November 01, 2017
MONAT: A Focus on Family
by Lin Grensing-Pophal
Headquarters: Miami, Florida
Top Executives: Chairman and Founder Luis Urdaneta; CEO Ray Urdaneta; and President Stuart MacMillan
Products: Anti-Aging Hair Care
“What has made you so successful?” It’s a question he hears frequently, says Ray Urdaneta, CEO of anti-aging hair care brand MONAT, and it’s not an easy one to answer. After all, he points out, in a direct sales company so many things have to come together in order for the company to work. But, he says, “If somebody were to ask me the No. 1 thing that has made us successful, it’s our focus on a culture of family.” Urdaneta feels strongly this applies not only in the field, but for MONAT corporate as well. It is this focus, he believes, that has allowed the company to accomplish so much in such a short amount of time.
Stuart MacMillan, President of MONAT, agrees. “We focus on family—family, family, family. It’s in everything we do.” Today that family has grown to a sales field of about 130,000 distributors, MacMillan says.
Jason Russell, Director of Communications, says this is especially true on the social level. “The cross-line/side-line support and connection here is unbelievable. In July, eight of our Market Partners (distributors) got together in Nashville for some fun. Four were from Illinois, two were from Indianapolis, one was from Nova Scotia, and one was from Rochester, New York. This represented five different, unconnected teams, so they don’t literally work together, but they love each other and celebrate each other’s successes.”
|Stuart MacMillan, Luis Urdaneta, Ray Urdaneta|
Results from this strategy show in MONAT’s current numbers—the percentage of month-to-month growth continues to be in the double digits. But that momentum started building early in the company’s life. Sales increased 300 percent from 2015 to 2016, with monthly revenue tripling between October 2016 and January 2017 and growing another 50 percent by February. MONAT’s 2017 annual revenue is anticipated to be more than $300 million, according to Russell.
Direct Selling Expertise Drives Business Growth
MONAT’s family focus has been important to business growth, but success is also likely driven by the extensive direct selling background of the company’s senior leaders. Ray Urdaneta is a second-generation direct sales entrepreneur and the co-founder of L’eudine Global, along with his father Luis Urdaneta, Chairman of the Alcora Group, which launched MONAT in 2014.
|Market Partners on a recent incentive trip.|
MONAT is a wholly owned subsidiary of Alcora Corp., which has holdings that include L’eudine Global. All three companies are headquartered in and around Miami. Monat, Urdaneta says, is “a very independent company—under the Alcora umbrella, but we are completely independent with separate product lines, different brands and even different staff.” MONAT’s market focus began in the United States and, a year after its launch, expanded into Canada.
MacMillan was brought on board as president of MONAT when the company was formed in 2014; he brought 30 years of management experience, with a heavy emphasis on direct selling, to the role.
The market also can be pointed to as a driver of success, MacMillan says. MONAT was positioned at the right place, at the right time, to resonate with its audience. With anti-aging products for skin care dominating the market, MONAT, MacMillan says, was the first to take a narrower focus by developing anti-aging products specifically for hair care.
Truly Social Selling
MONAT has a strong focus on social selling, recognizing its ability to bring people together to experience the product in a social setting. The creation of excitement around its products has been largely achieved through Meet MONAT events, which typically take place in a bistro or a restaurant to create an upscale, night-out-on-the-town experience.
Guests dress up, get together and socialize, with the event focused on a presentation as well as trying the product through samples. They take samples home and follow up with Market Partners in a couple of days to share their feedback on the products. The ability to sample broadly, MacMillan says, is aided by the fact that MONAT owns its own manufacturing facility and can cost-effectively create samples and sachets of products. The samples are provided to guests in a gift bag at the Meet MONAT events, creating a no-pressure, fun environment.
The demographics of MONAT’s market align well with the social “night out” focus, an idea that started when a lot of distributors would “band together” at a local wine bar. MacMillan says the experience appeals to many of the female attendees in the 29-to-44 age range, as well as to young moms. “The whole idea of the customers getting a night out has played so well,” he says. “We discovered it by accident when women started doing it on their own, and it’s just absolutely snowballed.”
That focus on social selling doesn’t only apply to distributors’ interactions with their customers, though. MONAT is also heavily focused on the use of social media tools—like Facebook Live to connect with the field. “Sometimes we’ve been blamed for over-communicating,” Urdaneta says with a laugh, but adds, “People want to know what’s happening—so we use email, we use social media a lot, and we have groups, mainly on Facebook.” Facebook Live has represented a very effective way to communicate with the field, he says. “The good thing about Facebook Live is I can do it myself, or Stuart can do it himself on the ground. You can just do it in the moment.”
