dot CEO Addresses Inaugural Silicon Valley Conference

Stella & Dot CEO Jessica Herrin joined an impressive lineup of speakers at the first-ever Watermark Silicon Valley Conference for Women. Hillary Rodham Clinton, fashion icon Diane von Furstenberg, and professor and best-selling author Dr. Brené Brown were among the women who delivered keynotes at the event. Also in the lineup was Dr. Gloria Mayfield Banks, an elite executive national sales director with Mary Kay Inc. as well as a motivational speaker and trainer.

Watermark is a community of executive women in the San Francisco Bay Area, home to tech industry hotbed Silicon Valley. For more than two decades, the nonprofit has worked to increase representation of women at executive levels, specifically through connection, development and advocacy programs.

The inaugural conference took place in Santa Clara, California, on Feb. 24. With the theme “Lead On,” the event promoted leadership as well as personal and professional growth. Throughout the day, more than 100 other speakers led discussions and interactive sessions on issues impacting women in the workforce.


Tupperware Closes FY 2014 Beating Q4 Consensus

In the fourth quarter 2014, Tupperware Brands Corp. (TUP—NYSE) beat EPS expectations by 19 cents, with earnings of $1.72 per share. The Orlando, Florida-based direct seller posted a profit of $82.3 million, down 8 percent versus prior year, but excluding the impact of foreign currency rates on the comparison, profit was up 6 percent versus 2013. Though down 5 percent in constant dollars compared to the previous year, net sales for the quarter ended Dec. 27, 2014, were $679.9 million, up 6 percent in local currency. Emerging markets accounted for 64 percent of the company’s fourth quarter sales.

Net sales for the full year were $2.61 billion, down 2 percent from the previous year. Gross margin was $1.72 billion compared to $1.78 billion in 2013. Net income totaled $214.4 million, or $4.20 diluted earnings per share, compared to $274.2 million, or $5.15 earnings per share in 2013.


Rodan + Fields Begins Global Expansion with Canada Launch

In its first step toward global expansion, Rodan + Fields is venturing beyond U.S. borders into Canada. Having outpaced its competitors in 2014 to become the fastest-growing premium skincare company in the U.S., according to a study by Euromonitor International, Rodan + Fields is looking to build momentum with its first market expansion into the rapidly growing Canadian skincare market. The San Francisco-based company has grown to more than $300 million in annual revenue since Dr. Katie Rodan and Dr. Kathy Fields, creators of the popular Proactiv skincare brand, launched the business in 2008.


AdvoCare Partners with MLS in Largest Sponsorship Yet

AdvoCare International is bolstering its sports performance products with the largest endorsement deal in the company’s history. Major League Soccer has selected the North Texas-based brand as its Official Sports Nutrition Partner. Kicking off this year, the partnership will run through the 2019 season.

Last fall, AdvoCare announced that it would extend its FC Dallas jersey sponsorship through 2020. As the league’s Official Sports Nutrition Partner, AdvoCare will have the opportunity to introduce all MLS clubs to its products. AdvoCare Rehydrate, a drink mix that promotes hydration, recovery and electrolyte balance, will be on the sidelines during league games as the Official Sports Drink of Major League Soccer. The company will work with individual clubs to utilize AdvoCare products in league locker rooms and team training.

March 01, 2015

Executive Announcements

Executive Announcements, March 2015


Amway Plucks Asia Pacific CMO to Head up Global Marketing

Su Jung (SJ) BaeSu Jung (SJ) Bae
Candace MatthewsCandace Matthews
Anshu BudhrajaAnshu Budhraja

Amway has selected one of its Asia Pacific executives to   serve as the brand’s new Chief Marketing Officer. South Korea native Su Jung (SJ) Bae is transitioning from the role of Asia Pacific CMO to oversee Amway’s global brand, corporate social responsibility and public relations efforts. Former CMO Candace Matthews moved from the position to serve as Regional President for the Americas, with her focus on enabling success for business owners in this very important region for the company.

Bae’s Amway career began in Korea, where a recent independent survey found that 58 percent of households own at least one Amway product. She came on board at Amway Korea in 1995 to market the company’s Nutrilite supplements.

As Asia Pacific CMO, Bae led the Artistry brand sponsorship of the Busan International Film Festival and helped establish Amway’s Asia Beauty Innovation Center. Her team also worked with local companies to launch new technologies and product ideas across Amway’s global networks. Amway has built a strong presence in the Asia Pacific region, where direct selling is experiencing rapid growth. China, Japan and Korea trailed only the U.S. in 2013 retail sales, according to a World Federation of Direct Selling Associations report.

Heading up Amway’s global marketing efforts, Bae will oversee strategy and execution of category marketing for the company’s nutrition, beauty and home brands. In a statement on Amway’s blog, she expressed her intent to create “an environment where global marketing teams embrace the creative friction and trial and error needed for true innovation.”

In other company news, Amway has named Anshu Budhraja as General Manager, Amway India. Budhraja joined Amway in 1998 and served the company in various capacities across departments, including finance, IT and regional operations, before he was posted as Chief Operating Officer in 2013.


LifeVantage Establishes Office of the President

LifeVantage Corp. announced that President and CEO Douglas Robinson has resigned from the company, ending a tenure that began in 2011. The Salt Lake City-based brand reports that a search is currently underway for Robinson’s successor. In the interim, LifeVantage independent director Dave Manovich will serve as Executive Vice Chairman.

“On behalf of the entire company, I would like to thank Doug Robinson for his leadership and contributions to LifeVantage over the last five years,” said Gary Mauro, Chairman of the Board. “…We wish him the best in his future endeavors.”

Dave ManovichDave Manovich

As part of this change, LifeVantage has established an interim Office of the President to provide seamless leadership continuity and to direct the company’s daily operations. The office comprises Chief Science Officer, Shawn Talbott; Chief Sales Officer, David Phelps; Chief Financial Officer, David Colbert; and Chief Operating Officer, Bob Urban.

Manovich will oversee the Office of the President and manage the strategic and tactical direction of the company’s operations until a new CEO has been appointed.

“We are very pleased Dave Manovich has accepted the position of Executive Vice Chairman, and we believe this change will lead to greater success for our distributors and improved long-term growth for our shareholders,” said Mauro.

Manovich has been an investor in LifeVantage for over a decade and an independent member of LifeVantage’s Board of Directors since January 2012. Currently Managing Partner at private firm DNS Investments, he has filled a string of executive roles at tech companies such as Apple Inc., Fujitsu America Inc. and @Road Inc.


Avon Taps Seasoned Leader as New CFO

Five months after the resignation of its CFO, Avon Products Inc. has announced James S. Scully as the company’s new Executive Vice President and Chief Financial Officer.

Scully brings nine years of experience with specialty retailer J. Crew to lead all finance and IT functions at Avon, beginning no later than April 1. There he will work with leadership on improvements and strategy as the company continues its process of turnaround. Scully’s appointment follows recent changes to Avon’s management structure intended to support this multiyear plan. 

Having most recently led J. Crew’s international expansion efforts for nearly two years as Chief Operating Officer, Scully previously served as the company’s Executive Vice President and CFO as well as Chief Administrative Officer. Before that he had spent time at both Saks Inc. and Bank of America in financial strategy and corporate banking capacities.

“[Jim Scully’s] deep consumer expertise, track record of working in complex environments, and experience developing opportunities in international markets make him the ideal fit for Avon,” said Sheri McCoy, CEO of Avon. “He is a seasoned finance and operational leader with public company CFO experience and will play an integral role in driving sustainable and profitable growth at Avon.”

Avon’s previous CFO, Kimberly Ross, resigned from the beauty company last October to become CFO at oil field services company Baker Hughes Inc.


LuLu Avenue Parent Elects Goldman as Board Chairman


Charles & Colvard, Ltd., parent company of direct seller LuLu Avenue and the sole source of created moissanite, announced that its board of directors has elected Neal Goldman to serve as Executive Chairman of the Board. The announcement follows the decision by George R. Cattermole to step down as Chairman of the Board while remaining a board member. The board unanimously appointed Goldman to lead the company into its next phase of growth.

Neal Goldman became a director with Charles & Colvard in May 2014. His financial expertise and knowledge of the direct-to-consumer market span many years. He has served as President of Goldman Capital Management Inc., an investment advisory firm, since he founded the firm in 1985. Prior to that, Goldman was an analyst and portfolio manager at Shearson/American Express Inc.


Nature’s Sunshine Adds New Board Members

Rebecca Lee SteinfortRebecca Lee Steinfort
Hani Charles SoudahHani Charles Soudah

Rebecca Lee Steinfort has been appointed to the board of directors at natural health and wellness company Nature’s Sunshine Products Inc. Steinfort is a senior executive with extensive experience in strategy and marketing in consumer-product and health-care oriented businesses.

“We are excited to welcome Rebecca Lee Steinfort to our Board of Directors,” said Gregory L. Probert, Nature’s Sunshine’s Chairman and CEO. “Rebecca brings significant strategic and broad marketing experiences to Nature’s Sunshine that I am confident will be highly beneficial in our continuing efforts to transform the business into a multi-brand and multi-channel organization. We look forward to her guidance and strategic thinking as a member of the Board.”

Steinfort is currently the Chief Operating Officer of Paladina Health, a subsidiary of Davita Healthcare Partners Inc. Prior to Paladina Health, she was Chief Marketing Officer and Chief Strategy Officer at Davita Healthcare Partners Inc.

In other company news, Hani Charles Soudah, M.D., Ph.D., of the Washington University School of Medicine in St. Louis has joined the Medical and Scientific Advisory Board. Dr. Soudah is a doctor of internal medicine with a medical practice in St. Louis and is an expert in the field of obesity management. His service on the Advisory Board will include assisting with research activities, educating and training NSP and Synergy Worldwide distributors, and speaking at various company events.

Dr. Soudah currently serves as an Associate Professor of Clinical Medicine in the Department of Internal Medicine for Washington University School of Medicine and is the Visiting Associate Professor at Nanjing University Medical School.


Herbalife Creates Local Government Affairs Role


Marcus Reese has joined Global nutrition company Herbalife in the newly created role of Vice President, State and Local Government Affairs. Having spent more than 16 years in the public policy arena, he will manage the company’s relations with state and local thought leaders.

“Marcus is an important addition to the team as we continue to inform and educate key thought leaders about the positive impact Herbalife is having on communities across the nation,” said Alan Hoffman, Executive Vice President, Global Corporate Affairs. “I am pleased to welcome someone with Marcus’ knowledge and experience to Herbalife, and have no doubt he will have an immediate impact in this important area.”

Most recently Reese has served as Chief of Staff at Tusk Strategies, a public affairs consulting firm, where he managed state and local regulatory issues for corporate clients and issue advocacy organizations including Uber, AT&T and Wal-Mart.

Earlier in his career, Reese worked at global public relations firm Weber Shandwick, and later at crisis management and communications firm Smith & Co. where at both he provided legal and crisis communications counsel for clients. Reese has also served in various campaign and government roles for President George W. Bush; Staten Island District Attorney Dan Donovan; Lt. Governor Michael Steele and the Georgia State Legislature, among others.


Medifast Board Member Becomes an NACD Fellow

Barry B. BondroffBarry B. Bondroff

Medifast Inc., a U.S. manufacturer and provider of clinically proven weight-loss and healthy living products and programs, announced that Barry B. Bondroff, Lead Director on the Medifast Board of Directors, has become a National Association of Corporate Directors (NACD) Fellow. NACD is a membership organization focused on advancing exemplary board leadership, by identifying, interpreting, and providing insights and information to corporate board members.

As an NACD Fellow, Bondroff has demonstrated his knowledge of the leading trends and practices that define exemplary corporate governance today and has committed to developing professional insights through a sophisticated course of ongoing study.

A Director on Medifast’s Board since 2008, Bondroff also serves as a member of Medifast’s Audit Committee, Executive Committee, and Mergers & Acquisitions Committee. With over 40 years of accounting and financial experience, he is an Officer at Gorfine, Schiller and Gardyn P.A. accounting firm. 

“Barry’s leadership and business acumen have helped drive success at Medifast during his board tenure as Lead Director,” said Mike MacDonald, Chairman and CEO of Medifast. “As Medifast works to advance our strategic objectives and deliver strong shareholder returns, Barry provides exemplary guidance and direction.”


Mary Ann Luciano Joins Plexus Worldwide

Mary Ann LucianoMary Ann Luciano

Plexus Worldwide, a direct-marketing weight-loss and health-supplement seller, announced that Mary Ann Luciano will join the company as Vice President of Ambassador Education. In her new role, she will guide the education, recognition, culture and training of more than 200,000 Plexus Ambassadors from across the world and will help build sales training tools and personal development plans to support them as well.

“As Plexus continues its phenomenal growth, we’re very excited to add Mary Ann’s extensive network marketing sales and talent management experience to our team,” said Tarl Robinson, CEO of Plexus Worldwide. “Mary Ann will play a significant role as Plexus Worldwide continues to grow and expand.”

Highlights of Luciano’s previous direct selling experience include executive leadership in market expansion strategy and performance improvement guidance in existing markets, as well as the creation of a recruitment program to identify high potential candidates at leading undergraduate and graduate universities for roles in marketing, finance, and engineering.

Most recently, she led programs for talent management at technology distributor Avnet, in addition to leadership management, executive coaching and succession planning for Itochu International, one of the world’s largest global trading companies.


Submissions: Please submit news of executive promotions and hires at your company to be included in the Executive Announcements section of Direct Selling News.
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March 01, 2015

New Perspectives

The Rise of the Mission-Driven Marketplace

by Brian Knapp

Nearly fifty years ago, a black-and-white television series called Star Trek aired for the first time on TV sets across America. Today, its iconic mission statement still resonates across the world:

“Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.”

Today’s companies have adopted this spirit of exploration as a survival tool. With so many new companies on the horizon, and so much competition, you have to ask yourself: How can my company go where no one has gone before? What problem am I solving that no one else has? What is my mission, and why does it matter? 

In an effort to find a niche and attract more customers, businesses have melded ethical goals into their business strategy—and it’s worked. We walk an extra few blocks to buy fair trade coffee, we seek out shoes that support kids in the developing world, and we select cleaning and beauty products that are the epitome of eco-friendly. There is even a coveted recognition—the B Corps Certification—for companies whose mission is to benefit society as well as their shareholders.

This “doing good” trend is powered by another powerful trend: the rise of the Internet marketplace. Together, companies with a social mission that are powered by e-commerce are reshaping the way we consume goods and services. I believe we are witnessing the dawn of a new type of business: the mission-driven marketplace.

The Evolution of the Mission-driven Marketplace

There are mission-driven companies, and there are marketplaces; but only a small number of companies have actually combined their mission with a consumer-facing marketplace, resulting in a mission-driven marketplace.

I believe this term, “mission-driven marketplace” will become commonplace as we move toward an economy in which businesses give individuals the opportunity to make money in ways that matter to them, and impact their lives in a positive way.

The history of the mission-driven marketplace can be traced to the early days of the Internet, with Craigslist as the most notable example. Craigslist followed a horizontal model, meaning you could find listings for pretty much anything (and I do mean anything). However, the need for more specialized marketplaces became apparent, with sites like Zillow for real estate and Monster for job seekers emerging. These sites focused on one specific area, which led to better content, and more sophisticated, specific functionality.


I believe this term, “mission-driven marketplace” will become commonplace as we move toward an economy in which businesses give individuals the opportunity to make money in ways that matter to them.


More recently we’ve seen the rise of the “sharing economy.” Companies like AirBnB, Thumbtack, Poshmark and Etsy have created online marketplaces that have fundamentally transformed how people view online commerce. These companies have built businesses by creating connections between technology and the physical world. They focus on creating unique transactional experiences, rather than simply selling a service or product. For instance, AirBnB hosts are encouraged to act as tour guides for those staying with them. Etsy has people buying directly from the hands that made the product, while Poshmark has created an easy way for women to find clothes from other women’s closets, reducing consumption of new items. These companies all leverage social features to create a culture of human interaction and trust, and have experienced exponential growth and, in some cases, soaring valuations as a result.

Mission-driven marketplaces are the next step in this evolution. With these businesses, it’s about connecting people, not just the transactions. It’s about experiences—sometimes personally transformational ones—that improve the lives of people on both ends. Clearly, direct selling companies will play a major role in the mission-driven marketplace. Indeed, they always have.

Idealistic? Yes. But so was Gene Roddenberry’s idea for a TV show in the ‘60s that featured a multinational, multiracial cast to crew the U.S.S. Enterprise.


Already companies in the sharing economy leverage social features to create a culture of human interaction and trust, and have experienced exponential growth and, in some cases, soaring valuations as a result.


We are still in the early days of the mission-driven marketplace, but the opportunities are endless. Adoption of green energy is on the rise, and I predict there will be some innovative marketplace models to emerge out of that sector. The healthcare industry is also undergoing seismic changes, and marketplaces are already playing a role in bringing health coverage to millions more people. As mobile devices continue to bring billions of people online, including some of the world’s most marginalized populations, there too will be a wealth of possibilities.

The crew of the Enterprise succeeded because they had a clear, honest mission; it is my belief that companies who are creating mission-driven marketplaces will succeed for the same reason.

Preserving Memories for a New Generation

Legacy Republic is a new marketplace, launched in October 2014 by YesVideo, the largest home movies transfer service worldwide. Legacy Republic is aimed at preserving the 1.5 billion non-digital photo albums and videos deteriorating in basements and closets across the country. Through its team of consultants, Legacy Makers, the company educates friends, family, and community members about the importance of digitizing old media and helps them convert their family photos and videos into digital format. Its goal is to help rescue family photos and videos across America.

Legacy Republic provides the training and tools for Legacy Makers to educate others about the importance of media digitization, while enabling these micro-entrepreneurs to earn a profit in the process. It was a natural growth from YesVideo, enabling people to earn an income and preserve generations of history, and it is the first and only marketplace centered on the preservation of memories.

For 15 years, YesVideo has helped families protect and share generations of memories, and has done so for over 8 million families across the country.


Author NameBrian Knapp is Chief Revenue Officer and General Counsel of YesVideo and Head of Legacy Republic, its direct selling marketplace. Learn more at LegacyRepublic.com.

March 01, 2015

Cover Story

Getting Bang for the Buck in Sports Sponsorships

by Jeremy Gregg

Sports sponsorships have grown over the past few decades from a relatively unknown concept to one of the fastest-growing segments of the marketing industry. In fact, IEG—a global leader in sponsorship solutions with more than 30 years’ experience in the industry—forecasts that 2015 global sponsorship spending will surpass $57.5 billion.

Sports Marketing Fastest Growing

IEG reports that sports marketing is growing faster in North America than almost any other form of brand promotion. According to a January 2015 article from NY Sports Journalism on the just-released 2015 Sponsorship Report from IEG:

“Companies are expected to spend more on marketing and sponsorship deals this year than in the World Cup-Summer Olympics year of 2014. Sponsor spend by North American companies is projected to rise 4% in 2015 versus 2014. And even without such tent pole events as the Olympics, ad spend will grow 3.8% in 2015 driven by double-digit increases in digital spending, which should offset nominal growth for TV and out-of-home and declines in radio and print advertising.”

By contrast, other forms of marketing—including public relations, direct marketing and promotions—are only expected to grow 3.5 percent this year.

Herbalife signed an agreement in 2005 to serve as the official nutrition company of the LA Galaxy, a Major League Soccer (MLS) team based in California, for whom David Beckham famously played. And the company expanded that relationship in 2007 by becoming the official jersey and presenting sponsor. In exchange for cash to the team and products for the players, Herbalife now has its logo front and center on the chests of these globally recognized athletes.

In 2009, Amway announced a 10-year, $40 million naming rights agreement on Orlando, Florida’s brand-new city complex, which is also home to the Orlando Magic professional basketball team. This deal puts the Amway brand in front of millions of NBA fans around the world, in addition to the other types of events hosted at the arena. Clearly, companies are interested in making the sports marketing investment. But why?

The Pros’ Playbook

According to Kirk Wakefield, the author of Team Sports Marketing, there is a distinct difference between people who consider themselves loyal consumers of a product versus fans of a sports team. “Sports marketing is basic psychology,” he says. “We trust those we love; and if a company partners with someone or something that I already love, then I am more likely to trust them as well. Teams with jersey sponsors, for example, are generally very closely aligned with that sponsor, and fans can begin to feel the same way about the sponsor as they do the team.”

Sports marketing allows a brand to instantly tap into this community of consumers already deeply engaged with a complementary brand (i.e. what IEG refers to as the “exploitable commercial property”). For direct sellers, such relationships can be particularly effective ways to:

  • Secure a high level of consistent exposure, often at a lower cost than doing so via traditional advertising;
  • Build visibility among a devoted, and often rabid, fan base;
  • Leverage the aspirational value of this other brand to complement their overall messaging;
  • Most importantly, gain legitimacy and credibility by association with this trusted brand.

Ultimately, of course, what matters in marketing is no different than what matters in sports: delivering results that contribute to the overall success of the team. In the competition for customers, a growing number of direct
sellers are finding that sports sponsorships are part of a winning strategy.


A sports sponsorship recently brought a significant amount of exposure to the direct selling industry itself when AdvoCare announced that it was now the official nutrition sponsor for Major League Soccer (MLS).


Direct Sellers in the Game

In addition to the large companies such as Amway and Herbalife, smaller growing companies are also turning their attention to sport sponsorships. LifeVantage, a Utah-based dietary supplement company, has its name emblazoned on the jersey fronts of the Real Salt Lake Major League Soccer (MLS) team. While Salt Lake is one of the smallest markets in MLS, this particular deal is one of the league’s largest for a specific team, at $30 million over 10 years.

Another sports sponsorship recently brought a significant amount of exposure to the direct selling industry when AdvoCare announced that it was now the official nutrition sponsor for all of Major League Soccer (MLS). Beginning with the 2015 MLS season and extending through the 2019 season, this sponsorship is AdvoCare’s largest sports sponsorship and its first league sponsorship. As part of the agreement, AdvoCare Rehydrate will be the Official Sports Drink of Major League Soccer and will be featured on the sidelines of MLS games. The company first showed interest in MLS in 2012 when it became the first jersey sponsor for FC Dallas, and in 2014 AdvoCare extended that sponsorship through 2020.

AdvoCare also sponsors athletes in football, baseball/softball, basketball, bodybuilding, golf, hockey, lacrosse, motor sports and the Olympics with New Orleans quarterback Drew Brees as its national spokesperson.


“We are opportunistic buyers. If an athlete believes in our products, we want to work with them.”

—Brian McKinley, Vice President of Sports Marketing & Products, Herbalife


Richard Wright, President and CEO of AdvoCare, states: “This is an incredible opportunity to share the AdvoCare vision of physical wellness with dedicated soccer fans across the nation. Soccer is a rapidly growing sport in North America and our partnership with MLS makes perfect sense as we continue to grow together.”

Already AdvoCare’s announcement has created positive ripple effects for other direct sellers. According to Brian McKinley, Vice President of Sports Marketing & Products for Herbalife, “the biggest news in sports marketing is the partnership between AdvoCare and the MLS. This is getting the attention of the overall sports industry; they are more aware of direct selling companies and are getting better at talking to us.”

Herbalife began their sports marketing program 12 years ago by sponsoring a small triathlon in LA. According to McKinley, the program grew to three or four different sponsorships over the next two years. The success of those early ventures spurred additional investment, and today Herbalife invests over $30 million in 250 different sponsorships. The largest investments are in the LA Galaxy, and in Cristiano Ronaldo, a professional soccer player with the Spanish club Real Madrid and the captain of Portugal’s national team.

Amway CenterAmway’s brand is front and center on Orlando, Florida’s city complex, home to the NBA’s Orlando Magic.

For McKinley, who has worked for Herbalife since the beginning of their sports marketing program, these sponsorships present a strong opportunity for addressing the direct selling industry’s greatest marketing challenge.

“On one hand, since most of our revenue goes to distributors, traditional advertising is cost-prohibitive,” he says. “So, we rely on distributors to do most of our promotions. And yet, once you get to the size of Herbalife, the reality is that effectively branding a billion-dollar business can be a challenge without traditional advertising.”

By turning to sports marketing, companies like Herbalife, USANA, Amway, LifeVantage and 4Life have begun to address this challenge while establishing a level of credibility that may not have been possible through traditional advertising. Yet, this success has come with some important lessons learned. Direct sellers who are new to sports marketing may benefit from considering the following insights from these experts.

Why Target Sports Fans?

Kirk Wakefield, the author of Team Sports Marketing, describes how sports marketing seeks to create an “Affinity Transfer” among sports fans. He describes why sports fans are likely to support companies that sponsor their favorite teams and athletes:

A fan of a team, even a losing team, will likely:

  1. Identify with and follow the behavior of the team and individual players on that team, on and off the field;
  2. Purchase licensed merchandise promoting the team;
  3. Donate or pay for permanent seat-licenses (PSLs) in order to buy season tickets;
  4. Travel to see games of that team outside the local market;
  5. Support tax-based initiatives to pay for a new arena or stadium for the team;
  6. Be a supporter of the conference or league in which the team plays;
  7. Devote significant social time attending, watching and discussing the team with others devoted to the same or other teams.

Sports marketing, he explains at www.TeamSportsMarketing.com, seeks to transfer that level of passion to the sponsoring brands.

Mastering the Fundamentals

Sports marketing presents an exciting opportunity, but it is not a guaranteed recipe for success, according to Herbalife’s McKinley. His first piece of advice to companies considering sports marketing is to ensure that these sponsorships are a “core component of an overall marketing strategy,” and not a strategy in themselves.

The experts at IEG agree, determining that sponsorships work best when leveraged with other forms of marketing, particularly digital, social and mobile platforms. According to IEG, this allows sponsorships to become:

“…catalysts in driving interest, engagement and enthusiasm for their partners’ digital, social and mobile platforms through their nearly unparalleled ability to provide relevant content. As more marketers discover the ability to drive positive ROI by integrating digital and sponsorship efforts, the effect should be stronger growth for both segments.”

LA GalaxyThe MLS’s LA Galaxy with Herbalife as its jersey sponsor.

McKinley’s second piece of advice is to adopt very strict requirements for what kinds of properties a company will sponsor. At Herbalife, it all comes down to one core ideal: authenticity. “We are opportunistic buyers,” McKinley states. “If an athlete believes in our products, we want to work with them. If the product does not work for them or their sport, the answer is ‘no’… no matter how big a star they might be.”

For example, Cristiano Ronaldo was initially a user of Herbalife’s products. As someone whom McKinley believes “embodies nutrition at its best,” Ronaldo was a natural fit for being an Herbalife ambassador. After that, it was simply a matter of negotiating the sponsorship like any other business deal.

“Money is certainly a factor, along with what marketing rights you can get. But we treat sponsorships the same as any other part of our business: It’s about the relationship. We have to know who they are, and they have to know who we are,” says McKinley. “We use the LA Galaxy and Cristiano Ronaldo as global partnerships that work more like traditional marketing. But for others, such as an Indian cricket player whom we sponsor, the benefits are more aimed at meeting a regional need.”

The fundamental strategy does not change with the size of the relationship, McKinley continues. “What changes is how we leverage it.”

Zach LoydFC Dallas soccer player Zach Loyd endorses AdvoCare products

A similar approach drives the success of the USANA’s sports marketing efforts, says Dan Macuga, USANA Chief Communications Officer. These efforts began over a decade ago as “a natural partnership between USANA and several Olympic athletes [thanks to] the evolution of health and nutrition in high-profile sports.”

“We evaluate and pursue partnering with high-character individuals that also happen to be some of the most elite athletes in the world. Their dedicated commitment to living a healthy lifestyle and consuming only the highest-quality products truly reflects the same standards we espouse as a brand. These qualities make for a fantastic fit when it comes to being ambassadors that best represent USANA.”

Amway’s primary goal through its sports sponsorship programs is to build brand equity, especially with people under 35 years of age, says Jackie Nickel, Amway’s Chief Marking Officer for the Americas Region. “By associating with a sport that people feel passionate about,” she says, “we are able to engage our business owners and the public in a relevant way. But it doesn’t stop there. We’ve found sports marketing to be a terrific way to begin a conversation and connect with people.”

A Marathon, Not a Sprint

Even with all of the fundamentals in place, sports sponsorships are not a promise for overnight success. Many of the direct selling industry’s strongest sports sponsorship programs took years to develop.

Calvin Jolley has witnessed this first-hand over the past 10 years while working as Vice President of Communications at 4Life. The company launched Team4Life in 2006 and now has 23 athletes involved in the program. ”We have a rather unique model of athletic relationship development; every one of our sponsored athletes originally came to us from the field in one way or another,” he says. “Our athletes were first customers of the product who have some kind of a relationship with a distributor.”

Jolley cites the example of Manny Ramirez from the Denver Broncos. Ramirez first began using the product after his wife, Iris, fell in love with the products and signed up as a distributor. That information came back to Jolley, who then spent time cultivating the relationship with Ramirez.

The only consistent guarantee for 4Life’s sponsored athletes is that the company will put them on autoship for their products. The company then just asks them to do what they do best on the court or on the field.


“That [our sponsored athletes] are mostly product-sponsored is significant—it means these are not fiscal sponsorships. We provide them only with supplements and health products, and our athletes understand the value in that.”

—Dan Macuga, Chief Communications Officer, USANA


Scoring Major Points for Sponsors

Whether it is with one of their globally renowned soccer athletes or one of their more regionally recognized Russian players, Herbalife’s primary focus for its sports sponsorships remains the same: establishing credibility. “People trust Nike, Tylenol and Coke because they invest a half-billion dollars per year building trust. Direct selling companies can’t afford to do that,” McKinley states. He then outlines three critical goals that sponsorships can help direct selling companies to achieve:

  1. Establishing Credibility: Sponsorships are a stamp of approval from the sponsored team/athlete.
  2. Brand Awareness: Sponsorships soften the market for distributors and help them to attract customers.
  3. Tools for Distributors: Sponsorships provide high-impact marketing tools for distributors to build connections with customers (“unlike a 30-second spot on ESPN”).

“We are a person-to-person business with a high emphasis on training and nutrition expertise,” he continues. “These tools are crucial to that messaging.”

McKinley cites the LA Galaxy jersey sponsorship as a prime example of this. Not only are all of the LA Galaxy’s fans being turned into “walking billboards for our product,” but the jerseys are powerful tools to help Herbalife distributors build their own businesses. In fact, when the jerseys first became available, Herbalife’s own distributors purchased more than 60,000 of them. “The jersey says something different than other forms of Herbalife apparel. It is the embodiment of authenticity and credibility. It shows that the LA Galaxy chose us as much as we chose them,” states McKinley.

Verve LoungeVemma’s Verve! Energy Lounge™ at US Airways Center, home of the Suns.

At USANA, Macuga explains that they focus on the nature of their sponsorships to differentiate their sports marketing program. Macuga says that there are currently more than 700 “product-sponsored” Olympic and professional athletes that make up Team USANA. “That they are mostly product-sponsored is significant—it means these are not fiscal sponsorships. We provide them only with supplements and health products, and our athletes understand the value in that. Improving their health and performance is ultimately what the partnership is about.”

Macuga shares that USANA receives requests for product sponsorships every week from athletes all over the world. “Many of these athletes hear about USANA from their teammates or friends who have safely and effectively used our product. Because anti-doping regulations are so stringent, it’s important for athletes to only take supplements they know they can trust.”

“We’ve focused on gaining third-party credibility in every way we can. This makes us stand out,” Macuga explains. USANA then leverages its sports sponsorships to “prove our trustworthiness.”


“The main ROI is credibility from a third-party voice: people without the incentive of a paycheck. How can you place a figure on that? For supplement manufacturers like 4Life, athletes are the best way to do this.”

—Calvin Jolley, Vice President of Communications, 4Life


Maximizing the Investment

IEG reports that the nature of sports sponsorships is also changing. Gone is the transactional model of sponsorship, replaced by the partnership model. “A growing number of sponsors are looking to establish partnerships that create incremental value for both parties through efforts such as developing content, collaborating on activation and creating new products. Because of that, smaller properties that continue to rely on the one-dimensional and transactional model of sponsorship… will remain at a disadvantage.”

Herbalife has found a unique way to leverage their sports sponsorships: The company’s sponsored athletes serve as a combination of R&D team and focus group, representing Herbalife’s most valuable consumers. “Our sponsored athletes try many of our developing products and offer critical feedback,” McKinley shares. Based in large part on these relationships, Herbalife has now launched a sports skincare line that could better leverage their sponsorships. “The LA Galaxy is now one of our biggest skincare users.”

Verve LoungeTeam Herbalife takes on the 2014 Leadville Trail 100 Mountain Bike Race.

Sponsored athletes also play an important role in Herbalife’s training program. From attending major training events to hosting meet-and-greets with top distributors, Herbalife’s sponsored athletes make as much of an impact within the company as they do outside of it. “When world-class athletes are involved, you can just sense it at the events,” McKinley says.

Andy Sutherden, Global Head of the Sports Marketing+Sponsorship practice at Hill+Knowlton Strategies, writes that sports marketing is also blurring the lines between commercial sponsorship and CSR (Corporate Social Responsibility).“Nowadays, the two often unite. Western Union’s exclusive activation of its Europa League sponsorship through an educational cause initiative called PASS is just one case in point. Based on a further insight that 87% of people around the world believe companies should place as much importance on the ‘interest of society’ as on the ‘interest of their business,’ expect a similar pattern in 2015. Clients will place social purpose at the heart of their sponsorship/partnership strategy, and the year will see the maturing of sports’ ‘third sector.’ ”

This blended approach to sponsorships is embraced at 4Life, Jolley explains. He says that the company has found ways to leverage their sponsored athletes to complement their other third-party relationships. This includes industry partnerships as well as the UNPA (United Natural Products Alliance), the U.S. Chamber of Commerce, the Better Business Bureau, and academic associations that offer scientific validation. Integrating 4Life’s sponsorships into all of their work “establishes us as authentic and creates a sense of credibility.”

Examples of Sports Sponsorships by Direct Selling Companies

  • Herbalife – 250+ athletes, such as soccer superstar Cristiano Ronaldo, and teams ranging from baseball and rugby to cycling and soccer, including five-time MLS champions the LA Galaxy.
  • 4Life – 23 athletes on Team 4Life, including Manny Ramirez of the Denver Broncos.
  • USANA – 700+ affiliated athletes, including WTA, U.S. Speedskating Team and U.S. Ski & Snowboard Association.
  • Amway – Sponsor of the Amway Center, home to the NBA’s Orlando Magic, as well as college football’s Amway Coaches’ Poll powered by USA TODAY Sports.
  • AdvoCare – Official Sports Nutrition Sponsor of Major League Soccer and title sponsor of college football’s AdvoCare Texas Bowl, AdvoCare Texas Kickoff and AdvoCare Cowboys Classic. Sponsor of NASCAR’s No. 6 Ford piloted by Trevor Bayne.
  • LifeVantage – Jersey sponsor of Major League Soccer’s Real Salt Lake.
  • LegalShield – A sponsor of the Indianapolis 500 Bryan Herta Autosport and Bowen & Bowers Motorsports team.
  • Vemma – Official energy drink of the Phoenix Suns.
  • MonaVie – 19 endorsing athletes.
  • Shaklee – 53 Athletes on the Shaklee Pure Performance Team.

Determining the ROI

One of the major challenges with a sports marketing program is measuring the specific return on investment. Since the sponsorship creates a multi-faceted relationship, evaluating its true worth is hard to accomplish other than simply looking at the company’s overall progress during the time of the sponsorship. Nickel states that Amway tracks a number of metrics to measure program impacts, including traditional PR impressions and engagements. “But we also look at internal metrics,” she says, “such as how much program content is being used by the business owners.”

Still, measuring ROI, like PR itself, can be a tricky business. This is a frustration that Wakefield describes well in Team Sports Marketing:

Travis JaynerU.S. short track speedskater and bronze medalist Travis Jayner endorses USANA products

“For major sports and entertainment properties, sponsors spend millions of dollars to build brand equity. Yet, IEG tells us that 43% make no effort to determine if goals are met and another 39% spend one percent or less of the sponsorship budget to measure ROI/ROO. That leaves only 18% who might have a clue, or at least are trying to have a clue or two, whether or not the sponsorship investment is paying off. At the same time, sponsors count assistance in measuring ROI/ROO the No. 1 most valuable service that can be provided by properties.”

Jolley argues that, for 4Life, “the main ROI is credibility from a third-party voice: people without the incentive of a paycheck. How can you place a figure on that? What is the value of defending the industry’s trustworthiness and creating a sense of credibility in terms of the business opportunity? For supplement manufacturers like 4Life, athletes are the best way to do this.”

Similarly, Herbalife’s McKinley says that “sponsorships, and the sports industry overall, are not formulaic. It’s not one size fits all… yet in all of our sponsorships, we are focused on authenticity.” However, he states that one of the ways that he determines the success of sponsorships is through social media metrics that demonstrate whether members are actively engaging in the relationship.

