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April 02, 2010

Company Focus

Syntek Global: Driving Toward Green

by Jennifer Workman Pitcock

Clockwise from top: John Winterholler, President and CEO; Kirk Newman, Vice President, Marketing and Sales; Curt Ence, Vice President, Product Research and Development; Joel Theler, Vice President, Distributor Relations

Clockwise from top: John Winterholler, President and CEO; Kirk Newman, Vice President, Marketing and Sales; Curt Ence, Vice President, Product Research and Development; Joel Theler, Vice President, Distributor Relations

One hundred and forty billion gallons. According to the U.S. Energy Administration’s most recent numbers, that’s how much gasoline Americans use annually. Aside from the huge costs to consumers, this staggering number also affects the environment. As consumption continues to rise, more and more harmful chemicals are emitted into the atmosphere.

Eighteen years ago, Curt Ence began selling a fuel additive that reduces harmful emissions and pollutants. Packaged in 55-gallon drums for commercial use, companies around the world have come to depend upon Xtreme Fuel Treatment (XFT). That’s because XFT improves mileage, decreases emissions, increases horsepower and extends engine life.

Over time, as evidence of the product’s benefits piled up, Ence determined to bring the product to consumers. From the start, Ence knew he wanted to market the product using a direct selling model. Before he’d begun selling XFT commercially, Ence had had a successful career as a distributor in direct sales.

In 2007, Ence brought his idea to three other men—John Winterholler, Kirk Newman and Joel Theler. Together, they began to explore founding a direct selling company to distribute the product to consumers. Just two years later, in October of 2009, Syntek Global officially launched.

The Story of Syntek

Syntek’s founders are convinced they’ve got a product that will change the world—and they’re collecting the evidence to prove it. Syntek continually gathers data demonstrating the product’s effectiveness. That includes technical and industrial reports from commercial clients who have used XFT for many years.

“The convenience and multiplicity of XFT’s benefits are unlike anything else on the market today,” Winterholler says. “The product was first patented in 1986, and has been re-patented several times since. It’s registered with the Environmental Protection Agency. There’s a lot of scientific proof behind XFT.

“Our biggest user is PAMA, an international mining conglomerate based out of Jakarta, Indonesia. They treat about 160 million gallons of fuel a year,” Winterholler says. “They’ve done so for the last nine years. PAMA and other companies who’ve been using the product on a long-term basis give us confidence in the testing and data collected over the last 17 years. We know that the product does what we say it does.”

Syntek’s founders challenge all of XFT’s users to do their own scientific research, as well. “Every time we sell the product, we include a tracking chart,” Winterholler says. “We want you to know what kind of fuel mileage you were getting before you used the product. We want you to compare the before and after and prove to yourself that there’s a financial benefit to using XFT.”

Two principles drove the decision to take the product to consumers. The first was economic—XFT could reduce the cost of fuel consumption. “Every time you use this product, it will put money back in your pocket,” Winterholler says. The second was ecological. “We want to do everything we can to preserve the environment. This product reduces emissions by between 20 and 60 percent each time we use it. There’s a huge green component.”

But why direct selling? Doesn’t it make more sense to place a fuel treatment in gas stations? The founders of Syntek don’t think so. “There’s a story that has to be told about why XFT is a superior product,” Winterholler says. “That story doesn’t get told by setting the product on a shelf.

“If you go into an auto parts store, or even a Wal-Mart, and go down the fuel additives aisle, you usually see 12- to 16-ounce bottles that cost between $5 and $10,” Winterholler says. “Typically, they’re very reactive treatments—for if you’ve got water in your fuel line or your engine’s sputtering and so on. Each one of those bottles treats about 12 gallons of fuel. Our product treats 20 gallons and it’s 10 milliliters—2 teaspoonfuls. From a cost perspective, it doesn’t look like you get as much for your money. But, in actuality, XFT’s high concentration gives you a lot more benefit.” And at a cost of only about $2.50 per treatment for distributors, it’s less expensive, too.

Winterholler comes from a large corporate business background, working for companies such as Goldman Sachs, U.S. Bankcorp/Piper Jaffray and American Express. He’s started, run, consolidated and funded large businesses. And since the other founders have backgrounds as successful direct sellers, it’s not surprising that direct sales is the only model they considered.

“Rather than take XFT to the marketplace and spend large advertising dollars to earn brand awareness and the public’s respect, we thought direct marketing was a much more powerful method,” Winterholler says. “We decided to pay all of those revenues that we would otherwise use for advertising and marketing back to the distributors in the forms of bonuses and commissions.”

Early Successes

Early on, Syntek made two seemingly counterintuitive choices, but, already, the company is reaping the benefits. The first was writing Syntek’s commission accounting and back-office software instead of going with an off-the-shelf system. “In the long run, it’s turned out to be a huge benefit because it saved in overall costs and gives us ownership of our own system,” Winterholler says.

