July 01, 2016
Xyngular: Giving Members Life-Changing Experiences
by Angela E. Soper
Headquarters: Lehi, Utah
Executives: Marc Walker, President; Russ Fletcher, CEO
Products: health and wellness
2015 Revenue: $49.7 million
Xyngular, a health and wellness company with 82 employees based in Lehi, Utah, began as a kernel of an idea by a privately held ownership group. They had new ideas for both a product and a compensation plan, and as they began to search for the right people to put these ideas into action they found direct selling veteran Marc Walker. Trouble is, the first two times they contacted Walker he politely told them, “Thanks, but no thanks,” since he was working on another venture and didn’t want to get involved with something new.
But the group had a vision for the company that included Walker’s expertise, so they persevered and went back to him a third time. This time Walker agreed to fly to California to hear their plan. He listened, and that kernel of an idea began to sprout with possibilities. But he had some questions, since he had strong feelings about particular issues related to direct selling. “I grilled them,” he says. “And they just kept coming back to their focus on the distributor and building a company that’s going to last and be a good company.”
Gathering All of the Good within the Channel
Walker became more interested, talked it over with his wife, and decided he should join the group in co-founding the company and leading as President. Walker had two important issues to be addressed from the beginning. “One, we had to have products that worked,” he explains. “You can build a short-term company on hype, but if your products don’t work you’ve got nothing to drive it.” With Walker on board, the founders went back to the drawing board and made some changes to the introductory product, Global Blend, to make it more powerful—it’s one of Xyngular’s best sellers even today.
The second critical issue for Walker was the need for a strong and unique compensation plan, which prompted the owners to fine-tune the existing one. “We have to build a compensation plan that’s going to pay people who don’t know what the heck they’re doing as they get started,” Walker told them. “We’ve got to pay the mid-level leaders as they’re starting to build their organization, and we’ve got to pay leaders who have built a great organization, but provide incentives in there for everybody to do the things that are going to maximize what they can earn from us.”
One of the things Walker insisted he would not do is create a compensation plan that enables top leaders to make a lot of money, and then change the plan mid-growth. “I just don’t agree with that at all,” Walker says. For him, if he was going to be involved in helping to build a new company, he wanted to be sure they focused on the positive. “We are in a great industry; we help people, we give people opportunity,” he says. “It’s such a cool thing that we get to do, and I wanted to make sure we gathered up all of the good that’s in the industry.”
Walker says he feels Xyngular’s compensation plan lives up to his initial goal, since its unilevel structure enables the company’s salesforce to earn commissions, bonuses and incentive trips based solely on volume. In addition to receiving rewards for building volume in their individual organizations, Distributors also earn bonuses on the overall growth of the company through Xyngular’s 12% Corporate Sales Pools. “We put 1 percent of our monthly volume in each of these 12 pools for 12 percent total,” he explains. “They can start qualifying with only 2,000 in group volume.” The one requirement is that only 60 percent of the qualifying volume can be generated from one leg of the Distributor’s organization.
Walker believes the Corporate Sales Pools help to foster company-wide teamwork among its leaders in the field. “It’s created this great sense of unity where we have leaders flying across the United States or up to Canada to help each other grow,” explains Walker. That’s because if the company’s income increases—no matter which region or leaders’ organizations may be growing—all Distributors with at least 2,000 in volume benefit.
Xyngular’s recent Park City Director Invitational in Utah.
100,000 Lives Changed
Steve Elder, Chief Operating Officer, has seen how the company’s compensation plan resonates with people building a business—especially those new to the channel. “People are very complimentary about the payout from our plan,” says Elder. “It’s very beneficial to the entrepreneur, and we work very hard to keep our operation streamlined so we can provide as much benefit to them in return on their work and effort.”
Xyngular CEO Russ Fletcher says this model not only allows its Distributors to capitalize on the company’s day-to-day growth, it helps Xyngular build revenue. “We had a very concrete revenue goal for 2015,” says Fletcher. “It was $50 million, ‘50 in 15’… that’s what we were shooting for, it became a mantra of sorts, and we came within a whisper’s breath of hitting that at the end of the year… we were just shy at $49.7 million.”
Fletcher adds that the “50 in 15” mantra really motivated the field, and it also was motivational for company employees. This year the goal has changed its focus somewhat—for 2016 the company is pledging: “100,000 Lives Changed.” Fletcher explains: “The metric is 100,000 unique people who have bought and used our products during the course of 2016.” And, he adds, they are just about on track to hit that target.