“It’s never going to be traditional CPG marketing (Consumer Packaged Goods) in terms of numbers, but we know from the outset if a sponsorship will be successful,” says McKinley. While he does not cite specific numbers to any particular sponsorship, he states that “we’ve seen brand growth in each of the 12 years since launching our sports marketing program.”

Madison KeysMadison Keys of the Women’s Tennis Association is ranked No. 20 in the world. (USANA PHOTO)

Jolley agrees citing that sports marketing has helped 4Life to grow rapidly. “We have doubled in the last five years, from $150 million and No. 71 in the DSN Global 100 in June 2010 to $300 million and No. 41 in June 2014. While they certainly are not the only factor, sponsorships have played an important role in achieving that growth. And in 2015, we are positioned to grow to $320 million to $330 million.”

At Herbalife, there is not a specific part of the budget dedicated to sports sponsorships. McKinley explains that these costs are considered part of the advertising budget, all of which is included as part of the company’s cost of “equipping distributors.”

At USANA, Macuga states that the ROI is seen more from a global branding perspective. The athletes, he says are incredibly popular among the salesforce, providing fun and authentic stories that associates can share on social media. He says, “Our partnerships with these athletes and organizations also allow us to participate in some incredible events, such as the Olympics, and gain on-court/course branding seen by millions, on a global scale.”

For example, during the 2014 Winter Games in Sochi, nearly 200 USANA-sponsored athletes competed and recorded 30 podium appearances—13 gold, seven silver and 10 bronze. Macuga shares that if USANA were a country the company would have taken second place in the medal count right behind Russia.

The LifeVantage deal with the Real Salt Lake team creates high impact exposure as well, as the players appear on the field, and in appearances, including advertising, around the globe. LifeVantage’s name is associated quite intensely with the players and in prominent view on their chests. 


“Once you know what story you want to tell, it’s easy… You find the right athlete or team to help you tell it. The major pitfall is not knowing your story.”

—Brian McKinley


Are Sponsorships the Right Call?

McKinley suggests that there is a simple way to know whether or not launching a sports marketing program is a fit for your company. He says, “Once you know what story you want to tell, it’s easy… . You find the right athlete or team to help you tell it. The major pitfall is not knowing your story.”

Macuga suggests that sports marketing is the best fit for a “product-driven, science-based” company like USANA, since athletes can speak authentically about the quality of products. “They can say that they work, and they feel comfortable taking them. It’s a strong message to stand behind if you’re in direct selling; it makes your job that much easier.”Jolley states that “there is no magic bullet. But these relationships with athletes can play an integral role at establishing credibility with distributors, customers, and the general public.” The key is to anchor the sponsorship in an authentic relationship with the product first. Above all, always be looking for the story—the stories are out there.

March 01, 2015

Exclusive Interviews

Executive Connection with Randall White – Founder, President and CEO, Usborne Books & More


In this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Randall White, Founder, President and CEO of Usborne Books & More, about the difference between management and leadership, making bold decisions and staying true to a company’s vision.

DSN: What is the one thing you enjoy most about being the CEO of Usborne Books & More?

RW: Witnessing our sales consultants’ passion about literacy translate into having a successful business.

DSN: What has been your proudest accomplishment?

RW: Making a bold decision to discontinue selling to outlets that discounted our products and then watching our company respond with record sales.

DSN: What do you tell Usborne Books & More consultants to lead and inspire them?

RW: They can impact our nation’s literacy problem while building a successful business. Also, a message I always attempt to remind them of is that we want them to do this business for their family, not to their family.

DSN: If you could give a single bit of advice to the CEO of a young direct selling company that would help the company reach the 25-year mark, what would you say?

RW: Keep true to your vision and never waiver. And value your salesforce.

DSN: If you could relive one period of time—a year, a week, whatever—since you founded Usborne Books & More, what would it be? You could choose a great time to relive or a period where you’d change something.

RW: In looking back over 25 years, there have been many things I probably would like to have done differently. However, the obstacles and difficulties we overcame molded our philosophy and were instrumental in the success we are experiencing today.

DSN: Is there one basic principle that has governed your leadership at Usborne Books & More?

RW: Know the difference between management and leadership, and communicate. If you don’t believe the messenger, you won’t believe the message.

DSN: What do you see as the direct selling industry’s greatest challenge?

RW: I believe the greatest challenge is that the Internet has the potential to make every product a commodity and eliminate personal selling.

DSN: What’s on your bucket list?

RW: To continue to develop a strong team at the home office so we can maintain continuity and growth.

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

RW: My life revolves around my family and Usborne Books & More. My family understands, so I am never “not at work.” I have been known to communicate with the field salesforce at 3 a.m. because they are the ones who have made this company. However, I do enjoy my summer lake house with the grandchildren making memories.

DSN: What is your long-term vision for Usborne Books & More?

RW: My long-term vision is to continue the current sales growth and reach the milestone of $100 million in annual sales.

February 27, 2015

World News

Oriflame Consolidates Russia Operations in New Production Plant

Oriflame Cosmetics S.A. has completed another step toward streamlining its Russia business with the inauguration of a new production facility in Noginsk. The Swedish beauty and hygiene products group sold its production site in Krasnogorsk to consolidate operations in the turbulent market. The new facility dovetails with Oriflame’s strategy to focus and simplify its business amid geopolitical tensions in Russia and Ukraine.

The $170-million complex, including production facilities, warehousing and a LEED-certified distribution center, enables Oriflame to cut down on lead times and prices in Russia, where it draws a third of its business. The company has scrambled to increase prices in the region, and it anticipates further increases this year as the devaluation of the ruble continues to impact its core business. Oriflame has also retooled its compensation plan and ramped up promotion of its skincare and wellness offerings, particularly the brand’s daily skincare regimen and products sets.

“We continue our ambition of providing the most attractive offer in the markets—both when it comes to our beauty offer and business opportunity offer,” said Johanna Palm, Oriflame’s Senior Director of Investor Relations & Finance Projects, of the company’s strategy in Russia and Ukraine. “The improvements we have made to our compensation plan have definitely strengthened our position in the region, and will constitute a competitive advantage given the current challenges.”

In the quarter ended Dec. 31, 2014, Oriflame’s adjusted operating profit totaled 29.8 million euros ($33.7 million). Adjusted operating margin fell to 8.4 percent from 12.6 percent, slightly above the forecast. For 2014, the company posted net sales of 1.27 billion euros ($1.41 billion), down 10 percent from 2013 and up 1 percent in local currency.

Oriflame is working to counter economic uncertainties by working closely with its consultants and leaders and maintaining a well-managed product portfolio, said Palm. “This, in combination with price increases and administrative and organizational efficiency measures, should help us manage the challenges we see in CIS and Europe while ensuring continued strong momentum in Latin America, Turkey, Africa and Asia.”

February 26, 2015

World News

China Gives Morinda the Green Light on Direct Selling

Morinda Inc. is the latest company to secure a direct selling license from China’s Ministry of Commerce. Government officials have issued just 48 licenses since the country lifted its direct-selling ban in 2005. Morinda plans to market its juice blends and TruAge nutrition products in the city of Chongqing, a hub of over 32 million people, as it awaits additional permits.

“We’ve spent several years and a lot of effort pursuing this license,” said Morinda President John Wadsworth. “This is an expression of our commitment to the future of Morinda.”

China is the industry’s fastest-growing market, accounting for $27.3 billion in 2013 retail sales. In the same year, only eight new companies received approval to launch direct selling operations. The Chinese government’s narrow regulations have posed challenges to many companies within the industry, including Amway, which obtained a new license in 2006 after modifying its business to accommodate the ban.

“The rules in China are still unique,” Amway President Doug DeVos wrote of reinventing Amway China in a piece for the Harvard Business Review. “The way we operate our business and compensate our salesforce there is very different from what we do in other parts of the world. But we’ve learned a lot, and our revised business model is working.”

Since launching in 2003, Morinda’s Chinese subsidiary, Tahitian Noni Beverages (China) Ltd., has established offices in nine cities across the country. The company also opened its own GMP (Good Manufacturing Practice) plant in Chongqing in July 2014.

February 25, 2015

World News

Fortune Ranks Tupperware among World’s Most Admired Companies

Photo: Flickr/PeacockModern


Tupperware Brands has once again landed on Fortune’s annual ranking of the World’s Most Admired Companies. The global brand has now spent eight consecutive years on the list, where it falls under the Home Equipment, Furnishings category.

To compile its report card on corporate reputation, Fortune ranks nine key attributes such as use of corporates assets, social responsibility and long-term investment value. Tupperware ranked highest in its category for global competitiveness, and second for innovation and use of corporate assets. The company markets its kitchenware, beauty and personal-care products through an independent salesforce of 2.9 million in nearly 100 countries.

“The strength of our mission and our people propels us as a company to continue our success,” Rick Goings, Chairman and CEO, said of Tupperware’s work to empower and support women. “Global competitiveness is one of the priorities of the business, along with the other categories the list is derived from, and we are honored to be ranked on the World’s Most Admired Companies list for the eighth year in a row.”

Tupperware’s efforts on behalf of women extend beyond promoting financial independence. As a natural extension of its business model, the brand also aims to impact lives through opportunity, support and relationships—a philosophy embodied in its Chain of Confidence program. Goings and his wife, Susan, Global Ambassador for the program, recently accepted the Sewall-Belmont House & Museum’s Voice for Women Award in recognition of their work. U.N. Women also tapped Goings to represent Tupperware on its Private Sector Leadership Advisory Council, an initiative focused on economic and political advancement for women.

February 20, 2015

U.S. News

President Michael Somoroff Steps down from Longaberger

President Michael Somoroff has exited the Longaberger Co. after six months with the CVSL-owned brand. Longaberger did not elaborate on the decision, nor whether it is looking to fill the position.

“Michael Somoroff is no longer in a management position at The Longaberger Company,” spokesman Russell Mack confirmed to DSN in an email. “The company has a fine team at the Home Office, with Tami Longaberger and a very experienced management group. We also have a wonderful and loyal group of sales field leaders, and we have a strong supporting team at CVSL. So the leadership of Longaberger is in good hands.”

Formerly based in New York, Somoroff is also a photographer and filmmaker whose work has appeared in magazines such as Vogue, Elle and Harper’s Bazaar, and in commercials for Olive Garden and Red Lobster restaurants. He first partnered with Longaberger last April to help the brand reinvent its annual catalog, which now features merchandise alongside stories of the brand and its people in a magazine format, titled Storybook.

The Newark, Ohio-based basketmaker has cycled through seven presidents in the past decade, amid several rounds of layoffs that have reduced the company to a fraction of its former size. Somoroff succeeded Mike Trempe, who left Longaberger last June after a 15-month stint as President and COO. The position had remained vacant in the three years leading up to Trempe’s hire.

Dallas-based CVSL Inc. acquired Longaberger in March 2013, setting in motion its strategy to build a family of micro-enterprise brands. With the addition of U.K.-based Kleeneze this month, CVSL’s growing portfolio now includes eight direct selling companies. For the nine months ended Sept. 30, 2014, the parent company reported revenue of $75.3 million, up 53 percent over the prior year period, and a loss of $15 million.

February 18, 2015

U.S. News

SimplyFun Taps Play Experts for Newly Formed Advisory Council

Educational board game developer SimplyFun Inc. is serious about play, as evidenced by the brand’s newly formed Play Advisory Council. SimplyFun has introduced Professor Emeritus Dr. Toni Linder and play expert Matt Brown as founding members of the council, alongside company President and CEO, Patty Pearcy, and Chairman of the Board, Alan Luce.

A specialist in early childhood development and early childhood special education, Dr. Linder has authored books on transdisciplinary play-based assessment (TPBA) and intervention (TPBI), the method she developed for identifying a child’s strengths and needs through play. While working at the Sewall Child Development Center in Denver, she also developed a corresponding preschool curriculum—Read, Play, and Learn!­­—based upon her research and consultation with teachers, students and specialists.

Brown is an industry veteran and consultant who has worked for companies like Scholastic, LeapFrog, Conteneo and Speck Design. He also sits on the PBS KIDS Next Generation Media Advisory Board. As a consultant, Brown has helped develop educational systems for kids, new leadership approaches for companies, and collaborative cultures within communities and organizations.

The Play Advisory Council formed as a result of SimplyFun’s ongoing partnership with Brown and Linder, who have helped identify key learning and skill elements in the brand’s award-winning games. As members of the council, they will contribute to SimplyFun’s strategic direction and future offerings.

February 17, 2015

U.S. News

Endurance Athlete Endorses Morinda Products

As the youngest person ever to start and finish the seven-day TransRockies Challenge race—at age 16—cross-country cyclist Josh Brown is no stranger to sports performance products. The professional mountain biker has found a favorite in Morinda’s TruAge Rapid Fuel, and will don a Rapid Fuel cycling jersey as the company’s newest spokesperson.

Putting the protein and electrolyte supplement to the test, Brown found that Rapid Fuel enabled him to “train harder, longer.” The product contains a high-quality protein that assists in building lean muscle. Rapid Fuel earned its name from its patent-pending delivery system, developed by university scientists to transport protein more quickly than other means.

“Normally, with the protein and such in any other drink I would feel bloated, get side aches or simply feel sick, but it was as if I was only drinking a pure electrolyte drink,” Brown said of his experience with Rapid Fuel. “I’ve also been able to reduce my intake of solid foods because of the high-quality protein that Rapid Fuel contains.”

Brown, a 23-year-old Utah native, competed in his first mountain bike race at age 9. The Utah State University student has since claimed 11th place out of 98 racers in the USA Cycling Collegiate Nationals, third in the USA Cycling Marathon Nationals, and second in the Pierre’s Hole 50-mile competition, among other notable finishes.

February 16, 2015

U.S. News

Mary Kay Renews Sponsorship of Dating Abuse Helpline

Pictured left to right: Crayton Webb, Vice President Corporate Communications and Corporate Social Responsibility for Mary Kay Inc., and Katie Ray-Jones, CEO for the National Domestic Violence Hotline. (PRNewsFoto/Mary Kay)


At Mary Kay, empowering women is about much more than lipstick and pink Cadillacs. Through its Don’t Look Away initiative, the global cosmetics brand has become a strong advocate for victims of domestic violence, including the one in three teens who experience dating abuse. Following a three-year partnership with text-for-help service loveisrespect, Mary Kay has announced plans to sponsor the helpline for an additional six years.

Break the Cycle and the National Dating Abuse Helpline launched loveisrespect.org as a tool for young people, with extensive information regarding dating abuse, as well as chat, text and phone crisis services. Since Mary Kay signed on as lead sponsor in 2012, the number of communications received over the helpline has increased by 48 percent. In 2014 alone, loveisrespect responded to nearly 56,000 texts, online chats and phone calls from across the nation.

“Mary Kay has long been a leader in working to end dating abuse in our communities, and we are thrilled about the continuation of our partnership,” Katie Ray-Jones, CEO for the National Domestic Violence Hotline, shared in the company’s statement. “This gift will help provide critical resources to teens and young adults and ensure that someone is always available when a young person is ready to reach out for help.”

Mary Kay’s ongoing partnership with loveisrespect will include an additional $1.25 million grant distributed over the next three years. The organizations have also announced plans to continue working with the national headquarters of Alpha Chi Omega, providing healthy relationship education and tools to the sorority’s collegiate chapters nationwide.

February 13, 2015

World News

Mannatech Secures Its 100th Global Patent

This week Mannatech is celebrating a major feat of research and development. The nutrition company has received its 100th patent, issued in Korea for its PhytoMatrix dietary supplement formulation.

While industry giants such as Amway and Mary Kay—with more than 1,100 and 800 patents, respectively—have built up large patent portfolios, Mannatech is an aberration among mid-sized companies both in direct selling and in the nutritional supplement industry. Averaging nearly five patent awards per year, Mannatech has outpaced many larger, older brands.

Mannatech guards its core technology and formulations to keep its products from becoming “mere commodities” in the market, says Dr. Rob Sinnott, CEO and Chief Science Officer. “We believe this approach helps our Associates to build a successful business in major global markets around the world.”

Mannatech’s comprehensive quality assurance program complies with the U.S. Food and Drug Administration’s current Good Manufacturing Practices. Many of the company’s products have also attained third-party certification through NSF International, which imposes rigorous testing and compliance standards. In addition to its PhytoMatrix product, Mannatech has patented technology pertaining to its Ambrotose, Ambrotose AO and GI-ProBalance formulations.

February 12, 2015

U.S. News

Avon Losses Widen as Quarterly Earnings Drop

An increasingly strong dollar weakened fourth quarter sales at Avon Products Inc., and the beauty company expects to feel continued negative effects in 2015. On Thursday the global brand projected that 2015 revenue will decline by 12 percentage points due to currency rates.

Fourth quarter revenue decreased 12 percent to $2.34 billion; however, Avon reported modest 5 percent growth in constant dollars. Quarterly volume fell 3 percent, while the company’s average order increased 9 percent. Active representatives were down 4 percent.

Quarterly sales fell 14 percent in the Beauty category, with a 5 percent increase in constant dollars. Fashion & Home sales fell 13 percent and rose 1 percent in constant dollars.

North America continues to pose the greatest challenge for Avon. The New York-based company saw regional sales fall 12 percent in the quarter and 17 percent for the full year. Avon posted global revenue of $8.85 billion for 2014, an 11 percent decrease versus the prior year, or relatively unchanged in constant dollars. The company reported a net loss of $331 million, or 75 cents a share, broadening its $69 million loss in 2013. Excluding one-time costs, operating profit totaled $734 million.

“While progress against our financial goals in 2014 was slower than I would have liked, I am pleased with the sequential improvements we made in several key markets and categories in the second half of the year,” said CEO Sheri McCoy. “We have stronger management teams across our key markets and better discipline in executing consistently against Avon’s core processes.”

The company also reported declining sales outside the U.S., where it generates 88 percent of its sales. Revenue fell 7 percent in both EMEA (Europe, Middle East & Africa) and Asia Pacific. Latin America, Avon’s most profitable market, posted revenue of $4.24 billion for the year, a 12 percent decrease versus 2013.

The company says that it is working to mitigate the impact of foreign currency rates. In the meantime Avon has announced plans to pull out of Jamaica and other Caribbean islands, the Jamaica Observer reports. A Jan. 29 email from Pablo Muñoz, President of Avon North America, informed distributors that, effective Monday, they will no longer be able to place orders to the company. Avon’s regional managers were not available to provide comment on the contents of the email.

February 11, 2015

U.S. News

Fourth Quarter Results Show Sustained Growth at Primerica

Strong sales of investment and savings products contributed to a solid fourth quarter at Primerica Inc. (PRI—NYSE). This week the financial services provider posted quarterly revenue of $345.4 million, up 9 percent versus the prior-year period.

Fourth quarter earnings were 84 cents per share, narrowly missing the Zacks Investment Research consensus estimate of 85 cents. The company reported record annual sales of its investment and savings offerings, which increased 14 percent in the fourth quarter to close out the year at $5.68 billion. The quarter also yielded a 13 percent increase in new representatives, primarily due to improved incentive programs and messaging.

The Duluth, Georgia-based company logged another year of growth in 2014, generating revenue of $1.34 billion, a 9 percent year-over-year increase. Net income totaled $182.8 million. Primerica attributes the strong performance to growth in its Term Life net premiums as well as the aforementioned investment and savings category.

“Our full year 2014 results were marked by solid performance across segments including 11 percent growth in Term Life net premiums, 9 percent growth in ISP sales and an 8 percent increase in ending client asset values, while the size of the life insurance licensed sales force grew 3 percent,” said Rick Williams, Chairman of the Board and Co-CEO. “John Addison and I believe the positive 2014 results make this the perfect time for a leadership transition and are confident that [incoming CEO] Glenn Williams will take the company to the next level.”

Primerica’s board of directors has also announced an increased quarterly dividend of 16 cents per share for the fourth quarter of 2014. The company will pay out the dividend on March 16, 2015 to stockholders of record as of Feb. 20, 2015.

February 11, 2015

U.S. News

USANA Sees Sales Surge in Fourth Quarter

Strong salesforce incentives proved to be a significant contributor to USANA’s (USNA—NYSE) positive results for fourth quarter 2014, not only in customer sales but also associate growth. USANA’s revenue was up 22.3 percent at $227.9 million for the quarter, while earnings were $21.3 million, or $1.65 per share, an increase of 17.0 percent, though lower than the Capital IQ Consensus Estimate of $1.92.

Sales incentives introduced in the quarter drove the number of active Associates up 31.7 percent, particularly in the company’s Asia Pacific region, which contributed to a sales surge of 34.1 percent to $163.3 million in the region, compared with $121.8 million for the fourth quarter of the prior year. Net sales also increased by 25.4 percent on a sequential quarter basis.

Full-year results included a profit of $76.6 million, or $5.60 per share, with revenue of $790.5 million, compared with $718.2 million the previous year.

Net earnings for 2014 decreased by 3.0 percent to $76.6 million, compared with $79.0 million in 2013, due primarily to the pricing and compensation plan changes implemented during the third quarter of 2013. Earnings per share for the year increased by 0.7 percent to $5.60, compared with $5.56 in the prior year.

“2014 was another exceptional year for USANA,” said Kevin Guest, USANA’s President. “Our vision as a Company continues to center on improving the overall health and nutrition of individuals and families around the world through our world-class product offering. To further this vision in 2015, we will continue to execute our overall strategy, which focuses on promoting customer loyalty, enjoyment and success with USANA.”

USANA’s full-year outlook for 2015 includes revenue in the range of $850 million to $870 million and earnings between $6.40 to $6.70 per share.

February 10, 2015

World News

4Life India Moves into New Mumbai Headquarters

Pictured: 4Life India leaders light a traditional Indian lamp to inaugurate the new office.


4Life recently celebrated a milestone in India, where the company hosted employees and top leaders at the grand opening of its new office in Mumbai. The facility will serve as the new headquarters of 4Life India, which has operated from Mumbai, the capital city of the state of Maharashtra, since the market’s launch in 2008.

The Salt Lake City-based company has also announced an expansion of its Surabaya, Indonesia office. Like most direct selling companies, 4Life designs its offices with the independent distributor in mind. The Mumbai headquarters features meeting rooms for distributor training, a sales counter, and large office space for operations, marketing and distributor services.

“Our office includes a beautiful distributor area with ample space for distributors to interact with their prospects and share the message of 4Life,” said Manoj Shirodkar, 4Life India General Manager. “The look of the office is full of positive energy and represents the 4Life philosophy of Together, Building People.”

India is one of direct selling’s billion dollar markets, and while the regulatory atmosphere has posed challenges to many companies, industry sales show no signs of slowing. Retail sales topped $1.2 billion in 2013, an 11.7 percent increase over the prior year. India ranked sixth—behind China, Argentina, Venezuela, Indonesia and the Philippines—in terms of sales percentage growth.

February 09, 2015

World News

Rodan + Fields Enters Canada’s Growing Skincare Market

After seven years of business, Rodan + Fields is venturing beyond U.S. borders into Canada. The brand outpaced its competitors in 2014 to become the fastest-growing premium skincare company in the U.S., according to a study by Euromonitor International. Rodan + Fields is looking to build momentum with its first market expansion into the rapidly growing Canadian skincare market.

Rodan + Fields has grown to more than $300 million in annual revenue since Dr. Katie Rodan and Dr. Kathy Fields, creators of the popular Proactiv skincare brand, launched the company in 2008. The company’s targeted skincare regimens have driven high double-digit compound annual growth.

The Canadian launch is the first step toward further global expansion for Rodan + Fields, says President and CEO Lori Bush. “Our Canadian initiative not only addresses the demand for our products from our neighbors to the north, it validates the foundational infrastructure that will enable us to effectively extend our business model beyond North American borders.”

Rodan + Fields Canada is offering select skincare regimens, as well as its REDEFINE AMP MD and Macro Exfoliator tools, featuring the brand’s patent-pending technology. The company’s formulations, specifically designed to treat sun damaged and aging skin, target a growing segment of Canadian consumers. Euromonitor International reports that in 2012 sales of anti-aging products increased by 9 percent, faster than any other segment of the country’s skincare market.

 

February 06, 2015

U.S. News

UK-based Kleeneze to Join CVSL’s Family of Companies

CVSL Inc. is adding another direct seller to its line-up of brands. The Dallas-based company has signed an agreement to purchase health and household company Kleeneze from Findel PLC of the United Kingdom for $5.5 million.

Upon completion of the acquisition, CVSL will own one of the U.K.’s longest-operating and best-known direct selling businesses, which is also a founding member of the U.K. Direct Selling Association. Established in 1923, Kleeneze originally sold products through catalog, and now it offers household cleaning, health and beauty, home, and outdoor products through a network of more than 7,000 independent representatives in the U.K. and Ireland.

“Kleeneze has an extensive product line, a nearly century-long heritage, a well-known brand and a robust presence throughout the U.K. We believe Kleeneze will be an outstanding addition to our CVSL family of companies,” said John Rochon Jr., CVSL’s Vice Chairman and head of its investment committee. “Kleeneze gives CVSL a very significant presence in the U.K. and represents an important step forward in CVSL’s international expansion.”

By joining the CVSL family of companies, Kleeneze will retain its own separate brand identity, salesforce and compensation plan but operate under the support of a growing portfolio of companies that include The Longaberger Company, Your Inspiration At Home, Agel Enterprises and Uppercase Living.

“Becoming part of the CVSL family of companies will open an important and exciting new chapter in the long, distinguished history of Kleeneze,” said Lisa Burke, Managing Director of Kleeneze. “This will allow us to be part of a global, public company, while at the same time maintaining our own unique identity. We view this as the best of all worlds.”

Closing of the agreement is anticipated by the end of First Quarter 2015.

February 06, 2015

U.S. News

Financial Results a Mixed Bag for Nu Skin

Nu Skin’s (NUS—NYSE) regulatory review earlier this year in Greater China has had a significant impact on the company’s 2014 fourth-quarter and year-end results that posted Thursday. In response to the revenue drop in the company’s largest market to $213 million in Q4 from $482 million in the prior-year period, Nu Skin’s overall profit fell almost 63 percent for the quarter to $46.5 million, or 77 cents per share.

Despite the year-long decline in the region, according to President and CEO Truman Hunt, revenue began to stabilize there earlier in the year and has continued. Results were also negatively impacted by the strengthening of the U.S. dollar bringing revenue down by more than $100 million in 2014, and by $24 million consecutively from the third to the fourth quarter.

“Our business performed as we expected for the quarter, and we look forward to a solid 2015,” said Hunt. “…Despite the 2014 revenue decline, our three-year compounded annual revenue growth rate was 14 percent, reflecting longer-term business improvement.”

Total revenue for the quarter was $609.6 million, at the high end of the company’s guidance, compared to $1.06 billion in the prior-year period, but Hunt references the $550 million TR90 launch, the company’s largest product introduction, in the second half of 2013 for the uneven year-over-year comparison.

Nu Skin reported profit of $189.2 million, or $3.11 per share, for the year with revenue of $2.57 billion, compared to $3.18 billion the previous year.

The company’s outlook includes revenue in the range of $530 million to $550 million for the quarter, and full-year earnings of $3.80 to $4.00 per share, with revenue ranging from $2.5 billion to $2.56 billion.

The company announced an increase of its the quarterly cash dividend to 35 cents from the previous dividend of 34.5 cents per share, payable on March 18, 2015.

February 05, 2015

U.S. News

LifeVantage’s Flat Sales a Contributor to Management Change

Lagging sales in Japan continue to handicap quarterly results for LifeVantage. On Wednesday the wellness company reported second quarter revenue of $48 million, down 8 percent over the prior year period. Outside the Japan market, LifeVantage saw a 1.6 increase over 2013 revenue.

The report comes two days after the resignation of LifeVantage President and CEO Doug Robinson, who led the company for nearly four years. Independent director Dave Manovich will lead the company as Executive Vice Chairman until the board names Robinson’s successor. Manovich, currently Managing Partner at private firm DNS Investments, has filled a string of executive roles at tech companies such as Apple Inc., Fujitsu America Inc. and @Road Inc.

“The board believes this change in our management is necessary as our growth has reached a plateau,” Gary Mauro, Chairman of the Board, told investors during the company’s earnings call. ”The company is not progressing in line with our business model of a growth-oriented, science-based network marketing company.”

In 2014, LifeVantage diversified its business with the AXIO line of healthy energy drinks and TrueScience skincare products. The company is looking to build momentum around its newest offerings, while also doubling down on its efforts to revive sales in Japan. LifeVantage has brought on both a Managing Director and Vice President of Marketing and Sales in Japan to strengthen the country’s executive leadership team.

February 05, 2015

World News

Amway Plucks Asia Pacific CMO to Head up Global Marketing

Amway has selected one of its Asia Pacific executives to serve as the brand’s new Chief Marketing Officer. South Korea native Su Jung (SJ) Bae is transitioning from the role of Asia Pacific CMO to oversee Amway’s global brand, corporate social responsibility and public relations efforts. Former CMO Candace Matthews vacated the position to serve as Amway’s Regional President for the Americas.

Bae’s Amway career began in Korea, where a recent independent survey found that 58 percent of households own at least one Amway product. She came on board at Amway Korea in 1995 to market the company’s Nutrilite supplements.

As Asia Pacific CMO, Bae led the Artistry brand sponsorship of the Busan International Film Festival and helped establish Amway’s Asia Beauty Innovation Center. Her team also worked with local companies to launch new technologies and product ideas across Amway’s global networks. Amway has built a strong presence in the Asia Pacific region, where direct selling is experiencing rapid growth. China, Japan and Korea trailed only the U.S. in 2013 retail sales, according to a World Federation of Direct Selling Associations report.

Heading up Amway’s global marketing efforts, Bae will oversee strategy and execution of category marketing for the company’s nutrition, beauty and home brands. In a statement on Amway’s blog, she expressed her intent to create “an environment where global marketing teams embrace the creative friction and trial and error needed for true innovation.”

In other company news, Amway announced Wednesday that 2014 sales dipped to $10.8 billion, down 8 percent from the company’s record in 2013. Though it does not release sales figures by country, Amway cited foreign currency fluctuations and lower revenue in China. The company noted strong growth in neighboring South Korea and Taiwan, as well as several of its South American markets.

“Looking ahead to 2015 and beyond, we are optimistic and feel we are well positioned for growth,” Amway President Doug DeVos shared in a statement. “We will be opening five new manufacturing facilities and many new Amway Experience Centers to support our ABOs, and improving virtual experiences online. Additionally, attitudes toward, and interest in, entrepreneurship remain at all-time highs.”

February 04, 2015

U.S. News

Direct Selling News, SUCCESS Partners Plan Headquarters Move

Direct Selling News will move into a new headquarters later this year, shifting from its long-time home in Lake Dallas about 20 miles east to Plano, Texas.

The move will put DSN back under the same roof as its parent company, SUCCESS Partners, the leading producer of marketing tools, videos and personal development materials in the direct sales industry as well as the publisher of SUCCESS magazine and Success from Home. The company’s warehouse, manufacturing and fulfillment operations will remain at SUCCESS Partners’ Lake Dallas facility. In all, about 150 employees will make the move.

“We are thrilled to be moving into this new world-class home that will better serve us and our partners in the direct sales industry as we continue to expand and build a platform for the future,” said SUCCESS Partners Founder and CEO Stuart Johnson.

In January, SUCCESS Partners purchased a two-story, 80,000-square-foot building along a portion of the Dallas North Tollway that is home to such notable corporate offices as Dr Pepper/Snapple, Frito Lay, JC Penney, FedEx, Toyota, Hewlett-Packard, Intuit and USAA. Architectural firm Corgan Associates Inc. is designing the renovation, with work expected to be completed in time for a late-summer move. Plans call for an open, inviting atmosphere designed to support creativity and teamwork.

“As Direct Selling News moves into its second decade, the new facility will provide tremendous support for continued print and digital expansion,” said DSN General Manager Lauren Lawley Head. “This is an exciting opportunity to foster the growth of both the publication and of each of our valuable team members.”

SUCCESS Partners also sees the building and location as the perfect home for fostering its growth in the digital technology space while maintaining its roots in the physical creative and publishing world. “Our facility, vision and upcoming refurbishment activities will allow us to provide a highly collaborative, productive and healthy work environment for our team of professionals,” said COO Mark Layton. “This will give us a much-improved location and facility foundation to compete for the talented professionals we need to support our exciting growth plans.”

 

February 03, 2015

U.S. News

President and CEO Doug Robinson Exits LifeVantage, No Successor Named

LifeVantage Corp. announced Monday that President and CEO Douglas Robinson has resigned from the company, ending a tenure that began in 2011. The Salt Lake City-based brand reports that a search is currently underway for Robinson’s successor. In the interim, LifeVantage independent director Dave Manovich will serve as Executive Vice Chairman.

“On behalf of the entire company, I would like to thank Doug Robinson for his leadership and contributions to LifeVantage over the last five years,” said Gary Mauro, Chairman of the Board. “We appreciate his hard work and dedication to growing our company’s footprint, ensuring our transition from retail to network marketing, positioning our distributors for the next phase of growth and strengthening our product line. We wish him the best in his future endeavors.”

The announcement follows a period of steady growth for the company. For its fiscal year ended Sept. 10, 2014, LifeVantage reported revenue of $214.0 million, up 2.8 percent over the prior year. In the Americas, sales increased 6.1 percent over 2013. LifeVantage operates in seven countries, with Asia Pacific generating its strongest business outside the U.S. In December, the company completed a new Hong Kong office to support its growth in the region. LifeVantage will announce its second quarter results on Wednesday.

LifeVantage has established an interim Office of the President to direct the company’s daily operations. The office comprises Chief Science Officer, Shawn Talbott; Chief Sales Officer, David Phelps; Chief Financial Officer, David Colbert; and Chief Operating Officer, Bob Urban.

February 03, 2015

U.S. News

It Works! Founders Donate $3 Million to Michigan State Athletics

Photo: An artist’s rendering of planned updates to MSU’s Alfred Berkowitz Basketball Complex.


It Works! may have relocated its corporate headquarters from Michigan to Florida, but Founders Mark and Cindy Pentecost are still Spartans fans. Michigan State University has announced that a $3 million gift from the couple will fund improvements to its men’s basketball program.

The donation contributes to MSU’s ongoing Empower Extraordinary campaign, which launched publicly in October 2014. Set to conclude in 2018, the campaign aims to raise $1.5 billion for the university. The Pentecosts support Empower Extraordinary alongside more than 30 other leaders and volunteers on the Athletic Director’s Campaign Leadership Council.

Mark Pentecost, It Works! President and CEO, grew up among Spartans fans in MSU’s hometown of East Lansing. As a former basketball coach, he has also witnessed firsthand how athletics can impact an individual’s life. The Pentecosts’ gift will help MSU extend that impact with updates to the men’s basketball offices and practice facilities at its Alfred Berkowitz Basketball Complex. The donation also establishes an endowment for further facility improvements in the future.

“Prior to entering the direct selling industry, I was a teacher and high school basketball coach trying to help kids accomplish their goals. I still feel like I get to be a coach every day, but now on a larger scale with thousands of It Works! team members around the world,” Mark Pentecost told DSN. “Giving back to the student athletes at MSU is something we’ve always wanted to do, and we hope it’ll help them continue to perform at the highest level and reach their dreams.”

February 02, 2015

Exclusive Interviews

Executive Connection with Erik Johnson, Chairman and CEO, Hy Cite


Erik JohnsonIn this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming speaks with Erik Johnson, Chairman and CEO of Hy Cite, about leading his company as the second generation, recognizing people as his greatest asset and welcoming change.

DSN: What is the one thing you enjoy most about being the CEO of Hy Cite?

EJ: The wonderful relationships I have been able to develop with our distributors.

DSN: What has been your proudest accomplishment?

EJ: Taking over a family-run business and successfully moving that business forward as a second- generation family leader. Often the second generation doesn’t succeed. It doesn’t have the same view, knowledge, or respect for the business, and the statistics for their success aren’t very good. My brother also works in Hy Cite, and we are very proud of continuing the family’s success.

DSN: What do you tell Hy Cite/Royal Prestige distributors to lead and inspire them?

EJ: The main thing we talk about is that they have a real business opportunity to change their family’s and their children’s lifestyles. Success is in their hands. If they want it, their work effort and knowledge will bring them success. Their future depends on their motivation and their work ethic. They can be as successful as they want to be with Royal Prestige.

DSN: If you could give a single bit of advice to the CEO of a young direct selling company that would help the company reach the 55-year mark, what would you say?

EJ: Invest in your people, both within the company and in the field. Your people are your greatest asset.

DSN: If you could relive one period of time—a year, a week, whatever—since you’ve been working full time at Hy Cite, what would it be? You could choose a great time to relive or a period where you’d change something.

EJ: I would relive the years right after my father’s retirement. They were wonderful times of acceptance and success. Those early years working with the mature markets and starting up in Mexico as a new territory—those were great years. I like change and new things. I had a blank canvas. It was a great time in my life.

DSN: Is there one basic principle that has governed your leadership at Hy Cite?

