August 01, 2015
WorldVentures: Dreaming Up a Better Way to Travel
by Jeremy Gregg
Headquarters: Plano, Texas
Co-Founders: Wayne Nugent, Chief Visionary Officer; Mike Azcue
Top Executives: Dan Stammen, CEO; Eddie Head, President, WorldVentures Holdings; Jon McKillip, President, Global Sales, WorldVentures Marketing; and Roberto Canales, CFO.
Products: Vacation and entertainment club
|Dan Stammen and Wayne Nugent|
From the start, WorldVentures founders Wayne Nugent and Mike Azcue set out to build a different kind of business. They dreamed of a vacation and entertainment club that would give members access to high-quality, yet affordable, travel experiences while also giving participants an opportunity to grow their own business by marketing the membership.
In the nearly 10 years since its founding, WorldVentures also has carved a unique position for itself in the direct selling space. Only 18 companies worldwide from the Direct Selling News Global 100 list increased revenue by more than $100 million last year, and WorldVentures was among them. Most of the other high-growth companies offer consumable products in the health, wellness or cosmetics industries. WorldVentures is one of just two that sells memberships, and it is the only one to focus exclusively on travel.
CEO Dan Stammen says the company is on track to join an even more elite group by the end of 2017: those posting annual revenue of $1 billion or more. WorldVentures increased its revenue by 80 percent last year, closing 2014 with revenue of $352 million, up from $195 million in 2013. It is on track to nearly double again to $650 million in 2015. In the past 12 months alone, new member sales have increased from 50,000 to more than 80,000 new enrollments per month.
What’s driving this growth? Company executives credit an innovative product offering coupled with key leadership strategies.
Established in 2005 by Wayne Nugent and Mike Azcue, WorldVentures’ primary offering is an annual membership that allows members to receive significant discounts on pre-arranged travel packages as well as the opportunity to earn points that can be applied to a variety of additional purchases, such as spa services at the destinations they visit. Stammen served as the company’s chief executive for its first three years, but then transitioned into the CMO position before stepping back from an active role so that he could primarily focus on his other business ventures. Azcue then stepped into the role to replace Stammen, and he led the company through an important period of growth over the next few years.
|WorldVentures’ UNITED conference this year in St. Louis|
However, with many of the members of the executive team living outside of the company’s home state of Texas, WorldVentures felt it was not achieving its full potential. So, on Feb. 1 of this year, Stammen returned as CEO. One of Stammen’s primary goals is to leverage his 30-plus years of network marketing experience to build a stronger culture that is based on the industry’s best practices.
“My daily presence creates a whole new level of accountability in the office. If I am the first one in and the last one out, the other C-level execs see that and begin getting here earlier and staying later,” Stammen says. “We’ve also made some changes in the reporting and some internal moves within the executive team that have streamlined a lot of our processes. Decisions are being made faster, there are no bottlenecks in place, projects are getting completed faster, and morale is up.”
As part of the change, members of the executive team are no longer able to commute. Stammen explains: “We decided that if we are going to hire you as an exec and pay you this kind of money, you have to live in the Dallas area. That has made a huge impact on the team.”
As WorldVentures began to expand rapidly outside the U.S., the executive team developed a list of other direct selling travel companies that had failed to thrive. Stammen says, “Before we started WorldVentures we came up with almost 100 reasons other direct selling travel companies either failed or went out of business. Most of our predecessors were just trying to buck the system and did not choose to work in partnership with travel suppliers. We then analyzed what these companies did wrong, and made a commitment to avoid those practices.”
The result has been unparalleled growth in the travel industry. In a recent lunch meeting with the president of one of the largest cruise lines in the world, Stammen learned that WorldVentures was bringing them more guests than any other company with which they had worked in 30 years.
Making a Living by Giving
WorldVentures partners with Nancy Lieberman (far left) to build DreamCourts all over the U.S.
WorldVentures has three corporate pillars: “Build the world’s best vacation and entertainment club,” “Build a family of world-class direct sales people,” and “Leave the world a better place.” It is through support of this last pillar that the company’s corporate citizenship efforts are driven to undertake three signature initiatives:
To learn more about World Ventures’ charitable efforts, visit www.WorldVenturesFoundation.org.
To learn more about World Ventures’ charitable efforts, visit www.WorldVenturesFoundation.org.
Growing by Investing
Expansion into other countries added a significant improvement to the company’s bottom line, even though it took time to build the momentum. WorldVentures entered the Asian market about five years ago, but struggled for the first year and a half. As Stammen reports, “When we were launching in Asia, the pro was we were new, exciting and different… but the con was the same. People did not understand an MLM that did not require distributors to maintain a stock of [products]. We sell experiences.”
The company has since adapted to local needs by offering trips that are more conducive to the Asian culture. Today, nearly two-thirds of WorldVentures’ new starts and about half of its revenue are originating in the Asian market, particularly Singapore, Malaysia and Hong Kong. The company also recently entered Australia, which has rapidly grown into one of WorldVentures’ most important markets.
This success came as the result of tremendous persistence on the part of the field leaders that WorldVentures initially attracted. Stammen reports that WorldVentures’ top income earner in Asia only had 60 people in his downline after the first 15 months; but today, just a few years after he began, he has built it up to over 150,000 people.
President Eddie Head credits the company’s growth to its focus on supporting the field leadership. The “sweet spot” for new recruits, he explains, are people for whom an additional $300 to $500 per month makes a meaningful difference. To better attract distributors within this income range, the company began to adjust the compensation plan to incentivize the right behaviors within this target market. WorldVentures now pays out more than 60 cents per dollar directly to the field.
One of the most successful changes was a simple, volume-based monthly bonus, which expanded upon an already successful car promotion called “Wings & Wheels.” In 2012, the company lowered the qualifications on this program to only $5,000 in total monthly business volume. This paid a fixed monthly bonus of $600. The field responded enthusiastically and sales tripled globally.
