December 01, 2015
Team National: A Legacy Races Forward
by Courtney Roush
Headquarters: Davie, Florida
Top Executives: CEO Angela Loehr Chrysler
Products: Membership savings on products
2014 Revenue: $339 Million
North America 50 Rank: No. 22
|Angela Loehr Chrysler|
If you haven’t heard the name Team National, then you’ve most certainly heard of the company this direct seller keeps—names like AT&T, Sprint, Met Life and ADP. All of those mega-brands and several others have partnered with Team National to present a product offering to customers from more than 20 industries.
Team National independent distributors, called Independent Marketing Directors (IMDs), sell memberships offering significant discounts on a host of products and services, including everything from furniture, legal services, wireless services and jewelry to co-branded credit cards, car care, coffee and nutritional supplements. Think of an Amazon Prime or Costco, which offer access to savings via memberships. Instead of opening buildings around the country, however, Team National leverages the direct selling model to market membership savings directly to customers.
In an industry in which new product launches are the norm, Team National is marching to its own beat. And as membership offerings become more popular and profitable in the marketplace, the company couldn’t be in a better position. Its leadership team continually examines the depth of the company’s membership offerings, forging additional partnerships with name brands, enhancing coverage for existing services and, occasionally, even launching their own services from the ground up. What keeps the company’s field of more than 400,000 Independent Marketing Directors and their customers excited is that near-universal love of saving money. And in an era in which online comparison shopping takes seconds, and news turns viral in the blink of an eye, Team National could just be scratching the surface of its potential for success.
|Team National and its IMDs regularly help sponsor the Boys & Girls Club backpack school supply drive in the company’s local Florida community.|
Founded in 1997 by former drag racer-turned-entrepreneur Dick Loehr, the company is celebrating four consecutive years of double-digit growth. Total product, service and membership sales reached $399 million in 2014. Before Loehr passed away from cancer in 2008, he passed the torch to daughter Angela Loehr Chrysler, who has proudly served at the helm as CEO ever since. And she’s kept his culture of sincerity, unshakeable ethics and family atmosphere very much alive.
This deep-rooted loyalty also extends to the field, and Angela believes the company’s recent growth is due in large part to rewarding the IMDs for their efforts. One of the more successful promotions has been a cruise contest that has an easily accessible threshold for winning, something she says was set in place so more people could be rewarded early on in their business development and allowed to experience the leadership training as well as other valuable prizes on the trip. Top executives and sales leaders are there to mingle and connect with salespeople at all levels, and the family atmosphere of Team National shines through. This is especially true, since the cruise leaves out from the Fort Lauderdale, Florida, port near the home office and includes that all-important tour of the headquarters to connect the field to the larger team.
The Legacy of Dick Loehr
It’s impossible to explain the current success of Team National without recalling the foundation laid in its early years by Dick Loehr. At first glance, he may seem an unlikely choice to have founded a direct selling company, but his entrepreneurial spirit suggests otherwise.
Loehr might be the textbook definition of a Renaissance man. He began his career as a racecar driver of the champion Ford Drag Racing Team, for which he would serve as captain, and where he was profoundly influenced by the legacy of Henry Ford. In fact, Loehr would often quote his favorite Ford adage: “You can’t make a new beginning, but you can make a new ending.” That very philosophy would define the rest of Loehr’s life and have a profound influence on Angela.
When Ford left the racing industry in 1971, Loehr opened his own car dealership and RV lot in Portage, Michigan. A second dealership would follow, this one in Kalamazoo. In time, the pair of dealerships would include nine franchises and hundreds of employees. Loehr became well-known for the fun commercials and promotions that would air in his hometown. Angela had the benefit of learning right alongside him, witnessing her father’s no-holds-barred approach to customer service and hard work.
In 1990 Loehr sold both dealerships and headed to South Florida, where he owned and operated nine restaurants. Six years later, he decided to chart a new course for his life: He began working on the plan for a membership savings company. Loehr’s objective was to create a one-of-a-kind savings program that would empower any member to enjoy discount buying power on par with any Fortune 500 company. Although he didn’t have a background in direct selling, he had grown up in Amway territory in Michigan. With the team mentality of his racing days, he wanted to provide real value for items consumers would buy anyway, and give them the option to earn money and supplement their incomes. In 1997, Loehr offered his membership savings and services to a small direct selling company, and then merged the direct seller with his benefits company two years later to form National Companies. He established the corporate office in Davie, Florida, where it remains today under the name Team National.