EJ: Your distributors’ successes are your success. When they fail we all fail. Once distributors are with us three or four years, they don’t leave.

DSN: What do you see as the direct selling industry’s greatest challenge?

EJ: Attracting the new generation of direct sellers. Our challenge is always recruiting new talent to continue our growth.

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

EJ: At home with my family. I’m very focused on work and family. Both of them bring me great joy.

DSN: What is your long-term vision for Hy Cite?

EJ: We have a vision to reach $500 million in retail business.

February 01, 2015

Executive Announcements

Executive Announcements, February 2015


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


Primerica Leadership Shifts to Next Generation

Glenn Williams, currently Primerica’s President, was recently named the company’s new CEO as part of Primerica’s management succession plan. With this appointment, Williams will take on the role at this time split between Co-CEOs Rick Williams and John Addison.

With Williams’ promotion, effective April 2015, the longtime Primerica leaders will remain members of the board, holding non-executive positions.

DSN spoke with Glenn Williams and John Addison to discuss the succession process, the legacy of the company and its future.

John Addison

DSN: How did company leadership choose Glenn Williams as successor?

Addison: Glenn has served as Rick’s and my “right-hand man” for the past 15 years, and served as President for 10 of those years. He grew up in our company and understands our business as well as anyone I can think of. Over the years, we have developed a unique culture at Primerica, and one key aspect of that is developing the next generation of strong leaders across the company. I’ve often said that there’s no success without successors, and Glenn’s career path demonstrates that our program works. Glenn has all of the skills necessary to be successful as our next CEO: great leadership ability, impeccable integrity, and he knows and loves Primerica. He’s the ideal leader to take over at this point in our company’s history.

John AddisonJohn Addison
Rick WilliamsRick Williams
Glenn WilliamsGlenn Williams

DSN: What kind of legacy do you feel you will leave behind?

Addison: Without a doubt, the thing I’m most proud of is how we responded when the country’s recent financial crisis occurred. At that time, Primerica was a part of Citigroup, which was at the epicenter of the crisis. By fighting for our business and fighting for the thousands of family businesses that comprise Primerica, we were able to separate our company from Citi in a healthy, positive way. As a result, we’re able to give thousands of entrepreneurs the chance to build a “company within a company,” and create a business that will last for generations and make a tremendous impact on the lives of people throughout North America.

Glenn Williams

DSN: What are your goals as CEO?

Williams: I’m fortunate to take over the reins when the company’s in outstanding condition. The strategic direction set by John and Rick has positioned us for continued growth, and we’re riding a strong wave of momentum right now. My goal is for us to capitalize on that momentum and accelerate our success.

There are several ways we will accelerate the pace of positive change. Most importantly, we can continue to enhance the Primerica opportunity for our representatives by continuing to improve our incentive programs and improve our salesforce’s cash flow. We can accelerate our success by enhancing our award-winning technological offerings, which enable our representatives to be more effective in growing their businesses and serving their clients. And, we’re going to focus more of our attention on the millennial market. From the research I’ve seen, most millennials haven’t chosen their financial services provider—Primerica can and should fill that role.

DSN: What have John Addison and Rick Williams done to set Primerica up for success?

Williams: For the past 15 years, Primerica has had two of the best business leaders I’ve ever known running this company. In fact, they’re the longest-serving CEOs in our company’s history. John and Rick realized long ago that our company would be successful if we focused on distribution and increasing the size of our salesforce. They’re also responsible for our successful IPO, which was one of the top IPOs of 2010. This critical change allowed us to control our own destiny and has set our company on a growth trajectory.

DSN: How have they inspired you?

Williams: I’ve worked with both John and Rick for more than 30 years, including the past decade in my capacity as President. It would be an understatement to say that they are both role models for me—it goes way beyond that. I received a phenomenal business education from working with John and Rick, but I also developed strong friendships with both of them. They are men of great character and integrity, and they both have served as shining examples of how to conduct themselves professionally and personally. They’re great leaders, but also great people, and working closely with them has been a highlight of my career.


Jeff BellJeff Bell
Kathy PinsonKathy Pinson
Don WestDon West
Keri NorrisKeri Norris
Darnell SelfDarnell Self
Steve WilliamsonSteve Williamson

LegalShield Creates New Office of the Chief Executive

» In his first six months at LegalShield, CEO Jeff Bell has restructured the company’s top leadership and created an Office of the Chief Executive (OCE) to streamline communication between key areas of the business. The legal services provider is gearing up for future growth, particularly with enhanced digital support of its sales associates and clients.

The OCE comprises LegalShield’s new COO, Kathy Pinson; CFO Steve Williamson; Don West, Vice President of Human Resources and Leadership Development, and two newly created roles: Executive Vice President of Network and Business Development, Darnell Self; and Vice President of Regulatory Compliance and General Counsel, Keri Norris.

“These changes are made in an effort to better support LegalShield’s present and future growth strategies,” said Bell. “…Our management structure is cleaner, and it brings more clarity on accountability and authority for us to do what we need to do.”


Global Growth Encourages 4Life Promotions for 2015

Manny CastilloManny Castillo
Deborah DixonDeborah Dixon
Teressa StreetTeressa Street
Rick EastmanRick Eastman
Jenny BeanJenny Bean
Dr. David VollmerDr. David Vollmer

4Life Research has announced that Manny Castillo has been named General Manager of Peru, which opened as 4Life’s 16th international office in 2009. In this new role he will support the business growth of the company’s network of distributors and contribute to 4Life’s strategic growth plan for 2015 and into the future.

Originally from Trujillo, Peru, Castillo joined the marketing department of 4Life Research in 2009 as an international marketing manager. In 2011, he took a role in the international department as a market coordinator for the countries of Ecuador, Colombia, Brazil and Peru.

In the corporate office, new vice presidents include Deborah Dixon as Vice President of Field Development for Spanish Markets, Teressa Street as Vice President of Quality Assurance, and David Vollmer, Ph.D., as Vice President of Analytical and Quality Services.

Dixon’s new responsibilities include collaborating with Spanish-speaking distributors to develop relationships and achieve business objectives in the U.S., the Caribbean, Europe, South America, and Central America. Street will oversee the strategic development and tactical implementation of 4Life’s quality systems. Dr. Vollmer’s team will ensure that all quality testing at 4Life complies with worldwide regulatory requirements for dietary supplements, nutritionals and cosmetics. 

In addition, new 4Life directors include Jenny Bean as Director of International, and Rick Eastman as Director of Technical Support. Bean will provide operational direction to support Chinese-speaking distributors through the company’s Hong Kong and Taiwan offices. Whereas, Eastman will oversee operational support for technical assistance to 4Life’s global headquarters as well worldwide international offices in 24 countries.


New foru President Targets Growth

Sharon Morgan TahaneySharon Morgan Tahaney

» As foru International enters its third year of business, the skincare and nutrition company is welcoming a familiar face to its executive team. Foru has named Sharon Morgan Tahaney successor to company President Karl Krummenacher, who came on board when foru Holdings acquired the business in 2012.

Tahaney has held other executive leadership positions during her direct selling career, including a stint as president of foru predecessor GeneWize Life Sciences. Like foru, GeneWize marketed personalized nutrition products based upon an individual’s DNA results. Tahaney joined GeneWize just 8 months after the company launched in 2007. Prior to serving as president, she headed up the brand’s marketing efforts.

With the team at foru, Tahaney has developed a five-year plan that includes 100 percent growth in 2015, strategic philanthropic efforts, taking DNA swabs of 1 million people, and a DSN Global 100 ranking by 2020. Having laid out a clear vision for the company, Tahaney says her primary goal is “to keep us focused on the mission critical, not every new shiny thing that comes along.”


Susan M. ArmstrongSusan M. Armstrong

Nature’s Sunshine Announces New COO

Nature’s Sunshine Products Inc. announced the appointment of Susan M. Armstrong as Chief Operations Officer. Armstrong has previously served in the role of Executive Vice President, Operations with Nature’s Sunshine since joining the company in March 2013. In addition to her current responsibilities of manufacturing and worldwide distribution, she will also assume responsibility for the corporate IT function.

Prior to joining Nature’s Sunshine, Armstrong served as Senior Vice President, Value Chain at Metagenics, a manufacturer and distributor of dietary supplements and medical foods. At Metagenics, she was responsible for creating a new Value Chain team that spanned the entire end-to-end process to drive value to the customer as a result of internal collaboration.

Adrienne MurphyAdrienne Murphy

Winnie & Kat Announces New Hire

» Winnie & Kat, a women’s contemporary clothing brand, announced that it has hired Adrienne Murphy as Director of Sales and Leadership Development. Murphy brings 10 years of experience growing direct sales party plan companies. She has produced positive revenue results for those companies with her high energy and results-driven training methods, focusing on peak individual performance. Murphy is currently based in Kansas City and will travel to and from the home office, as well as visit Stylists in the field.

Seth SaundersSeth Saunders

Blendfresh Enters Industry

» Blendfresh LLC, a health and wellness startup providing nutrition through pure whole-food products, has hired Seth Saunders as their Vice President of Communication, Training and Recognition. Saunders has over 17 years of executive level experience in direct selling that covers a number of areas including, sales, marketing, communications, training and development, administration, operations, and information technology.



SUCCESS Partners Establishes New Position of Chief Brand Officer

Wayne MooreheadWayne Moorehead

» SUCCESS Partners, a marketing and branding partner to the direct selling industry, announced that Wayne Moorehead has joined the company as Chief Brand Officer. The newly created position allows the company to meet the growing demand for brand strategy within the industry.

Moorehead brings a depth of experience in marketing and branding to the role. He has more than a decade of experience in the industry, holding significant marketing roles such as Senior Manager of Marketing Communications, Senior Vice President of Marketing, and most recently as Chief Marketing Officer.

The breadth of his marketing experience also includes positions with New York-based creative agency Case and Hint Creative.

Moorehead will be based in Salt Lake City, where he will work closely with Partners to develop and strengthen brand image, experience and promise.

“I’ve admired and respected Wayne for over a decade,” notes SUCCESS Partners CEO, Owner and Founder Stuart Johnson. “He has done some of the most exceptional branding work in the industry. He’ll be an important part of our efforts to fulfill the visions of our Partners and the millions of entrepreneurs they serve.”


Wixon Hires New Controller

» Wixon, a company that has a 100-year history of providing seasonings, flavors and technologies for the food and beverage industry, has announced Jenny Vonckx as Controller. In her new role, Vonckx is responsible for managing the company’s accounting department, including financial reporting, implementing business policies and procedures, and strategic financial planning. She reports to Wixon’s Chief Financial Officer, Peter Caputa.

Prior to joining Wixon, Vonckx spent nearly five years as a Controller for several business segments of Jason Inc. and five years at PricewaterhouseCoopers, both based in Milwaukee.

February 01, 2015

Company Spotlight

 Hy Cite: The Recipe for Growth

by Barbara Seale

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


Company Profile

  • Founded: 1959
  • Headquarters: Madison, Wisconsin
  • Executive: Chairman and CEO Erik Johnson
  • Products: Cookware, air and water filtration systems, juice extractors, dinnerware, cutlery


Family-owned direct seller Hy Cite Corp. is a master chef when it comes to cooking up growth. They do it by actively and enthusiastically embracing a community that many direct selling companies seek to engage: the Latino community.

Peter O. Johnson, FounderPeter O. Johnson, Founder
Erik Johnson, Chairman & CEOErik Johnson, Chairman & CEO

Hy Cite’s engagement constitutes far more than simply speaking Spanish. Some 90 percent of its market and distributors are Hispanic. This demographic grew from three Hispanic distributors—two on one coast and one on the other—who were extremely successful in the early 1990s. Their legacy plus the commitment of Hy Cite managers to listen closely to the needs of distributors and consumers has resulted in a company that has grown by more than 15 percent average annual growth since the year 2000. In fact, except for the two toughest years in that economic period, growth has been closer to 20 percent.

Hy Cite was founded in 1959 as the Hope Chest Club (HCC) by Dave Johnson, but it was Peter O. Johnson, an unrelated college student, who carried the company into the future. Peter paid his college expenses by selling the company’s products to young women who collected its cookware, china and flatware as they anticipated their marriages. After college Peter worked for another cookware company for a short time to learn more about the cookware business. He was a fast learner, and he rejoined HCC as a partner in 1961. Dave eventually left the business, but Peter carried on. He grew the business and evolved it as the country’s culture changed and the “hope chest” market shrank. He expanded the original vision, and with that expansion came a name change.


Some 90 percent of Hy Cite’s market and distributors are Hispanic.


“As folklore has it, we realized we needed a different name, but we had a lot of letterhead that said HCC,” explains Hy Cite’s Chairman and CEO Erik Johnson, Peter’s son. “Things were tight right then, but the top managers had ‘high sights’ for the future. So they had a meeting and came up with a name that would let them maintain the corporate brand: HCC—Hy Cite Corporation.”

Erik wasn’t in that meeting in 1974. He hadn’t even had his first of many part-time jobs at the company: working in the warehouse during the summer at age 12. Throughout high school and college he continued to work in most departments, but, like his father, he went to work at another company after college. He spent five years at Procter & Gamble. Then he returned to his family business in 1995 as a project manager focused on improving its business systems. When Peter retired in 2000 Erik was named Chairman and CEO. He and his brother Peter, Hy Cite’s President and COO, continue to run the company.


Andrea Legarreta, a well-known TV personality in the Hispanic market, is the Brand Ambassador for the Royal Prestige® line of cookware.Andrea Legarreta, a well-known TV personality in the Hispanic market, is the Brand Ambassador for the Royal Prestige® line of cookware. Founded in 1959, Hy Cite has expanded into 20 countries over the last two decades.Founded in 1959, Hy Cite has expanded into 20 countries over the last two decades.

Improving Lives through Education

Hy Cite is committed to expanding the opportunity for a great life even beyond its own ranks. That’s why the company and its more than 2,200 distributors believe in supporting the communities throughout the world where it does business.

While the company has supported health-based organizations such as The United Way, Direct Relief International, March of Dimes, American Cancer Society, American Red Cross, and Kick AIDS, it has begun to focus its resources heavily on education.  

“We believe that education leads to prosperity and self worth, and with education you can improve people’s standard of living and overall life experience,” notes Hy Cite Chairman and CEO Erik Johnson. “In many of the countries our distributors come from, educational opportunities are not that strong. We want to make sure that people throughout the world have the chance to receive educational opportunities like they would in the United States.”

As a company that does 90 percent of its business in the Latino community, Hy Cite has become a major contributor to the Hispanic Scholarship Fund. Its scholarship grants provide educational opportunities, as well as another way to enhance brand awareness and loyalty for its Royal Prestige cookware line. The Royal Prestige Scholarship Program provides scholarships to low-income Latino students who are dependents of Royal Prestige’s customers and distributors. The program is designed to make a positive impact on students’ education and career preparedness, while creating a positive awareness of Royal Prestige as a potential employer and good corporate citizen.

Philanthropic donations to the University of Wisconsin, located in the company’s home town of Madison, have been a Johnson family tradition for decades. In fact, Hy Cite Founder Peter O. Johnson has been a longtime donor and ambassador of the University of Wisconsin-Madison, serving in a number of capacities over the years.

In Mexico Royal Prestige is also heavily involved with a telethon that supports the needs of children with developmental handicaps.

Product-Centric

Erik says that much of the company’s success is product-based. It has three brands of cookware—Royal Prestige, its first and biggest brand of top-quality products, especially in the Hispanic market; NutraEase, a high-quality stainless steel line sold at in-home dinner parties; and its latest, Kitchen Charm, which was introduced in early 2014 and is focused on the bridal market. Each includes supporting products, such as water filtration units, juice extractors and air purifiers, but the core product in each line is cookware. Both distributors and consumers know the company by its cookware brands, rather than by the corporate name. Distributors focus on a single brand to sell and build their businesses.

The decision to focus on the brands rather than the company name was made in the 1980s. “No one thought that consumers related to the name Hy Cite,” Erik explains. “We hired a marketing firm to come up with our own product brand name, which was Royal Prestige. Before that we had sold other companies’ brands. But we had gotten to the size and scale where we wanted consumers to recognize our own brand.”


The cocinaMAX™ magazine was created to nurture the connection of the customers with the brand. It is mailed to over 130,000 Hispanic households every quarter.

Consumers don’t just recognize the brands; they’re intensely loyal. Even though the cookware carries a 50-year warranty, consumers keep returning to the company to purchase its latest products. But since the cookware maintains its quality so long, they pass it along to family members and then buy more for themselves. Hy Cite and its distributors keep previous buyers informed about new products through direct mailers. Distributors often purchase local advertising, which Hy Cite supports with $3 million to $4 million of national television advertising on stations such as Univision and Telemundo in the U.S. and Televisa in Mexico.

Hy Cite also publishes a quarterly magazine, cocinaMAX™, which it sends free to consumers who have purchased products within the past two years. The company nurtures the connection to the brand and the cookware by publishing health tips, recipes and general information about cooking. It also runs recipe contests that keep customers cooking and using their products, and it features well-known Hispanic TV personalities, such as Andrea Legarreta.


Even though the cookware carries a 50-year warranty, consumers pass it along to family members and keep returning to the company to purchase its latest products.


Brand Fans

The marketing plan has driven Hy Cite brands to No. 1 among direct-sales cookware brands within the company’s target demographic in the United States. Brand recognition in the Hispanic marketplace exceeds 85 percent in the U.S. and almost 50 percent in Mexico. That brand recognition supports both recruiting and sales, even translating to repeat sales.

“We run over a 25 percent add-on rate,” Erik notes. “Our consumers are very pleased and enjoy our products, so they’re always looking to add to their collections. We even have consumers who call us to ask whether we have anything new.”

The answer to those consumers is often “yes,” and the new product has typically been developed because of consumer demand. Hy Cite stays in constant communication with its field salesforce, plus it gathers regular input from consumers to understand what they want in products for their kitchen. The company then incorporates technical cookware advances, such as a silicone-rimmed cover on the Royal Prestige line that allows food to be cooked with minimal liquid, preserving flavor and nutrients.

“We haven’t hung onto the past or to a single product,” Erik emphasizes. “We let the marketplace take us to where the marketplace is going, and that has led us to bring out new products that consumers are looking for.”

Those new products have helped Hy Cite grow. In addition to the completely new products, it made modifications to cookware, including detachable handles and a moisture-viewing window. Consumers eager for the latest innovations don’t hesitate to purchase them. The average order value is more than $1,200, and Hy Cite helps make those high-ticket purchases possible by offering consumer financing.

“One of our major differentiators is that we provide proprietary consumer financing that lets our end consumer pay for their purchase over 24 to 36 months,” Erik says. “That opens a purchasing door to someone who bought their cookware a few years ago, so they pass their older product to their daughter or son and they
buy new cookware.”


“One of our major differentiators is that we provide proprietary consumer financing that lets our end consumer pay for their purchase over 24 to 36 months.” —Erik Johnson, Chairman and CEO


Family Heritage

Hy Cite continually awards and recognizes the performance of its large network of distributors. Hy Cite continually awards and recognizes the performance of its large network of distributors.

That kind of support creates a thriving business for many distributors. It’s often a family business with entire families becoming involved over several months or years. One spouse may work full time in the family Royal Prestige business while the second spouse is employed elsewhere and is involved part time. Once the business grows large enough to replace the second spouse’s income, he or she also joins the business full time. Often their older children become involved as well and develop their own businesses when they become adults.

The process can also open doors to another group that most direct sellers want to attract: millennials. Erik says that they are a developing market segment for Hy Cite. Research on millennials shows that 25- to 35-year-olds are increasingly interested in cooking. He notes that many young Hispanics maintain the eating and food traditions they learned as they grew up.

“What has helped is making sure that we have cookbooks and sponsorships with Latino chefs, and we’re providing information that helps young people cook traditional dishes in our cookware,” he says.

In addition to providing consumer financing, Hy Cite supports distributors with product innovations, order processing and distribution, sales and marketing materials, and motivational incentives such as trips—areas where it can leverage size and scale. That frees its distributors to focus on selling, recruiting and training. Hy Cite is able to provide effective support to a salesforce in multiple countries through a corporate employee base that is around 80 percent bilingual. Many employees speak English and Spanish, but other languages are represented as well.

Hy Cite takes advantage of state-of-the-art technology and the latest trends to develop its different product lines.

Hy Cite takes advantage of state-of-the-art technology and the latest trends to develop its different product lines.


“We sell family values—working and eating together, health, and keeping the family together.” —Erik Johnson


That well-oiled system has worked well as Hy Cite has entered new territories that have expanded its revenue sources. When Erik became the company’s CEO in 2000, more than 95 percent of the company’s business was in the United States. Today the company has expanded into 20 countries and had 2014 revenue of approximately $177 million. Its U.S. market is still strong at 50 percent of sales, plus other markets have expanded. Mexico and Canada are thriving, and the fastest growth is in South America. One of its newest market expansions, Brazil, is growing by 300 percent annually. Erik explains that the quality of the company’s products and the quality of the business opportunity is appealing to entrepreneurs in the small but developing middle-class in South America.

The Royal Prestige business opportunity is something that people in those countries see as an opportunity to elevate their standard of living, and that of future generations. The company has been able to recruit highly educated, talented people who want to become distributors. Its current growth focus is in Brazil, followed by Colombia and Peru, which it opened in January. It prepared by establishing offices, service personnel and product distribution, as well as hiring sales management. They deployed two senior executives to recruit and train distributors, and to help them build their networks in South America. The company’s goal is to double its business in those countries every five years.

“Looking out 10 years, once we build out our business in the Americas, our next step will be expansion into Asia-Pacific,” Erik forecasts.

He notes that the element that unites Hy Cite—including employees, distributors and brands—is family.

“We sell family values—working and eating together, health, and keeping the family together,” Erik reflects. He notes that the same culture thrives at the corporate headquarters. “We believe that the field salesforce drives sales and much of our marketing and idea generation. We believe strongly that the entire organization learns from each other and that people help each other so that we are all successful together. After 55 years in business, we have a multi-generational family business being successfully led by the second generation. We’re very proud of that.”


Executive Connection with Erik Johnson, Chairman and CEO, Hy Cite

February 01, 2015

Company Focus

Beautycounter: Safer Products Changing Lives

by Andrea Tortora

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


Photo above: Beautycounter Founder Gregg Renfrew is committed to changing the beauty products industry for the better and getting safe products into the hands of customers.


Company Profile

  • Founded: 2013
  • Headquarters: Santa Monica, California
  • Founder: Gregg Renfrew
  • Products: Beauty and skin care

Beautycounter


Beautycounter is a content first, product second kind of company. The California-based upstart maker of safe, nontoxic beauty and skincare products is focused on advocating for public health as it defines its own way of doing business in a crowded market.

“We are not all-natural or organic,” says Founder Gregg Renfrew. “We are focused on safety. We make sure we don’t ever say we are perfect. It is about progress.”

Beautycounter defines itself as a “direct retail brand.” It sells to consumers through consultants, at beautycounter.com, and via strategic partnerships with companies such as J. Crew and Gwyneth Paltrow’s Goop.com.

Renfrew is on a mission to change the regulation of the beauty products industry, and she thinks telling the Beautycounter story through person-to-person interactions is the best way to do it. “We want to be an information first, disruptive beauty brand,” she says. Beautycounter’s mission: to get safe products into the hands of everyone.


“We are not all-natural or organic. We are focused on safety. We make sure we don’t ever say we are perfect. It is about progress.” —Gregg Renfrew, Founder


Explosive Growth

At just under 2 years old, Beautycounter is already making an impact on the $59 billion U.S. cosmetics and personal-care industry. In 2013, natural and organic personal-care products accounted for $12.6 billion in sales, according to data from Sundale Research.

Since January 2014, Beautycounter has grown over 550 percent. From its initial launch in March 2013, the company’s multi-channel strategy now claims more than 5,000 independent consultants. 

Renfrew started her company with a few SKUs for essential skin and body care. Today Beautycounter offers more than 75 products for men, women and children, including face and body collections, sunscreen, and a color collection.

The company’s e-commerce channel is also booming. The Band of Beauty membership program lets direct customers earn rewards and free shipping for online orders, all while supporting Beautycounter’s push to promote safe products. Loyal clients pay a $25 annual fee in order to receive extra online discounts; $10 is donated to one of three nonprofit groups that Beautycounter supports: Environmental Working Group, Breast Cancer Fund (which coordinates the Campaign for Safe Cosmetics,) or Healthy Child Healthy World.

In addition to the consultant base and their customers, there are now more than 6,000 consumers in the e-commerce Member Program who support Beautycounter’s social mission, Renfrew says, a fact of which she is very proud. “The only way we can bring about change is to be a large movement of lots of people.”

An Eye-Opening Start

Beautycounter is well on its way, says Janet Nudelman. She runs the Campaign for Safe Cosmetics and is Director of Program and Policy at the San Francisco-based Breast Cancer Fund.

“Beautycounter is one of the first companies to ever emerge in a public-facing way regarding safe cosmetics,” Nudelman says. “They start the conversation with the safety issue while most other companies bury it.”


“Beautycounter is one of the first companies to ever emerge in a public-facing way regarding safe cosmetics. They start the conversation with the safety issue while most other companies bury it.” —Janet Nudelman, Campaign for Safe Cosmetics


Renfrew’s eyes were opened to the lack of regulation of personal-care products after she watched the 2006 documentary, An Inconvenient Truth, about former Vice President Al Gore’s campaign to educate citizens about global warming. The film drove her to dive deep into researching what really goes into the products she uses. As a result, Renfrew changed many of the items she uses at home, from pots and pans to sunscreen. But she says she still was challenged to find products she loved.

A move to Los Angeles in 2008 led to Renfrew working with actress Jessica Alba. Alba hired Renfrew to research the personal-care industry and look at toxic and nontoxic ingredients. The work aided Alba as she launched the Honest Co., which makes nontoxic items for baby and home.
“That work helped me see that there was a void of products that were safe to use,” Renfrew says. Some of what she learned:

  • Only 10 percent of the 10,000 chemicals used in personal-care products have safety data.
  • Known toxins, such as lead and formaldehyde, are allowed in products.
  • The last time the U.S. passed a law to regulate ingredients in personal-care products was 1938.
  • The U.S. bans 11 ingredients; the European Union bans or restricts the use of more than 1,400 ingredients.

Science and Safety

Renfrew spent four years working full-time to lay the groundwork for Beautycounter. She teamed up with industry heavyweights Mia Davis, who had worked for the Campaign for Safe Cosmetics, and celebrity makeup artist Christy Coleman to formulate a line of products based on safety and performance.


Gregg Renfrew’s background includes starting her own bridal registry, The Wedding List, which she sold to Martha Stewart Living Omnimedia, and consulting for high-profile clients such as Jessica Alba.


Davis’ sourcing background led to a strict Beautycounter screening process and the company’s “Never List,” which can be found in its entirety on the Beautycounter website. This is a roundup of ingredients Beautycounter will never use in its products. It began with the 1,400 ingredients banned in the E.U. and grew by a few hundred more to include anything linked to cancer, reproductive issues or endocrine disruption. Many are known or believed to cause irritation, allergic reactions or cancer.

“We think we have the most health protective and strenuous process in the U.S.,” Renfrew says.

Beautycounter also provides an online Ingredient Glossary on the site, which describes every ingredient used in all Beautycounter products. Products are formulated and manufactured in the U.S.

According to Nudelman, Renfrew and her team are aligned with the Campaign for Safe Cosmetics and constantly lobby for public health. “The way they do business raises the bar for the rest of the cosmetics industry,” Nudelman says. “They are a small company, but they are doing so much more than firms 50 times their size. That speaks volumes for those firms that want to be a part of the solution.”

Building a Brand

A lot of work went into establishing the Beautycounter brand and making sure the message remains consistent across all channels. To Renfrew, this is key. She champions the motto, “A million voices, one brand.” Renfrew makes herself available on a weekly basis to answer consultant questions and to do her part to ensure that the brand message is consistent across all platforms.

She says most consultants are drawn to the direct selling segment of Beautycounter because of the firm’s mission. This is a company driven to educate customers and consultants. It aims to create and provide solutions with its products.

Passion for creating a grassroots demand for change at the federal level—and the passion that mission evokes in consultants and customers alike—is what keeps Renfrew energized to continue her quest for change in industry regulations.

“We are focused on people,” Renfrew says. “We are defining our own way of doing business, and we have tried hard not to look at other companies. Change is good and change is necessary.”

Trained to Educate

With a slew of retail, sales and entrepreneurial experiences under her belt, Renfrew is a newcomer to the direct selling world. She started out at Xerox. She later sold her startup bridal registry, The Wedding List, to Martha Stewart Living Omnimedia and is a former CEO at the Best & Co. children’s retail group. She has consulted for high-profile clients such as Bergdorf Goodman, Ann Taylor and Jessica Alba.

Renfrew says she is taking best practices from traditional and direct sales models, as she builds a comprehensive guide to a long-term sustainable business. “We really train hard on ingredients and being authentic in terms of our story and the ways in which we talk about our products,” she says.

Frequent and weekly trainings are offered for regional directors and all consultants through newsletters, videos, calls and webinars. And Renfrew makes a point to be available. “It is really important to be with the people who are working for you,” she says. “I do not like the arm’s length distance of management. We very much focus on internal clients and the end customer.”

Social media is one way Beautycounter reaches out, but Renfrew says the company is still learning how to use the platform. She encourages consultants to use their networks and break out of the mold of traditional home parties.

When Beautycounter trains consultants, it encourages organic information sharing, whether that takes place on the playground, at school or online. Consultants also get a personally branded website that ties into the main Beautycounter site.

“We make sure people are not just selling, but are interacting with others in ways that feel natural and comfortable,” Renfrew says. “We want them to put their personal touch on it but also be consistent with our message.”

Investing in Challenges

If you have several days, Renfrew will be glad to sit down and explain that trying to create products that are safe and work is not an easy process. It takes years. “What’s difficult is to create excellent and amazing products that really perform and are truly safe,” Renfrew says.


Investors like Beautycounter’s model of sharing relevant information through social networks. The company has raised $15 million to date and at the end of 2014 was getting ready to close on another round of funding.


Beautycounter is fortunate in that investors like its model of sharing relevant information through social networks. The company has raised $15 million to date and at the end of 2014 was getting ready to close on another round of funding.

While Beautycounter is experiencing explosive growth, it does not come without challenges, such as managing inventory on limited funds. Inventory lead-time has been long and sometimes raising capital is a struggle, Renfrew says.

As investors signed on, Renfrew used their dollars for product development and research to create the technology and infrastructure to support the field. She also created robust marketing and branding materials.

Renfrew says she invested heavily in people early on to create “less of a homegrown situation” and to ensure the long-term validity of the Beautycounter brand. This comes right back to the company’s larger worldview and passion for public and consumer health as well as the need for more regulation of the personal-care products industry.



Proof of Concept

What makes Beautycounter such an important company, Nudelman says, is that it proves the concept: You can be a safe and profitable company. “That is the message that the Campaign (for Safe Cosmetics) is trying to get out. That consumers will buy safer products,” she says.

Renfrew and Beautycounter take a strong position on the issue. Renfrew has made it her mission to affect change all the way to Washington.

“We want to be the face of the newer, safer, highly effective beauty company,” she says.

Renfrew and others with the Campaign for Safe Cosmetics are meeting with senators about cosmetics reform.

The issue is becoming a worldwide concern as more national governments take it seriously. Canada issued a “hot list” of chemicals, and Japan and China are also taking action, Nudelman says. Yet the U.S. is lagging behind as toxic chemicals still remain in cosmetics—from lead in lipstick to heavy metals in face paint for children.

For change to happen, Congress must authorize the Food and Drug Administration to regulate the cosmetics and personal-care products industry. The Safe Cosmetics Act has been introduced in Congress in the last three sessions, but has not advanced to a full vote. “Consumers are waking up to the problem,” Nudelman says.

In Renfrew’s view, there has never been a better time to be in the direct selling world, especially when looking to inform the public and find support for a worthy cause. “The whole direct selling industry can embrace what is going on at a macro level and share relevant information through social networks and use it to drive commerce,” Renfrew says. “Everyone has been touched by one of these issues. We are creating social impact and educating people so they can take control over their personal exposure to toxins.”

February 01, 2015

New Perspectives

Are We Winning?

by John Fleming

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


It’s hard to keep a scorecard on the direct selling industry! Those who tend to look for a way to criticize can always find something. Those of us who see within the industry and have the opportunity to interact with industry decision makers gain much insight and perspective. And this is a time of year to reflect. The corporate scorecard will be the year-end financial statements that will recap the business of the previous year. Businesses will win or lose depending upon the bottom-line numbers of profit or loss and the top-line number of revenue generated in comparison to the prior measurement period. But the question for those of us affiliated with the direct selling industry might be: What is the industry scorecard? Are we winning or are we losing?

Some scorekeepers like Bill Ackman, the hedge fund manager who has specifically targeted Herbalife with venomous attacks on the company’s method of conducting business (direct sales), completes his scorecard based on a set of very personal criteria that leads to an accusation and attack on, in this case, Herbalife in particular. However, this type of scorecard has implications for the entire industry. Direct selling, as a channel of distribution, is executed in many different ways, from what we often refer to as party plan to network marketing, social entrepreneurship, social selling, and social commerce, or even simply person to person. Today, the actual definition of direct selling is so very broad that direct sellers utilize online methods for delivering messages and transacting business as effectively as any channel of distribution.

In response to a scorekeeper like Bill Ackman and his staff, we remind such scorekeepers of the fact that the industry has a formal code of ethics as well as an informal code of ethics. The industry code and the more stringent company codes of ethics serve to govern the manner in which those who utilize the direct selling channel engage both employees of the company and the independent brand partners representing the company’s products, services and business opportunity. Independent contractors are also consumers as it simply makes sense to be your own best customer. 


Today, the actual definition of direct selling is so very broad that direct sellers utilize online methods for delivering messages and transacting business as effectively as any channel of distribution.


The formal Code of Ethics is provided by the U.S. Direct Selling Association, and this code is public information. Members of the U.S. DSA pledge to abide by the U.S. DSA Code of Ethics. Many non-members of the U.S. DSA (direct selling companies) have created their own company codes and often use the DSA Code of Ethics as their benchmark. In either case, the direct selling industry overall has done a good job of policing itself and has grown as a channel of distribution to over $30 billion in U.S. revenue and $150 billion in worldwide revenue, generated by approximately 16 million U.S. independent contractors and 90 million worldwide independent contractors.

Every organization and every business has some type of scorecard for reflection on previous-year results and the planning of the new year. It is part of our nature to desire a scorecard to determine if we are winning or losing. Each winter, the NFL hosts the ultimate scorecard in professional football, the Super Bowl, where thousands will witness the final score that determines the best football team of the year. The same process holds true for all professional sports teams and leagues wherever they are located in the world. Hundreds of millions watch these events on television.

Direct Selling News created a scorecard for the direct selling industry when we first published the Direct Selling News Global 100 listing in 2009. Each year, this enormous research project serves to identify the top 100 direct selling companies in the world who certify their revenue performance by submitting the DSN Revenue Certification Form and complete a profile of their company. This process results in the publishing of perhaps the most important scorecard on the industry issued by anyone.

However, there is more to score on a company-by-company basis, and we offer on this page a potential scorecard profile that we believe tells even more of the story about an industry that shows such diversity in its representation of people from all walks of life. Direct selling as a method of distribution provides people with hope and with training to learn the basic knowledge and skills to be able to build a business. This could be a small part-time effort or a more serious effort that not only develops customers but also provides the opportunity to recruit and train others to do this, resulting in a much larger business opportunity. Because a scorecard is so important, we encourage each direct selling company to submit your Global 100 information and profile, as in so doing you participate in a valid process for scoring an incredible industry.

In going through the scoring process, we remain optimistic that we will have experienced another year of overall growth with respect to the first two categories on the scorecard pictured. Within the growth, there will always be those companies that did not grow, and the reasons for that are many, some of which are mentioned below and are also being researched by Direct Selling News.

1. Restructuring and Refocus
2. A Shift in Momentum
3. Competition
4. Failed Strategies
5. Disruption to Normal Business
6. A Change in the Season of the Business
7. Fast Growth


Scorecard


Yes, We Are Winning!

Based on the results of 2013 and the anticipated reports on direct selling companies for 2014 performance, we find that people everywhere in every region of the world are seeking to engage in some form of entrepreneurship that is accessible and realistic for the average person, and provides the opportunity without the traditional risks. Direct selling is thriving around the globe. DSN’s Billion Dollar Markets story published last October reflected growth in 16 of 22 markets identified from the data of the World Federation of Direct Selling Associations, which provides proof that people everywhere are finding direct selling companies that fit their needs and desires. From beauty, wellness, gifts and accessories, home, and education, to beverages, telecommunications, financial, and energy, direct selling companies are providing an opportunity to engage in free enterprise. The barriers to entry and risks associated with starting one’s own direct selling business are virtually zero. Such opportunities are increasing in demand and interest, not shrinking—so yes, we are winning!