Changing the product packaging has also made a huge difference. In the early days, Syntek sold XFT (then known as Syntek Engine Boost 2.0), in 2-, 4-, 8- and 16-ounce bottles. Though a 2-ounce bottle treats eight tanks of fuel, it doesn’t look like much. Syntek’s executives came up with a better plan: single-use foil packages. “We found several vendors who were able to take XFT and put it in a very convenient secure foil pouch,” Winterholler says.

Now distributors can share the product inexpensively. Instead of giving away $30 to $40 bottles, they can hand out a couple of samples for a total of $5. They can get a prospect to try it and become interested in the product or the opportunity, or both.

A Supersized Opportunity

Because XFT began as a commercial product, it is available in the large quantities needed by industrial entities. Distributors are not only allowed to sell commercially, but they’re encouraged to do so. Curt Ence will maintain his previous commercial customers, but all new commercial clients will be solicited by Syntek’s distributors.

Selling to industrial customers provides distributors with an amazing opportunity—the ability to make commission on very large sales of XFT. Whether selling to an individual or a commercial entity, distributors participate fully in the compensation plan. Distributors make a 25 percent upfront bonus on every sale—no matter the size.

“On the surface, it may look distracting,” Winterholler says. “The sales cycle is longer, and commercial sales are more difficult. But, for many people, it’s an opportunity to dream big. Some distributors who’ve spent about 20 percent of their time pursuing commercial accounts are beginning to see the fruits of their labor, both domestically and internationally. They’re starting to see some very big sales.”

A Different Mentality

Syntek’s founders knew they faced some challenges in choosing a direct selling model to market a fuel additive. “So much of the direct selling industry is invested in health and wellness. A lot of distributors may not want to leave their comfort zone—consumable body treatment products,” Winterholler says. “A fuel treatment has a whole-different mentality that surrounds it.”

But they haven’t been disappointed with Syntek’s distributor base—far from it. Already, they’re approaching 10,000 distributors. The caliber of distributors makes the executive team happy as well. “I’ve never met a more sincere group of people in my life,” Winterholler says. “They want to do good.”

On the whole, the salesforce is largely blue-collar. “We’re attracting a new breed of direct seller—people who drive cars, trucks, snowmobiles, four-wheelers—who have a passion for being behind the wheel,” he says.

Each new distributor is given a free 30-day trial of the fully functional Web site, including all the back-office tools. They have access to dozens of data reports as well as a virtual library of everything Syntek produces. “All of the videos, all of the training modules, all of the conference calls—everything is put in the back office on the Web,” Winterholler says. Whether or not they choose to purchase access to the full Web site after their trial, all distributors get a free site with the shopping function where their customers can purchase products.

To support growth and training, Syntek executives offer weekly webinars, conference calls and training calls. “We try to cover the whole gamut of what a distributor might need,” Winterholler says.

Winterholler and the other executives travel frequently. “Our size and our interest in being hands-on mean we spend a lot of time in local meetings across the country,” he says. In lieu of a national convention this year, Syntek will hold six regional conventions in different parts of the country.

And they’re not neglecting their own development, either. Syntek applied to the DSA and is awaiting final approval. “I’ve been to several of the Direct Selling Association conferences, and I’ve been involved in VideoPlus University and SUCCESS Symposium. We’re trying to do our best to keep up with the rest of the industry as well as being an active participant,” Winterholler says.

Future Plans

Visit Syntek Global’s Web site, and you can’t miss the cute little tree frog that peeks from behind products and brightens up the page. “We started using the frog just because we liked it, but it’s become a moniker for the company. It fits in with—and actually has come to represent—the green aspects of Syntek,” Winterholler says. “We’ve named the frog Eeko.”

As Syntek expands—both by adding products and markets—the executives are committed to holding true to their “green roots.” “At our October launch, we introduced Eco-Mist, a waterless carwash. You spray it very lightly on a panel of your car about the size of a door. You wipe it with our high-tech microfiber cloth. It not only cleans your car but puts a shine—almost a wax—on it,” Winterholler says. “Each time you use Eco-Mist instead of washing your car in the driveway using a hose, you save upward of 120 gallons of water.”

And that’s the litmus test for any product Syntek will consider selling: Does it complement the existing products? Syntek is only interested in adding products that fall in line with its mission as a company.

“We feel very confident that we have global implications with XFT,” Winterholler says. So confident, in fact, that Syntek plans to open two new markets soon: Australia and the United Kingdom. “We’re in the process of formalizing the business now. We’ve already got a lot of activity brewing in those areas from a pre-market standpoint. We’re confident that there’s a big market. In the UK today, gas is just shy of $10 a gallon.”

And that, in a nutshell, is why Winterholler believes his company is one to watch. “I think the real power of what we have here is our demographic: It’s anyone who drives. We’ve got a very, very broad perspective.”