Growing the company in those first several years wasn’t an easy proposition. “The membership is based on group buying power, and at that time, we didn’t have a very big group,” Angela says. “We’d go to another company and ask for their partnership, but we had a struggle attracting name brands.” Through Loehr’s continued persistence, and by leveraging his direct selling industry knowledge and contacts, partners eventually joined the fold. The company’s robust membership today is testimony to his entrepreneurial spirit. “We started with six manufacturers,” says Executive Vice President Phil Chrysler, “and now we have 170 from more than 20 industries. Our membership looks vastly different today than it used to.”
While the company still actively pursues partnerships, its greater buying power these days has shifted the dynamics. “We have name brands coming to us now,” says Lou Prats, Vice President of Business Strategies. “And we say no more often than yes, because there has to be real, demonstrated value for our International Marketing Directors and their customers. We want to create savings opportunities that allow them to validate their memberships.” Sprint is among the company’s newest partners.
Collectively, these third-party associations “give us credibility” both inside and outside of the industry, Prats adds. “These brands are putting their names next to ours, and they do their due diligence.”
Team National memberships are available either for a two-year period or for a lifetime. Lifetime memberships are intergenerational and willable. Today, Team National has issued approximately 300,000 active memberships, which is a somewhat misleading number when you consider that each membership covers multiple family members or co-workers. The average membership covers four people.
“We offer products at close to manufacturer price—lower than wholesale. For us, the biggest hurdle is that it seems too good to be true,” says Andres Forero, Vice President of Membership.
Home furnishings rank among the membership’s top-selling items. Due to the high retail markups associated with furniture sales, it’s here that Team National customers typically realize big savings and recoup their initial membership fees quickly. Realizing the potential that home furnishings could have to propel membership sales forward, the company created its own furniture division, Team National Factory Direct, from the ground up in 2006.
On the surface, the timing seemed perfect for the launch. The national housing boom was in full swing, and mortgages were all too easy to obtain. Direct Buy was probably Team National Factory Direct’s closest competitor, and its membership was significantly more expensive. However, the concept of online furniture sales was still a foreign one.
“When we started, it was hard to go to manufacturers and have them understand what we were doing,” Phil says. “They didn’t think online furniture sales could be done.” Once again, persistence paid off. Online furniture sales finally caught on once customers realized the potential savings, says Chris Ramcharitar, Vice President of Team National Factory Direct. Whereas retail furniture sales include high markups to compensate for inbound shipping costs, inventory, warehousing and inspection, “we just send a carrier over to pick up the items from our manufacturing partners and bring them to our customers’ homes,” Ramcharitar says.
While the company could not have predicted the crash of the housing market or the Great Recession that followed, Angela says that despite a decrease in sales in the Factory Direct division, and the business overall, for that matter, people were still in need of furnishing basics such as mattresses, tables and chairs.
Fast-forward a few years, and Team National shows it is nothing if not ambitious, welcoming a diverse lineup of manufacturers and industries under its membership umbrella. In fact, the company currently is exploring the renewable energy space for potential opportunities, Phil says. Regardless of the product, “Our compass, whether we launch internally or partner with a company, is whether we can provide value,” he adds. “Our value proposition has to be real.”
It costs nothing to become an Independent Marketing Director; the membership, in essence, is the product. As IMDs enjoy the benefits of membership and promote it to others, they earn commissions on those sales. Over the years, the company has continued to enrich the membership but has never raised the price point. It’s worth noting, too, that business owners who hold a Team National Premium membership have the opportunity to participate in Team National’s Business Exchange. In exchange for discounts on their own products or services, they receive promotion to the company’s base of membership holders through a host of Team National channels, online/mobile directories, banner ads, even a Team National TV network.