Direct selling companies and the opportunities they offer provide something that traditional jobs and opportunities do not provide as effectively: mission, purpose and a sense of community.


Direct selling companies and the opportunities they offer provide something that traditional jobs and opportunities do not provide as effectively: mission, purpose and a sense of community. Direct sellers appear to find a shared sense of purpose in the work they do, selling and serving customers while recruiting others who desire to learn to do the same. Worthwhile values like helping others better understand the products and services they are purchasing, promoting physical and financial health, being environmentally conscious, and doing personal shopping for almost anything sold through more traditional channels turn individuals into a community of people who share values for the work they do. It is this sense of community that is hard to duplicate in ordinary part-time jobs, which attracts many people to the direct selling industry. Mission, purpose and values play a huge role in this. “Much like teams in sports, communities have a goal in mind, and they will not rest until it’s met,” says John Parker, Chief Sales Officer at Amway.

The recent Harris Poll commissioned by Direct Selling News further found that social, emotional and intellectual fulfillment ranked very high amongst those who had experienced a direct selling opportunity. In fact, about eight in 10 current sellers say their direct selling business offers many opportunities, including valuable social interaction, the ability to connect with other people with similar interests, entrepreneurship, flexibility and freedom, and recognition of skills and achievements (See graphic below).

The Harris Poll also revealed that, when considering their most recent purchase, roughly six in seven current customers bought an item for themselves (85 percent strongly or somewhat agree) and really wanted the item they purchased (85 percent strongly or somewhat agree), and the majority were highly satisfied with the item (73 percent were extremely or very satisfied). Additionally, seven in 10 current customers reported high satisfaction of their experience with the seller (69 percent were extremely or very satisfied) and 87 percent enjoyed the sales experience a lot or a little (See graphic below).

These results reinforce the positive impact that direct selling companies and their independent contractors have on the social fabric of communities, as well as the significant economic impact the individual family has on the broader economy.

We are also winning because direct selling companies are good at what they do. The amount of time and investment most companies make in the development of their product or service would amaze anyone not familiar with the operational side of the business model. Amway is known to be the largest direct selling company in the world, but few realize that their NUTRILITE nutritional supplement brand is also the largest nutritional brand in the world, outside of the direct selling arena. Tupperware is known for its plastic bowls, but the brand has expanded into so much more. Mary Kay is a direct selling company but also one of the most-respected beauty brands in the world. Primerica sells financial services through independent contractors utilizing the direct selling model, but they also sell more term life insurance than any other insurance company in the world. Ambit Energy surpassed $1 billion in sales in less than eight years. Origami Owl with its line of personal jewelry and Nerium International with one anti-aging product surpassed $200 million in sales in less than three years.

Direct selling companies are winning because they offer quality products and services at competitive prices. Direct selling companies are also winning because they place a lot of focus on the compensation plans that reward their independent contractors for the time and effort invested. Direct selling companies are also nimble, quick to react and quick to implement some of the newest and most impactful uses of technology. The giant steps being made in extending new technology to the independent contractor levels the playing field. An application on a smartphone is now capable of providing the most remote direct seller with the information and even the presentation needed to impress the most sophisticated of prospective clientele.

With millions of customers being engaged by millions of independent contractors, supported by a variety of products, services and state-of-the-art technology, even the newest direct seller can now compete with the most established traditional retailer and in a far more personal manner.

Make sure your company submits its profile. The DSN Global 100 will recognize the top 100 direct selling companies in the world as ranked by Revenue Certification. We also look forward to publishing the profiles of all direct selling companies whose profile is received by and recognized by Direct Selling News as an authentic submission.

With all of the current talk about “social” and the importance of being social in all business relationships, we can point to the first social selling model—the direct selling model—and convincingly say, in accordance to our scorecard, YES, WE ARE WINNING!

February 01, 2015

New Perspectives

 Strategy Tinkering Can Stop Your Growing Business in its Tracks

by Robert Sher

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


Building a business through the direct selling channel can be a powerful strategy for rapid growth. Creating innovative products and services, along with leading-edge approaches to connecting with the field and motivating performance are similarly efficacious strategies. However, even great strategies aren’t enough to sustain success.

In-depth research has shown that there are seven silent growth killers that are particularly harmful for midsized companies (generally regarded as those with $10 million to $1 billion in revenue) that can offset the success coming from a great strategy. While each of the killers is deadly in its own right, this article will focus on the danger of “strategy tinkering at
the top.”

First, let’s start with an overview of the seven growth killers:

1. Letting Time Slip-Slide Away

Time—or rather, lack of appreciation for it—is the first silent growth killer. Midsized companies have big, complex projects they never experienced when small. As a result, projects seem to take too long, or get stuck altogether.

2. Strategy Tinkering at the Top

For midsized firms, tinkering with the business’ core strategy can be deadly, particularly when changes are made without proper research, planning and testing. Founders and entrepreneurial leaders are at risk of over-innovation, distracting the core business from scaling.

3. Reckless Attempts at Growth

In the effort to scale, organizations face increased risk and expense. If the attempt at growth costs too much and the revenue doesn’t match the expense, growth won’t materialize, but a cash crunch will.

4. Fumbled Strategic Acquisitions

Acquisitions can be vital to a growth strategy, but they can also derail an organization. Successful less than half of the time, acquisitions are less about the deal and the closing and more about selection and what happens afterward: the integration process and execution of the acquisition plan.

5. Operational Meltdown

A rapidly growing bottom line and a rigorously lean operation can be a death sentence under the cover of success. Leaders must be able to recognize early signs that an operational meltdown is looming. The magical time when the field hits the tipping point can be tarnished or destroyed when operations fails to deliver.

6. The Liquidity Crash

Running out of cash can happen to any organization—particularly those making reckless attempts at growth and those suffering financial erosion or a shock to the system.

7. Tolerating Dysfunctional Leaders

Having a strong, high-performing leadership team in place is critical to growth and to overcoming the other silent killers—or better yet, avoiding them in the first place.

These growth killers often grow out of sight and out of mind for midsized firms, and can drive even successful firms into extinction. Firms looking to survive the killers must proactively guard against them.


For midsized firms, tinkering with the business’ core strategy can be deadly, particularly when changes are made without proper research, planning and testing.


Let’s dig into the second growth killer: Strategy Tinkering at the Top. In theory, an entrepreneurial CEO is a dream-come-true. What executive wouldn’t want a boss who gets excited about good, new ideas and is willing to back them? But in reality, an entrepreneurial CEO can be a nightmare—especially for midsized companies, which simply can’t afford to experiment with too many new ideas and strategies at once.

Consider an online publisher whose CEO was highly innovative and in tune with his market. Every month, he would dream up two or more “fantastic” ideas and would order the team to give these new ideas top priority. When his staff would ask him about his previous month’s priorities, he gave them no guidance. His focus was squarely on the new idea of the moment.

This forced his team to steer from guardrail to guardrail as they tried to refocus on their new task. Of course, they couldn’t implement any of the new ideas; as soon as any headway was made, the ideas were discarded in favor of bigger, better ideas the CEO had cooked up. This is a classic case of strategy tinkering. As is typically the case with strategy tinkering, the team was demoralized, and the CEO’s most talented executives fled. The firm stagnated.

Some of his “fantastic” ideas were in fact fantastic, but due to the constant change of direction, they never got executed. While no one—not the board, the management team, or investors—should ever try to stop the CEO from generating ideas, there must be a process to select the best ideas from the CEO and test them without diverting the business’ operating team from their core mission.

Strategy tinkering becomes disastrous when the company and its leadership are driving hard toward a specific goal or mission. Complete focus on execution is required to reach the goal, and hard decisions must be made on allocating resources to this primary goal. Then comes talk of a different objective. Of a new competitive threat. Or a new opportunity. Some of the teams scatter to reconnoiter the new strategy. Another team thinks the core goal has already been replaced, so it begins work on the new one. Resentment builds when employees’ hard work feels wasted. Progress toward the core objective is slowed or stopped, and significant effort will be required to get everyone reoriented in the proper direction.

Such CEO strategy tinkering can be a bad habit, perhaps the product of an overactive urge to chase squirrels or pick up shiny objects. In addition, it may be a reaction to seemingly intractable problems like inconsistent revenue generation or low profitability.

An important indicator of CEO strategic tinkering is resistance from the executive team. Hard-headed, passionate CEOs often struggle to listen to the counsel of those around them—usually to their detriment.

Most CEOs won’t admit it, but oversight makes us better executives. The worst cases of strategic tinkering come from CEOs with complete freedom. Boards should act to require the CEO to stay within the firm’s approved vision and mission. CEOs who understand how a strong, involved board can help them will make sure their boards are stocked with experience and talent.

Of all the C-Suite executives, CFOs have the greatest chance to reign in a tinkering CEO. They are acutely aware of the effects of distraction and bad decisions on the financial statements. And it’s the CFO’s fiduciary responsibility to sound the alarm when targets are missed. Yet most CFOs won’t sacrifice their relationship with the CEO (or their jobs) in the face of a CEO who won’t listen. In fact, almost no one (other than a strong board) can deal with a CEO who refuses to listen.


There must be a process to select the best ideas from the CEO and test them without diverting the business’ operating team from their core mission.


CFOs need to understand that they’ll never be able to completely dissuade their CEO from tinkering, but even winning a 20 percent tinkering-reduction is a big win. CFOs should be persistent, and CEOs must remember to seek the CFO’s advice and listen carefully. This will encourage the CFO to keep presenting his or her opinions, even if the CEO doesn’t accept them all.

But CEOs can help curb their own tinkering impulse in a very simple way: by putting their vision for their company down on paper. Writing it down makes it real.

I’ve sat down with over 100 CEOs and asked them what their company’s most important priorities are. Generally, they quickly can outline the crucial key performance indicators (KPIs), the critical projects that must be executed and the three to five differentiators that make their business thrive. Unfortunately, most have never shared their insights with their team in a concise written document.

These simple plans, often just one page, can create clarity and agreement. They promote focus, and make it easy for everyone to assess the company’s performance and progress each month. As targets are missed and the team focuses on achieving them, the group becomes increasingly intolerant of the tinkering that gets in the way of execution. And when the tinkering starts, the CEO will face a team that will be able to ask how the tinkering fits into the CEO’s own written plan. And, if the new ideas are truly superior to those that preceded them, they can ask what parts of the original plan should be reprioritized.

This will stop many CEOs in their tracks as they remember the conviction with which they created and wrote down their plan in the first place. Again, even if this only stops 20 percent of the tinkering, it is still a major win.

Even at startups with relatively small leadership teams, being clear about the organization’s priorities and what work should be done first is essential. Operating plans, progress tracking and prioritization do not have to be bureaucratic or cumbersome. If the CEO is to be free to innovate, he or she must know that the rest of their team is getting the right things done each day. Yet planning and organization don’t come naturally to many founder-CEOs, and that job falls to their senior leaders.

One of my clients was a self-acknowledged tinkerer. She loved spotting new opportunities and chasing them, and found running the core business to be boring. But she understood that building value in her own company required that she slow down her tinkering. In fact, she became so excited at the prospect of formal planning as a tool to limit her own tinkering that she made a large poster showing the company’s one-page plan and posted it prominently on an office wall. She reasoned that if she started to tinker, it would be clear to everyone that she was violating her own plan.

So how can CEOs and their teams find the proper balance between strategic intransigence and the alluring temptations of tinkering? No CEO and no top team should ever stop thinking strategically. But they should keep such thoughts and discussions from the execution team. Top executives should be able to discuss strategy—and changes to it—without confusing it with or negatively affecting current execution priorities. For those leaders striving to have a more transparent organization, produce a brief and very high level summary after strategic off sites, just enough to stop misunderstandings and supposition.

If the reconnaissance work to explore a new strategy requires more than discussion, a separate team should be assembled to do just that. And keep it low-key. Most strategic ideas that at first appear to be brilliant are discarded upon review and testing. It’s best that this happens in the background until one new strategy rises to the level of a roll-out.

Disciplined processes such as business planning and monthly reviews of the plans, combined with broad visibility throughout the firm, will also play a strong role in keeping tinkering at bay, and keeping midsized businesses the healthier for it.


Robert Sher is Founder of CEO to CEO and the author of Mighty Midsized Companies: How Leaders Overcome 7 Silent Growth Killers (Bibliomotion; hardcover; September 2014). A regular columnist on Forbes.com, Sher has worked with executive teams at more than 85 companies to improve the leadership infrastructure of midsized organizations.

February 01, 2015

Top Desk

Taking Care of Your People So They Can Take Care of You

by Jere Thompson Jr.

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


Photo above: Ambit Energy co-founders Chris Chambless and Jere Thompson Jr.


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


When I was a graduate student at The University of Texas, I spent a month in Washington, D.C., learning about the federal government and how it works. A couple of us in the program were given the incredible opportunity to visit the West Wing of the White House. James Baker, a fellow Texan and President Ronald Reagan’s Chief of Staff at the time, was our tour guide. The highlight, of course, was the Oval Office. While telling stories about President Reagan, Mr. Baker walked over to the President’s desk, opened a crystal jar and offered us some of his famous jelly beans. It was unforgettable, and so was a small brass plaque sitting next to the jar. It read, “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”

To me, President Reagan was emphasizing that success is all about teamwork, about attracting and retaining the best people and giving them the recognition they deserve. 

Today, Chris Chambless, my Co-Founder and our CMO; John Burke, our CIO; Laurie Rodriguez, our CFO, and I all have replicas of that brass plaque on our desks. From the very beginning we wanted to build a culture that would enable us to attract and retain the best talent. First, however, we had to decide what we wanted to focus on and what we were willing to say “no” to.  We had to narrowly target our limited startup capital and time. We kept repeating, “The main thing is to keep the main thing the main thing.”
 
At Ambit, we have three main things: our systems, our people and our standards.

Systems

Our entire executive team came from telecom backgrounds. In that industry, we had seen companies with great back offices and systems thrive and prosper while those with poor systems capsized, sank and disappeared forever when the inevitable data tidal wave hit them. We knew that operationally Ambit would be a data processing company. Everything we would do would involve the receipt, processing, storage, sharing, presentation and mining of data. 

At first, John thought we would be able to find a vendor to supply our systems. But what we wanted didn’t exist. He told us that we would have to build our own systems because the cost and the delays of modifying off-the-shelf systems would be prohibitive. Chris and I didn’t know what we didn’t know about coding. We just shrugged and with very little empathy said, “Let’s get started.” John turned pale, but the next morning he was loyally at his desk starting to code. John built our IT organization and systems from scratch. He started alone and today has 130 people in his IT department. Our systems have been patented, and we feel they are a key qualitative difference between Ambit and our competitors.

People thought we were crazy to build our own systems. Any time you do something unconventional, you get criticized. The first time I was invited to a telecom industry conference to speak on a panel, I was asked to describe Ambit. I told everyone that we were a data processing company that happened to sell electricity and used direct sales for gathering customers. There were snickers in the room. We heard them and ignored them. We didn’t want to be like them, act like them and have returns like theirs. In fact, we didn’t even want to think like them. We didn’t hire anyone from the utility industry for over four years. Any time we needed to learn about something, we Googled it. This approach had risk, but it succeeded because of talented, curious people.



People

Companies are collections of people. Their cumulative and collective knowledge multiplied by their focus and passion is what distinguishes one company from another. That’s what culture is all about. The question for us was how to begin creating a culture. There is an old saying, “First, we define our space and then our space defines us.” We set our culture in motion by moving into a 100-year-old warehouse space and tearing out all of the offices. Light immediately cascaded through the many windows onto the beautiful polished hardwood floors and red brick walls. We wanted open spaces so that we could more closely connect to the emotions of our business. We wanted to hear the excitement and concerns in voices to know what to applaud or what to address immediately. We wanted to sit in the open so that we could have hundreds of conversations a day without ever leaving our desks. 

Actually, our desks are $19 fold-up tables. They, too, were unconventional, and concerns were voiced that everyone would think we had no money and little chance of success. But we explained that we were going to invest all of our capital in great people and outstanding systems, not in fancy offices and elegant furniture. We told everyone that the smart people would understand this and not to worry about anyone else. Eight years later, we are a $1.5 billion company, and our executive team still sits at those same fold-up tables, next to each other and out in the open. 

If we started over tomorrow, we would do it exactly the same way. Smart, young people want a space with high energy that promotes speed, creativity and collaboration. They want to be surrounded by other smart people. We knew that only assigning IT the task of figuring out what was needed and how it should be designed, coded and then prioritized would lead to disaster. We were determined to enable companywide collaboration, believing that everyone had to be engaged in this process. Our space and open culture made that work. 

Standards

The very first time Chris and I sat down to map out the kind of company we wanted to build, we talked about our reputations and the reputations of consultants who would one day join us. We knew that consultants would be putting their reputations on the line every time they approached someone about becoming an Ambit customer or Ambit consultant, and we wanted to deliver as promised—not some of the time, but all of the time. So we committed to building the finest and most respected retail energy provider in America. Those were pretty bold words for a company with a couple of customers, but we knew the opportunity was enormous. To be the finest, we had to have great systems and outstanding people. To be the most respected, we could never sacrifice integrity for growth. 

Over the past few years in almost every speech I have made, I have emphasized that the only way to attract and retain the best people, whether it is inside an organization or in a consultant downline, is by maintaining high standards. We tell our people to be the finest and most respected, to never sacrifice integrity for growth and to never exaggerate. We explain that exaggeration is like quicksand, and once you slip into it, it is almost impossible to get out of. You cannot build a long-term sustainable business with a foundation built on quicksand. Build your foundation on rock. Build it on truth. 

Looking back over the past eight years, we have always tried to work our hardest and do our best. We have always tried to deliver as promised. We have always tried to attract and retain the best people. We have communicated our values repeatedly, and have enforced them when necessary. And along the way, we would like to think that we have built up a certain level of trust with our customers, with our consultants and with our people. That is why we have achieved what we have achieved.

President Reagan was right. Success is all about teamwork, about attracting and retaining the best people and giving them their well-deserved credit. Everyone can do that.


Jere Thompson Jr. is Co-Founder and CEO of Ambit Energy.

February 01, 2015

DSA News

DSA Membership: Perpetuating the Collaborative Culture of Direct Selling

by Joseph N. Mariano


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


Like every industry, direct selling companies must compete for business, making product development, marketing and sales a highly competitive proposition, particularly at organizations that have business lines in common. This competition is healthy because it drives innovations that ultimately improve the experience of our customers and increase the likelihood they’ll come back to us.

Yet, in spite of the routine competitive pressures associated with operating a business at a high level, our industry is defined by a strong culture of collaboration that I would suggest is unique and adds significant value. As Mary Kay’s Michael Lunceford, Chairman of the Direct Selling Association’s (DSA) Government Relations Committee, likes to remind others in direct selling, we are fundamentally in the people business—certainly to a much greater extent than online and brick-and-mortar retailers.

The face-to-face engagement that characterizes direct selling invites knowledge sharing among companies, even among the fiercest of competitors. At every DSA conference, I am continually inspired by how generously executives from different—and sometimes even competing—companies work together to lend perspective on challenges and opportunities. Many view such collaborations as a way to pay it forward, grateful for critical information they received along the way. Learning from successes and failures of others helps all of us build a stronger direct selling industry together.

At DSA, we live this culture of collaboration every day and harness its power to live up to our mission of promoting, protecting and policing the direct selling industry. Our efforts to bring companies together and facilitate collaboration and conversation are on clear display during each of our conferences, but that is just the beginning. Through our committee and council structure, we create forums for companies of every size, marketing model, and product line to discuss pressing challenges and opportunities and, most importantly, implement solutions that benefit all of our member companies and the direct selling channel.

I appreciate this opportunity to discuss some of the ways in which DSA membership and our strong culture of collaboration can add tangible business value to your direct selling company this year—and for years to come:

  1. Government Relations. Each year, state legislatures meet to consider thousands of bills. Year after year, the Association’s collaboration with DSA member companies in this important area has prevented unnecessary or costly mandates from becoming law. We also pursue legislation proactively, including independent contractor measures in various states that protect the direct selling business model. The committee engages similarly with federal policymakers from our headquarters here in Washington, D.C.

  2. Ethics and Law. Direct selling companies cannot join us without undergoing a year-long, rigorous review process to ensure compliance with standards set by DSA’s Code of Ethics. Once on board, members on the Ethics Committee help us chart the future of our Code, identifying areas that further strengthen consumer and salesforce protections. Membership in DSA helps differentiate our companies from bad actors within the industry.

  3. Industry Research. DSA’s Industry Research Committee implements a program that helps our members stay abreast of and understand industry trends to make more informed business decisions. Our members receive timely access to market sizing, benchmarking and best practice reports.

  4. Executive Education. Each year, DSA’s Education Committee develops a wide-ranging calendar of networking opportunities, issue-oriented summits, and executive-level dialogue and learning experiences to provide members with the knowledge they need to succeed.

  5. Communications. Making sure that key external stakeholders, such as policymakers, understand the business model and appreciate the entrepreneurial opportunity associated with direct selling is important. Our Communications Committee guides efforts in this area and is pursuing a number of new activities this year.

To every direct selling company that has already renewed membership with DSA or is about to, please accept my sincere thanks. Our industry is stronger when as many companies as possible are represented at our table.

For those of you who are new to the direct selling space or are wondering how you can increase your exposure to industry experts and help us chart the future of the industry, I would be honored to welcome you to DSA. For more information, contact Nancy Burke, DSA’s Vice President of Membership, at nburke@dsa.org.


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

February 01, 2015

Cover Story

Show Them Who You Are: Driving Successful Events with Cultural Authenticity

by Beth Douglass Silcox

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


Excitement is palpable and anticipation electric. Energy fills the space and all eyes wait, fixed center stage. Perhaps no other industry rallies its salesforce in quite as spectacular fashion as direct selling, where participants create an atmosphere that resembles a professional sporting event, a national political convention and even a homegrown dance party.

DSN February 2015Large-scale events are the culmination of tens of thousands of smaller gatherings that push business growth forward and foster belief among the rank and file selling field. By the time the pockets hit the seats in hotel ballrooms, convention centers and stadiums across the globe, successful direct selling companies have made it their business to fascinate their sales fields. As that first spotlight welcomes believers, it is up to corporate to deliver an authentic experience that lives up to the fascination and defines how the company wants the world to see them.

At an event is clearly one of the few times when a voice from the corporate level goes out powerfully to the field. The independent contractors are present, attentive, and invested in hearing and learning. This is the place to deliver big on consistency in messaging. 

Events of all sizes are avenues where direct selling companies pass along their corporate culture. But it is the large-scale annual or semi-annual extravaganza that should capture the essence of a company’s culture in every conceivable way, from the personal development speakers who take the stage and ceremonial recognition of top leaders to the entertainment and extracurricular activities. Often, even the venue locales themselves, point back to the company’s authentic, true self—its culture.

Cultural expressions at these grand events range from Team National’s homegrown comfort, banquet-style roundtable seating, indoor beach volleyball games and sandcastle sculptures to NuSkin’s on-stage pyrotechnics, Cirque du Soleil style performances and innovative musical concerts by top-shelf artists like Seal.

While some companies because of the scale of their corporations or their cultural style may spend more money and offer more visual sizzle, the same event methodology applies to all. It’s not enough to simply tell the field who you are and what you stand for, you must show them.

Event-centric Culture


“If you can’t see it, feel it or experience it quickly, we don’t sell it. We’re all about the experience, and our company name really defines how our events strategy works—It Works!”
—Mike Potillo, Chief Sales Officer, It Works!


For direct selling companies, “showing” starts in living rooms, kitchens and coffee shops across the globe. Every gathering, whether it be just two people or 2,000, is an event, and each of these events layers one on top of the other to lead direct sellers to yet a larger event, culminating in attendance at a national convention.

Participating in local events provides the first degree of connection for the independent consultant to the company, and to other consultants. From this, an individual is much more likely to take that leap to go to a regional event or fly to a national conference. When a company’s strategy includes a layered event rhythm, independent consultants build relationships, gain knowledge and understand the value of that national conference. By layering events with specific intention, it reinforces the perception that the bigger national conference will provide significant value to the attendee.

Whether it’s an intimate one-on-one meetup or an on-stage affair in front of thousands, It Works! events—or parties as they like to call them—are central to the company’s overall business strategy. “The purpose of the event is to not only inspire your existing field, but to create new revenue, increase retention and give recognition,” says Mike Potillo, Chief Sales Officer. “If you can’t see it, feel it or experience it quickly, we don’t sell it. We’re all about the experience, and our company name really defines how our events strategy works—It Works!”

Where some direct selling companies cater their events, marketing, sales strategies, and business models to 100 percent of the potential market, It Works! pinpoints the segment of market share they want and caters only to them. In so doing, Potillo says, “We know that we can be ourselves. We can be who we are. We can be goofy. We can be silly. We can be the crazy one, but we’re going to pull a big percentage of what we want and they are going to be like us. We can truly have a lot more fun and not have to worry about how we are perceived. I think that the genuine authenticity of our company resonates with everyday people because that’s exactly who we are.”

Cultural authenticity also infuses Nerium’s events through the expression of its main core value: Be Real. Their approach is personal and humanizing and giving. “Our speakers and everyone we have on stage share from the heart and are transparent with their stories, their struggles. It’s not like we’re just showing a bunch of perfect people up on stage that aren’t relatable to our Brand Partners,” says Amber Olson Rourke, the company’s Chief Marketing Officer. “Our philosophy for events is to make it a time for giving back, investing knowledge and personal development into the field, giving them fun experiences and opportunities to network and really making them feel special. We see events as a way to give back to our Brand Partners and invest in them, and I think a company gets more in return if they look at events this way.”

While Viridian Energy shares a similar event escalation process, they take a distinctly business-like approach when addressing their independent associates at events. “They are sweat equity investors in our business because they invest their time and talent,” says President Meredith Berkich. “Our desire to honor that investment is taken super, super seriously. We open the majority of our events talking to our independent associates on a business level because they consider themselves the CEOs and presidents of their own companies. We want to take a very mature business approach with them.”

Viridian’s high-level business strategy posture at events attracts extremely professional associates to Viridian’s ranks, while corporate transparency in its sustainability efforts to minimize carbon footprints through renewable energy purchases solidifies the overall integrity of the company and increases trust. It’s a strategy that keeps Viridian growing.

To successfully grow in today’s marketplace, direct selling companies must know who they are and find authentic ways to skillfully exhibit it to their sales fields. Event choices—no matter how seemingly incidental—will read authentic or not to the direct selling field. It’s imperative that companies pay attention to the details, for it is the field that literally embodies the company’s culture when they return home to build their businesses, and it’s their first-hand accounts that will fill the seats of that next national event.


“We see events as a way to give back to our Brand Partners and invest in them, and I think a company gets more in return if they look at events this way.”
—Amber Olson Rourke, Chief Marketing Officer, Nerium


A Fascinating Formula

Meeting Technology

The use and applications of technology have grown in every aspect of business, including meeting planning. In fact, according to the Event Industry Trends Report 2015, published by Julius Solaris, Editor of the Event Manager Blog, the most exciting technologies for events in 2015 will be focused around attendees and maximizing their experience at events. Take a standard Q&A session, for example, a segment that can be challenging for audience participation. Traditionally, attendees would take turns at a solitary microphone, or attempt to pass around a few wireless ones, often creating awkward silences. 

A startup company called CatchBox has created an innovative and fun way to get the audience involved. A microphone and its required audio equipment are tucked inside a foam square that can literally be tossed around the room. The attendee simply catches the box and then speaks into it. When the question is answered, the attendee tosses the box to the next person with a question. This unique product promotes not only engagement, but also does what is traditionally very difficult—it motivates attendees to get involved.

New apps can also turn anyone’s mobile device into their own personal microphone, syncing up with the room’s sound system so they can be heard—with top-quality sound. These innovations work at two important levels—increasing audience engagement, which is always a goal, but also making the experience more personal and gamified, and thus reducing the stress usually associated with speaking out loud in front of strangers.

Apps on mobile devices will also replace paper event schedules, and even maps and guides, as the old standard “You are Here” map-on-a-wall becomes a micro-locating flag on your smart phone, ready to lead you to your next workshop.

ACN does a great job at building the belief level of new consultants, not only in the power of the business opportunity, but also the power of attending events. ACN regularly has new people—some only in the business for a few weeks—sign up for national conventions.

Successful companies establish formulaic events. They’ve got a standard set of objectives, and often a standard platform or schedule mixing general sessions with targeted workshops. Basically, each objective or segment should revolve around growth and getting people consistently doing the right things when they return to the field. The event is the largest and loudest “voice” during the year, but everything coming from the company all year long should layer into the messaging from the event, and keep the field going in the same direction.

That’s not to say that the companies should create a boring event that never changes or has surprises. Excitement is critical to a successful event. But it should be within the framework of consistency that the creativity of each company flourishes, instead of simply calling on the same people each year. New attendees generally always bring excitement with them, especially if the company has laid the groundwork leading up to the event. Ideally, the attendee list should be a mix of current leadership and a heavy number of brand-new attendees.

As for those escalation events like Viridian’s Road Shows and Super Regionals, Berkich says a 20 to 30 percent guest-to-associate ratio is a good rule of thumb. “If you get to the point that you have a lot of associates coming to a normal escalation event and they aren’t bringing guests with them, then the business is not growing,” she says. And direct selling companies are wise to heed that warning.

“We approach every event as if we are talking to a brand-new person,” Berkich says. “But the reality is that we all need recharging at times. You miss goals, and you have people out there trying to steal your dreams. Even people who have been in the business for some time need to come and build their own beliefs back up, and sometimes they need to borrow the belief of other people.”

Putting Pockets in the Seats

The same corporate people saying the same corporate stuff year after year can be a hard sell. Companies like ACN have drawn phenomenal speakers to their international training events over the years. These influential voices provide positive front-end promotion, give companies great bang for the buck and drive people into the seats time and time again. Other companies mobilize and utilize the talents of their own field leaders to provide the inspiration they know will reach their particular salespeople.

But personal development speakers and motivational messages are just part of a successful event framework that also includes major corporate announcements. There’s no better time to launch a new product, promotion or initiative than in conjunction with a major event when companies can build excitement for a brand, a message and a product. After all, a picture is worth a thousand words. Where better to paint a picture of success and excitement than at a national or international event?

Events offer the ideal show-and-tell playground for top leader recognition too. Regardless of the corporate culture’s style, these hard-working direct sellers must get their moments in the spotlight. Primerica’s Next Generation Giants walk away with enormous trophies and fine art portraits, while Ambit Energy awards cash prizes, iPad Minis and even a Cadillac CTS Coupe.

But it’s not only top leaders who benefit from attending events. One of the most important aspects of a successful event is also something that is relatively easy to do: Give people something they may not get elsewhere in their lives—recognition and appreciation. That could be as simple as seven minutes of applause while 100 people stream across the stage waving or handing the microphone over to an unpolished speaker so she can share with the crowd why she joined the company. Recognition is about making every single direct seller feel special because they actually made it to their goal, and it’s about inspiring the audience to earn their way on stage next time.


One of the most important aspects of a successful event is also something that is relatively easy to do: Give people something they may not get elsewhere in their lives—recognition and appreciation.



Events and Strategic Growth

“The biggest mistake most companies make at events is that they think they are just there to have fun,” Potillo says. In fact, making friends and having fun is only part of the equation. “When people leave our events, they don’t just leave with a good feeling that they had a good time. They leave with a specific goal, a specific path, and a very simple system for how to achieve that.”

Without such a game plan, Potillo says It Works! would not have posted year-over-year growth since 2010. “We had an event. We came together as a team, made a lot of friendships, had a lot of fun, put together a plan for freedom, and we jumped to $45 million in sales the next year,” Potillo says. They repeat the process each year, and have continued to experience high growth. Last year, It Works! placed No. 27 on the DSN Global 100 list for 2013 at $456 million.

Startup companies can use an aggressive event schedule to expose as many people as possible to their products and to encourage new consultants to take the first step of engaging with the company. Consistency in events also aids this process, as existing consultants know that the new people they bring to an event will have the same experience they did. It’s this kind of confidence that sparks the daily field behavior that grows events and, by extension, companies.

Still, for a lot of direct selling companies, lack of staff and resources can make such tight event schedules really difficult to execute. In this case, two events a year is an excellent beginning. It establishes the kind of event rhythm companies need in order to consistently gather a captive audience. This schedule creates a foundation to build upon, and part of that is also driving behaviors in the field with product and recruitment promotions that head toward that event.

In the simplest of terms, the field sees the event as a very real deadline for achieving goals. They want to be recognized at the convention, and they know what they need to do to meet their goals. A strategic event schedule allows the company to create deadlines that are good for business and, at the same time, a rhythm to drive the business.


Events are all about the people in the seats—connecting with them, recognizing their accomplishments, and driving and inspiring their behavior and growth.


But it’s a mistake for companies who are culturally ambiguous to believe they can host a large-scale event, give people some good information and see immediate success. Events are best utilized when they are part of a larger strategy to train, recognize and motivate the field to achieve their goals. After all, if the strategic plan is carefully orchestrated, when the field reaches their goals the company also reaches theirs.

Additionally, while it’s true events can facilitate rebranding or repositioning of a company, they are not a place to display ego or confirm the executives’ public speaking skills. Events are all about the people in the seats—connecting with them, recognizing their accomplishments, and driving and inspiring their behavior and growth.

The enemies of direct selling are time and distraction. The average direct seller has only a few precious hours to spend building a business each week with no time to waste trying to figure out what your company stands for or in which city you’re appearing next. Berkich says, “The element of surprise and ‘aha’ for a volunteer army is a slippery slope. You need those people to be able to engage on a level that they have set for themselves for their own personal goals and aspirations. You need to be able to maximize that precious time and provide an environment of stability and consistency.”

February 01, 2015

Stock Watch

Stock Watch, February 2015


February 01, 2015

News in Brief

News in Brief, February 2015

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


Janet Kincade and Cindy Monroe

Thirty-One Taps into Artisan Jewelry with Jewel Kade Acquisition

» Columbus, Ohio-based Thirty-One Gifts has acquired Utah-based direct seller Jewel Kade, an artisan jewelry brand founded in 2009. Beginning this spring, Thirty-One will offer JK by Thirty-One jewelry in addition to its handbags, totes and home organization products.

Like Thirty-One Founder Cindy Monroe, Janet Kinkade launched Jewel Kade from her basement with the hope of equipping and empowering women to succeed on their own terms. Both brands also bring a personal touch with the option to customize select products. Jewel Kade now partners with a network of 1,500 stylists nationwide and has been featured on the TODAY show, Ellen and American Idol.

JK by Thirty-One is not the only fresh offering coming to Thirty-One customers in 2015. The company has also acquired upscale accessories brand Jewell, a direct selling startup co-founded in 2013 by Monroe and her sister, Christie Jewell Woodfin. These strategic acquisitions bring new growth opportunities to a company that has achieved annual net sales of $763 million in its first decade.

With the acquisition, Thirty-One is offering Jewel Kade stylists the opportunity to join its family of consultants. Kinkade will also carry on her role as the principal jewelry designer for JK by Thirty-One.


Nu Skin Donates 400 Million Meals through Nourish the Children

Children in Malawi, Africa, receive meals supplied by Nourish the Children.Children in Malawi, Africa, receive meals supplied by Nourish the Children.

» As Nu Skin closed out its 30th anniversary year, the wellness and skincare company quietly celebrated a major milestone in its Nourish the Children initiative. Since the program launched in 2002, Nu Skin employees and distributors have donated more than 400 million meals to malnourished children around the world.

Nourish the Children supplies often life-saving nutrition through Nu Skin’s specially formulated VitaMeal product. The Provo, Utah-based company partnered with an expert on child malnutrition in third-world countries to develop VitaMeal, a blend of carbohydrates, protein, fat, fiber and other nutrients that easily supplements local ingredients.

When individuals purchase VitaMeal, Nu Skin matches the donation and distributes the meals to one of its authorized charity partners. The model answers a need for consistent sources of nourishment among the world’s neediest populations. Every day, nearly 100,000 children receive meals as a result of the initiative. Nourish the Children has also established education and disease prevention programs, such as the School of Agriculture for Family Independence (SAFI) in Malawi, Africa.


Natura Is the World’s Largest B Corps Certified Brand

» Natura Cosméticos, Brazil’s leading cosmetics, fragrance and toiletries maker, has built its business on a commitment to relationships, sustainable development and promoting well-being. The brand’s purpose-driven practices emphasize respect for and preservation of natural resources, as well as a strong sense of social responsibility. Pursuing that core philosophy, Natura has now become the largest—and first publicly traded—company to attain B Corps certification.

Certified B CorporationThe nonprofit B Lab certifies B Corporations for voluntarily meeting rigorous standards of social and environmental performance, accountability and transparency. Inc. magazine describes B Corp as “the highest standard for socially responsible businesses,” and the Sierra Club calls it “one of the most trustworthy eco-certifications.” More than 1,000 Certified B Corps across 33 countries and more than 60 industries have joined the initiative.

