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August 01, 2015

Company Focus

Immunotec: Growth Driven by Alignment

by Barbara Seale

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

Company Profile

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

Charlie OrrCharlie Orr

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

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

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

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

Product Prodigy

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

About the Science

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Walking the Talk

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

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

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

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

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

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

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

Business Builders

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

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

ImmunotecImmunotech Research founders Chuck Roberts and Dieter Beer

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

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

Investing in Infrastructure

HeadquartersImmunotec headquarters in Vaudreuil-Dorion, Quebec, Canada

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

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

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

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

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

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

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

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

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