May 01, 2016
Strong Product Sales and Customer Retention Drive Q Sciences’ Growth
by Angela E. Soper
Headquarters: Pleasant Grove, Utah
Top Executive: Daren Hogge, Founder and CEO
Products: health and wellness
The story behind the creation of Pleasant Grove, Utah-based Q Sciences parallels a classic movie plot line. It’s a story that contains serendipity, two skeptics initially wary of working together and a powerful spark ignited by a product with an established reputation in Canada that is now fueling growing interest in the United States—and beyond.
Daren Hogge, Q Sciences’ Founder and CEO, has a 28-year history of creating successful direct selling companies. He was actually retired when a friend in the channel told him about a product formulated by a Canadian man who had been successfully retailing it there for 17 years. The Canadian wanted to bring the product to the United States, but Hogge’s friend felt selling it in stores was not the correct channel. However, there was a problem: The Canadian did not like direct selling nor anyone associated it. Hogge also was wary about the potential partnership; he had been approached by many other people who claimed their products delivered remarkable results.
Two Days of Conversations Sealed the Deal
In October 2012, a week to the day after Hogge had volunteered at a local school and learned about the devastating effect stress has on children both in and out of the classroom, he received a call from the Canadian formulator. During two days of talks, Hogge learned about the product’s many independent studies (20 at the time) on how it helped to alleviate stress—especially in children—and its demand by people in Canada. The formulator got to know Hogge and direct selling. After the two days, they struck a deal: Hogge could have exclusive rights to market the product through the direct sales channel.
By late December of the same year, Hogge had created Q Sciences with Marc Wilson and Jimmy Kossert and the company was selling and shipping the product, called EMPowerplus™ Q96. Hogge had been won over when he discovered that people had been buying the product for 17 years without making money on those purchases and with no intention of ever making money. “Something is happening here with a product like that,” he remembers thinking. “Because if it isn’t impacting people, they’re not going to buy a product for that long.”
Product demand in the United States spurred the quick launch. “We started without a website… without a compensation plan,” Hogge says. “We started with products that we knew would make a difference in people’s lives.” And it is this demand for the company’s products now offered that is driving steady and growing sales.
Korean IBOs enjoy a recent Q Sciences incentive trip to Hawaii.
A 65 Percent Retention Rate
Every year since that December 2012 launch, Q Sciences has nearly doubled its revenue and credits that growth to its focus on product sales and customer retention strategies. It is trending, especially in the past six months, toward a four-to-one ratio of customers to the company’s salesforce, or Independent Business Owners (IB0s), with approximately 20,000 IBOs and Preferred Customers.
Colby Greene, Q Sciences’ Chief Financial Officer, says each month the ratio of customers to IBOs is “getting more and more heavily weighed to the customer side.” The company also has notable customer retention. “We took a look at people who started with us back in January 2013, and of those people, how many purchased product in the last three months,” he says. “We came back with 65 percent. After three years, to still have 65 percent [customer retention] is something to be proud of, I believe.”
EMPowerplus™ Q96, considered the “Q foundation” for the company’s product line and billed as a product that provides “calm, coping and clarity,” has an impressive pedigree when it comes to its scientific background; it’s now backed by 28 independent, published clinical studies. “They’re all third-party studies… nothing has ever been paid for by the formulators, the manufacturer or by Q Sciences,” adds Greene.
Lowering the Price Was a Strategic Decision
Enhancing the product’s popularity among both customers and IBOs is its price; Q Sciences actually managed to lower the price when it acquired the rights to sell the product through the direct sales channel. Hogge says they felt lowering the price would get the product into the hands of more people, which was their primary goal.
Company Founder and Executive Managing Director Marc Wilson believes their ability to offer such a popular product at a lower price caught people’s attention. “I think that was quite a surprise to many people,” he says. “I don’t think they’d seen that happen too many times.”
Q Sciences’ products are a big reason Wilson is so pleased to be involved with the company—a business venture that is new to him on a full-time scale. “We have really seen that our products can make a difference in people’s lives,” he states. “And I can’t tell you how that makes me feel every morning.… I just can’t wait to hear what’s happened for someone or someone’s family—that’s just a phenomenal thing that I love about it.”
A Business Model He Never Forgot
Known as a skilled negotiator and leader, Wilson lives in Seattle, Washington, when he is not at company headquarters helping to devise corporate strategies. He has founded and managed several successful companies, including a real estate development and investment firm, a commercial property management and brokerage company, and a private equity firm. He also spent the first 10 years after college playing professional football for the Oakland Raiders, where his career included two Super Bowl Championship seasons.
|Q Sciences corporate headquarters in Pleasant Grove, Utah.|
Direct selling, however, had caught Wilson’s attention when he was still in college, and he never got it out of his mind. “I was an economics major in college and in one of these classes we studied all the distribution channels.… One of those channels was direct sales and I was absolutely blown away by the financial model of direct sales,” he explains. “I had never been exposed to it before, and I just thought it was the most incredible model I’d seen. I never really forgot that.” Years later he worked as a financial consultant for a startup direct sales company, which enabled him to learn about the business model from the inside out. This experience confirmed his positive opinion of direct selling and reinforced his desire to start Q Sciences with Hogge and Kossert, the company’s master distributor.