Like its fellow B Corps companies, Natura leverages the power of business to solve social and environmental problems. Natura’s internal performance evaluation includes execution of its social or environmental mission and goals. The company also provides generous benefits and training to employees, and more than 50 percent of its managers are women. Other factors highlighted by B Corps include Natura’s contribution to public education and community investment—both monetarily and through partnerships with small community suppliers—and the company’s close tracking of environmental aspects of its operations.

Natura—a 7,000-employee company with $2.65 billion in net sales last year—joins two other large, high-profile businesses recently added to the B Corps ranks. Crowdfunding platform Kickstarter and energy company Green Mountain Power 
both announced certification earlier this month.


DreamTrips by WorldVentures Named World’s Leading Travel Club

» The World Travel Awards (WTA), annual industry honors voted upon by travel professionals and high-end tourism consumers, has named WorldVentures’ DreamTrips vacation club the 2014 World’s Leading Travel Club. The club offers its members curated group travel opportunities and membership discounts, currently in 60 countries worldwide. DreamTrips members can also sign up to experience VolunTours, which combine voluntary service with travel.

The World Travel Awards have been setting travel and tourism industry benchmarks for more than two decades. Leading up to the international awards, DreamTrips and its travel agency partner, Rovia, were named this year’s Leading Travel Club for the North America, Europe, Asia and Africa regions.


Youngevity

 Youngevity to Offer Energy Services through New Partnership

» Youngevity International is adding another segment to its diverse direct selling business, this time in the services category. The San Diego-based company has branched into energy and natural gas services through a new partnership with Energy Professionals.

The new services, including green renewable energy options, launched for Youngevity’s Texas distributors and customers in January. The company anticipates that more deregulated markets will follow. Energy Professionals holds contracts with 10 of the country’s top 13 energy supply companies, enabling it to service more than 5 million residential customers and more than 50,000 commercial accounts.

Youngevity’s extensive offerings span the Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family categories. Further diversifying its model with energy services allows Youngevity customers and distributors to participate in a
$500 billion industry, said President Bill Andreoli.


Foundation 4Life Brings Aid to Malaysian Flood Victims

» Foundation 4Life is bringing relief to Malaysia amid flooding on the country’s east coast, as well as in parts of neighboring Thailand and the Philippines. An unusually heavy monsoon season inundated the region from mid-December to early January, leaving nearly a quarter of a million people displaced from their homes.

4LifeThe flooding has caused dozens of deaths and extensive damage throughout the region. Initial estimates from the Malaysian ministry project that clean-up efforts will cost the federal government nearly US$60 million. 4Life reports that the disaster has affected more than 100 of its Malaysian distributors. The company has an office in Kota Bharu, a city in the northeastern state of Kelantan, where some of the most severe flooding occurred.

Foundation 4Life focuses on building people, family and communities wherever 4Life conducts business, and the company has repeatedly mobilized its network of distributors around the world to aid in disaster relief. In Malaysia, employees and distributors gathered at 4Life’s Petaling Jaya office outside Kuala Lumpur to prepare aid packages. The foundation delivered an initial shipment totaling nearly 2,000 pounds of food and necessities to Kota Bharu, followed by a second shipment exceeding 2,800 pounds.

4Life’s Vice President of Communications, Calvin Jolley, told DSN the company is also supporting local distributors with monetary donations and supplies. Foundation 4Life is holding a February event at its Kota Bharu office to meet with leaders, make donations, and assess next steps in the aftermath of the disaster.


Avon China Probe Concludes with $135 Million Settlement

Avon China» The Department of Justice will defer criminal prosecution of Avon Products Inc. for three years, according to a recently disclosed bribery probe settlement. A six-year federal investigation of the company has ended with Avon’s Chinese subsidiary pleading guilty and accruing $135 million in fines.

The investigation focused on the period from 2004 to late 2008. The SEC alleged that Avon China’s inaccurate and incomplete bookkeeping during that period conceals payments to government officials who ultimately awarded Avon the country’s first direct selling license.

According to the SEC’s Manhattan court filing, Avon violated the Foreign Corrupt Practices Act (FCPA) by bankrolling $1.65 million in travel, meals and entertainment for Chinese officials. The company also provided $8 million in cash and gifts without properly recording the expenses. Additional payoffs went to state-owned media outlets to help the company avoid negative press.

The direct selling leader has spent about $300 million on an internal investigation launched in 2008. In the settlement, the DOJ recognized Avon’s cooperation and the “extensive remediation” it has undergone to improve compliance and internal controls.

Avon stated in May 2014 that it would settle the probe, which includes $68 million in fines to the DOJ and $67 million to the SEC. The agreement includes a corporate compliance monitor to oversee monitoring and reporting obligations for three years. With the company’s ongoing compliance, the charges will then be dropped.


Young Living

Young Living Plans to Create Utah Jobs

» After surpassing the 1,000-employee milestone in 2014, Young Living Essential Oils has announced plans to grow its workforce by nearly 50 percent over the next seven years. The Salt Lake City-based company worked with the Utah Governor’s Office of Economic Development on a plan to bring new job opportunities to the state. The jobs would bring a major economic boost, with total salaries amounting to 125 percent of the county average income.

  • Founded: 1993
  • Members: 925,000
  • Employees: 1,375
  • New jobs projected: 445
  • Farms worldwide: 8
  • Global markets: 11

Beautycounter Backs Controls on Chemical Use

CFP» Nontoxic skincare and cosmetics brand Beautycounter has teamed up with a group of likeminded corporations and NGOs (non-governmental organizations) to introduce the Chemical Footprint Project (CFP). An initiative of BizNGO and the Lowell Center for Sustainable Production and Pure Strategies, the project is using a model similar to carbon footprinting to establish the first-ever common metric on corporate chemicals management.

Founder Gregg Renfrew launched Beautycounter in 2013 to offer products that are both safe and highly effective. Though the U.S. government has banned just 11 ingredients from personal-care products to date, the company has established its own “Never List” that currently includes 1,500 ingredients restricted from its products. With its partners in the Chemical Footprint Project, including companies such as Target Corp., Staples Inc. and the Environmental Defense Fund, Beautycounter is providing a means for consumers and investors to identify organizations committed to using safer chemicals.


Medifast

Medifast Shifts Focus

» Weight-loss company Medifast Inc. is shifting away from managing its own weight control centers to partnering with franchisees through its various distribution models. At the close of 2014, the Take Shape For Life parent company closed 34 of its corporate-owned Medifast Weight Control Centers. It also expects to sell the assets of 17 corporate-owned Medifast Weight Control Centers to existing business partners, which would then be transitioned to the franchise model. 

“Exiting the corporate center model is consistent with our long-term strategy and will allow us to focus on optimizing the performance of our franchise partners,” said Michael MacDonald, Chairman and CEO of Medifast. “We will continue to leverage our multi-channel distribution approach across franchised Medifast Weight Control Centers, Take Shape For Life, Medifast Direct, and Medifast Medical Providers. By providing unique support offerings, we meet customers where they are in their weight-loss or weight-management journey and provide healthy living tools for long-term wellness.”

The company offered severance to impacted employees and the unique opportunity to become a Take Shape For Life Health Coach. Affected Center members also had several options to continue their programs with Medifast.


ViSalus Orchestrates International Workout in World Record Bid

ViSalus» ViSalus helped people jumpstart their New Year’s health and fitness resolutions in a big way. At noon on Jan. 3, the healthy lifestyle company attempted to set a record for the World’s Largest Simultaneous Group Workout.

Troy, Michigan-based ViSalus invited individuals to participate by hosting or joining one of its Challenge Group events. The groups formed across North America as well as Europe, where the company operates under the Vi brand.

If the attempt proves successful, the record would not be the first set by ViSalus, which teamed up with celebrity Alfonso Ribeiro in 2012 to perform the World’s Largest Simultaneous Flash Mob. The flash mob featured Ribeiro’s “Carlton” dance, named for his character on television’s The Fresh Prince of Bel-Air. The famous moves also helped Ribeiro and his partner, Witney Carson, win the latest season of ABC’s Dancing With The Stars.

In addition to gunning for a world record, the Challenge Groups worked up a sweat for a good cause. For every person who participated, ViSalus donated 30 meals through its PROJECT 10 Kids program, which supplies Vi-Shape Nutritional Shake Meals to children in need.


Nu Skin Enterprises Hosts Annual Investor Conference

» Nu Skin Enterprises hosted its annual investor conference on Dec. 12, 2014, at the Nu Skin Innovation Center at its global headquarters in Provo, Utah. The company’s management team shared details of its 2015 and longer-term growth plans at the event.

The anti-aging and wellness company projects 2015 revenue of $2.50 billion to $2.56 billion, representing growth of 4 to 6 percent in local currency. This revenue level reflects a negative foreign currency impact of 6 percent. Earnings per share are estimated to be $3.80 to $4.00.

Nu Skin also announced that it has received official approval to commence direct selling activities in five new districts in Shanghai and two new cities in Jiangsu Province.


MonaVie China Lays Groundwork for Official Launch

» MonaVie rolled out big plans in 2015 with the launch of its business in China, direct selling’s second largest market. The health and wellness company has kicked off a pre-launch phase in the country with a ribbon-cutting ceremony at its new Shanghai administration office.

The Shanghai office is one of three that will initially support MonaVie’s Chinese distributors and customers. MonaVie has also opened an office in Guangzhou, the capital of South China’s Guangdong Province, and plans to open a Beijing location with its full market launch in April 2015.

February 01, 2015

Publisher's Note

The Power of Connection

by Lauren Lawley Head


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


Lauren Lawley Head

Benjamin Franklin once said, “Energy and persistence conquer all things.” You will find echoes of that idea as you read this edition of Direct Selling News.

In the direct selling community, energy is never more palpable than at a major company event. When done right, new product announcements, inspirational speakers and critical training come together in a carefully designed blend to create an atmosphere of excitement and belief that take a company’s business—and that of its independent salesforce—to new heights. In this month’s cover story, writer Beth Douglass Silcox examines some of direct selling’s best event practices, providing a tip sheet for companies of all sizes that are looking to craft a cohesive, ongoing event strategy and maximize the return on the effort. Viridian Energy President Meredith Berkich is among the top executives who shared insights for the article. “We approach every event as if we are talking to a brand-new person,” Berkich says. “But the reality is that we all need recharging at times. You miss goals, and you have people out there trying to steal your dreams. Even people who have been in the business for some time need to come and build their own beliefs back up, and sometimes they need to borrow the belief of other people.”

The Direct Selling News team is powering up for a high-energy event of our own: the sixth-annual DSN Global 100 Awards. On April 8, at the InterContinental Dallas Hotel, we will unveil our exclusive list of the largest direct selling companies in the world. It is a celebration you won’t want to miss, and tickets to the gala dinner, open to direct selling executives, are available now at dsnglobal100.com. But the Global 100 is more than a night of recognition and celebration. As DSN Publisher and Editor in Chief John Fleming describes in his article “Are We Winning?” on page 58, the list has become “perhaps the most important scorecard on the industry.” As such, you’ll want to be sure that your company participates in this important research. To qualify, companies should submit complete profile and revenue certification forms by March 20, which also are available at dsnglobal100.com.

You’ll find a feature story of one of last year’s Global 100 companies on page 30 of this issue. Hy Cite Corp., which ranked No. 75 with 2013 net sales of $164 million, has found success by transitioning from selling female college students on cookware for their hope chests in the 1950s to offering multiple brands that have earned the respect of the U.S. Hispanic market and beyond. “We sell family values—working and eating together, health, and keeping the family together,” says Chairman and CEO Erik Johnson. “We believe that the field salesforce drives sales and much of our marketing and idea generation. We believe strongly that the entire organization learns from each other and that people help each other so that we are all successful together.”

At DSN, we believe that the entire community benefits when direct selling executives share their stories so that companies can learn from each other. As you continue to work your business and event plans for 2015 and further into the future, don’t hesitate to reach out so that we may continue to contribute to the body of knowledge for the entire channel.

All the best,

Lauren Lawley Head
General Manager

January 30, 2015

U.S. News

Thirty-One Brings its Totes and Accessories to Alberta, Canada

On the heels of its success in Ontario, Thirty-One Gifts’ first Canadian province, the company is expanding the sale of its products into Alberta. Beginning Feb. 10, Thirty-One will make available its entire line of personalized home organization products and totes as well as its new Jewell by Thirty-One line of faux leather purses and accessories.

The Columbus, Ohio-based company has worked to establish itself in Ontario over the past two years, and Alberta, with a strong economy and interest in Thirty-One products, served as a welcomed opportunity for the company’s movement into new markets. 

“We were purposeful about keeping to a single Canadian province for a period of time in order to thoughtfully introduce our brand and values to a new country,” said Thirty-One Founder, President and CEO Cindy Monroe. “Our business is about relationships and we’ve spent time focusing on building those relationships in Ontario, creating a strong foundation for growth and success as we expand into Alberta.”

Christina Snyder, Vice President of New Market Development, said she already sees a strong leadership base in Alberta, and looks forward to holding two upcoming opportunity events in Calgary, Alberta, for potential consultants.

“We’re going to show them we truly are a relationship company and we care about women having a fulfilling, enjoyable way to earn extra income,” Snyder said.

 

January 29, 2015

U.S. News

Avon Taps J. Crew Executive as New CFO

Four months after the resignation of its CFO, Avon Products Inc. has announced James S. Scully as the company’s new Executive Vice President and Chief Financial Officer.

Scully brings nine years of experience with specialty retailer J. Crew to lead all finance and IT functions at Avon, beginning no later than April 1. There he will work with leadership on improvements and strategy as the company continues its process of turnaround. Scully’s appointment follows recent changes to Avon’s management structure intended to support this multiyear plan. 

Having most recently led J. Crew’s international expansion efforts for nearly two years as Chief Operating Officer, Scully previously served as the company’s Executive Vice President and CFO as well as Chief Administrative Officer. Before that he had spent time at both Saks Inc. and Bank of America in financial strategy and corporate banking capacities.

“[Jim Scully’s] deep consumer expertise, track record of working in complex environments, and experience developing opportunities in international markets make him the ideal fit for Avon,” said Sheri McCoy, CEO of Avon. “He is a seasoned finance and operational leader with public company CFO experience and will play an integral role in driving sustainable and profitable growth at Avon.”

Avon’s previous CFO Kimberly Ross resigned from the beauty company last October to become CFO at oil field services company Baker Hughes Inc.

January 28, 2015

U.S. News

Tupperware Closes FY 2014 Beating Q4 Consensus

Reporting fourth quarter 2014 results before markets opened today, Tupperware Brands Corp. (TUP—NYSE) beat EPS expectations by 19 cents, with earnings of $1.72 per share. In response, shares spiked 11.9 percent in premarket trading, according to The Street. The Orlando, Florida-based direct seller posted a profit of $82.3 million, down 8 percent versus prior year, but excluding the impact of foreign currency rates on the comparison, profit was up 6 percent versus 2013.

Though down 5 percent in constant dollars compared to the previous year, net sales for the quarter ended Dec. 27, 2014, were $679.9 million, up 6 percent in local currency, due in large part to emerging markets, which were up 10 percent in local currency and accounted for 64 percent of the company’s fourth quarter sales.

Rick Goings, Chairman and CEO, said, “While there continue to be challenging external forces, this quarter’s results demonstrated we can and will continue to navigate through the environments we find ourselves in, with our strong global management team using our growth levers: innovative and demonstrable premium products; an entertaining selling situation and direct-to-consumer fundamentals driven through the relationships of our 2.9 million sales force worldwide.”

Guidance for first quarter 2015 shows an EPS in the range of 98 cents to $1.03 with earnings for the full year in the range of $4.90 to $5.00 per share. Both are below Wall Street expectations, which are $1.11 for the quarter and $5.20 for FY15, according to the Capital IQ Consensus.

Read Tupperware’s full results here.

January 28, 2015

U.S. News

Team 4Life Welcomes Olympic Gold Medalist

Australian professional snowboarder Torah Bright, who was a stand-out competitor and medalist in the 2014 Winter Olympics, has joined Team 4Life. Already a fan of the health and wellness company’s products, she will endorse 4Life’s Transfer Factor® line.

Bright was a Silver medalist in the Half-pipe competition of the most recent Winter Olympics in Sochi, winning Australia its first medal of that year’s Games. Adding to the Gold she had won in the same category in the previous Olympics in 2010, Bright became Australia’s most successful Winter Olympics athlete. She’s also won two Gold and two Silver medals for her performance in the Snowboard SuperPipe competition at the Winter X Games in Aspen, Colorado, and in 2013 took first place at the Sprint U.S. Grand Prix at Copper Mountain, Colorado.

Growing up in Cooma, New South Wales, Australia, Bright was first introduced to 4Life products in 2013 through her mother, Marion, who was already a long-time distributor for the company.

“Torah’s spirit, discipline, and character exemplify what we look for in Team 4Life members,” said Trent Tenney, Senior Vice President of Marketing. “I’ve had the pleasure of spending time with her at 4Life Global Headquarters and I can attest to the passion and determination she demonstrates in competition. We are thrilled to welcome her as the first new Team 4Life member in 2015.”

By joining Team 4Life, Bright, who just won Bronze in the Women’s Snowboard SuperPipe competition for the 2015 Winter X Games in Aspen last week, will become part of a group of world-renowned athletes who excel in their disciplines.

 

January 27, 2015

U.S. News

PartyLite to Centralize Global Innovation in State-of-the-Art Facility

PartyLite is bringing it all home—its manufacturing operations that is. The candles and home décor division of Blyth Inc. recently announced that it is creating a Global Center of Excellence in Batavia, Illinois, where the company currently houses one of its two facilities for the manufacturing and development of its candles. The second facility in Cumbria, United Kingdom, will be shut down as a result.

After a comprehensive evaluation of the two sets of operations, the company concluded that having one worldwide facility would provide a central location where it can best concentrate its expertise on candle-making innovation, research and development.

“The Global Center of Excellence in Batavia will represent a significant investment in a state-of-the-art, global manufacturing complex with advanced process control systems and unrivaled quality and service levels,” Robert B. Goergen Jr., CEO of Blyth and President of PartyLite Worldwide, said in the company’s release.

The project will launch early this year with management expecting financial results to include total annualized savings of $8.0 million, or $40.0 million over the next five years, and one-time and transitional costs of approximately $6.0 million and a $2.0 million asset write-down in Cumbria.

PartyLite continues to expand the reach of its products as acceptance of direct selling grows in other regions of the world along with popularity of its candles and accessories. The company recently made products available in both Turkey and Korea, expanding its total worldwide markets to 23.

January 23, 2015

U.S. News

This Week: Beauty Game Changers and Profit in the Party

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

  • Non-toxic skincare and cosmetics brand Beautycounter found itself in good company when women’s style magazine Elle featured the direct retailer as a “game changer” in the beauty industry, along with trendsetters in hair care and fragrance.
  •  
  • With wine an internationally coveted commodity and parties always in style, at-home tastings are surging in popularity. Now more people have found opportunities through direct sellers such as U.S.-based Boisset Wine Living and Germany’s WIV Wein International.
  •  
  • What do you want for your birthday? A 14-year-old boy with autism received a surprise demonstration of his favorite “toy”: a Kirby vacuum cleaner.
  •  
  • Ryan Blair, Co-Founder and CEO of recently revitalized health and fitness company ViSalus, makes a “game” out of interviewing potential employees and found inspiration for his company’s latest product from a surprising source.

January 22, 2015

U.S. News

Stella & Dot CEO to Speak at Inaugural Silicon Valley Conference

Stella & Dot CEO Jessica Herrin has joined an impressive lineup of speakers slated for this year’s Watermark Silicon Valley Conference for Women. Hillary Rodham Clinton, fashion icon Diane von Furstenberg, and professor and best-selling author Dr. Brené Brown are among the women who will deliver keynotes at the first-ever event. Also in the lineup will be Dr. Gloria Mayfield Banks, an elite executive national sales director with Mary Kay Inc. as well as a motivational speaker and trainer.

Watermark brings together executive women in the San Francisco Bay Area, home to tech industry hotbed Silicon Valley. For more than 20 years, the nonprofit has worked to increase representation of women at executive levels, specifically through connection, development and advocacy programs. Watermark’s board of directors includes top executives from brands such as Intuit, Oracle and Deloitte & Touche LLP.

The inaugural Silicon Valley Conference for Women will take place in Santa Clara, California, on Feb. 24, 2015. With the theme “Lead On,” the event aims to promote leadership as well as personal and professional growth. Throughout the day, Herrin and more than 100 other speakers will lead discussions and interactive sessions on issues impacting women in the workforce.

Watermark is also using the conference as a platform to introduce its first Watermark Index. Based on a survey of Bay Area companies, the Index will highlight businesses actively supporting and developing the women in their ranks.

January 21, 2015

U.S. News

Direct Selling Association President Responds to NYT Op-Ed

Direct Selling Association President Joseph Mariano has a message for New York Times columnist Joe Nocera. Earlier this month, the opinion writer added to the abundant ink that has been spilled on the topic of activist investor Bill Ackman’s $1 billion Herbalife short. This week Mariano penned a Letter to the Editor addressing the questions raised by Nocera.

The salient question appears in Nocera’s headline: “Riddle of the Pyramids: What Is Herbalife?” He compares the volleys between Ackman and Herbalife, with its bullish investors behind it, to a “hotly contested political race”—very entertaining at times, but a sideshow to more serious issues. In Herbalife’s case, that issue is whether a company is duping millions of individuals through deceptive business practices.

It is a question currently under investigation by the Federal Trade Commission (FTC) and the Department of Justice. Though the FTC declined to provide comment to the Times editorial page, Mariano gives some background on the regulations governing pyramid schemes in his response.

“There is no riddle,” Mariano writes. “Federal law and statutes in a majority of the states clearly define a pyramid as an operation that pays salespeople primarily for recruiting additional members into a network instead of selling products. The Federal Trade Commission further warns that pyramids may require members to buy large amounts of inventory, meaning you couldn’t consume it yourself, or unwanted items.”

Mariano also points to the clear distinction between the multilevel marketing business model and illegal business operations—a distinction that falls through the cracks of Nocera’s argument. 

“We should consider the consequences to the individuals who sell and consume their products—and the communities their parent companies serve—before placing scarlet letters upon their legitimate businesses,” Mariano concludes.

January 21, 2015

U.S. News

USANA Named a Trusted Partner and Sponsor of ‘The Dr. Oz Show’

Photo: Dr. Myron Wentz (from left), USANA Founder and Chairman of the Board, Dr. Mehmet Oz and USANA CEO Dave Wentz. (Photo courtesy: USANA)


USANA Health Sciences and Dr. Mehmet Oz are making it official, so to speak. USANA has teamed up on several occasions with the heart surgeon and Daytime Emmy Award-winning host of The Dr. Oz Show. On Tuesday, the global nutrition company announced its new status as one of The Dr. Oz Show‘s Trusted Partners and Sponsors.

According to Dr. Oz, the relationship grew from a shared vision “to make a positive impact on the health of others.” In 2012, USANA became a national sponsor of HealthCorps, the charitable foundation that Dr. Oz and his wife, Lisa, founded in 2003. HealthCorps is a wellness movement to combat childhood obesity through in-school and community programming. The following year, Dr. Oz served as master of ceremonies at the USANA Champions for Change 5K, an annual superhero-themed event supporting the USANA True Health Foundation.

“For The Dr. Oz Show to call any company a Trusted Partner and Sponsor, it must meet certain criteria,” Dr. Oz shared in the company’s release. “Chief among them is integrity. We’ve done our research and found USANA to be an outstanding company—one that offers cutting-edge products that we here at the show would feel comfortable recommending to our wonderful audience.”

To kick off the partnership, USANA’s joint health supplement Procosa will appear this week on The Dr. Oz Show. The company’s award-winning products will also appear on Dr. Oz’s website and in future broadcasts.

January 20, 2015

U.S. News

Herbalife’s $100M Plant Brings Hundreds of Jobs to N.C.

Herbalife is marking a company milestone two years in the making. The global nutrition company recently celebrated the grand opening of its fourth and largest Herbalife Innovation and Manufacturing (HIM) facility. The Winston-Salem, North Carolina, location will produce an estimated 150 million units of made-in-the-U.S.A. product each year.

In 2012, Herbalife announced plans to convert an existing, 800,000-square-foot building in Winston-Salem, an investment of $130 million. The NSF-certified facility came online in 2014 and currently houses approximately 350 employees. That number will top 500 when the site reaches full production capacity later this year.

“The economic impact of this facility will be felt throughout the Winston-Salem area, particularly for the hundreds of talented workers who will contribute to its success,” said Rep. Virginia Foxx (R-NC), on hand with other officials and business leaders to celebrate the grand opening. “It gives me great pride to see national companies like Herbalife recognize all North Carolina has to offer, and I believe today’s event is another sign that our best days are ahead of us.”

With a sister site in California and two in China, HIM Winston-Salem is the largest facility ever built by Herbalife. The company will distribute nutrition powders, liquids and teas from the plant to more than 50 countries worldwide. Within its one-mile loop, HIM Winston-Salem also houses Herbalife’s Global Technical Operations Center and a state-of-the-art quality and testing lab.

“This is an incredibly important project for Herbalife as we strengthen our influence throughout our supply chain—from seed to feed—and increase capacity to meet the growing demand for our nutrition products,” said Michael O. Johnson, Herbalife Chairman and CEO.

 

January 19, 2015

U.S. News

North American Power Terminates Direct Selling Enterprise

North American Power brought its direct selling operations to an unexpected halt last week. In a statement posted to its representative site, the U.S. energy supplier announced the termination of its North American Power and Thrive customer referral programs, although it will continue to operate through its other business channels.

“Effective immediately, Independent Representatives will be unable to refer new customers or representatives to Thrive or North American Power. All referral sites have been disabled,” the notice reads.

Veteran energy executives Kerry Breitbart and Carey Turnbull founded the Connecticut-based company in 2009. Breitbart, a member of the National Energy Marketers Association Executive Committee, has been a key voice behind energy deregulation in New England, where North American Power has signed on a large percentage of its customers.

In 2011, Forbes magazine named the growing company No. 57 on its list of America’s “100 Most Promising Companies.” Last year North American Power reported $256 million in revenue, earning it the No. 47 spot on the DSN Global 100.

North American Power will continue to grow its direct-to-consumer channels, enroll new customers, and serve its existing customer base, a company spokesperson told DSN in an email.

“Although we are no longer accepting new enrollments through our referral network, our Independent Representatives will continue to receive residual commissions on customers that have been referred to date,” the company stated. “We are truly grateful for all of our Representatives’ efforts throughout this memorable journey, and wish them the very best of luck in the future.”

January 19, 2015

U.S. News

The New Talk Fusion Launches with Fresh Designs, Offerings

Moving at the speed of technology, Talk Fusion has overhauled its web-based business with fresh designs, product offerings and incentives. This week the video communications company unveiled its new look—and its new “Better with Video” slogan—during a Talk Fusion Dream Builder Broadcast by the company’s Founder and CEO, Bob Reina, and Vice President of Training and Development, Allison Roberts.

“At Talk Fusion, we’re constantly innovating, we’re constantly pushing the envelope to keep our video communication products exciting and ahead of the technology curve,” Reina told DSN. “This gives our Associates a huge competitive advantage with hot technology that’s the talk of the Internet.”

Talk Fusion’s newest offering is CONNECT Video Chat, an industry-first product that utilizes WebRTC to enable real-time video communication between any web browsers. Customers can try a free product demo via one of Talk Fusion’s newly redesigned websites, which introduce the company through videos in multiple languages.

The redesign extended to Talk Fusion’s full CONNECT suite of products, which features Video Email, Video Newsletter and Live Meetings as well as the chat tool. With its video communications technology, Talk Fusion has surpassed industry giants such as Yahoo, AOL, Viacom, CBS and MegaVideo to become the eighth-largest online video content provider in the world. Now in 140 countries, the company is setting its sights higher with a fresh look and innovative product offerings.

“Ultimately, our relaunch goal is to maximize the Talk Fusion brand worldwide, which has the additional benefit of helping our Associates achieve greater financial freedom,” said Reina.

As they build their businesses, Talk Fusion Associates will have the opportunity to earn new rewards for their work. The company has also revamped its compensation plan with incentives like Rolex watches, gold and diamond rings for milestone achievements, and a purchased Mercedes-Benz.

January 16, 2015

U.S. News

Amway Boosts Business with XS Energy Acquisition

If Amway’s history of building successful brands is any indication, the energy drink segment just got a bit more interesting. This week the industry giant acquired XS Energy, the brand behind Amway’s popular line of nutritious, sugar-free energy drinks. Amway says the move is part of its strategy to connect with young entrepreneurs, who represent a growing number of Amway business owners.

“According to our research, no demographic is more positive about entrepreneurship than those younger than 35, which is the precise target group for the XS brand,” Chairman Steve Van Andel shared in the company’s release. “Bringing Amway and XS together will strengthen our efforts in the years ahead and create more opportunities for aspiring business people.”

Former Amway business owner David Vanderveen co-founded XS Energy in 2001, and Amway became exclusive distributor of the company’s products in 2003. Available in 38 of Amway’s international markets, XS Energy has now topped $150 million in annual sales. With the help of Vanderveen, who has signed on as Vice President and General Manager for the XS brand, Amway is looking to build upon its success in the $27.5 billion energy drink market.

January 16, 2015

Events

DSA’s 2015 Annual Meeting


January 16, 2015

Events

2015 DSN Global 100 Event


January 16, 2015

Events

DSA Be Connected Conference 2014


January 16, 2015

Events

DSA’s 2014 Annual Meeting


January 16, 2015

Events

2014 DSN Global 100 Event


January 15, 2015

U.S. News

New Foru President Targets Growth with ‘Mission Critical’ Focus

As foru International enters its third year of business, the skincare and nutrition company is welcoming a familiar face to its executive team. Foru has named Sharon Morgan Tahaney as President, succeeding Karl Krummenacher, who came on board when foru Holdings Inc. acquired the business in 2012.

Tahaney has held other executive leadership positions in direct selling, including a stint as president of foru predecessor GeneWize Life Sciences. Like foru, GeneWize marketed personalized nutrition products based upon an individual’s DNA results. Tahaney joined GeneWize just 8 months after the company launched in 2007. Prior to serving as president, she headed up the brand’s marketing efforts.

A family move ended Tahaney’s work with GeneWize, but in the interim the company has relocated its corporate headquarters to her new hometown of Dallas. When the opportunity arose to rejoin the company, foru’s unique product and story once again drew her.

“I’ve always been fascinated by the fact that science and technology allow us to personalize nutrition and skincare according to our DNA,” Tahaney told DSN. “What’s missing from all the other product offerings out there is you—what do you specifically need and lack based on your genetic structure? We help people figure that out so they can look and feel their best.”

One of Tahaney’s first actions as President was to sit down with top foru Brand Partners and gather feedback on their needs and their vision for the future. She is reinforcing that same posture toward the company’s sales network among her corporate team members.

“We understand that we are a service organization to entrepreneurs in the field who are building their businesses,” said Tahaney, who has authored four personal finance books for independent entrepreneurs and a strategy book for direct selling executives.

To guide foru into the future, Tahaney and her team have developed a five-year plan that includes achieving 100 percent growth in 2015, advancing philanthropic efforts, taking DNA swabs of 1 million people, and earning a spot on the DSN Global 100. Having laid out a clear vision for the company, Tahaney says her primary goal is “to keep us focused on the mission critical, not every shiny new thing that comes along.”

Part of that mission is to create buzz and attract customers, and the young company is stepping up its media outreach and PR efforts, as well as its use of automated marketing tools. Last month, foru announced a strategic alliance with YEA Networks LLC, a media company whose lineup of popular, syndicated radio programs includes The Kidd Kraddick Morning Show. Two of the show’s hosts, J-Si Chavez and Jenna Owens, will promote foru’s products through YEA Networks’ online properties.

“This company has such an incredible story, and it’s been so unsung,” said Tahaney. “I want to change that.”

January 14, 2015

U.S. News

AdvoCare Partners with MLS in Largest Sponsorship Yet

AdvoCare International is bolstering its sports performance products with the largest endorsement deal in the company’s history. Major League Soccer has selected the North Texas-based brand as its Official Sports Nutrition Partner. Kicking off this year, the partnership will run through the 2019 season.

Last fall, AdvoCare announced that it would extend its FC Dallas jersey sponsorship and its presence at Toyota Stadium and Toyota Soccer Center through 2020. The club’s jerseys have displayed the AdvoCare logo since 2012, and new kits unveiled in 2015 and 2016 will also feature the brand.

As Official Sports Nutrition Partner, AdvoCare will have the opportunity to introduce all MLS clubs to its products. AdvoCare Rehydrate, a drink mix that promotes hydration, recovery and electrolyte balance, will be on the sidelines during league games as the Official Sports Drink of Major League Soccer. The company is also working with individual clubs to utilize AdvoCare products in league locker rooms and development team training.

“This is an incredible opportunity to share the AdvoCare vision of physical wellness with dedicated soccer fans across the nation,” Richard Wright, President and CEO, shared in the company’s release. “Soccer is a rapidly growing sport in North America, and our partnership with MLS makes perfect sense as we continue to grow together.”

 

January 12, 2015

World News

PartyLite Opens for Business in Turkey, Korea

Photo above: Front middle: Elçin Birben, Hürcan Haydar (holding flag), and Luca Pozzoli at the PartyLite Turkey Opening Ceremony in Istanbul.


PartyLite is jumpstarting 2015 by introducing its candle and home décor products in two international markets. The party plan company has launched its business in Turkey and Korea, expanding its global presence to 23 total markets.

In Turkey, its 18th European market, PartyLite has inked an agreement with third-party distributor PL EV DEKORASYON ÜRÜNLERİ TANITIM VE PAZARLAMA LTD. ŞTİ. Founders Elçin Birben and Hürcan Haydar launched the young company with a vision of becoming a major player in the Turkish direct selling industry, and it will serve as the sole distributor of PartyLite products in the country.

“Elçin and Hürcan are very ambitious individuals, and we have no doubt that they are capable of growing a successful direct selling business,” said Luca Pozzoli, PartyLite Vice President of Market Development, in the company’s release. “We are thrilled that they will be the exclusive distributors of PartyLite candles, home fragrances and home decor in Turkey. Their enthusiasm for PartyLite products is remarkable, and their excitement during the entire launch has been evident.”

January 09, 2015

U.S. News

This Week: Tupperware, Stella & Dot, and the Long Herbalife Short

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

  • In “5 Ways to Make More Money in 2015,” Kiplinger encouraged readers to consider direct sales in the new year. The piece cites low startup costs, a flexible work schedule and commission-based earnings as benefits of the model.
  •  
  • Tupperware Brands announced that the company’s Executive Vice President and CFO, Mike Poteshman, will participate in the ICR XChange Conference, one of the largest investment conferences of the year. Tupperware will webcast Poteshman’s Orlando presentation, scheduled for 8:30 a.m. EST on Jan. 12, 2015.
  •  
  • Stella & Dot CEO Jessica Herrin appeared on HuffPost Live with host Caroline Modarressy-Tehrani. The fashion executive shared insights into her entrepreneurial journey and the opportunity that Stella & Dot brings to women worldwide.
  •  
  • USA Today took a look at Bill Ackman’s Pershing Square Capital, which posted gains of 40.2 percent in 2014—all without material profit from the activist investor’s $1 billion Herbalife short.

January 09, 2015

World News

Foundation 4Life Launches Malaysia Relief Efforts amid Severe Flooding

Foundation 4Life is bringing relief to Malaysia amid flooding on the country’s east coast, as well as in parts of neighboring Thailand and the Philippines. An unusually heavy monsoon season inundated the region from mid-December to early January, leaving nearly a quarter of a million people displaced from their homes.

The flooding has caused dozens of deaths and extensive damage throughout the region. Initial estimates from the Malaysian ministry project that clean-up efforts will cost the federal government nearly $60 million. 4Life reports that the disaster has affected more than 100 of its Malaysian distributors. The company has an office in Kota Bharu, a city in the northeastern state of Kelantan, where some of the most severe flooding occurred.

Foundation 4Life focuses on building people, family and communities wherever 4Life conducts business, and the company has repeatedly mobilized its network of distributors around the world to aid in disaster relief. In Malaysia, employees and distributors gathered at 4Life’s Petaling Jaya office outside Kuala Lumpur to prepare aid packages. The foundation delivered an initial shipment totaling nearly 2,000 pounds of food and necessities to Kota Bharu, followed by a second shipment exceeding 2,800 pounds.

4Life’s Vice President of Communications, Calvin Jolley, told DSN the company is also supporting local distributors with monetary donations and supplies. Foundation 4Life plans to hold an event at its Kota Bharu office in the first week of February to meet with leaders, make donations, and assess next steps in the aftermath of the disaster.

January 07, 2015

U.S. News

Youngevity to Offer Energy Services through New Partnership

Youngevity International is adding another segment to its diverse direct selling business, this time in the services category. The San Diego, California-based company has branched into energy and natural gas services through a new partnership with Energy Professionals.