Linda Padilla is Chief Marketing Officer at MONAT and brings more than 30 years of direct selling experience to the job. She’s a relatively new member to the team—she’s been on board for less than a year—and her focus has been on “ensuring that we upgrade our visual brand,” she says. “Our branding and our aesthetics are extremely important, especially on the social marketing side. We attract Market Partners who like the kind of edgy, fun, MONATitude. Our social media and our communications are very important to support that.”
More specifically, Russell adds, “MONATitude is shorthand for our happy, determined, striving, carefree way of doing what we do. Our brand is in the premium space, but we are approachable and fun and inclusive. So one aspect of it is we help people enjoy great hair while encouraging them to be themselves and have fun.”
It’s a process that has really worked, says Padilla, who points out that the company’s VIP, or preferred customer program, has increased tenfold to twelvefold in the past six months, and close to 40,000 new customers join the preferred program monthly. The preferred customer program is designed to focus on the end user, in addition to nurturing Market Partners, or distributors. VIP customers pay a one-time membership fee of $19.99 and make three qualifying orders. They then receive 15 percent off their purchases, a free product with qualified orders and free shipping on orders of $85 USD.
Product First, But Don’t Hide the Opportunity
In the direct selling channel, MacMillan says, there are often discussions about what to present first: the product or the opportunity. “We typically lead with the product, but we don’t hide the opportunity,” he says, adding that the product is something you don’t have to convince anyone to buy—shampoo, but with an added appeal. “It’s not only a good product, it’s innovative and appealing.”
Having its own manufacturing plant as well as scientists and labs, MacMillan says the company is able to produce its wares with a product plan that spans 40 years. And with a name derived from “modern” and “nature,” MONAT’s innovation starts at home. As a result of its clinical research, MONAT has combined naturally based botanical oils as the foundation for its special product formulations. The company uses state-of-the-art technologies to create safe, high-quality, naturally based, hair care products, which work to restore hair that has been exposed to the damaging effects of the environment and the aging process. Products are infused with Rejuveniqe™, its proprietary blend of oils, and key ingredients such as Capixyl™ (Red Clover Extract), Procataline™ (Pea Extact), and Crodasorb™ (a UV absorber).
“We’re constantly looking and planning as it relates to expanding our product line, but we do so in such a way that we’re not trying to sell a lot of SKUs,” Padilla says. “We concentrate on those hair care items that will bring to the market something unique, or something on-trend, and keep that momentum in the field.”
The best is yet to come, Padilla adds. “As we grow and look at extending our portfolio, there’s a lot out there as far as hair care. We will continue to be looking at innovative additions to the line. We have a great niche, and we intend to stay close to that, but to continue to be on the leading edge.”
Even though products are front and center, MONAT welcomes everyone interested in the opportunity and who come aboard as distributors. From day one, Market Partners are given support, training, motivation and encouragement with a focus on the midrange of earners—those people who can add $500 a month in income for their families. “Our goals are really tied to touching millions of families’ lives by adding $500 or more for their household,” MacMillan says. “We focus our message on the mainstream as opposed to focusing on the top end.”
Run a Tight Ship, But Focus on Fun
MONAT is also focused on the bottom line and works hard to ensure cost-effectiveness in its operations.
The company manages “super-tightly,” MacMillan says. “We benchmark every single month to industry averages for companies our size.” There’s one area where they don’t skimp, though—events. “We do a lot of events,” MacMillan says. “We have a cruise to Bermuda where we expect about 2,000 people coming up in May; we have a leadership summit that we expect to take about 700 people to in San Francisco in February—a few weeks ago we took our top level, 80 of our directors, to a resort in Arizona. Events are a huge part of our culture, and we think that this differentiates us as well.”
MONAT hosts a number of events to both educate and reward its Market Partners:
- Leadership Summit. Each year MONAT issues a challenge to its Market Partners to achieve a certain level of success. Those that do earn an all-expense-paid trip to the Leadership Summit with a focus on training and helping Market Partners achieve the next level of success.
- Incentive Trips. These have a focus on fun and luxury. Market Partners who qualify for incentive trips earn an expense-free trip to locations that have included Miami, Orlando, Los Cabos, Maui and more.
“In order to spend that much money on events, we have to be super-frugal in some other areas and manage efficiently,” MacMillan says.
Despite the bottom-line focus, fun is a big part of the mix, Padilla adds. “I just think it’s important that the element of fun is a huge part of our culture. We celebrate our success as a family, and we do constantly talk about working hard and meeting goals,” she says. “But we also make sure that the balance of the fun part and the celebratory part is a huge part of our culture. That’s why I think a lot of people love working for MONAT.”
As far as advice for other direct sales organizations, at the end of the day, Urdaneta says, “My advice is to focus on what’s important and what really affects your field.” Fancy ideas and fancy strategies, he says, won’t drive success if they’re not designed to help the field and help the leaders. That’s why MONAT focuses its investments on its people. “Focus on what’s important, and make the investments where it really matters,” he says.