From the very beginning, Loehr created a company determined to prove itself on a continual basis to the customers it aimed to serve. Thanks to technology, it’s easier than ever to do that. The competitive climate for Team National is much different than it was in 1997. Potential customers most assuredly are researching sites like Amazon and Wayfair, and comparing the deals offered on Sprint, AT&T and elsewhere, to validate the savings of a Team National membership before they ever commit.
Executives like Forero are very aware that every service and product offering associated with a Team National membership must offer clear and measurable savings. “The membership wouldn’t hold water if it didn’t save you money,” he says. In an environment in which information is so readily available, the onus is on leadership to stay one step ahead, continually examining ways in which they can offer more and better savings to an increasing share of the marketplace, and leaving no stone unturned.
CEO Angela Loehr Chrysler believes the company’s recent growth is due in large part to rewarding Independent Marketing Directors for their efforts. One of the more successful promotions has been a cruise contest.
A ‘Top-Down Servant Leadership’ Mentality
This loyal, family-owned company of 60 employees, small by direct selling standards, prides itself on maintaining an inclusive, close-knit culture. For the field, that begins on day one. Education for IMDs begins with the very first company email. “Most independent distributors in our industry don’t have prior entrepreneurship experience,” Forero says. With that in mind, “We take a systematic approach to education; we cover all of the bases. All of our materials are free or close to free. It’s not a profit center for us.” An online learning center contains more than 300 video and audio recordings and syncs with the company’s mobile app. Phil refers to his wife, Angela, as the company’s “Chief Encouragement Officer,” who routinely uses the Periscope app to record impromptu videos for the field, including recognition.
Twenty of Team National’s 60 employees are in customer service. By the end of 2015, the company will have launched a new customer contact system. This knowledge-based software includes a database that is both searchable by topic and can be augmented as representatives address additional topics with the field over time, which greatly reduces training time for new staff. In anticipation of similar double-digit growth over the next three years, Team National is moving into paperless, automated and less labor-intensive systems across the board. With the price of the membership remaining the same, “We continue to be profitable because of our technology,” Forero says. “We’re always working with IT to operate faster and better.”
The company’s forthright culture has served it well amid continued misperceptions of the direct selling industry. Visit the Team National website, and you’ll find a “Consumer Explanation” video from Angela, who outlines the company’s commitment to being as proactive and transparent as possible. “There’s not a company out there who hasn’t been scrutinized,” says Prats, who formerly served as the company’s Chief Compliance Officer. “Anytime you can diffuse potential criticism, you should. We’re above board on everything. Frankly, we don’t know any other way.”
By the end of 2015, the company also will include an income disclosure statement on its website, something Chrysler says is becoming standard in the direct selling industry. Team National’s statement will allow prospective IMDs to decide the amount of income they’d like to make with a Team National business, then chart the average number of months likely required to earn it. Dick Loehr always encouraged the field to focus on helping as many people as possible, and that the money would find them. As Angela told a crowd of IMDs at an event in Dallas: “Don’t have hype; have fun. Don’t exaggerate where you’re at on your journey. It’s not needed.”
Ramcharitar began his career with Team National as 16-year-old in the shipping and receiving department. Throughout those years, he watched the company grow from 13 to more than 60 employees in its Davie headquarters, making it a small but mighty presence in the direct selling industry. “One thing I admire is that what we preach to the field is exactly what we practice within the company,” he says. “Even as we tell them to dream, we’re dreaming, too.”
Staying on Home Soil
Team National is firmly based in the United States, “and we’re really proud of that,” Ramcharitar says. Does the company have any plans to go international? “Never say never, but it’s not in our plans for the next three years,” he says. If history is any indication, Team National will continue to grow intentionally and systematically.
“We’re seeing nice, grassroots steady growth,” Angela says. “But I don’t think we’ll ever have hyper-growth. We’re not about hype. We’re about need and value.”
What was the biggest lesson Loehr taught Angela? “To make decisions that you feel good about when your head hits the pillow at the end of the day. I’m going to make mistakes, but if I’ve made a decision with good intentions and good heart, our field knows that and appreciates it. My dad really helped establish a culture that lives on in me and in the sales field. The foundation that he established, we’re moving forward.”