The new services, including green renewable energy options, will launch for Youngevity’s Texas distributors and customers this month. The company anticipates that more deregulated markets will follow. Energy Professionals holds contracts with 10 of the country’s top 13 energy supply companies, enabling it to service more than 5 million residential customers and more than 50,000 commercial accounts.

Youngevity’s extensive offerings span the Health and Wellness, Beauty and Care, Food and Beverage, and Home and Family categories. Further diversifying its model with energy services allows Youngevity customers and distributors to participate in a $500 billion industry, said President Bill Andreoli.

“Energy services represent a transfer buying experience,” Andreoli shared in the company’s release. “Everyone uses energy every day, and now we believe our distributors can make a better energy choice and supplement their income by helping customers do the same.”

January 05, 2015

U.S. News

Former Primerica Canada Head Named Company’s New CEO

Photo above: Primerica’s corporate headquarters in Duluth, Ga.


Duluth, Georgia-based Primerica is carrying out its management succession plan with the appointment of a new CEO. At its Senior Leadership Meeting in Atlanta on Monday, the financial services provider announced that company President Glenn Williams will take on the role currently split between Co-CEOs Rick Williams and John Addison. Primerica has also elected Williams to its board of directors.

With Williams’ promotion, effective April 2015, 15-year Primerica veteran Peter Schneider will transition to the role of President. Schneider currently serves as Primerica’s Executive Vice President, General Counsel and, since 2010, Chief Administrative Officer. Longtime Primerica leaders Rick Williams and John Addison will remain members of the board, with Williams named non-executive Chairman of the Board and Addison non-executive Chairman of Primerica Distribution.

Primerica’s incoming CEO has overseen marketing for all of the company’s business lines. Williams initially joined Primerica as a representative before flipping to the corporate side in 1983. When Primerica launched its Canadian business, he took up residence in the country as part of the company’s expansion team. Williams went on to become President and CEO of Primerica Canada from 1996 to 2000, when he rejoined the company’s U.S. team as Executive Vice President of Field and Product Marketing.

“Glenn has served as our ‘right hand man’ for the past 10 years, and we are confident that he is the ideal leader to take the helm of our company and continue our growth trajectory,” Rick Williams said in a statement. “...He has valuable experience running our Canadian operations and leading Primerica’s overall management team, and he has been at the forefront of our most successful initiatives.”

January 01, 2015

Executive Announcements

Executive Announcements, January 2015

Avon Strengthens Management Structure during Turnaround

David LegherDavid Legher
Fernando AcostaFernando Acosta
John HigsonJohn Higson

Avon Products Inc. announced a series of changes to the company’s management structure designed to support its multiyear turnaround plan. Avon’s Latin America management responsibilities will be divided between two Avon executives who will each oversee a defined set of markets within the region, the company’s largest sales region. David Legher, currently Senior Vice President and President of Avon Brazil, will assume additional responsibility for the South Market Group. He will report directly to CEO Sheri McCoy and join Avon’s Executive Committee. Fernando Acosta, currently Senior Vice President and President, Latin America, will retain responsibility for North Latin America and the Andean Cluster.

Legher is a 13-year veteran of Avon having held positions of increasing responsibility throughout Avon Latin America, leading up to management of the company’s largest market, Avon Brazil. He will maintain his responsibility for the Brazilian market. 

Avon also announced changes in the marketing organization and increased support of the sales organizations in its key markets.

Acosta, in addition to his management responsibilities in North Latin America and the Andean Cluster, will take on additional responsibility as Avon’s Head of Global Brand Marketing. In this role, he will lead all global marketing activities, including brand, product category strategy, and research and development. He continues to report to McCoy and serve on the company’s Executive Committee. 

Acosta has led Avon’s Latin America region for more than three years. Prior to joining Avon, he spent 19 years at Unilever where he advanced through a series of senior marketing and operating positions for some of Unilever’s most prominent brands.

John Higson, currently Senior Vice President and President, Europe, Middle East, Africa (EMEA), will take on an expanded role as Head of Global Field Operations. In this capacity, he will provide assessment and advisory support to the sales teams in Avon’s top 12 markets. Higson will maintain responsibility for the Avon EMEA business unit. He continues to report to McCoy and serve on the company’s Executive Committee.

During his 29-year career at Avon, Higson has held a variety of sales, strategy and general management assignments.


Herbalife Creates New Role in Corporate Affairs

Amy GreeneAmy Greene
Dr. Ismet TamerDr. Ismet Tamer

Global nutrition company Herbalife announced the appointment of Amy Greene to the newly created role of Senior Vice President, Global Engagement, reporting to Alan Hoffman, Executive Vice President, Global Corporate Affairs. In this role, Greene will work closely with community leaders, non-government organizations (NGOs), industry groups, think tanks and other key influencers to educate them about Herbalife and the important role the company plays in society.

Greene, who has been with Herbalife since 2009, was formerly responsible for all investment community communications, including institutional marketing and interaction. In addition, she had responsibility for the company’s engagement with the NGO community in the U.S.

As a result of this change, Herbalife also announces the appointment of Alan Quan to the role of Vice President, Investor Relations, reporting to John DeSimone, Chief Financial Officer. Quan joined Herbalife in 2007 and has held a number of roles, most recently as Vice President of Business Optimization and Real Estate, leading the implementation of the company’s program of enhancements.

Herbalife also announced that leading nutrition and health expert Ismet Tamer, M.D. has been appointed to its Nutrition Advisory Board. Dr. Tamer brings many years of experience in medicine, academia, and research in the area of nutrition to Herbalife and its NAB.


Immunotec Names New Board Member

Robert RaichRobert Raich

Immunotec Inc., a direct-to-consumer company in the nutritional industry, announced the appointment of Robert Raich as an additional member of its board of directors.

Raich is a Senior Partner at the legal firm Spiegel Sohmer. He joined the firm in 1976 and served as its Managing Partner from 1985 to 2011. Raich is a senior member of the firm’s taxation law department, specializing in corporate tax planning and reorganizations, international tax law and estate planning. He also possesses extensive experience in commercial transactions.

Raich has also served on numerous public boards and has been a member of both the audit committee and the compensation committee for such publicly listed companies.

“We are extremely pleased that Mr. Robert Raich will be joining our Board,” said Rod Budd, Chairman of the Board. “With his experience and expertise Robert will have a significant and positive impact on Immunotec.”


CVSL Elects New Member to its Board

CVSL Inc. announced that the company has elected John W. Bickel to its board of directors.

Bickel brings with him decades of experience as a commercial litigation attorney; broad and deep experience in corporate law, governance, and dispute resolution; and analytical skills and leadership abilities. He co-founded the Dallas- and New York-based national law firm Bickel & Brewer, where he served as an equity partner for over 30 years. He currently heads the firm of Bickel PLLC.

After Bickel obtained a bachelor’s degree from the U.S. Military Academy at West Point, New York, he received infantry and parachute training, and served three years as an officer in an infantry battalion and aide-de-camp to a general officer of the U.S. Army. Pursuing and receiving a law degree, Bickel later completed his West Point obligation as a trial attorney in the Judge Advocate General’s Corps. As a business litigator he was selected by his peers as a Top 100 Lawyer in the State of Texas.

Bickel has been a member of the Executive Committee of the Southern Methodist University Dedman School of Law and has served terms as a trustee of the West Point Association of Graduates. He has not been appointed to serve on any committee of the CVSL board.


Dr. Adam FriedmanDr. Adam Friedman Dr. Neal BhatiaDr. Neal Bhatia
Dr. Mira StotlandDr. Mira Stotland Marie BertrandMarie Bertrand
Dr. Debra J. WattenbergDr. Debra J. Wattenberg Dr. Karthik KrishnamurthyDr. Karthik Krishnamurthy

Nerium Establishes Scientific Advisory Board

Nerium International, a direct seller of anti-aging skincare products, announced the establishment of a Scientific Advisory Board, comprised of the following notable scientists and dermatologists: Dr. Adam Friedman, Dr. Neal Bhatia, Dr. Mira Stotland, Marie Bertrand, Dr. Debra J. Wattenberg and Dr. Karthik Krishnamurthy. The mission of the Nerium International Scientific Advisory Board is to educate consumers about the efficacy and safety of Nerium’s products while also providing feedback on new product development.

The Scientific Advisory Board will be chaired by Adam Friedman, MD, FAAD. Dr. Friedman is a board-certified dermatologist, Director of Dermatologic Research and Assistant Professor of Medicine (dermatology), physiology and biophysics at the Unified Division of Dermatology of Montefiore Medical Center – Albert Einstein College of Medicine in New York City.

Dr. Neal Bhatia is a board-certified dermatologist and Clinical Director of Dermatology at Therapeutics Clinical Research in San Diego and Interim Program Director at Harbor-UCLA Medical Center in Torrance, California.

Dr. Mira Stotland is a board-certified dermatologist and a specialist in skin cancer prevention and treatment, cosmetic dermatology and laser surgery in Los Angeles.

Marie Bertrand is a microbiologist, skin scientist and Founder of SkinScience Center in Calgary, Alberta, Canada.

Dr. Debra J. Wattenberg is a board-certified dermatologist, dermatologic surgeon and Associate Clinical Professor of Dermatology at the Mount Sinai Medical Center in New York City.

Dr. Karthik Krishnamurthy is a board-certified dermatologist and an Associate Professor of Dermatology at Albert Einstein College of Medicine in New York City.


Take Shape For Life Finds Multinational Experience in New President

Mona AmeliMona Ameli

Medifast Inc., a U.S. manufacturer and provider of clinically proven, weight-loss products and programs, announces the appointment of Mona Ameli as President of Take Shape For Life, the company’s Direct Selling Division.

“From building multinational consumer packaged goods’ brands, to developing new products and expanding business units internationally, Mona Ameli brings a diverse corporate background with a distinguished portfolio in the direct selling arena,” said Meg Sheetz, CEO of Take Shape For Life and President and COO of Medifast.

Ameli brings more than 20 years of expertise in consumer products and the direct selling industry, both in the U.S. and global markets. Most recently, Ameli served as General Manager of a Latin American direct seller, where she led the U.S. beauty and lifestyle products business. Ameli serves on the Direct Selling Association Diversity Council.

Medifast also announced the appointment of Kenneth Kopp as Vice President of Medifast Direct. As Vice President, Kopp will direct overall sales and profits of Medifast’s direct response channel. Areas of focus will include P&L oversight, web and marketing content strategy, promotional campaign development, and customer journey management. Kopp will follow the ongoing process of testing, measuring, and improving initiatives to grow customer acquisition and retention.

Kopp has more than 20 years of direct-to-consumer experience, including several years at Guthy|Renke. Previously, he served as Founder and Vice President of Marketing for Matrix Media Consulting in Los Angeles. Kopp has helped to grow many notable companies, including Warranty Corporation of America, a division of Asurion Corp, and Western International Media.


ForeverGreen Appoints New President

Jeff Graham Jeff Graham

ForeverGreen Worldwide Corp., a direct marketing company and provider of health-centered products, announced the appointment of Jeff Graham as President of North American Operations and Steven Wu as General Manager of Greater China.

Graham, an industry veteran, brings a wealth of industry knowledge and experience to the position. He started off in direct selling playing a key role in product development for nine years. After a period of time pursuing his own entrepreneurial endeavors, he returned to the industry in 2005, and spent eight years helping another direct seller during a very strong growth period. As Head of Product Development and President of North America he oversaw operations for the company’s two largest markets.

Graham also maintains ownership in a number of ventures, including three Utah County-based restaurants.

Wu has 18 years of professional experience in direct marketing and sales. He has worked for multiple companies with extensive product lines, where his roles included chief marketing officer, senior marketing manager and general manager. Wu was responsible for the creation of various distribution teams to increase sale volume and establish new markets. He has hosted leadership meetings, and he will work to grow sales volume in China, Hong Kong and Taiwan.

As a manager at other large multinational companies in the region, Wu has implemented several sales and logistical support strategies. He is also an author, having published a book on marketing for the industry.

Wu’s appointment coincides with the opening of ForeverGreen’s new office in Hong Kong, which acts as a central location for ForeverGreen’s business in the city, including product distribution and member services.


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

January 01, 2015

Publisher's Note

Note from the General Manager, January 2015


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


Happy New Year!

I’ve always enjoyed the sense of opportunity a new year brings. There’s just something about turning the first page of a new calendar that seems to add a spark of excitement to the planning process. The key, of course, is harnessing that energy and maintaining it throughout the year.

LaurenAt Direct Selling News, we’ve started the year with an expanded approach to two areas at the core of our coverage: News in Brief and Executive Announcements. Through much of 2014, we worked to increase our commitment to delivering news throughout each business week online at directsellingnews.com. The changes you see in this issue stemmed from the question: How do we create a similar experience inside each edition of the magazine? We started by rethinking the way we plan each section—selecting the stories we think will have the largest impact for the most readers, giving photography and graphics a more prominent role and introducing new storytelling techniques. Finally, we incorporated the information that previously ran in our Financial News section into News in Brief and capped off the section with our long-standing Stock Watch page. Our talented Art Director, Marcia Allen, tied it all together with a fresh look you’ll find throughout each issue. We hope you’ll enjoy reading the new sections and find the information relevant, useful and interesting. If you’d like to suggest a story or news item for News in Brief or Executive Announcements, please email Managing Editor Jennifer Mills at jmills@directsellingnews.com.

We’re also kicking off the year with a look into the future. In this month’s cover story, writer Jeremy Gregg takes us inside the technology trends that are shaping the future of direct selling. You’ll hear from executives at a wide range of direct selling companies, as well as national and international leaders, who tell us how technology is changing the business landscape. For those who weren’t able to make the trek to Rio de Janeiro for the World Federation of Direct Selling Associations’ recent World Congress, you’ll also find the highlights from a presentation by Salesforce.com’s Peter Schwartz, a futurist—whose consulting work includes the blockbuster movie Minority Report—who sees in the not-too-distant-future a world where intimate computing delivered on smart devices brings powerful intelligence to every salesperson at any time anywhere in the world. “This is really what intelligence is all about,” Schwartz says, “taking all of that data and transforming it into an analytic product that enables you to understand your customer and his needs far more deeply.”

This month’s feature stories take you inside two growing companies. The first, Stream, is an example of how a large, established company is carving out a path for growth by expanding its product offerings and embracing technology. The second, Qivana, is a look inside a young company with its eye on expansion. As the year progresses, we will continue to bring you the stories of growth and change from around our dynamic community. Until next time, I wish you and yours a 2015 filled with health, happiness, joy and success.

All the best,

Lauren Lawley Head
General Manager

January 01, 2015

Working Smart

Supply Chain Basics: Managing Third Party Logistics and Embracing Technology

by Noel Datko

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


Defining Today’s 3PL Relationship

Meeting the demands of an ever-changing global marketplace is a challenge for many of today’s businesses. Changes in the transportation landscape, advancements in technology and globalization are pressing business leaders to analyze their operations and achieve new efficiencies to minimize risk. As a result, top companies around the globe are increasingly leaning on third party logistics companies to manage their supply chains.

According to an Armstrong & Associates report, 86 percent of domestic Fortune 500 companies use 3PLs for logistics and supply chain functions. Initially, companies outsourced these functions in order to increase in-house efficiencies and reduce their overall logistics spend. Next was the need to expand to foreign markets, reduce waste and answer to a growing number of impatient customers. Today, technology plays a much larger role in the operations of successful 3PLs, and is integral to the success of their clients.

What does this modern-day third party relationship look like for your business? Here are a few things to consider when selecting a provider.

Global Partnerships

Going global is complex and presents many hurdles for businesses. Unfamiliar sources of supply, transportation and economic regulations, advanced security processes and international compliance issues are all considerations when doing business internationally. Successful 3PLs are able to leverage global partnerships to provide the resources, expertise and infrastructure necessary for expanding your global reach.

Investments in Technology

Companies looking for a 3PL to help expand their market should look for providers with advanced technical capabilities and solutions. The diversity of technology required to track products from manufacturer to consumer, particularly with international supply chains, is costly and prohibitive for many businesses. A truly global 3PL makes regular investments in technology to support the unique supply chain strategies posed by different regions of the world.

Strategic Relationships


A modern day 3PL should be committed to providing value to the customer and looking out for their best interests.


Partnerships in today’s environment are becoming more consumer-centric. A modern-day 3PL should be committed to providing value to the customer and looking out for their best interests. This requires an emphasis on building long-term relationships and offering ways to transform and collaborate. By communicating on a regular basis to talk about the client’s business and how it’s being impacted by changing market conditions, both parties will achieve greater success, and the partnership grows.

Important Skills for Your 3PL

Your 3PL partner is crucial to your success in the industry; evaluation of potential partners needs to go far beyond basic cost, to look at what skills and knowledge your 3PL can truly offer.

Consider these five skills when you’re evaluating potential new partners.

  1. Adaptation and Evolution. Your 3PL must demonstrate a commitment to continuous improvement right out of the gate. Look at things like how many continuous improvement projects your potential partner has in the works, how many they initiate and how many they complete. Consider also whether they invest in formal training programs, how many Six Sigma Black Belts they have on staff, and any industry awards they’ve received for their continuous improvement projects and innovations. If your potential 3PL doesn’t have the ability, and the drive, to not only keep up with industry standards but exceed them, your relationship is set up for failure.


  2. Visibility. One of your biggest challenges is gaining and controlling supply chain visibility—especially as supply chains go global and processes become even more complex. You need insight into every stage of the supply chain, including lead times, landed costs, inventory carrying costs, and obsolescence costs, as well as the quality of your 3PL’s customer service. Can they give you that kind of visibility? Do they have the technology and skills in place to provide real collaboration, or are you likely to be left groping in the dark while they try to get their act together when you need information?


  3. IT Innovation. Why do companies complain about the length of time it takes their 3PL to make or enable process changes? Over and over it’s the fact that their 3PL uses an old, outdated, slowly dying IT infrastructure. The 3PL you choose should show that they are up-to-date with their software, and that their staff, both in the server room and on the floor, is familiar with technology innovations and can keep pace as they continue to evolve.


  4. Smart Hiring and Smart Retention. There’s a shortage of supply chain and logistics talent. Is your potential 3PL facing that issue? Or do they invest in hiring smart and fostering talent internally? Do they focus on developing their employees’ communication and relationship management skills? Do they understand the importance of having skilled and knowledgeable people at every level of the organization, who understand your industry thoroughly?


  5. Business Intelligence and Insights. Your 3PL needs to offer more than just access to business intelligence dashboards. Every piece of software nowadays offers that. What you need from your 3PL is insight. They should be staying on top of leading industry practices and trends, plus be able to offer networking and knowledge-exchange possibilities with other shippers. They should have the ability to conduct extensive market research and both share and implement their findings. If your 3PL has a dashboard but no idea how to leverage it, in the end you’re gaining very little from that relationship.

Just as the world is constantly evolving and changing, so are your logistics needs. A modern-day 3PL will rise to the challenge and apply their supply chain expertise and resources to enhance your business operations. If you are ready to expand your market or make investments in new technology, reach out to an expert who can reduce costs, improve service and achieve better visibility of the components that drive a global supply chain.


Working Smart


Technology Continues to Transform Today’s Supply Chain

Today’s business leaders are faced with the task of creating more efficient processes while keeping costs down. In order to stay competitive in a digital age, they need to stay aggressive in transforming their supply chains, and budget remains a barrier for many. Even during economic slumps, however, companies continue to invest in technology with the goal of improving business processes and increased profitability when times improve.

A recent Gartner’s user survey reveals supply chain managers are fighting for a bigger share of the budget in order to keep up with a key business driver—the customer. As far as spending plans, they are planning to invest significantly more on technology over the next year to meet growing expectations.

How are these investments helping companies transform their traditional supply chains into integrated value chains? Here are three technologies they’re employing to gain an advantage and make their services more valuable, accessible—and affordable.

Cloud

Cloud computing can have a transformational impact on the supply chain by enabling access to real-time data and mobility. Connectivity is one of the biggest advantages, providing end-to-end visibility and an intelligent supply network where analytics and smart apps provide the information needed for quick decision-making by leaders at all points in the supply chain.

Platform Approach

Platform-based technology can help companies cope with the challenges and complexities of modern-day supply chain management. It gives users a high-level view over their supply chains and allows them to better function in a multi-channel world. By having complete visibility into your inventory, you can identify where to reduce stock without compromising customer service.

Analytics

Analytic technology addresses demand variability and gives companies the power to respond more quickly to market trends that are redefining traditional supply chain networks. Surging data volumes are requiring companies to make investments in advanced analytics in order to sort through and make sense of it all. This data can generate powerful insights into your supply chain to improve operations.

Here the customer remains the focus for driving business for virtually every organization, and supply chain managers know that technology plays a big role in that experience.

Mobile Supply Chain Management

While you are investing in these technologies, one way to further improve efficiencies and reduce costs is to take advantage of new supply chain mobility devices and applications, especially at a time when the world is becoming increasingly mobile-centric. Gartner’s report says that mobile sales were expected to reach 1.9 billion units this year, a 3.1 percent increase from last year. Company leaders and team members at all levels are conducting business operations from their tablets or mobile phones—whether in the office, at home, or on-the-go.

One mobile supply chain management app out there, for example, helps companies with a range of supply chain activities—inventory management, order fulfillment, reduced operational expenses and transportation spend, and improved warehouse efficiency.

So what should you look for in a supply chain management mobile app? Here’s a checklist of five key features integral to supply chain apps:

1. Real-time Data

Your management app should provide capabilities for real-time reporting on an on-screen dashboard, providing complete visibility into your supply chain. Transaction accuracy can be improved with real-time data validation, and customers can track their delivery in real-time, improving the customer experience and giving your company a competitive advantage.

2. Integration

Having the right connectivity and integration capabilities in place for mobile devices is more important than ever. With all of the different points in your supply chain interacting with the same data on different platforms, it’s critical to control and secure the data being exchanged.

3. GPS Tracking

Transportation is increasingly becoming a focus for mobile device management. From proof of delivery to tracking vehicles and deliveries, dispatchers can receive more timely and accurate information regarding their assets. Geo-fencing, real-time traffic updates and optimized delivery routes can help cut costs and even improve driver safety.

4. Asset Tracking

Another supply chain function improved by mobile apps is asset tracking and inventory management. Mobile barcoding solutions enable better tracking and management as your products move through the supply chain and can drive inefficiencies out of existing, outdated processes. Real-time inventory updates can provide accurate information to customers about item and quantity availability, and data entry errors can be reduced.

5. Shipment Tracking

Many supply chain and logistics professionals are beginning to rely on mobile applications to access shipping data, including shipment tracking and tracing, getting rate quotes, and receiving shipment notifications. With added visibility into your supply chain and control over drop shipments, you can improve your lot traceability and reduce shipment errors, which results in cost savings and improved customer service.

Adopting technology within your organization is a big step, but if done properly, can result in the improvement of your overall supply chain performance and increase your bottom line. Before making a selection, seek out an expert. Work with partners who understand the capabilities of new technologies and can guide you in making the best decision for your business.


Noel Datko is Marketing Director at IntegraCore LLC, a company that offers outsource turnkey fulfillment center and distribution warehousing services.

January 01, 2015

DSA News

Ramping up for a New Year of Industry Research

by Ben Gamse

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


DSA

Management consultant Stephen Few said, “Numbers have an important story to tell. They rely on you to give them a clear and convincing voice.” This sentiment is no different for the direct selling industry. 

Direct selling is a unique sales model that is easily misunderstood and therefore subject to misinterpretations and misrepresentations. Clear and reliable communication of industry information to key audiences is enormously important and can help facilitate industry growth moving forward. Industry research is one of the most vital tools to effectively communicate this information, and Direct Selling Association (DSA) research is helping to lead the charge.

Leesa Martin, a member of DSA’s Industry Research Committee and Director of Market Research & Development, Sales Strategy at Thirty-One Gifts explains, “DSA and industry research is important because, unlike the non-direct selling world, many of the companies are privately held, and there is no syndicated data like IRI or Nielsen—all data sources that can help companies benchmark themselves and understand how our industry is evolving/changing. Industry research helps us understand our salesforce and our customers.”

DSA research, with the guidance and oversight of its Industry Research Committee—chaired by Jeff Morris (Director of Forecasting and Financial Analysis at The Pampered Chef)—is diligently working to help fill the data void with industry statistics and insights. “Industry research is vitally important to accurately portray the industry with complete and reliable data, unite ourselves as an industry, and demonstrate the social and economic benefits of direct selling in the U.S. in a tangible, quantitative way,” says Morris. “Industry research also helps us learn about our industry and uncover benchmarks and best practices that help drive business decisions, which in aggregate lead to industry growth.” 

Emily Trainor, also on the Research Committee and Lulu Avenue’s Sales Analytics Manager adds, “Industry research is important for all industry members because we are all unique companies that together comprise a huge impactful industry. The research helps to identify similarities to industry trends as well as highlight areas of uniqueness for our individual companies.”

DSA research has come a long way, and as data becomes increasingly important, DSA is bolstering its research offerings, and we are poised for an exciting future.

Setting the Stage

Over the past few years, the Industry Research Committee has grown significantly, increasing research capabilities. The Committee has compiled a 360-degree view of the industry by synthesizing the most recent research studies (listed below) as a comprehensive State of the Industry Report. Now we are excited to share some of the top-level findings:

DSA’s 2014 Growth & Outlook Report provides a macro industry-wide perspective and shows us that direct selling has achieved record growth: $32.7 billion in estimated retail sales and 16.8 million people involved in direct selling in the U.S. Both of these figures represent all-time highs. 

The 2014 National Salesforce Study surveyed over 20,000 independent sales representatives in direct selling and uncovered many motivations for joining the industry related to entrepreneurship, lifestyle, and love of the product. Drilling deeper, we find that long-term supplemental income, flexibility and getting the products at a discount were the most commonly cited motivations for becoming a direct seller. All motivations became stronger, except short-term income, as we look at reasons why people continue with direct selling.

DSA’s 2013 Sales Strategy Survey studies best practices and benchmarks from direct selling companies. Key findings are that distinctions between person-to-person and party plan sales strategies are becoming less rigid, and the Internet is growing to complement existing sales strategies. 

Initially the Internet was seen as a threat to the industry, but now some of the companies that are experiencing the most growth are successfully utilizing e-commerce, mobile, and social media technology to complement their business and drive growth. Forrester Research forecasts that e-commerce is expected to grow 10 percent CAGR over the next four years and reach $370 billion by 2017, posing a powerful opportunity for direct selling companies. 

DSA’s 2012 Consumer Attitudes & Perceptions in Direct Selling Survey finds that consumers list “feeling good about supporting a small business in my community” as one of the most appealing characteristics of direct selling. 

Having completed the State of the Industry Report, DSA is ramping up for a new year with a full pipeline of research initiatives including the 2015 Growth & Outlook Survey, Socio-economic Impact Study, and Economic Opportunity Assessment of Direct Selling. This exciting new research will allow us to tell the story of the direct selling industry in a clear, convincing voice. 

You can find even more top-line industry research statistics on the DSA website. Or you can browse full DSA reports including the Growth & Outlook Report and Sales Strategy Survey at the DSA Online Store.  Also, ensure that your direct selling company participates in DSA research, including DSA’s upcoming Growth & Outlook Survey. For questions, contact DSA’s Market Research Manager, Ben Gamse at 202-452-8866 or at bgamse@dsa.org.

Distributor Motivations


Ben Gamse is the Market Research Manager for the Direct Selling Association.

January 01, 2015

Cover Story

Tech Trends: Competing for Clarity

by Jeremy Gregg

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


Just 10 years ago there was no YouTube. There was no iPhone. Facebook was only a few months old. Today, these three technologies—online video, mobile phones and social media—have revolutionized nearly every industry on the face of the planet.

  • 100 hours of video are now uploaded to YouTube every minute.
  • If Facebook were a country, it would have the third-largest population on the planet.
  • There are now more mobile phones in use (7.7 billion) in the world than there are people (7.1 billion).

These trends will certainly continue to shape our industry over the next 10 years. The future will also undoubtedly be affected by many other technologies: Text messages now outnumber phone calls by at least 2-to-1; online sales are surging while sales at brick-and-mortar stores are dropping; though first introduced less than five years ago, tablets now outsell desktop PCs by a margin of 2-to-1.

Indeed, the dominance of technology in our business lives is so prevalent, the conference theme for the 2014 World Federation of Direct Selling Associations’ (WFDSA) World Congress, held in Rio de Janeiro last November, was “Direct Selling: The Original Social Network.” The schedule included speakers from Facebook, Salesforce.com, the global service design consultancy Fjord Accenture and the market research firm GfK Group.

Direct selling companies that find ways to link the power of person-to-person sales with the power of technology will have a huge opportunity to gain market share, outgoing WFDSA Chairman Alessandro Carlucci says. “We must be prepared as an industry to offer alternatives to the customer, and the technology is only going to leverage the differentials,” he says.

Forrester Research, in its research report on tech predictions for 2015, agrees with Carlucci, according to Forbes writer Gil Press, showing that the competitive edge belongs to those who stay ahead with technology. Press recently blogged about his chief interpretation of the Forrester report, stating that “the gap between digital leaders and digital laggards will widen in 2015.” Press goes on to quote from the Forrester report: “2015 will serve as an inflection point where companies that successfully harness digital technology to advantageously serve customers will create clear competitive separation from those that do not.”

Investing for the Future

Cover StorySome company executives still question how much technology to actually utilize, and how much to offer the independent representatives without complicating the business model.

At Medifast, a direct selling company marketing weight-loss products and programs, technical upgrades are underway to help the company serve a wide range of customers. “We are looking to meet people where they are, whether that’s on social, through an app or via some other technology,” says Meg Sheetz, President and Chief Operating Officer at Medifast and CEO of Take Shape For Life. “This has motivated our interest in wearable technology, virtual coaching and creating our new and improved dashboards.”

Medifast’s digital dashboards allow customers to track nutrition, exercise, meals, weight, sleep, well-being and more. Capitalizing on the trend to “wear” devices that transmit personal data such as heart rate or steps walked, Medifast has established a partnership with Fitbit®. Consumers with one of Fitbit’s award-winning activity trackers can now have their activity data linked to their personal Medifast Dashboard. But the upgrade includes a feature that the previous one lacked: a way to grant permission to health coaches (independent representatives) to view their customers’ progress in real time. This feature enables the coaches to better and more efficiently guide their clients, an investment that pays dividends for both the coach and the company.

Sheetz explains that in addition to providing the new tech tools available to the field, the investment also includes infrastructure to make it happen. Upgrading the back office and adding more business reporting tools in order to provide more data to executives for decision making is necessary, along with giving coaches more visibility to better manage their own businesses.

It’s no small cost when you are talking about creating and innovating new tools for the field and considering the internal changes the support will require. Lori Bush, President and CEO of skincare company Rodan + Fields, explains that her company faces this challenge: “We have been trying to get the balance of innovation versus core infrastructure right, which is a big challenge for a company growing as rapidly as ours. Our most recent initiatives are very focused on supporting our business to scale and globalize. This includes major re-platforming of our commerce web services and commissions-calculation engine, as well as our customer-facing applications.”

Cost and ROI are ever-present topics in the CEO’s mind. During the World Congress, Carlucci, who is also former President and CEO of Brazil-based Natura Cosméticos, moderated a panel discussion comprised of CEOs from seven of the top 10 companies represented on the DSN Global 100, representing a combined $38.5 billion in revenue. Mary Kay Inc. CEO David Holl, Amway President Doug DeVos, Oriflame Cosmetics CEO and President Magnus Brännström, Herbalife International Inc. CEO Michael O. Johnson, Avon Products Inc. CEO Sheri McCoy, and Nu Skin Enterprises CEO Truman Hunt expressed surprising consensus on the subject of technological development. Even in trying to keep technology implementation simple, these industry-leading CEOs agree that doing so requires a significant financial commitment. To that end, McCoy underscored the importance of testing new technologies on a small scale before an enterprise-wide rollout. “As we are trying to learn more, more experimentation and testing differing things in different markets is more important to me than the amount of money,” she says. “If it works, I’m willing to spend, but to me my message to the team is, ‘Let’s look at the return on investment and are we driving growth through our field force?’ ”


“Our most recent initiatives are very focused on supporting our business to scale and on globalizing. This includes major re-platforming of our commerce web services and commissions-calculation engine, as well as our customer-facing applications.”
—Lori Bush, President and CEO, Rodan + Fields


What Comes Next?

Cover StoryMany companies are directing a lot of their attention to social media and have an active presence on YouTube, Twitter, Instagram, Pinterest and Google+, with Facebook seeming to be the most critical part of their communication strategy. More than 1.3 billion people are on Facebook every month, and a staggering 800 million of them access the platform every day, Facebook’s Vice President for Small and Medium Business Dan Levy told the WFDSA audience.

In Facebook COO Sheryl Sandberg’s opinion, just as Facebook has become an important tool for direct selling, direct selling has become important to Facebook. “Direct sellers mastered personalized marketing before Facebook even existed, and we’ve learned a lot from the way direct sellers have always run their businesses, reaching consumers where they are, understanding what consumers care about and providing people with relevant products,” Sandberg states in a video message delivered to the audience at the WFDSA World Congress. “Facebook can help direct sellers scale this experience by enabling you to reach customers online and especially on mobile with the same personal touch and relevance you provide door to door…. Our business grows when we help you grow your business.”

Levy says, “This is about extending the relationships they already have with real people face-to-face into the digital world and to extend those relationships to make them even more real.”


“Direct sellers mastered personalized marketing before Facebook even existed, and we’ve learned a lot from the way direct sellers have always run their businesses.”
—Sheryl Sandberg, COO, Facebook


The rise of OTT (“Over-the-top”) messaging apps like WhatsApp presents an extremely cost-effective alternative to traditional SMS texts. OTT refers to delivery of messages—which can include audio, video and other media—over the Internet rather than through a cellular network, which means the service does not carry the cost of traditional texting. For direct selling companies, which need to maintain regular communications with a salesforce that is many times larger than that of a traditional business, such technology could be used to develop “private label” apps to facilitate OTT messaging across the field.

Additionally, this type of delivery system has been adopted by the sales fields of direct selling companies such as SwissJust. WhatsApp allows representatives to exchange information and communicate internationally at very low cost. In fact, the description on the WhatsApp page in the Google Play Store reads “Once you and your friends download the application, you can use it to chat as much as you want. Send a million messages to your friends for free!”

This technology seems to present a largely unexplored territory for many companies. For direct selling companies, which rely on massive networks of connected distributors and customers, the prospects are particularly interesting. We foresee 2015 as a year that could bring great innovation within this area.

Collaboration Key to Success

Cover StoryHow does one reconcile the enormous investment in IT and development with keeping a balanced offering of tools for the independent representative? A joint collaboration could be a way to stay competitive with new technology, and keep pace with rapid growth, while tapping into the motivations that compel the best types of sharing of information.

A recent study by Kleiner Perkins Caufield & Byers (KPCB), a Silicon Valley venture capital firm, spearheaded by Partner and analyst Mary Meeker, cited that two-thirds of the “digital universe’s content” is now consumed or created by customers themselves. Much of this is being led by the growth in social media and blogging.

This user-generated content is largely visual. In fact, Meeker states that about 1.8 billion photographs are uploaded and shared on the Internet and mobile devices daily. Companies who can collaborate with their salesforce and tap into this enormous opportunity can stand out amid the competition. Social media is inherently collaborative and sharable.

“Social media is one of the most collaborative endeavors in digital marketing,” says John Keehler, the Director of Digital Strategy & Emerging Platforms for The Richards Group, a Dallas-based advertising agency. A professor at the University of Colorado, Southern Methodist University, the University of Texas at Dallas, and BDW design studio, Keehler is one of the nation’s leading authorities on technology trends that affect business. “Fortunately, there are many software solutions to help organizations collaborate while still allowing them to maintain brand standards. Collaboration also enables easier coordination around important events or campaigns.”

Arbonne has developed a Digital Asset Management (DAM) database to control workflow, version control and single updates to multiple interfaces. According to Lisa LaCourte, Director of Online Marketing for Arbonne, “Our goal is to provide our field with a complete Digital Toolkit. This will include assets and training on how to optimize social media to drive brand awareness and sales. It is more authentic, and the sheer power of numbers will be more impactful and drive SEO [Search Engine Optimization] and brand consistency.”


“Consultant-produced videos can be more genuine and relevant than highly produced videos. Prospects and consultants are often more inspired and can relate better to them.”
—Heather Chastain, Senior Vice President and Chief Sales Officer, Arbonne


Other collaborations between company and independent representative are less formal. Much like the celebrated ALS ice bucket challenge individual videos spread, representatives create and upload their own content showcasing products or recognizing their sales stars. Heather Chastain, Senior Vice President and Chief Sales Officer at Arbonne, says that the simplicity of production that technology brings to consultant-generated videos can pay off big. “Consultant-produced videos can be more genuine and relevant than highly produced videos. Prospects and consultants are often more inspired and can relate better to them,” she says.

