March 01, 2016
Plexus: Strategically Refocused for Rapid Growth
by Angela E. Soper
Headquarters: Scottsdale, Arizona
Executives: Tarl Robinson, CEO
Products: weight management and wellness
2015 Revenue: about $385 million
Keeping up with strong growth in a short period of time is a challenge many businesses would love to face. Scottsdale, Arizona-based Plexus Worldwide is managing such growth with vision-oriented acumen, demonstrated most recently by the addition of a new $11.5 million corporate office building at Scottsdale’s Pima Center.
To help guide the company’s goals for continued growth, Plexus also has added experienced executives who are focusing on day-to-day operations that will improve and expand the company’s health product offerings and service to its salesforce. Along with devising short-term strategies to handle its fast-paced rise in the direct selling channel, Plexus is making sure it never loses sight of its long-term vision grounded in financial stability and corporate longevity. Already Plexus boasts a salesforce of more than 326,000 Ambassadors and about $385 million in revenue for 2015.
Plexus has joined an uncommon group in the business world. According to the U.S. Bureau of Labor Statistics, only about half of all new businesses survive five years or more and only one-third manage to stay in business 10 years or longer. Yet Plexus’ early focus on its brand, product and use of tools to invest in its salesforce and in customer acquisition have set it on the path to thrive, according to executives. The company also has put processes in place for immediate needs as well as those meant to guide the long-term direction of the business.
More Sales Meant More Space
Rapid growth can present its own set of challenges. With a focus on its popular weight-management products, Plexus experienced such fast-paced growth over the past three years that the company had to keep realigning its burgeoning expansion with the actual physical space needed for effective day-to-day operations.
Begun in 2006 as a company that offered a low-end entry point breast examination kit, Plexus was purchased in 2008 by current CEO Tarl Robinson and former International President Alfred Pettersen. At that point, the company was considered a startup, and the partners knew they would have to introduce new products to promote strong growth. In 2009 Plexus added a weight-management product, Plexus Slim, to its lineup. Slim was soon followed by Accelerator+. The company says the combination of the ingredients in the two products appear to work synergistically to help people lose weight quickly.
These products, along with others the company introduced to promote overall well-being, not only fueled customer sales, it propelled the company to its current standing in the marketplace and to a continued need for bigger facilities. To keep up with growth, over the years Plexus staff have been housed in multiple facilities, with employees spread out in three different locations. Plexus now has a new facility that consolidates everyone into the same location.
A Building Designed for Expansion
“We’ve been fortunate to have some great growth, but this also provides additional challenges to running a business,” says Robinson. “It’s interesting that when we moved into our last building we looked around and said, ‘How are we going to fill this space… did we bite off more than we can chew?’ This time, we’ve built out for about 80 percent of current occupancy, which means we’ve got room for growth.”
This facility is its new corporate headquarters located at Scottsdale’s Pima Center that encompasses more than 100,000 square feet. The company moved their employees into the new structure over the 2015 holidays, and now everyone is together since the distribution center is next door. Employees number about 240, with 50 working at the distribution center and 190 in the main building.
With an estimated cost of $11.5 million, the new facility includes 9,000 square feet of “gray shell” space—an area that is currently not built out for use but is available to meet Plexus’ future needs as the company grows. “It’s a blank canvas basically, so when we’re ready to design it, it’s available,” explains Robinson.
And if this space is not enough, the building can easily be expanded thanks to a walking path created on one end of the new facility that is actually a building pad for an additional 20,000 square feet. “With a form of construction called tilt-up, more building can easily be attached to this end because of the way the roof structure is designed,” says Robinson.
Adding New Talent to the Leadership Team
The Inc. 5000 list for 2015 shows Plexus at No. 132 with 2,833 percent three-year growth and total revenue for 2014 of $310.4 million. Plexus also earned a No. 56 spot on the 2015 DSN Global 100 list, up from No. 76 on the 2014 Global 100 rankings, and a No. 30 spot on DSN ’s new North America 50 list.
In addition to consistently readjusting the space needed to house employees and operational demands as the company has grown, Robinson and his team have added new leadership talent to keep Plexus moving forward. One of those individuals is Steve Howard, who joined the company at the end of 2012 as Chief Financial Officer. A newcomer to the network marketing industry—he has 25 years’ experience in finance and managing human resources and IT—Howard was not only quickly immersed in the company’s culture and the network marketing industry, he saw firsthand how rapidly the company was growing.
“When I got here, 2012 sales were about $37 million,” Howard says. “The company thought that was great and it had big plans for growth, but none like what materialized.” In fact, Howard points out, in 2015 Plexus had several months when monthly revenue actually exceeded the total revenue for 2012. “The real issue that we’ve had over the past three years has been primarily growth,” he adds.
Howard believes one reason Plexus grew so quickly is because company leaders sat down at the beginning of 2013 to map out a strategy for expanding the company’s footprint across the United States and even into Canada, Australia and New Zealand. They held opportunity meetings and brought in key Ambassadors to specific regions for important events, and the plan worked.