In 2014, WorldVentures retooled this program and created two tiers at $3,000 and $5,000 total monthly business volume. Representatives were paid a fixed 10 percent until the second tier, when they could earn up to a $900 bonus per month. This effort increased the number of bonus-qualifying reps by a staggering 800 percent. Realizing that the company would need a sales increase of 6 percent (or 1.5 additional months of retention) to sustain this initiative, the executive team partnered with the top-tier leaders in the field to fund and promote the effort. The result was that sales once again doubled in the U.S. and tripled internationally.
Training by Entertaining
The rapid influx of so many representatives in different countries created a need for in-depth training. At the same time, the novelty of WorldVentures’ service in the Asian market demanded that these trainings remain high-quality so that representatives could learn how to effectively promote such a new concept in their region. To meet these dual challenges, WorldVentures opted to facilitate over 90 percent of its global training events directly through the corporate office.
Marc Accetta, the Director of Training, has developed an innovative approach that has made the trainings incredibly popular with the field. In a typical training, Accetta delivers as many as 20 performances as different famous people whose story can offer a strong lesson on personal development; American characters include George Washington, the Grim Reaper, and various sports figures such as Babe Ruth. WorldVentures has made significant financial investment in the costumes and sets to make these mini-plays and skits as professional and impactful as possible and can adapt and use various characters depending on the region of the world. Stammen describes the model as “edutainment—we educate you while we entertain you. That level of engagement helps you to remember about 10 times what you would otherwise.”
Stammen cites this training program as one of the company’s primary advantages in the areas where it is rapidly growing. The use of a consistent curriculum of high-quality content has allowed the training program to scale to include major themed events each quarter in 21 U.S. cities and in every major region across the globe, with participation reaching upwards of 2,500 per room. These events are complemented by an international convention in the U.S. every April as well as summer boot camps around the world, which have gathered upwards of 16,000 attendees.
“Controlling all of this through corporate, and having all of the trainers always together around the world, creates the sense of having one big team,” says Stammen.
|The company’s new 100,000-square-foot facility, which it moved into last year, features brand-new décor, large windows overlooking a stream and is adjacent to a 14-mile walking trail.|
Focusing on Retention
|As part of the company’s successful viral marketing campaign, members take photos of themselves with a “You Should Be Here” sign in locations all over the world.|
For WorldVentures, there are two important moments that drive customer retention: immediately after people join the service, and the moment they step off the plane on their first trip.
The latter has been WorldVentures’ specialty since it was launched. While the service is offered as an effective way for committed travelers to save money, Stammen reports that the top value proposition reported through customer surveys is not the price savings but the convenience factor that “takes the guesswork out of travel.” Guests are picked up by uniformed staff right when they get off the plane, taken straight to their hotel (where they can bypass the registration and get their keys in two minutes), and then provided with an orientation that reviews all of the various activities from which they can choose over the course of their vacation. They are also introduced to many other WorldVentures members on the trip, many of whom remain friends afterwards.
“We have dozens of members who have been on over a 100 trips within the past several years,” says Stammen. The key, he believes, is getting customers to use the service more quickly and more often.
Currently, the average new member traveling takes about four months to take their first trip. Stammen and his team are focused on shortening this window by adding new benefits and features to membership. His vision is that a member “could sign up on Monday morning and by Monday night be realizing substantial savings and benefits that are available to them whether they are traveling or not.”
To drive this, WorldVentures is preparing to launch a new app that Stammen believes will revolutionize the company’s business model. Stating that he anticipates the app will “do to travel what Skype did to telecom,” one of its unique features is a customized member-based social community. The app is already available to existing members and reps, and by about the end of first quarter 2016 it will be available to share with non-members. Stammen expects at least 1 million downloads in the first 30 days of the release. To achieve this ambitious goal, the company has structured the app with a “freemium to premium” model in which users can download it without becoming members and then earn points for free travel by referring others and even by submitting pictures of themselves traveling around the world. This app will build on WorldVentures’ highly successful viral marketing campaign, in which members take photos of themselves with a “You Should Be Here” sign; members have successfully photographed themselves with over 100 celebrities, such as Katy Perry, holding this sign in locations around the world.
The Trip Ahead
WorldVentures has been able to leverage its low-cost structure to rapidly enter 30 countries in the past nine years.
As they enter uncharted waters, Stammen and his crew continue to direct all of their energy towards strengthening WorldVentures’ ship. The company invested $30 million in new products, systems and tools last year and is on pace to invest another $80 million in such long-term assets in 2015.
Head explains that “we’re committing our planning and resourcing to create a highly scalable, flexible, customer-centric e-commerce model that rewards consumers for sharing and adding value to the community. Our belief is that social commerce is the new model for marketplaces and we can help to define it. Our goal is to become a brand synonymous with great experiences the way that Disney is to family entertainment.”
WorldVentures is laying the groundwork to expand to six or seven more countries over the coming years. The company also is setting up regional offices in Singapore and the U.K., among others, to provide more support to the local markets in these areas. The company is investing millions of dollars in efforts to create additional revenue opportunities for its representatives and additional features that add value to the travel membership. This includes upgrades to WorldVentures’ own technology, apps, and systems as well as partnerships with strategic travel suppliers who continue to update their properties, resorts, and cruise lines for an improved experience for travelers.
These efforts are being taken to not only diversify the company’s revenue base, but to make it flexible enough to respond to any potential economic trend that could negatively impact the business.
Looking into the future, Stammen remains confident about WorldVentures’ prospects: “The travel industry is a multitrillion-dollar industry, more than oil or the entire direct selling industry combined. We are positioned to grow phenomenally over the coming years.”