At Rodan + Fields, video also plays an important role. Kylie Fuentes, Vice President of Digital Product Management, says that “video allows us to demonstrate product efficacy in really meaningful ways and reach a mass audience at low cost. Micro-video is a really interesting trend that we’re experimenting with. Instagram and Twitter’s VineApp have disrupted video consumption by tapping into the insight that people don’t have the time—or attention span!—for long-form viewing. Bite-sized videos force marketers to be very impactful with their messages, and I think this is going to lead to some innovative content strategies.”

Fuentes says that Rodan + Fields has evolved the approach to social over time, and it continues to grow; her approach to shaping the company’s social media strategy takes into account the inherent nature of social sharing. She says, “Naturally, we use Facebook to communicate brand messages and engage our community, but one of its biggest benefits is its virality. We invest in creating share-worthy branded assets that our consultants can amplify through their own social networks to spark conversations about our products.”

LaCourte says that her goals for social media at Arbonne have been to drive positive sentiment throughout social channels as a way to drive brand awareness and “improve the perception of the direct selling industry.” LaCourte has seen that their most effective social communiques relate to new product introductions and before-and-after efficacy results. These particular campaigns drive the largest engagement numbers and most positive sentiment. She says that the company’s 2015 goals include an increased emphasis on social selling that leverages the voice of the customer.

Yet even the most valuable of these social posts has an ever-decreasing shelf life. According to KPCB’s Meeker, social distribution on these platforms happens quickly. The average article reaches half of its total social referrals in 6.5 hours on Twitter and 9 hours on Facebook. The need to keep generating content is immense.

This short shelf-life is why Rodan + Fields put an emphasis on repurposing content across many social profiles. The team runs dedicated “test and learn” programs to optimize the content strategy. Fuentes says, “We’re defining a clear role for each social platform and profile and delivering much more channel-specific content. Our testing allows us to identify what’s working hard for us and focus on the things that drive engagement.”

One way to continue this drive for engagement is to integrate “sharability” in company initiatives. This has included incorporating the hugely popular Reddit AMA. Reddit is a social networking site that is basically a collection of entries submitted by its registered users, sometimes compared to a giant electronic bulletin board. In 2009, Reddit added a member feature called “AMA,” which stands for Ask Me Anything. The feature is something of a virtual press conference, where questions can be asked by users and answered by the poster. The format has become popular among celebrities and has garnered AMAs from singers, actors and even politicians. Dr. Katie Rodan and Dr. Kathy Fields decided to take advantage of this very popular network and post their own AMA for distributors. Utilizing this channel, as well as developing specific hashtags for events and promotions, has put Rodan + Fields at the forefront of companies willing to step into the future.

Eyes on the Prize

Particularly for innovative companies that are growing rapidly, alluring new technology can become a major distraction. Chasing the latest and greatest trend without a specific strategy can become a black hole, pulling in a tremendous amount of time, energy and especially money. If a new technology comes along that can facilitate a company’s existing core strategy, its pursuit can be a win.


The old marketing standard of the four P’s—product, price, promotion and place—is giving way to “the Three C’s—content, community and commerce,” coined by Partner and Analyst Mary Meeker of Kleiner Perkins Caufield & Byers.


The old marketing standard of the four P’s—product, price, promotion and place—is giving way to Meeker’s updated “Three C’s—content, community and commerce.” Meeker has labeled her three C’s “the Internet Trifecta.” She recommends that brands use these three C’s as the focus of their technology investments. She reasons that relatable content, especially when it connects with a consumer’s daily life, results in sales of products that solve problems for the customer. This, of course, is the goal, and when used well, technology can aid this process. But throwing everything against the wall to see what sticks can be an expensive (and potentially fruitless) process.

Tech authority Keehler warns that he sees companies spread themselves too thin trying to have a foot in too many digital channels. “The real opportunity,” he says, “is to focus on executing a few channels really well.”

This topic has been regularly explored by direct selling companies as they expand their capabilities in technology and grow with their customers. And it was recently reiterated by the CEO panel at the WFDSA meeting. Carlucci expresses his opinion that technology is not an end unto itself, but rather a means of leverage. The CEOs agree on a common message: Each company must choose the right technology, at the right price and right time, and then provide the right training in order to maximize the return. At the same time, it is important to remember that direct selling, at its core, is not about technology at all. It is about one person sharing a product or opportunity with another.


“It’s about people. It’s about keeping it simple. It’s about the right pace to have technology be empowering and enabling to our salesforce.”
—Doug DeVos, President, Amway


“One of the things that I have championed, and people who have come before me I think have championed as well, is to keep this business simple,” Mary Kay’s Holl says. “You can come up with a lot of technology. In my opinion if you let the IT department lead you down that path, it will be great technology but the salesforce might not use it because it is overwhelming.”

Amway’s DeVos echoes that advice to keep things simple, recounting his company’s experience with its launch of the Internet-focused company Quixtar. “We got ourselves upside-down in the late ’90s when we wanted to be a technology opportunity,” he says. “We were trying to be something we weren’t. Our experience there helped us to say, ‘We’ve got to figure this out in a different way.’ It’s about people. It’s about keeping it simple. It’s about the right pace to have technology be empowering and enabling to our salesforce.”

Keep a Watchful Eye

The frenetic pace of technological development is only going to increase, according to publications that follow tech trends. Robotic innovations in picking and packing orders have most recently captivated the largest fulfillment business of all, Amazon. Previously a client of Kiva Systems—a company whose scuttling robots can organize, pick, pack, ship and track orders in giant warehouses—Amazon decided they would rather just buy Kiva and bring those operations in-house. Amazon CEO Jeff Bezos says the number of picking and packing robots on warehouse floors will increase from 1,000 to 10,000 by the end of the year. Bezos is also planning on future tech developments to fulfill his dream of having drones deliver orders to a customer’s door within 30 minutes of ordering. The possibilities are staggering for all businesses that deliver goods to customers.

Indeed, more and more robots are doing things we consider to be in the domain of human activity. Some robots have embedded sensors that allow them to turn to you and smile at the touch of a shoulder. How might these “human” qualities allow for the delivery of training or other presentations to a sales field?

It’s spectacularly hard to imagine what other innovations are just around the corner. Keeping an open mind and preparing a budget for change seem to be the best course of action. And again, technology, and all that implies, is just the vehicle put in place to enhance the distributor-customer relationship and bring it successfully into the future, with companies better prepared to compete in the marketplace.


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Q&A

January 01, 2015

In This Issue

90 Days of Direct Selling


Chart

Click on the links below to discover 90 Day content:
(more will be added each week)

- See what we’re celebrating in our December issue!

- See what we’re celebrating in our November issue!

- See what we’re celebrating in our October issue!

- DSN Global 100 Profiles


Here’s What We Did:

Over 90 days between September 17 through December 15, we threw a party for the direct selling industry! We thank you for celebrating with us. With interviews, social media posts, stories, research information and personal development tips, we put a bright spotlight on many of the great things about our industry. You can find the interviews and stories in your last three issues of Direct Selling News magazine, or by looking in the archives on our website www.directsellingnews.com.

We want to thank you for taking this journey with us, but we also want to encourage you to keep the conversation going! By focusing on the areas specified in the graphic below, we believe we can help influence and guide key aspects in the general public’s understanding of our channel of distribution and business model.

As for us here at DSN, we’ll continue to bring you the stories that need to be told, as well as the excellent research, news and information you need in order to continue influencing the public conversation about the direct selling industry.


Thank You for Celebrating with Us!


90 Days of Direct Selling

January 01, 2015

Stock Watch

Stock Watch, January 2015


January 01, 2015

Company Spotlight

Stream: A New Face

by Barbara Seale

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


Photo above: Stream and Ignite’s recent Ignition event.


Company Profile

  • Founded: 2004
  • Headquarters: Dallas, Texas
  • Executive: President and CEO Mark “Bouncer” Schiro
  • Products: Life-essential services, including electricity, natural gas, mobile phone service, identity protection, tech support and credit monitoring services.

Stream Energy
When Stream reinvents itself, it doesn’t fool around. As it approaches its 10th anniversary, Stream settles into a new brand, redefines itself by offering new services, and jumps from seven energy markets to national scope, all in one bold move.

Mark “Bouncer” SchiroMark “Bouncer” Schiro

The change may seem sudden to outsiders, but planning and market trials have been underway for a year and a half at Stream, which direct sellers have known as Ignite since 2005. Its army of about 270,000 independent associates built their businesses switching customers to Stream Energy—electricity and natural gas—starting in the company’s home state of Texas and then expanding as energy deregulation went into effect in Georgia, Pennsylvania, Maryland, New Jersey, Washington, D.C. and New York.

But in 2014, Stream started signaling changes. The slow progression of deregulation gave way to the introduction of a new suite of HomeLife Services, including identity theft protection, computer tech support and credit monitoring, which associates could offer throughout the country. Stream priced the services so that customers got more affordable rates with each additional service. At the same time, it rolled out its Free Energy Program, allowing customers to earn free electricity and natural gas in exchange for referring other customers. And for the last few months, it has used the Stream and Ignite logos together like the biceps on two well-muscled arms. The longest-tenured network marketing energy company in the world was sending a message: Look out. We’re changing.

Associates have been seeing the changes on the horizon for a few months. However, at the company’s celebration of its 10-year anniversary, which has been named “Unleashed,” it will reveal a series of changes that will transform almost everything about it, including the national launch of mobile services by Stream.

Building Brawn

The changes are monumental, beginning with the brand. Stream Energy has always owned Ignite, and in January the parent brand will absorb the Ignite brand, which will no longer be used. According to President and CEO Mark “Bouncer” Schiro, the incorporation was done to unite the brands, and by using a single name it strengthens that name, which is important as the company brands all its other products. With the advent of new products, the Stream Energy brand becomes simply Stream. But the most powerful change—the one that will change the face of the company—comes in late January when Stream begins offering mobile phone service nationwide, focusing initially on NFL markets because of their large size. According to Schiro, it’s just the beginning.

“Your mobile handset is the remote control of the future,” he explains. “We are providing you a platform to purchase and control the services you need every day that you’ve already been purchasing. We are giving you a great value proposition so you can be comfortable promoting the services to your family and friends, as well as using them yourself.”

That’s key, because Stream also will expand its Free Energy concept to all its other products. Mobile is a centerpiece because it offers the opportunity to double the number of customers Stream serves within two years.


“I will be a failure as CEO of this company if I don’t have more non-energy customers than energy customers by the end of 2016.”
—Mark “Bouncer” Schiro, President and CEO


“I will be a failure as CEO of this company if I don’t have more non-energy customers than energy customers by the end of 2016,” Schiro states. “On average, there are three mobile phones per household. If I can get just 20 percent of our current customer base to switch their mobile service to Stream, that will increase our customers by 60 percent and double our customer count in the next two years.”

While Schiro prefers to talk in terms of customers rather than revenue, he notes that by the end of 2014, Stream will be knocking on the billion-dollar revenue door. Then when mobile service goes into effect, he anticipates that the company will add about 10,000 to 15,000 subscriptions a month, whether in mobile service, energy, or one of its other product categories.


Stream headquarters, located in the Infomart building in downtown Dallas. Stream headquarters, located in the Infomart building in downtown Dallas.

Stream headquarters, located in the Infomart building in downtown Dallas.


Empowering WomenPreviously, Women of Power has held workshops at the national convention and occasionally around the country, but in October Stream sponsored its first three-day Women of Power retreat in Orlando, Florida.

Empowering Women

Renée Hornbaker Renée Hornbaker

In some direct selling companies, women make up the largest part of the distributor base, but Stream seems to attract a smaller-than-usual population of female independent associates. Its initiative, Women of Power, is designed to change that.

The initiative started about five years ago as a grassroots effort led by a few of the company’s female field leaders. It struggled until it gained corporate support, and today the initiative is backed by no less than the company’s Chief Financial Officer, Renée Hornbaker. Women of Power focuses on helping women build the skills to be successful in Stream.

“Electricity and natural gas seem to be a more technical ‘sell,’ one that doesn’t appeal as much to women as other direct selling products do,” Hornbaker says. “Also, we started out with leaders who were mostly men, and we didn’t initially cultivate a culture of having women leaders. Women of Power is a revolution that is building a community of women leaders in an environment where they can feel safe and can learn and build the tools to be successful in this business.”

Previously, Women of Power has held workshops at the national convention and occasionally around the country, but in October Stream sponsored its first three-day Women of Power retreat in Orlando, Florida. About 140 women attended. It packed the time with coaching, training and building relationships. Attendees learned how to build powerful presentations, how to coach their teams and listen to their needs, and how to build a network of resources—successful women leaders who could teach other women how to do what they have already done, without regard to downlines. Hornbaker says that one of the most exciting actions that occurred at the end of the conference was the formation of three-woman accountability groups that will let members share tips and experiences and hold each other accountable for the goals they set.

“The groups will be a powerful part of the program,” she predicts. “Women definitely have different styles than men, and it’s important that we teach women how to capitalize on those differences.”

Stream hopes that capitalizing on those differences will help it capture the purchasing power of women that it hasn’t fully taken advantage of. Hornbaker notes that women make most of the buying decisions in the home, so by focusing on female associates, Stream can reach women customers and therefore address the market more effectively.

Because many Stream distributorships are held by couples rather than individuals, Hornbaker says that measuring the initiative’s effectiveness is difficult. But she has noticed positive trends.

“The first training session we had was with a select group of women, not necessarily top leaders, but senior leaders in the organization,” she recalls. “Shortly afterward, we had a significant number of women promote to the next level in the organization. That demonstrated the power of the focus and the training that gave women the boost they needed to get to the next level.”

Stream hopes to use a similar approach with two other groups: Hispanics and millennials. In fact, at the Orlando event, Hornbaker took time to discuss the concept with Hispanic female leaders.

“The Hispanic market is one we’ve been targeting, and we know their needs will be different,” she notes. “We’re getting their input about the best way to approach not just women, but Hispanics in general. We’ve also discussed millennials, and we believe that with the launch of our mobile product, we’ll be able to target and reach millennials and to develop programs for them.”

Tools and Training

New products aren’t the only fuel Stream is throwing on the growth fire. It has also created the “Freedom Plan,” an umbrella term for the process that provides associates with step-by-step incentives and training to help and encourage them to advance in their careers. The first incentive is You and Two, which rewards new associates with an e-tablet when they recruit two additional associates whom they mentor to recruit two additional associates. The tablet, which Schiro calls their “electronic tool box,” comes loaded with business-building tools: Stream apps, their back office, a savings calculator and more that help them carry their mobile Stream business with them, ready to present at a moment’s notice. As associates gather customers, they also work their way toward receiving their own Free Energy when they have 15 customers, along with compensation on those customer bills and on recruiting. The compensation plan’s focus is on sales to customers, but it has to start with associates. Associates can also earn Stream’s other services free. It’s part of the company’s “Freedom Plan” that lays out a roadmap toward financial freedom and then paves the road with training and support. The process helps associates visualize and then experience the rewards of growing their business.

“We tell our associates that once you’re free of those monthly bills, then get free of your car note and then the next $200 or $300 a month you’re now paying out. We want to create a simple, stair-step approach, and we’re fanatical about doing it The Stream Way,” Schiro says. “We also created a workbook that trains associates to bridge from face-to-face meetings to home meetings and webinars and then to presenting the business opportunity at a large venue, and finally to getting on stage at a regional or national event. We provide the details of how to get there.”

He notes that Stream’s field leaders have done a great job of training associates. To supplement and support them, the company has revamped its training organization. It developed the “electronic tool box” tablet and supports presentations each Tuesday, along with Thursday evening webcasts. Schiro predicts that the changes will produce a big payoff.

“We will double our associate count in 2015 over what we’ve averaged the last three years,” he anticipates.

One of the groups that will create the growth is millennials, a generation that virtually lives in the online world. You and Two, packaged with the electronic tool box, is the centerpiece of the strategy to attract them.

“If I can provide you with an electronic tool box, then every time you sign in to your business online, I can also give you the latest version of everything; there’s no more confusion,” Schiro explains. “We will also have Square Readers [mobile credit card readers] attached to our associates’ mobile phones so they can sign up new team members and take their credit card payments right then.”


Every product will be Stream branded. While CEO Mark Schiro is happy to work with robust partners, he says he has no interest in building any other company’s brand.


Ready, Set, Grow!

Preparing for all that growth has required relatively little investment. The company started with its customer-facing technology—systems used for customer enrollments, renewals and web portals—spending $2 million to update and make them even more robust and simple to use. Another half million went into Stream Connect, which allows back-office systems and several different billing systems to communicate with customer-facing systems. Stream sources Stream Connect through a third party to minimize its expenditures, paying by the number of customers on its network.

It also called 2014 “The Year of the Customer,” focusing all year on making improvements to its customer service that benefited current customers—and associates—as well as prepared it for the massive growth it expects over the next months. Customer service improvements help create happier customers as well as associates who are more confident when they gather customers and recruit their downline. Beginning in 2013, a consultant helped Stream identify and deliver on customer needs, whether the customer wants to use the company’s self-serve interactive voice response (IVR) system, talk directly to an agent, or reach the company through its website or a mobile app. In October and November they launched new customer enrollment and service platforms in Texas and Georgia, respectively, that let customers pay bills, change addresses, view their energy usage, and manage recurring credit card charges. Soon a shopping cart will allow them to add mobile and other Stream services.

The results have been impressive. For example, before it launched its improved IVR, only 27 percent of callers successfully self-served. The improved system let that number jump to 42 percent. The increase is important since it means that calls no longer need to be handled by a call center agent. Schiro says that Stream spent about $500,000 on improvements that paid for themselves in less than six months. Overall, in the last two years first-call resolution has increased by 17 percent and customer attrition—the number of customers that leave Stream—has decreased by 25 percent.

Brand Power

Ever-improving customer service sets the stage for product expansion, and Stream is already beta testing three more products that it is considering introducing after the launch of mobile service. Every product will be Stream branded. While Schiro is happy to work with robust partners, he says he has no interest in building any other company’s brand.

“I will build the Stream brand into one of the strongest brands in everyone’s home,” Schiro says. “I am happy to partner with a reputable firm. We will control the customer’s experience from A to Z, including the bill. We’ll have a strong brand platform in two years for whatever services we offer.”

Stream is now a reseller of mobile services just as it is a reseller of energy, meaning that Stream is not the initial provider of the service but rather manages both the marketing and complete customer experience. Stream has partnered with two providers, AT&T and Sprint, to provide the backbone for their mobile offering.

That brand is such a strong focus for Stream that it symbolizes Schiro’s vision for the company. His goal is to elevate the status of the Stream brand to match iconic brands such as Apple, a company whose products carry only its symbol, not its name.

“In five years, when you see the Stream globe, I don’t want the Stream name attached to it,” he says. “I want it to be so recognizable that when people see that globe, they know it’s Stream without having to read the name.”

January 01, 2015

News in Brief

News in Brief, January 2015

Born or Made?

Amway Global EntrepreneurshipReport Explores the Education Factor
Full report available at:
www.amwayentrepreneurshipreport.com


Amway Global Entrepreneurship Report Explores the Education Factor
As the year comes to a close, industry leader Amway has once again published research on the state of entrepreneurship around the globe. If entrepreneurs are the engine of business, the company’s Global Entrepreneurship Report provides a regular check under the hood. This year’s study includes a record 38 markets, where on average 75 percent of respondents expressed positive attitudes toward entrepreneurship. The report reveals that entrepreneur fever is highest among younger people, specifically those under 35, where positive responses increased to 80 percent.

Now in its fifth year, the survey explored attitudes toward entrepreneurship education. In 37 of the 38 countries polled, a majority believed that entrepreneurship is a skill that can be taught; however, one region of the world remains polarized on the question. Eighty-three percent of Chinese respondents—more than in any other market—affirmed the ability to learn entrepreneurial skills, while Japan represented the other end of the spectrum at just 40 percent.

Although education is a crucial factor, location is also key to striking out as an entrepreneur. The survey asked respondents to gauge their society’s attitude toward entrepreneurship based on factors such as politics, media coverage and personal experience. The responses show that Denmark is most friendly toward entrepreneurs, while direct selling’s largest market, the United States, appears 13th on the list. On average, almost half of respondents said their country is “very friendly” or “rather friendly” toward entrepreneurship.

The insights in this year’s report come from a survey of 43,000 people, ages 14-99. Amway once again partnered with Technische Universität München and research firm Gesellschaft fuer Konsumforschung to create the report. The company also partnered with an academic advisor in each market to assist in interpreting the data.


Moving Up: CVSL Now Trades on NYSE

Moving up: CVSL Now Trades on NYSE

The common stock of CVSL Inc. began trading on the New York Stock Exchange on Dec. 5 under the ticker symbol CVSL. Previously traded over the counter on the OTCQX, the Plano, Texas-based company first filed its S-1 in May and received authorization in late August.

CVSL recently withdrew plans for a $60 million equity raise, according to IPO investment manager Renaissance Capital. CVSL’s initial strategy had been to raise $60 million with an offering of 6.7 million shares priced at $8 to $10.

CVSL has built a portfolio of eight independent direct selling companies and has reported $89 million in sales for the 12 months ended Sept. 30, 2014.

For the third quarter ended Sept. 30, 2014, CVSL reported revenue of $24.0 million, compared to revenue of $24.3 million during the prior year period. Operating loss was $5.6 million for the third quarter, as compared to $1.3 million the previous year. The increase in operating losses was the result of the six acquisitions completed in 2013.


Youngevity Opens Russia Office

Youngevity International Inc. (YGYI—OTC.QX) announced the grand opening of its new distribution and sales support center in Moscow, its first office in Russia, one of the fastest-growing billion-dollar markets in the direct selling industry.

The company also posted a 77.3 percent increase in net revenue in the third quarter of 2014 to $37.6 million, compared to $21.2 million in the same period last year.

Gross profit was $21.0 million, compared to $12.9 million in the same period last year. Operating income was $1.2 million, an increase of 32.4 percent over the prior period. Net income decreased to $185,000 compared to $516,000. Adjusted EBITDA was $2.1 million, compared to $1.7 million. 


Be Connected Conference Calls for Executives to Change their Game

Mary Kay Inc. Chief Marketing Officer Sheryl Adkins-Green served as the Master of Ceremonies for the 2014 Be Connected Conference, which was held on Mary Kay’s home turf of Dallas, Texas. Photo Credit: Karen Garrett, DSAMary Kay Inc. Chief Marketing Officer Sheryl Adkins-Green served as the Master of Ceremonies for the 2014 Be Connected Conference, which was held on Mary Kay’s home turf of Dallas, Texas. Photo Credit: Karen Garrett, DSA

The Direct Selling Association’s 2014 Be Connected Conference, held Dec. 3-5 in Dallas, focused on disruptive thinking in the realm of marketing and communications, with a lineup of speakers addressing the audience from one main stage.

The conference once again included a special session for young and growing companies to interact with more seasoned executives. This Smart Start Seminar included roundtable discussions on topics such as marketing via grassroots efforts and social media, developing the salesforce and building the corporate team. Thursday’s and Friday’s sessions included rapid-fire segments sprinkled among panel discussions and presentations from some of the industry’s leaders.

A report from DSA President Joseph Mariano outlined the Association’s agenda for the coming year, which focuses on the “three Ps” of policing, promoting and protecting the industry. Through its programs, the DSA is working to demystify the sales channel for policymakers and the general public and tell the story of how direct selling positively affects the lives of millions of Americans. One of the most powerful ways to tell that story is through the Association’s Code of Ethics, which Mariano encouraged companies to share and promote among their salespeople.

Keynote speaker Luke Williams, a Professor of Innovation at the NYU Stern School of Business and Executive Director of the Berkley Entrepreneurship Center, took the stage on Thursday with a look at “game-changing, disruptive innovation.” A globally recognized authority on innovative leadership, Williams challenged leaders to avoid incremental innovation and focus on bold new experiments.

“To disrupt the marketplace, you have to change the way you’re thinking about your business and the way you interact with your customers every day,” Williams said.


Saddle up for San Antonio

Planning is well underway for the Direct Selling Association’s 2015 Annual Meeting, which will be held May 31-June 2 in San Antonio, Texas. The theme: Opportunity.

Mary Kay Inc. President and CEO David Holl is chairing the DSA’s Annual Meeting Committee. Early bird registration rates are in effect through March 31, and a number of sponsorship opportunities are available to active member and supplier member companies. Contact Britta Shillingsburg at bshillingsburg@dsa.org for details.

The Direct Selling Education Foundation plans to hold a fundraising auction during the annual meeting. The 2014 live auction raised more than $150,000 for the foundation. This year, the organization plans to add a silent auction component to the live auction with the goal of raising $200,000 combined. To learn more about how to contribute to the auction effort, contact Tamara Ingram at tingram@dsef.org.


DSEF Steps up Academic Efforts

Gary HugginsGary Huggins

The Direct Selling Education Foundation plans to expand the size and scope of its academic advisory council. Executive Director Gary Huggins, who joined the foundation in July, said he wants to recruit 20 new members to the council in 2015. The goal is to attract an active group of professors who will produce case studies, white papers and other academic products, as well as participate in public programs and events related to the industry.

“The Foundation’s Academic Advisory Council is an important platform for supporting and equipping key academics and thought leaders who will advance knowledge and understanding about the importance of the direct selling channel among their peer networks as well as the next generation of students,” Huggins said.


Primerica Plans Share Buyback

Primerica’s board of directors (PRI—NYSE) has authorized a share repurchase program for 2015, pursuant to which the company expects to repurchase up to $150 million of its common stock.

“In each full year since our 2010 IPO, we have returned over 100% of operating earnings to stockholders while executing initiatives to drive long-term distribution growth,” said Rick Williams, Chairman of the Board and Co-CEO.


1Q Earnings up at LifeVantage

For the first quarter ended Sept. 30, 2014, LifeVantage Corp. (LFVN—NASDAQ) reported that revenue was $52 million compared to $51 million in the prior year period. Revenue growth, excluding Japan, increased by 7 percent compared to the prior year period. Operating income improved 53 percent to $7.8 million. Net income grew 45 percent to $4.7 million or 5 cents per diluted share compared to $3.3 million or 3 cents per diluted share in the prior year period. During the quarter, the company also repurchased $2 million or 1.4 million shares.


ForeverGreen Sees 231% Growth

ForeverGreen Worldwide Corp. (FVRG—OTC.BB) announced earnings for the third quarter ended Sept. 30, 2014. The company achieved its sixth consecutive quarter of operating profitability and fifth consecutive quarter of net profitability. Sales increased each quarter for the last six quarters with sales for the third quarter increasing to $15.9 million from $4.8 million, a 231 percent increase. Gross profit rose to $12.5 million compared to $3.7 million during Q3 2013, a 241 percent increase. Gross profit margins increased to 78.7 percent versus 76.5 percent during the comparable quarter of 2013.


Direct Selling Companies Partner to Make the Season Bright for Kids

In addition to a $500,000 Toy Drive donation, Princess House gave $1.5 million in Cookin’ Kids and other healthy cooking products through its “Share the Joy” Holiday Donation Campaign.In addition to a $500,000 Toy Drive donation, Princess House gave $1.5 million in Cookin’ Kids and other healthy cooking products through its “Share the Joy” Holiday Donation Campaign.

Direct selling companies are a generous bunch, and that spirit of giving back shines brightly during the holiday season. As in many years past, the Direct Selling Association and its member companies focused their 2014 holiday charitable efforts on the TODAY show’s Holiday Toy and Gift Drive. Contributors included Amway, Arbonne, Mary Kay, Pampered Chef, PartyLite, Princess House, SeneGence, Shaklee, Southwestern Advantage, Stampin’ Up!, Team National, Thirty-One Gifts, Tupperware and Vantel Pearls.

This year, Thirty-One Gifts donated its one millionth product to the TODAY Toy Drive. The handbags, totes and accessories seller contributed more than 250,000 products valued at more than $9 million. Thirty-One Founder, President and CEO Cindy Monroe announced the donation alongside one of the company’s senior executive directors during the Dec. 2 segment of TODAY.

Taking part for the ninth year, PartyLite donated more than $2 million in home décor, candles and home fragrance gifts for children to use as holiday gifts for a special adult in their life. Joan Connor, President of PartyLite North America, also appeared on the show’s Dec. 2 segment to present the gift.

“The local organizations distributing our products tell us they especially love the concept of teaching children to give as well as to receive,” Connor said.

Longtime contributor Tupperware Brands Corp. donated lunchbox sets and other kid-friendly items to the Toy Drive. On TODAY’s Dec. 8 segment, Chairman and CEO Rick Goings appeared with special guest Maryah Sullivan, named National Youth of the Year by the Boys & Girls Clubs of America (BGCA). Tupperware is a charitable partner of BGCA, and Goings sits on the organization’s board of governors.

In addition to a $500,000 Toy Drive donation, Princess House conducted its own “Share the Joy” Holiday Donation Campaign to encourage healthy cooking and inspire giving in local communities. The kitchenware company donated $1.5 million in cookware and Cookin’ Kids products to local non-profits—including a handful or organizations selected by top leaders in the company’s salesforce.


EDC Records 18 Consecutive Months of Growth

Educational Development Corp. (EDC) (EDUC—NASDAQ) reported the largest quarterly net revenue in the company’s history with net revenue of $10.9 million for the quarter ended November 2014, compared to the previous high of $10.2 million recorded for the quarter.

Randall WhiteRandall White

EDC was led by the home business division, Usborne Books & More (UBAM), which recorded a 49 percent increase in the fiscal quarter ended November 2014. UBAM has now recorded 18 consecutive months of growth, with the past five months, July through November 2014, each posting monthly gains in excess of 40 percent over the same months in 2013. DSN asked Randall White, CEO of EDC and Founder of UBAM, what factors contributed to this growth. Here’s what he had to say:

“In order to understand increased momentum, it is imperative to first understand where we were. Just under three years ago, February 2012, our direct sales division was in decline that had reached six years in length. I received a call from an unhappy consultant in Texas who had just presented our titles to a school and the next day discovered they had purchased the items on Amazon. I had been struggling with this dilemma for quite some time, and that day it became crystal clear. If you undercut your sales people you will lose them.

It was that day that I began the process to eliminate our products from being sold on Amazon, sales which represented 20% of our retail division. Although it took some time for the direct sales division to recover and turnaround, once it occurred, the results were evident. The sales decline stopped and sales and recruiting have been terrific in the last 18 months.

Although “the Amazon decision” is the main reason for the positive effect, there have been numerous other changes within our organization resulting in our fabulous momentum: the addition of Heather Cobb, our Vice-President, who has brought insight and perspective that we had been missing, updated branding making us more recognizable to customers, and new and relevant graphics which have made us much more approachable. The mainstay, however, is a top-notch product and wonderful Home Office staff and Consultants.”


Mannatech Reports Over 25 Percent Increase

Mannatech Reports Over 25 Percent Increase

As international operations continue to grow and the number of active associates and members increase, Mannatech Inc. (MTEX—NASDAQ) is finding improvements in regional sales. For the third quarter ended Sept. 30, 2014, operations outside of North America accounted for approximately 63.4 percent of consolidated net sales, whereas in the same period in 2013, operations outside of North America accounted for approximately 57.8 percent of consolidated net sales.

Asia/Pacific showed the highest improvement with third quarter net sales that increased by $8.3 million, or 37.7 percent, to $30.3 million, as compared to $22.0 million for the same period in 2013. EMEA net sales were not far behind, increasing by $1.2 million, or 32.4 percent, to $4.9 million, as compared to $3.7 million for the same period in 2013. North American net sales increased by $1.7 million, or 9.1 percent, to $20.4 million, as compared to $18.7 million for the same period in 2013.

“The growth in net sales reflects the continued expansion of our business, the recent launch of our Uth skin care product in markets outside of North America, and the anniversary of our loyalty program,” said Dr. Rob Sinnott, CEO and Chief Science Officer.

For the third quarter net sales for the company’s overall business were $55.6 million, an increase of 25.2 percent as compared to $44.4 million in the third quarter of 2013. Net sales increased 22.5 percent in constant dollars. Net income was $5.1 million, or $1.89 per diluted share, for the third quarter 2014, as compared to net loss of $800,000, or 30 cents per diluted share, for the third quarter 2013.


RBC Life Sciences Reports 3Q Results

For the quarter ended Sept. 30, 2014, RBC Life Sciences Inc. (RBCL—OTC.BB) reported net sales of $7.5 million compared with net sales for the same period in 2013 of $6.6 million, an increase of $875,000, or 13 percent. Cost of sales for the quarter ended Sept. 30, 2014 was $3.2 million compared with $3.6 million for the quarter ended Sept. 30, 2013, a decrease of $372,000, or 10 percent. The net loss for the quarter ended Sept. 30, 2014 was $124,000, or 6 cents per share, compared with a net loss in the third quarter of 2013 of $143,000, or 6 cents per share.


Reliv Returns to Profit in Third Quarter

For the quarter ended Sept. 30, 2014, Reliv International Inc. (RELV—NASDAQ) announced a return to profit after “critical transitions” were undertaken to encourage company growth. Q3 net sales were $14.3 million, a 13.5 percent decrease from the third quarter last year. U.S. net sales totaled $10.9 million, a decrease of $2.2 million, or 16.8 percent, compared to third quarter 2013 net sales. Net income for the third quarter of 2014 was $166,000 or 1 cent per diluted share, compared to $293,000 or 2 cents per diluted share in the 2013 third quarter. Income from operations for the third quarter of 2014 was $228,000 compared to $402,000 in the same quarter of 2013.


J.Hilburn

J.Hilburn Opens Showroom Doors

Custom menswear brand J.Hilburn is opening the doors of its Dallas showroom to the public. The newly renovated space, previously available by appointment only, showcases J.Hilburn’s full collection of luxury clothing and accessories.

Stylists can use the space, located near Dallas Love Field airport, to introduce the brand to new clients and guide them through their selections, which include custom Italian fabric, collar, button, thread color and monogram options.


Crius Energy Has Best Quarterly Performance to Date

Crius Energy Trust (KWH-UN.TO—TORONTO), for the quarter ended Sept. 30, 2014, showed its best quarterly performance since the company’s IPO in November 2012. Driven by improved operation effectiveness and strong commodity margins, Crius had a gross margin of $37.9 million or 24.5 percent of revenue, compared to $30.0 million or 20.6 percent of revenue, despite energy consumption being lower than historical averages.

Adjusted EBITDA was $15.2 million, a 44.8 percent increase over $10.5 million. Revenue from the company’s residential solar offering continued its rapid growth, increasing by 18 percent to $2.0 million in the third quarter of 2014, from $100,000 in the third quarter of 2013.


Blyth Reports Increase in Third Quarter Net Earnings

Blyth Inc. (BTH—NYSE) reported that net sales for the three months ended Sept. 30, 2014, decreased approximately 6 percent to $90.8 million from $97.0 million for the comparable prior year period. Blyth’s operating loss for the third quarter was $11.4 million this year versus a loss of $11.5 million last year.

Net earnings attributable to Blyth Inc. were $106.2 million for the quarter compared to a loss of $8.5 million in the prior year period. Diluted net earnings per share attributable to Blyth Inc. were $6.57 per share compared to a loss of 53 cents per share in the prior year period.


6,600 People, 200 Companies, 4 Days, 1 Event

Eric Worre walks the room, answering questions from Go Pro Recruiting Mastery attendees as they use their mobile phones to set up appointments with prospects via text and other messaging platforms. Eric Worre walks the room, answering questions from Go Pro Recruiting Mastery attendees as they use their mobile phones to set up appointments with prospects via text and other messaging platforms.

Approximately 6,600 network marketing professionals representing more than 200 companies and 70 countries gathered in Las Vegas in late November for a four-day conference focused on recruiting and other business development skills.

The Go Pro Recruiting Mastery event, Network Marketing Pro Founder Eric Worre’s fifth, took over the Mirage Hotel with more than 30 speakers taking a single stage. It was likely the largest gathering of direct selling field representatives from multiple companies in U.S. history. In addition, approximately 500 six-figure earners participated in a two-day workshop before the event.

A key to Go Pro’s success is Worre’s steadfast commitment to prohibiting solicitation of participants.

“We decided from our very first one to take an extremely hard line—one strike and you’re out,” he said. “For this event, you’re going to take your pins off, leave your product in the room and have connection with people as peers and not as prospects.”

Rise logoThe event offers attendees a blend of practical advice, inspiration and hands-on training. During one of the most interactive sessions, the entire audience conducted an appointment blitz, using text messages to line up appointments for after the conference while Worre walked through the room answering questions and providing on-the-spot assistance in landing a meeting. By the end of the 1-hour session, virtually everyone reported lining up at least one appointment, with some participants saying they had as many as 14.

“This isn’t to replace any company event,” Worre said. “This is just a way to learn from other voices that you otherwise don’t get to hear.”

Worre also used the event to debut his documentary film, Rise of the Entrepreneur. The 50-minute movie features interviews with 25 notable supporters of the business opportunity the channel affords. At press time, nearly 200,000 DVDs had been sold and a digital delivery system was close to coming online.