Q Sciences’ lineup of products has grown considerably since its beginning three years ago. The company now offers a wide range of health and wellness supplements and products. It even offers a Cellerciser—the mini-trampoline that facilitates a form of exercise known as rebounding— designed to promote daily exercise; Q MindFit with PorterVision, a brain/mind development tool; and a vitamin/mineral supplement for pets.
The product development process is overseen by a team of doctors led by Stephen Kimberley, M.D., the Chief Science Officer, and William Moshofsky, M.D., the Chief Medical Officer. Once a new product is developed to the team’s satisfaction and rigorous standards, its maufacturing is outsourced to an approved facility here in the U.S. Drs. Kimberley and Moshofsky make sure that the products stay firmly rooted in science.
Promoting the Science of Happiness
According to Marmion Harrington, the company’s Senior Director of Marketing, Q Sciences takes very seriously its philosophy to purify, optimize and protect as it promotes the “Science of Happiness” with each of its products as well as within its community and corporate culture. “Daren always says, ‘The purpose of life is to be happy,’ and our purpose is to make that possible,” Harrington says.
In keeping with Q Sciences’ emphasis on giving people more happiness in their lives and, as its slogan says, “Live Life eXponentially,” Greene says he feels that the company’s products help to alleviate the stress so prevalent in society today. “It’s such a good product because everybody out there is dealing with stress,” he notes. The majority of IBOs are women who want to own their own businesses and take charge of their families’ health and well-being. The company culture is built on a formula that is both simple and easy to embrace: Proper Nutrition + Physical Activity + Friendship & Community + Opportunity = Happiness. By incorporating fitness and proper nutrition, along with building healthy relationships, the company embraces and promotes to its IBOs and customers a culture that goes beyond product sales. Hogge believes this attractive culture is one of the key reasons for the company’s high customer retention rate.
The company also promotes its culture on social media by encouraging IBOs and customers to share quick notes of gratitude, perform simple daily tasks for others or even paying for a stranger’s lunch.
Expansion Up Ahead
Along with making sure each of its products is supported by reliable science, Q Sciences focuses on providing delivery systems that meet people’s needs. It has formulated its key product in powder form for those who can’t take a tablet or capsule, and its oral sprays offer an additional form of supplementation that is easily absorbed into the bloodstream. “We try to address every aspect of nutrition,” Harrington says.
Hogge says the science team focuses first and foremost on absorption. “If the body can actually take [ingredients] in and use them, you’re going to see results,” Hogge explains. “I think that’s another one of the reasons our retention rate is so high.”
Rounding out Q Sciences’ mission to bring happiness to as many people as possible is its commitment to its IBOs. Harrington points out that the company has created product-specific replicated sites to help IBOs direct customers and prospects to particular product interests, as well sample packages that allow customers to try products. And, she adds, the back office provided to each IBO details all of the promotions going on in the company. “There’s quite a lot of information available on all the different products [and] for IBOs for their training,” she states.
As customers continue to increase, company leaders feel these strong and steady sales will fuel growth around the world. Now marketing its products in Canada, Japan, Korea, the Netherlands, Denmark and Germany with a relatively small staff of 52 employees, Wilson predicts Q Sciences will be open in 20 to 25 countries within five years and in 50 countries within 10 years and the company will continue to grow. “We have a product that’s going to play well in all those markets,” Wilson says. According to Hogge, the next market the company will open is Mexico, followed by countries in Central and South America.
Q IT UP!
For Hogge, serving the company’s IBOs and customers is the ultimate purpose for him and his staff. “We work for our Independent Business Owners,” he emphasizes. Hogge has become known for his “Q IT UP!” exclamation that defines what he feels is important about the company and its mission. Hogge explains that the Q stands for quality; the I for “I am third” after God and the IBOs/customers; the T is for trustworthy; the U stands for uncompromising values; and the P represents purpose.
Quick and astronomical revenue figures are not what is important at this stage of the company’s development, Hogge says. “We’re going to continue to grow and double if we’re doing what’s right for our IBOs,” he says. “They’re the ones who are going to make the growth, not the company. So let’s just keep doing what we need to do, and they will go out and do what they need to do in sharing our products out of trust and love of other people, and then this company will continue to do phenomenal things.”