An International Vision
Although Ambassadors currently cannot build Ambassador networks in Canada, Australia or New Zealand, they can sell products to people living in those countries. However, Howard says, company executives have a vision for international expansion, and expect to be registered by the end of this quarter in every province in Canada and to be fully registered in Australia and New Zealand in a year. “One of our strategic initiatives in 2016 is to analyze and develop a roadmap to do further international expansion in Asia, Europe and possibly Latin America,” he adds. “We’re developing a criteria that we would use to select the next market, even though we may not be there for another two years. We need to be planning and putting the building blocks into place now.”
|President Alec Clark invites Ambassadors up on stage for recognition at Plexus’ recent event.|
To bolster its international expansion and presence, Plexus is augmenting its management team with an individual from direct selling who has experience in international development. Mike Green, Plexus’ new Chief Information Officer, has been tasked with building out the company’s IT systems required for operating in foreign countries, as well as ensuring that new features and enhancements are put into the system so Ambassadors can effectively use the back office. “We’ve spent quite a bit of time over the past couple of months making sure that all the systems are working,” says Green. “Most of our focus going forward will be on the user experience and that we’re adding the appropriate business intelligence into the back office.”
Enhancing the Back Office
Howard says the Plexus leadership team knew they needed a scalable back office system as the current system could not meet the demands of a 24/7 business. They decided the risk of staying with the old system was greater than swapping out to something new—a fact made evident as the company faced outages, downtimes and functionality issues that were not good for meeting the needs of their Ambassadors. Although the company initially faced problems as they worked to integrate the new back office system into everyday use, Howard says from day one Plexus was able to take orders, pay commissions and ship orders. “No system implementation is easy at this magnitude,” he says, “but after three months we are mostly out of the woods and working on enhancements.”
Green also points out that how people access their back office information, and information available online overall, has changed dramatically in the past few years. Through Google analytics he has discovered that more than 50 percent of individuals are coming to company websites via a mobile device. “The desktop experience is definitely diminishing,” he says. According to Green, Plexus’ Ambassadors are 80 percent women and most are using an iPad or iPhone. Social media is also playing a big role in how they conduct their businesses. “We’re definitely seeing a shift to more social media use and targeting customers that way,” he adds.
Managing the Process
An immediate priority for Plexus has been to focus on establishing processes so it can continue to handle new growth. “This company was a baby three years ago. Now it’s like an adolescent. It looks like an adult and talks like an adult, but we still have some growth and maturing to do,” he explains. “In 2015 we went through a lot of change. We weathered some storms with our systems, but in 2016 our emphasis is on maturing the company, our people and filling in any gaps that we still have.”
|Plexus’ official ribbon cutting with its executive team: (from left) Vice President of Compliance and Corporate Affairs Christopher Reid; CEO Tarl Robinson; Chief Financial Officer Steve Howard; Chief Operations Officer Keith Jackson; President Alec Clark; Chief Information Officer Mike Green; and Vice President of Ambassador Education MaryAnn Luciano.|
Improving the company’s product development is one example of how Plexus intends to fill in some of those gaps. The company has hired Cynthia Latham as its new Chief Marketing Officer, someone who has more than 25 years of experience leading global marketing sales and product teams. Alec Clark, Co-Owner and past Chief Marketing Officer, has taken on the title of President of the company to better reflect his role in day-to-day operations, after having overseen many projects and departments beyond marketing.
Introducing new products is a complex process, but Clark says the company works to ensure that a focus remains on the core products, including the flagship Plexus Slim. “Every new product,” says Clark, “is run through a rigorous process to make sure it makes sense to our Ambassadors and meets their needs, as well as meets our strict quality standards.” New products often are effectively launched at the company’s annual convention, which will be held in June in Las Vegas. More than 9,000 Ambassadors currently are pre-registered for the event.
Here for the Long-Term
When it comes to setting financial goals for the company, Robinson says they tend to project on a shorter run. “We try not to tie too closely our monetary projections to where we want to be as a company,” he states. “Our longer-term goals are to be a company that is doing it the right way in this space, a company that’s an example.”
Although Plexus leaders are hesitant to announce specific financial goals, Howard says research shows that companies that stay in business for 10 years and achieve $1 billion in annual sales are “here for the long-term.” And these achievements “are two things that have been in the back of our minds as we’ve made decisions,” he says. Moving into the new headquarters is part of their growth strategy to get them to secure footing for the future. “It’s all because we’ve got a plan designed to get us past the 10-year mark (from the company purchase in 2008) and to $1 billion in sales,” Howard adds.
Another factor that is designed to add stability to Plexus is its focus on remaining debt-free. “We’re financially strong,” states Howard. “Yes, we just finalized the construction of this building, but we plan to pay it off by the middle of this year.”
To Robinson, it is very clear why Plexus is in business: “Our ‘why’ is our love for network marketing and what we think it offers for consumers, for entrepreneurs and for people just trying to find a little something extra in life.”