Boosting the company’s compensation plan is its incentive program. Its reward trips sound like excursions you would find in a luxury travel brochure: Dubai, Bora Bora, Costa Rica, a seven-day Caribbean cruise, a 10-day Mediterranean cruise, and retreats at the Sundance Resort and in Park City, Utah. The company’s Passport Program enables Distributors to qualify for trips starting with just 10,000 in qualifying volume. Its President’s Club is a program that uses a point-based system to reward its Distributors for business-building activities.
To keep them up to date on new products and programs and to celebrate their accomplishments, Xyngular holds an annual convention, called Xyngfest, every fall—the next one will be held Oct. 13-15 in Dallas—and a spring event called Xyngfling that focuses on training. In July it will hold its annual Leadership Conference in Washington, D.C., an event designed for upper-level leaders, according to Curtis Call, Executive Vice President of Sales. The company also holds corporate city meetings around the country and in Canada to help new Distributors learn more about the opportunity from Member leaders and the corporate team. The company does not have a car program; it focuses on giving its Distributors “once-in-a-lifetime experiences” as they build their businesses.
Expanding with a Position of Strength
Founded in December 2009, Xyngular now has close to 33,000 Distributors and customers, with a ratio of 82 percent customers to 18 percent active Distributors.
Although Xyngular contracts with an outside vendor to handle its back office system, the company has a strong internal IT department, which consists of both a development team that creates and improves in-house tools and reports as well as a business intelligence team whose function is data analysis and coming up with unique ways of looking at data patterns and trends. “We are a data-driven company; we like to see what the data tells us instead of going by our gut and our feel all the time,” says Call. “We feel like the data can reveal to us true patterns and trends of behavior.” And by understanding this data, Call believes they can better guide their Distributors to the activities that are most productive.
The company’s Distributors stretch from throughout the United States, Puerto Rico and Canada, with a heavy concentration of growth in the Midwest and in the Canadian provinces of Alberta, British Colombia and Saskatchewan. The company also has a small number of Distributors in Europe. Elder says international expansion is “always in discussion,” but when it comes to opening new markets the company will “go where the field takes us.”
Fletcher supports this philosophy. He says Xyngular does not want to spread itself too thin and make it hard to maintain profitability and manage growth. The company intends to be international on a wider scale at some point, but, he adds, “when we are ready to go, we will go in a position of strength, not from a position of desperation.”
From 2014 to 2015, Xyngular experienced 46 percent growth, and Elder says the company is currently a little ahead of this figure for 2016. Call adds that March and April were the company’s two biggest months, and it is on track to continue this growth. Xyngular now offers 21 individual products, all in the health and wellness category, plus 20 different kits or bundles. Its newest products, Prime for men and Shine for women, designed to optimize hormone levels, have undergone independent doctor-run studies, and the company plans to publish third-party, peer-reviewed studies later this year. Spearheading product development at corporate headquarters is formulator Peter Griscom, Senior Director of Products. The products are manufactured at facilities in Texas, New Jersey and California, and the company offers a 30-day, money-back guarantee. Not often exercised, Walker says the return rate has held steady for six years.
Elder believes the products’ strength lies in their simplicity. “The combination of the products and plans we’ve put in place get great results, and they’re very simple, very easy to use,” he says. “We try to provide very straightforward instructions, very simple plans and great support to [our Distributors] to help people to really take root in the changes they want to make in their lives from a health standpoint.”
Although the company’s first successful products tended to support weight loss, Fletcher believes interest in the products has now shifted to a more overall sense of well-being. “Your health is a journey, not an event,” he says, and feels that even though people may start out using the products to lose weight, they soon experience other benefits.
Distributors and guests take a helicopter ride through the Grand Canyon, Arizona, as part of a Xyngfest 2015 reward trip.
Changing Lives with an Extra $300 to $400
For Fletcher, an MIT graduate who has had a successful career working as an efficiency trainer—with an impressive client roster that included the White House—Xyngular provides new satisfaction and purpose to his life. Initially associated with the company as a member of the board of directors in 2011, he became CEO in 2014. He has been involved in the direct selling channel in various capacities for 20 years, and found himself drawn back to it with Xyngular, a company that he believes is changing people’s lives in both their health and their financial status.
“One of the things that I say all the time is, ‘How much good could you do in the world if you could put $300 or $400 in as many people’s pockets every month as possible?’ ” he says. Fletcher realizes some people will make far more than that, but it’s that small increase in many people’s monthly incomes that he hopes to encourage. “The real goal is to see how many people we can get into that $300-$400 range, because that’s life-changing,” he adds. “It’s the car payment you didn’t get to make, it’s part of the house payment you were behind on, or a lesson, or a sports team your son or daughter gets to play in.… It’s truly eye-opening to some people, and they go, ‘Wow, this is amazing, and I have changed my life with just that little bit of money.’ ”