Natural Health Trends Posts 250% Increase in Earnings Per Share for Third Quarter

Natural Health Trends Corp. (NHTC—OTC.BB) announced financial results for the quarter ended Sept. 30, 2014. Total revenue was $31.8 million, up 125 percent compared to $14.2 million in the third quarter last year. Operating income was $5.5 million, up 312 percent compared to $1.3 million in the third quarter last year. Net income was $5.4 million, or 42 cents per diluted share, which is an increase of 250 percent compared to $1.3 million, or 12 cents per diluted share, in the third quarter last year.

On Nov. 4, 2014, the board of directors also authorized management to pursue the listing of its shares of common stock on The Nasdaq Capital Market.

January 01, 2015

Company Focus

Strategic Synergy: Creating Qivana’s Sustainable Future

by Beth Douglass Silcox

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


Company Profile

  • Founded: 2009
  • Headquarters: Provo, Utah
  • Founders: Derek Hall, Founder and CEO; Devin Glazier, Founder and Chief Financial Officer; Justin Banner, Founder and Chief Strategy Officer; Craig Johanson, Founder and Chief Marketing Officer
  • Products: Skincare and health and wellness

Qivana

In the decade after the millennium, the exploding market for an ever-healthier beverage sent network marketing companies clamoring for exotic, antioxidant rich fruits, most often found in remote island paradises. The most successful companies—marketing a large variety of antioxidant packed juices, health and wellness, and beauty products—invested millions in researchers trudging through remote jungles, in controlled labs, and in scientists who became jacks-of-all-trades and in-house product formulation teams.

It was within this space that a group of men, those who would eventually form Qivana, decided that they would not be in the product development business at all.

It seemed unlikely to this group of network marketing professionals that breakthrough products would emerge from an in-house team focused on a variety of formulations. So they opted for different path—one that has led Qivana to market four cutting-edge product lines, currently consisting of 21 products within the direct selling spaces of health and nutrition, as well as beauty and anti-aging.


Qivana owners (L to R): Justin Banner, Founder & CSO; Craig Johanson, Founder & CMO; Derek Hall, Founder & CEO; Devin Glazier, Founder & CFOQivana owners (L to R): Justin Banner, Founder & CSO; Craig Johanson, Founder & CMO; Derek Hall, Founder & CEO; Devin Glazier, Founder & CFO


Everyone Doing What They Do Best

Qivana’s product strategy focused on partnerships with published scientists and university researchers with 10, 20, maybe 30 years invested in health and wellness solutions. They reckoned that true breakthrough products were born in these labs and saw no need to put their own scientific “fingerprints” on any product. “Let the scientists and the universities and the researchers do what they do best, which is develop, formulate and research. Then allow us to do what we do best,” says Founder and Chief Marketing Officer Craig Johanson.

Qivana productsQivana would bring products into the direct selling channel, giving these scientists, researchers and formulators an effective avenue to reach consumers with their breakthrough products. Then, Johanson says, the company would “turn that product over to our field. Then we let them do what they do so well, which is put that product in front of people and share that message.”

Derek Hall, Devin Glazier, Justin Banner and Johanson sat around that planning table in 2008. Hall, once president and CEO for another nutritional company, found synergy with a former director of finance, Glazier, as well as other industry alums Banner and Johanson. Strategy and development was Banner’s forte, while marketing was Johanson’s focus.

By 2009 they had launched a new company they called Qivana.

Built to Last

“We have a really strong corporate team, made up of great leaders in the industry and some of the best athletes in the world,” says Banner, Founder and Chief Strategy Officer. “We brought on a top-notch scientist as our Chief Science Officer [Dr. Donald Layman] and brought product lines that we believe are some of the best in the world in their categories. We are confident in our products and our team, and we believe it’s a winning combination that plays out perfectly.”

But, perhaps, Qivana’s founders drafted their own success story when they methodically planned for long-term sustainability. Qivana’s focus is not on next month or next year, but rather decision-making to build a sustainable foundation for the long run. “I see that as a big philosophical difference between us and a lot of other companies,” Johanson says.

Banner adds, “We’re attracting a field that wants stability and longevity. We talk about our 25-year business plan, not our six-month plan.” But short-term growth—double-digit, year over year in each of the company’s six years—has not suffered in the least for their long-range business philosophy.

Product Strategy Breakthroughs

Johanson says, “We want to put together a great set of products that allows people to build a consumer base just out of love of the products and that will then transfer into a business opportunity for people.”

And therein lies Qivana’s strategy and a not-so-well-kept secret: Qivana markets scientifically based, breakthrough products utilizing the direct selling model of distribution. Vetting for new products can take as long as two years.

“We do feel that we get the very best of products.” Banner says. “We can go to the University of Illinois or the University of Texas to find breakthrough advancements.”

Case in point: Qivana’s 2014 launch of SkinShift, a DNA-based skincare line. The product line was developed by Dr. Ruthie Harper, a physician of nonsurgical aesthetics, DNA-based skincare solutions, nutritional medicine, and optimal health and wellness, who has more than 10,000 patient consultations at her internationally recognized practice in Austin, Texas.

Harper’s product, SkinShift, eliminates the guesswork in caring for the skin by creating a unique DNA skin profile for customers. It identifies five key skin-condition factors: collagen formation, sun protection, antioxidant protection, inflammation control and glycation protection. Following an at-home cheek swab test, Qivana recommends a base skincare product line, customized products for unique skin strengths and weaknesses, and nutritional supplements aimed at helping the skin from the inside out.

Qivana

“[Our product] was a good match for Qivana because they like scientific breakthroughs, and they like companies that have taken a science and moved it forward… ”
—Dr. Ruthie Harper, a leading physician and developer of Qivana’s SkinShift product line


SkinShift was four years in development before Harper took the genetic-based skincare products direct to consumers online and to medical professionals in 2012. “What we wanted to do was to change the way skincare is done and get the message out that these old ways of doing skincare based on generation or skin type were outdated,” Harper says. “We believe that what you really want to do is understand your genetic blueprint and how that plays out in what your skin is going to do in your 20s, 30s, 40s. Essentially, we’re addressing skincare at a deeper level—a genetic level.”

Harper’s breakthrough generated press, as well as public awareness. It also piqued the interest of Qivana. “It was a good match for Qivana because they like scientific breakthroughs, and they like companies that have taken a science and moved it forward, ones that have studied and analyzed and done the scientific research,” Harper says.

Product developers and researchers, Harper says, get to choose how they want to get their products to market. “You can stay in the medical marketplace or you can go direct to consumers. But my goal was to get the science to as many consumers as quickly as possible,” she says. Cultivating a relationship with Qivana, Harper realized, was the fastest, most efficient way to meet her goal to create and impact change in skincare.

Qivana’s third-party product development strategy often generates media attention. When the company launched its MetaboliQ weight loss system, it was recognized through more than 100 reviews and published articles. Now SkinShift may well outpace that success. To date, it’s appeared nationally on The Doctors and Good Morning America, as well as in Prevention, Redbook, Woman’s World and Health magazines.

“The largest, most iconic companies in the industry,” says Johanson, “despite immense backing and resources, would have trouble getting the national media coverage Qivana has received with SkinShift. The reason it was in the national media is because it’s newsworthy. We’re very, very proud of that.”

An Enviable Competitive Advantage

This dynamic, third-party national media coverage, along with the company’s worldwide exclusive rights to the SkinShift product line and its other breakthrough health and wellness products, puts Qivana and its Independent Business Owners in an enviable position.

Of Qivana’s top 15 earners, more than half are new to network marketing, but IBOs like Doug Wead, Regina Noriega, and John Terhune are equally at home at Qivana.

“The mission of the company is to help their customers and their Independent Business Owners gain optimal health throughout their lives by providing the most cutting-edge and validated products that exist in the marketplace,” says John Terhune, master IBO. And the way Qivana does that—from their product development strategy to the use of technology to empower and support their network of IBOs—constitutes what Terhune terms “an unfair competitive advantage.”

“For a person involved in our business today, in a matter of a second they can send a link to somebody and tell the Qivana story as effectively as someone who has done it for five years,” Terhune says.

Understanding that encouragement and personal development are key to the independent representative’s progress, the Qivana’s Success System provides not just the nuts and bolts basics of what every IBO needs to get started building an organization for the first time, but also supplemental audio segments from leaders like Terhune and Wead, who lend their expertise.

“We’ve been able to whittle the business down to a very simple pattern. Our method of operation is really very simple: strike interest, give information, collect a decision,” Terhune says. “If anybody is ever doing anything that the newest person in the room can’t do, then it’s too complicated.”

Wead says frustration can set in even “if you put the instructions in the box along with some tools, because when you build it you are on your own. You’re there on the living room floor with all the screws and the parts and shelves scattered all over. You’ve got to figure out how to build this thing. It’s nice to have someone who has built it before who can warn you, ‘Don’t put that screw in backward. You’ll regret it!’ ”

This servant leadership style resonates at Qivana, and for IBOs it begins with getting to understand a prospect’s vision. “They’re not interested in building a great company, no matter how well intentioned the owners and stockholders and investors may be. They’re interested in what kind of medical care their parents get, what school their children go to, what kind of car they drive, where they live, how they will save for retirement,” Wead says.

“If they’ve got a vision and want it bad enough, I’ve got a vehicle that will help them get it,” he continues. “I can help guide them each step of the way and urge them on, provide them with stories of others who’ve been in the same place and show them what their solutions were.”


Qivana Cares travels to the Bahamas.Qivana Cares travels to the Bahamas. The Qivana team takes time out to enjoy the Bahamas.The Qivana team takes time out to enjoy the Bahamas. Qivana corporate headquarters.Qivana corporate headquarters.

Qivana’s Synergy for Growth

Expanding into Russia and Kazakhstan has become a primary focus for both Wead and Noriega, who have experience in both the field as distributors and in the corporate offices. Though working as Independent Business Owners for Qivana, they have influence on developing the corporate culture, as well as defining the future of field leadership.

Official openings have yet to be announced in Russia and Kazakhstan, but Qivana’s international operations do currently include Canada, Mexico, Hong Kong and Taiwan. A high-level, slow and methodical international expansion strategy allows Qivana to avoid pitfalls of rapid expansion. “We’ve worked at companies where it was a lot more aggressive—to the tune of five or 10 or even 30 new countries a year,” Banner says. “We think one country a year is sustainable for the long run and gives everybody the ability to focus and penetrate it before we move on.”

Domestically, Qivana’s stronghold is the eastern U.S. with less saturation in the West. Banner stresses, “There’s plenty of opportunity in the U.S., but like every company we will extend and move, go after those markets that are high potential with great leadership.”

It’s the synergy within that leadership in the field and Qivana’s corporate headquarters, as well as its IBOs, athletic endorsers the likes of Olympic Gold Medalists Bonnie Blair, Nadia Comăneci, Bart Conner, Mike Eruzione and Dan Jansen, and university scientists that make everything at Qivana click. Johanson says, “We’ve compiled an incredible who’s who list, and our success is not based off one particular personality or even one product. It’s based off of a compilation of what all these people do.”

January 01, 2015

Industry with Heart

In Memoriam: A Tribute to Harland Stonecipher

by Barbara Seale

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


The direct selling industry lost an icon on Nov. 10 with the death of Harland Stonecipher, who founded one of the industry’s most unique companies, LegalShield. Stonecipher was 76 years old.

The concept for Stonecipher’s business brainchild was inspired by difficult circumstances. In 1969 he was involved in a head-on auto collision. Though the accident was not his fault, he was sued. The experience cost him thousands of dollars in legal fees and shook his idealistic beliefs about justice. But it caused the teacher-turned-life-insurance-salesman to begin thinking about how others could be protected from the nightmare he endured.

By 1972 he had created LegalShield’s predecessor company, which incorporated as Pre-Paid Legal Services Inc. in 1976. Six years later Stonecipher’s old friend John Hail introduced him to the concept of marketing his legal services memberships through network marketing. Stonecipher served as CEO from the company’s inception until 2010, when he relinquished that title, but he continued to be active as Chairman of the Board and Founder. In 2011 MidOcean Partners, a private equity firm, acquired Pre-Paid Legal for $650 million and renamed the company LegalShield.

Today the company provides legal services to some 1.4 million families covering 3.7 million people across North America, and more than 34,000 companies offer the LegalShield plan to their employees as a voluntary benefit. The company has dedicated law firms in 49 states and four provinces in Canada.

LegalShield CEO Jeff Bell, who joined the company in mid-2014, reached out to Stonecipher soon after joining the company. He found that Stonecipher was kind, professional, and generous with his time and advice.

“One of my principles is that you need to find the truth within every business, and that truth resides in its people. I couldn’t imagine speaking to anyone who knew more about this business than Harland Stonecipher and his wife, Shirley,” Bell says. “I wanted to show my respect because he was the company’s founder, but meeting them was a surprise and delight. I only got to spend four months with him, but I treasured the time. He spoke to me like a father would. I valued his counsel about our team in Ada [Oklahoma] as well as our field leadership. He talked about the challenges, what to avoid, and how to motivate a volunteer army. He still spoke with such conviction and passion about free enterprise and access to the justice system. It will stay with me forever.”

Stonecipher’s passion for his business and his conviction that it could change lives may have been at least part of the reason he was so highly regarded. Few people called him by his first name. To most, he was Mr. Stonecipher—it was a term of respect.

John Long, LegalShield’s Vice President of Marketing Operations and spokesperson for the Stonecipher family, knew the company founder for decades. He first encountered Stonecipher in 1987 at their shared alma mater, East Central University in Oklahoma. Long was in the ’87 graduating class, and Stonecipher was being named the University’s Distinguished Alumnus and commencement speaker. Long then worked at Pre-Paid Legal for a short time, left to return to school, and then rejoined Pre-Paid Legal in 1999, working directly for Stonecipher.


“Very few people called him Harland. He was Mr. Stonecipher. I never heard him instruct anyone to call him mister. He just drew that respect everywhere, even from his peer CEOs at other companies.”
—John Long, Vice President of Marketing Operations, LegalShield


“I had a glossy title, but the more heartfelt title would have been Harland’s Assistant,” Long recalls. “I did the things he didn’t have time to do so that he could be in front of the salesforce, traveling and motivating and speaking to them all over North America.” Long confesses, though, that he still feels a little uncomfortable using the first name. “Very few people called him Harland. He was Mr. Stonecipher. I never heard him instruct anyone to call him mister. He just drew that respect everywhere, even from his peer CEOs at other companies.”

He adds, “One of the first things Jeff did was ask to meet with Mr. Stonecipher and Shirley. That resonated with people around the country. I knew it would help Jeff, but I also knew it would help Harland and Shirley. In the last few weeks of his life he had gone back to referencing this company and himself as ‘we’—not that he was ever excluded. I know how important it was to him.”

Stonecipher was passionate about his business for 40 years, and in 2002 he was recognized by Ernst & Young as their Southwest Master Entrepreneur of the Year. He also became a sought-after speaker and addressed a variety of businesses and organizations, including several attorney general associations. He was just as passionate about his community. He and his wife used their wealth and influence to improve the community in numerous ways. His alma mater, ECU, recognized him as Distinguished Alumnus in 1987. He and Shirley later bestowed a gift to the university, which led to the naming of the Harland C. Stonecipher School of Business. An avid hunter and outdoorsman, Stonecipher was appointed to three consecutive terms as a Commissioner of the Oklahoma Department of Wildlife Conservation.

Two other projects were especially dear to him. Both show his inclination to find ways to help others after tragedy strikes, as he did when he founded Pre-Paid Legal. The first was in 1999 when a rash of tornadoes ripped through Moore, Oklahoma—the first of three instances when tornadoes devastated the community. About 10 days later, Stonecipher and the then-Pre-Paid Legal team rang the opening bell on the New York Stock Exchange, where the company was listed at the time. He and Oklahoma Governor Frank Keating used the occasion to announce that the Stoneciphers would be the initial contributors to a tornado relief fund, contributing $250,000 to help people impacted by the tornadoes.

Then, in 2005, his son Brent along with Brent’s wife and daughter died in a plane crash. To honor them and to help others, the Stoneciphers gave $5 million to build the Life Community Church, which includes a memorial chapel for parents and grandparents who have lost a child or grandchild. The church is located just southwest of LegalShield’s home office on Stonecipher Boulevard. Construction is expected to be complete in early 2015.

“They were happy to have created it,” Long notes. “They always said they hoped that no one has to endure what they did, but if that happened they could help comfort the parents and memorialize those who passed.”

Bell says that the LegalShield team is considering ways to appropriately memorialize Stonecipher. He notes that many of the Stoneciphers’ philanthropic contributions—such as the new church and the Harland C. Stonecipher School of Business at ECU—are lasting legacies that are already in place. In addition, the company’s headquarters office, chosen by the Stoneciphers and built on the highest hill in Ada, Oklahoma, is visible from every direction to anyone driving into Ada. It has a bust of Harland and Shirley Stonecipher and two other Pre-Paid Legal founders in its lobby.

“We don’t want to detract from those established legacies,” Bell says. “We’ll consult with Shirley and find a way to commemorate and institutionalize his memory. There are lasting legacies already, but I think we’ll find more to do.”

Long adds, “Mr. Stonecipher’s death is a tremendous loss—not just for me but for people all across America. But we have reason to celebrate. We are all far better off for having known and having been associated with Mr. Stonecipher for whatever period of time we knew him.”

December 31, 2014

World News

ViSalus Coordinates Group Workouts in Bid for World Record

ViSalus is helping people jumpstart their New Year’s health and fitness resolutions in a big way. On Jan. 3 at 12 p.m., the healthy lifestyle company is looking to set a record for the World’s Largest Simultaneous Group Workout.

Troy, Michigan-based ViSalus has invited individuals to participate by hosting or joining one of its Challenge Group events. The groups are forming across North America as well as Europe, where the company operates under the Vi brand. Challenge Group members will come together on Jan. 3 for a variety of activities oriented to people at all fitness levels.

The record would not be the first set by ViSalus, which teamed up with celebrity Alfonso Ribeiro in 2012 to perform the World’s Largest Simultaneous Flash Mob. The flash mob featured Ribeiro’s “Carlton” dance, named for his character on television’s The Fresh Prince of Bel-Air. The famous moves also helped Ribeiro and his partner, Witney Carson, win the latest season of ABC’s Dancing With The Stars.

In addition to gunning for a world record, the Challenge Groups will be sweating for a good cause. For every person who takes part, ViSalus has committed to donating 30 meals through its PROJECT 10 Kids program, which supplies Vi-Shape Nutritional Shake Meals to children in need.

December 31, 2014

U.S. News

Beautycounter Backs New Benchmark on Corporate Chemical Use

Nontoxic skincare and cosmetics brand Beautycounter has teamed up with a group of likeminded organizations to introduce the Chemical Footprint Project (CFP). The project, an initiative of BizNGO and the Lowell Center for Sustainable Production and Pure Strategies, is using a model similar to carbon footprinting to establish the first-ever common metric on corporate chemicals management.

Founder Gregg Renfrew launched Beautycounter in 2013 to offer products that are both safe and highly effective. Though the U.S. government has banned just 11 ingredients from personal-care products to date, the party plan company has established its own “Never List” that currently includes 1,500 ingredients restricted from its products.

As Renfrew shared in an Oct. 2 interview on Bloomberg TV’s Market Makers, her vision is to see Congress modernize regulations against known toxins. In the meantime, Beautycounter and its partners in the Chemical Footprint Project are providing a means for consumers and investors to identify organizations committed to using safer chemicals.

“Beautycounter’s mission is to get safe products into everyone’s hands, so carefully evaluating potential ingredients and materials are core to our business and our purpose,” explained Mia Davis, Head of Health and Safety at Beautycounter. “We look forward to helping to advance CFP as a measure for improving business decisions and supply chain transparency, and ultimately, as a way to ensure people have access to safer products.”

The CFP’s members include corporations and NGOs (non-governmental organizations) ranging from healthcare to retail. Beautycounter is a member of the CFP Steering Committee, which also includes representatives from Target Corp., Staples Inc., Boston Common Asset Management, Kaiser Permanente, Partners Healthcare, ChemSec, Environmental Defense Fund, and the U.S. Green Building Council, among others. The group will host a free webinar on Jan. 21 to share more about the project’s launch.

December 30, 2014

World News

LR Health & Beauty CEO Joins Advisory Board in Management Shuffle

Photo above: Dr. Jens M. Abend, CEO of LR Health & Beauty Systems


Leading European direct seller LR Health & Beauty Systems is restructuring the leadership of its day-to-day operations at the close of 2014. LR has announced that Dr. Jens M. Abend, CEO of the company since 2007, is transitioning to the Advisory Board of the LR Group. Abend has overseen a change in ownership and rapid international expansion at LR, while helping the company improve its internal structures and processes.

Managers Patrick Sostmann, Tilo Plöger, Dr. Andreas Laabs and Thomas Heursen will take over Operational Management of the company following Abend’s transfer. Sostmann, who leads Global Sales, will also serve as Spokesman of the Executive Management; Plöger will oversee Human Resources in addition to Marketing and Operations; and Laabs, the company’s new CFO, will also manage LR’s E-Commerce and IT department. Heursen will continue to manage LR’s Global Partner Relations segment.

“Dr. Abend played a decisive role in the company’s success. We would like to express our sincere gratitude for his outstanding commitment and appreciate that we can continue to build on his expertise in the Advisory Board,” said Dr. Andreas Fendel, CEO of Quadriga Capital and Co-Chairman of the Advisory Board of LR Group, in the company’s release. “At the same time, we are happy to have such an experienced management team under the guidance of Patrick Sostmann continuing the success story of LR.”

Based in Ahlen, Germany, LR Health & Beauty Systems has extended its direct sales enterprise across Europe and Asia through a network of 300,000 sales partners. As the company enters its 30th anniversary year, it is also signing on a new celebrity partner, popular German fashion designer and television star Guido Maria Kretschmer. The multi-year collaboration will include an exclusive fragrance coming in 2015. Kretschmer joins other high-profile celebrities who have partnered with LR, including actor Bruce Willis and supermodel Karolina Kurkova, who introduced her second LR fragrance this month.

December 29, 2014

World News

DreamTrips by WorldVentures Named World’s Leading Travel Club

To build the world’s best vacation and entertainment club is one of WorldVentures’ three pillars of business, and the company has done just that according to this year’s World Travel Awards (WTA). In the annual industry awards, travel professionals and high-end tourism consumers voted the company’s DreamTrips vacation club the 2014 World’s Leading Travel Club.

The World Travel Awards have been setting travel and tourism industry benchmarks for more than two decades. In 2013, WTA collected more than 500,000 individual votes throughout the competition. This year, WTA held regional galas in the Middle East, Africa & the Indian Ocean, South & Central America, North America & the Caribbean, Asia & Australasia, and Europe. Regional winners then vied for world awards at the year-end WTA Grand Final.

Leading up to the Grand Final, DreamTrips and its travel agency partner, Rovia, were named this year’s Leading Travel Club for the North America, Europe, Asia and Africa regions. The club offers its members curated group travel opportunities and membership discounts, currently in 60 countries worldwide. In addition to prestigious resorts, hotels and historic destinations, DreamTrips members can sign up to experience VolunTours, which combine voluntary service with travel.

December 24, 2014

World News

MonaVie Enters Pre-Launch Phase in China

MonaVie is rolling out big plans for 2015 with the launch of its business in China, direct selling’s second largest market. This week the health and wellness company kicked off a pre-launch phase in the country with a ribbon-cutting ceremony at its new Shanghai administration office.

The Shanghai office is one of three that will initially support MonaVie’s Chinese distributors and customers. The company has also opened an office in Guangzhou, the capital of South China’s Guangdong province, and plans to open a Beijing location with its full market launch in April 2015.

“For years now we have been exploring the opportunity to enter China, which can quite possibly become the largest direct selling market in the world,” Dan Zhu, MonaVie’s President of Asia Pacific, shared in the company’s release. “Plus, one of the fastest-growing segments of our global distributor family is among our ethnic-Chinese distributors who have ties to China.”

December 23, 2014

World News

Nu Skin Donates 400 Million Meals through Nourish the Children

Photo Above: Children in Malawi, Africa, receive meals supplied by Nourish the Children.


As the year of Nu Skin’s 30th anniversary comes to a close, the wellness and skincare company is quietly celebrating a major milestone in its Nourish the Children initiative. Since the program launched in 2002, Nu Skin employees and distributors have donated more than 400 million meals to malnourished children around the world.

Nourish the Children supplies often life-saving nutrition through Nu Skin’s specially formulated VitaMeal product. The Provo, Utah-based company partnered with an expert on child malnutrition in third-world countries to develop VitaMeal, a blend of carbohydrates, protein, fat, fiber and other nutrients that easily supplements local ingredients.

When individuals purchase VitaMeal, Nu Skin matches the donation and distributes the meals to one of its authorized charity partners. The model answers a need for consistent sources of nourishment among the world’s neediest populations. Every day, nearly 100,000 children receive meals as a result of the initiative. Nourish the Children has also established education and disease prevention programs, such as the School of Agriculture for Family Independence (SAFI) in Malawi, Africa.

“Since our founding, we wanted Nu Skin to be a force for good in the world,” said Steven J. Lund, Chairman of Nu Skin Enterprises’ Board of Directors. “This milestone reflects the generosity and goodness of our sales leaders, customers and employees across the globe, and we thank all those who are helping to alleviate the plague of childhood malnutrition with their donations of VitaMeal.”

December 23, 2014

U.S. News

Young Living Reveals 7-Year Plan to Create Hundreds of Utah Jobs

After surpassing the 1,000 employee milestone this June, Young Living Essential Oils has announced plans to grow its workforce by nearly 50 percent over the next seven years. The Salt Lake City-based company worked with the Utah Governor’s Office of Economic Development on a plan to bring 445 new jobs to the state.

The jobs created by Young Living will pay out total salaries amounting to 125 percent of the county average income. In addition to its corporate staff, Young Living partners with a network of more than 500,000 active members to market its essential oils and wellness products.

“The success experienced by Young Living Essential Oils is a testament to the friendly business environment the state offers to homegrown businesses,” said Utah Governor Gary R. Herbert. “More than two decades ago the business started because of a demand for organic essential oils. Now, it is growing not just regionally or nationally, but internationally.”

Chief Operating Officer Travis Ogden attributes much of the company’s growth to its strong commitment to quality. Since its beginnings operating from one herb farm and distillery, Young Living has established several farms across the globe to support its Seed to Seal production process. The company strictly controls the production of the oils to ensure its products remain pure and free of synthetic chemicals.

December 19, 2014

U.S. News

LegalShield’s Executive Restructuring Brings New Focus on Digital

In his first six months at LegalShield, CEO Jeff Bell has restructured the company’s top leadership and created an Office of the Chief Executive (OCE) to streamline communication between key areas of the business. The legal services provider is gearing up for future growth, particularly with enhanced digital support of its sales associates and clients.

The OCE comprises LegalShield’s new COO, Kathy Pinson; CFO Steve Williamson; Don West, Vice President of Human Resources and Leadership Development, and two newly created roles: Executive Vice President of Network and Business Development, Darnell Self; and Vice President of Regulatory Compliance and General Counsel, Keri Norris. The company is also actively searching for a chief technology officer who will oversee internal support of LegalShield’s associates.

“We’re 43 years young. We’ve got a lot of legacy systems that need to do a better job of letting sales associates know where they are in their career, how they’re advancing, and what are we doing today in terms of helping them achieve success,” Bell told DSN.

In addition to strengthening internal databases and systems, Bell and his team are working to build out more web and digital tools. To head up that effort, Bell recently brought on Chris D’Alessandro, formerly of interactive marketing agency Razorfish, as LegalShield’s first chief digital officer. One item on D’Alessandro’s agenda was the company’s MyLegalShield member app, which launched this week for iOS and Android.

“In our world, because we’re a direct selling organization for a service, it’s a little different. If you’re selling lipstick or vitamins, you can carry it with you. We’re selling an idea or a service,“ Bell said. “…Now we have the ability to tap on our member app and say, ‘No really, when you join our family for $20 a month, you push this button and you’re talking to a lawyer.’”

LegalShield’s digital team is also refining its strategy for managing leads, which will include a stronger hub site to ensure no potential customers or associates fall through the cracks. Lead management is familiar territory for Bell, a former executive at Ford and Chrysler, who described automotive sales as a “massive lead management business.”

“It’s all about being able, when people raise their hand—whether they do it over the phone, on the Web, in writing—to funnel that lead to an individual in their community who is actively engaged in the business,” Bell explained.

Through more robust digital offerings, the company aims to provide a better explanation of its competitive legal plans and identity theft protection. It represents a means of generating awareness and supporting LegalShield’s associates in the field, as Bell emphasized, not a substitute for human interaction.

“Our Chief Commercial Officer, Alan Fearnley, has said technology is direct selling’s friend, and he’s right,” said Bell. “The whole concept of speaking person-to-person doesn’t need to be replaced, but enhanced.”

December 19, 2014

World News

Avon China Probe Concludes with $135 Million Settlement

The Department of Justice will defer criminal prosecution of Avon Products Inc. for three years, according to a bribery probe settlement disclosed Wednesday. A six-year federal investigation of the company has ended with Avon’s Chinese subsidiary pleading guilty and accruing $135 million in fines.

The investigation focused on the period from 2004 to late 2008. The SEC alleged that Avon China’s inaccurate and incomplete bookkeeping during that period conceals payments to government officials who ultimately awarded Avon the country’s first direct selling license.

According to the SEC’s Manhattan court filing, Avon violated the Foreign Corrupt Practices Act (FCPA) by bankrolling $1.65 million in travel, meals and entertainment for Chinese officials. The company also provided $8 million in cash and gifts without properly recording the expenses. Additional payoffs went to state-owned media outlets to help the company avoid negative press.

The direct selling leader has spent about $300 million on an internal investigation launched in 2008. In the settlement, the DOJ recognized Avon’s cooperation and the “extensive remediation” it has undergone to improve compliance and internal controls.

Avon stated in May that it would settle the probe, which includes $68 million in fines to the DOJ and $67 million to the SEC. The agreement includes a corporate compliance monitor to oversee monitoring and reporting obligations for three years. With the company’s ongoing compliance, the charges will then be dropped.

December 17, 2014

World News

Mannatech Launches in Spain with Mission 5 Million

Dallas-based Mannatech is advancing its Mission 5 Million movement with the launch of its operations in Spain. The wellness and skincare company, which celebrated its 20th anniversary this year, has now expanded into 24 markets worldwide.

“Adding Spain to our European market was an essential and natural fit for Mannatech,” said Dr. Robert Sinnott, CEO and Chief Science Officer, in the company’s release. “We have seen a demand for our products and business there that is unprecedented, and we believe that this initial launch will precede an era of long-term growth for this region.”

Mannatech reports that it has targeted additional European markets for expansion following its launch in Spain. Europe, the Middle East and Africa (EMEA)—currently Mannatech’s lowest sales region—generated 8 percent of net sales in 2013. For the quarter ended Sept. 30, 2014, EMEA net sales increased to $4.9 million, up 32.4 percent over third quarter 2013. Mannatech attributes its growth in the region to a rising number of active associates and members.

December 16, 2014

U.S. News

Thirty-One to Offer Artisan Jewelry Following Jewel Kade Acquisition

Photo above: Jewel Kade Founder Janet Kinkade (left) and Thirty-One Gifts Founder Cindy Monroe.


Thirty-One Gifts is ringing in the new year with a new addition to its family of brands. The Columbus, Ohio-based company has announced the acquisition of Utah-based direct seller Jewel Kade, an artisan jewelry brand founded in 2009. Beginning in spring 2015, Thirty-One will offer JK by Thirty-One jewelry in addition to its handbags, totes and home organization products.

Similar vision and values make the two companies a great fit, said Thirty-One Director of Communications Kate Hannum-Rose. Like Thirty-One Founder Cindy Monroe, Janet Kinkade launched Jewel Kade from her basement with the hope of equipping and empowering women to succeed on their own terms. Both brands also bring a personal touch with the option to customize various products. Jewel Kade now partners with a network of 1,500 stylists nationwide and has been featured on The Today Show, Ellen and American Idol.

JK by Thirty-One is not the only fresh offering coming to Thirty-One customers in 2015. The company has also acquired upscale accessories brand Jewell, a direct selling startup co-founded in 2013 by Monroe and her sister, Christie Jewell Woodfin. These strategic acquisitions bring new growth opportunities to a company that has achieved annual net sales of $763 million in its first decade.

“Years ago, Thirty-One offered gifting categories like jewelry and purses, and these acquisitions are great opportunities to bring some of these successful products back in our product offering, along with the other amazing bags, totes and home organization products in our spring catalog,” said Hannum-Rose.

With the acquisition, Thirty-One is offering Jewel Kade stylists the opportunity to join its family of consultants. Kinkade will also carry on her role as the principal jewelry designer for JK by Thirty-One.

December 16, 2014

World News

Natura Becomes World’s Largest B Corps Certified Brand

Natura Cosméticos, Brazil’s leading cosmetics, fragrance and toiletries maker, has built its business on a commitment to sustainable development. The brand’s purpose-driven practices emphasize respect for and preservation of the planet, as well as a strong sense of social responsibility. Pursuing that core philosophy, Nature has now become the largest—and first publicly traded—company to attain B Corps certification.

The nonprofit B Lab certifies B Corporations for voluntarily meeting rigorous standards of social and environmental performance, accountability, and transparency. More than 1,000 Certified B Corps across 33 countries and more than 60 industries are currently working to give new meaning to success in business.

Like its fellow B Corps, Natura leverages the power of business to solve social and environmental problems. For example, the company has long used refill packaging with less than half the environmental impact of conventional versions, and consistently works to reduce its consumption of water, energy and raw materials. Natura is also working to preserve Brazil’s biodiversity through a research program in partnership with Brazilian universities. A focus on people and place has led Natura to build “equitable” relations with numerous traditional communities to obtain ingredients found in local flora.

Natura joins two other large, high-profile businesses recently added to the B Corps ranks. Crowdfunding platform Kickstarter and energy company Green Mountain Power both announced certification earlier this month. With these latest additions—Natura is a 7,000-employee company with $2.65 billion in net sales last year—B Corps has added considerable heft to its community of small, privately owned companies.

December 12, 2014

U.S. News

This Week: CEOs in the Media Edition

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

  • Fortune spoke to Amway Chairman Steve Van Andel about criticisms of the direct selling model, Amway’s China success, and the next steps in the company’s international expansion. As a recent Chairman of the U.S. Chamber of Commerce, Van Andel also addressed U.S. manufacturing prospects and the value of “Made in the U.S.A.”
  • Stella & Dot Founder Jessica Herrin appeared on MSNBC’s NewsNation with Andrea Mitchell. Featured on the show’s Born in the U$A segment, Herrin shared how her social selling company is empowering women.
  • As President and CEO of the No. 14 company in direct selling, Stream Energy’s Mark “Bouncer” Shiro has seen many distributors come and go. This week Entrepreneur published his four essentials for retaining and motivating salespeople.
  • Tupperware CEO Rick Goings joined CNBC’s Brian Sullivan and Fortune’s Alan Murray on MSNBC’s Morning Joe. The segment explored the growth of the middle class and female leadership abroad.
  • Advertising and PR giant Havas Worldwide released its annual trends report. In a piece for Forbes, the company’s North America CEO, Marian Salzman, notes that the time-honored art of matchmaking is currently one of the hottest concepts in business. Salzman points to personal styling service Keaton Row as one example of this trend.

December 11, 2014

World News

LifeVantage Supports Asia Pacific Growth with New Hong Kong Office

After two years operating in Hong Kong, LifeVantage is opening a corporate office to support its growing customer and distributor base in the region. The state-of-the-art facility in the Empress Plaza will serve as a hub for business meetings and training sessions as well as a corporate office.

Asia Pacific is the primary focus for LifeVantage outside its business in the Americas. The wellness company began building a presence in the region in October 2012, with the opening of its Tokyo office. The formal launch of its Hong Kong business followed in December 2012. For its fiscal year 2014, LifeVantage reported revenue of $214.0 million, up 2.8 percent over 2013. Thirty-four percent of total revenue came from its business in the Asia Pacific region.

“We talk a lot about responsible growth, and we’re in seven countries today. We’re building this company for generations to come,” LifeVantage President and CEO Doug Robinson told DSN in a recent interview. “That means that our distributors can go all in and be assured that the company will be there for them through thick and thin, good times and bad. The more distributors we attract, the bigger growth engine we’ll have.”

The science behind LifeVantage products promotes health, wellness and anti-aging at the cellular level. The company’s flagship Protandim supplement reduces the oxidative stress caused by free radicals. LifeVantage has developed additional offerings that combat the effects of oxidation, including its TrueScience beauty system and AXIO energy drink powders.

LifeVantage Meeting Space
Inside one of the office’s meeting spaces.

LifeVantage Meeting Space
The view from LifeVantage’s Empress Plaza office. (photos: LifeVantage)