May 01, 2015
Younique: Social Selling Reimagined
by Beth Douglass Silcox
Headquarters: Lehi, Utah
Executives: Derek Maxfield, CEO; Melanie Huscroft, Chief Product Officer and Chief Sales Officer
Products: cosmetics and skincare
|Derek Maxfield and Melanie Huscroft|
Over a decade ago, Derek Maxfield reimagined direct selling through the use of technology. His company, NetSteps LLC, created innovative business applications for real-time content delivery, e-commerce, and website and compensation management for global direct selling companies. NetSteps was an industry tech solutions leader, and their success won accolades, including two listings on the Inc. 500.
Developing high-tech solutions for direct selling companies fueled Maxfield’s love of the industry and the business model, which grew exponentially with the success of the company’s clients. But for all the tools that NetSteps created, dozens more were passed over, captured only on paper or whiteboards and never pitched or built.
When Maxfield and his sister Melanie Huscroft aspired to create a brand-new, mission-first direct sales cosmetics company called Younique, the founders offered up differing, yet complementary, skill sets.
Huscroft, Chief Product Officer and Chief Sales Officer, had an education in advertising and business, a flair for fashion and beauty, and experience in purchasing, sales, marketing and art. As a homemaker, wife and mother of four, she embodied Younique’s targeted demographic and held a strong belief in the power and influence of today’s women. CEO Maxfield brought direct selling industry experience, tech savvy and the ability to revisit those brainstorm sessions from his entrepreneurial NetSteps venture.
Rediscovering that once forgotten stash of NetSteps ideas brought innovations that Younique would mesh with a corporate philosophy and mission. In just two short years, this young company has successfully proved its mettle and landed in late 2014 among the Party Plan Top 10 of two public interest and Internet popularity trackers. Younique has effectively reimagined party plan direct selling online.
Uplift, Empower, Validate and Build
Founded in September 2012, Younique markets and sells cosmetics and skincare products almost exclusively through the use of social media. “First and foremost, we are a beauty company,” says Brian Gill, Executive Vice President of Marketing. “But we are also a social media company and a technology company. These tools help drive our business model. We operate across an expanding list of social media platforms, which makes doing our business and purchasing our products simple, accessible and doable by everyone.”
The company launched Moodstruck 3D Fiber Lashes into the social media sales stratosphere in November 2012. “We’re the Leader in Lashes,” Gill says. “The before-and-after images of 3D Fiber Lashes became ubiquitous on Facebook and instantly helped us create a name for ourselves.” Since then, skincare and cosmetic products have rounded out a cutting-edge, healthy, clean and pure repertoire.
Younique operates its business in the space where nature, love and science converge. At that intersection, their mission is to “uplift, empower and validate, and ultimately build self-esteem in women around the world through high-quality products that encourage both inner and outer beauty and spiritual enlightenment, while also providing opportunities for personal growth and financial reward.”
That mission-first underpinning inspired Younique Foundation, created in 2014 as an avenue for the company, its network of field Presenters and customers to help sexually abused girls and women. Maxfield and Huscroft’s philanthropic intent is on track to expand this year. “It was clear to me from the very beginning that the business model that could best fund the Younique Foundation and make this miracle happen was a party plan business built on social media,” Maxfield says.
Fun, Crazy, Disruptive Ideas
“You can’t innovate on something that’s been around for a long time unless you truly know the subject matter. We know party plan. We know social selling,” says Joey Toscano, Executive Vice President of User Experience.
When Toscano, who spent eight years working at NetSteps, began working with Maxfield to create Younique’s party system, he says, “It was our chance to revisit all the fun, crazy and disruptive ideas that were just sort of sitting around gathering dust.”
They started from scratch, including the technology on which they built the platform. Simplicity and user motivation were the only goals, which meant putting aside long-held concepts about party plans and reimagining social selling for a new world of online interaction.
Today, people communicate in 140 characters or less, in six-second videos, and with solitary photos. Toscano says, “You have a couple of seconds to get someone interested in something these days, let alone get them to commit to and understand some relatively complicated topics. You can have the greatest idea in the world, but if people don’t get it, you’re done.”
How could Younique deliver a meaningful party plan experience within those contextual constraints? By identifying and meeting the majority’s needs—no more, no less—that’s how. “Younique delivers on the core needs, and then iterates, improves and expands as needed. That’s what allows us to deliver quickly and to adapt to growth and change at a speed that meets the demands of our field,” Toscano says.
In 2014 Younique moved into its current corporate headquarters and opened a 75,000-square-foot warehousing facility, both in Lehi, Utah.
Pioneering Virtual Parties
Forget house cleaning, food prep and babysitters. Younique believed busy women wanted a more viable direct selling party plan option. So they pioneered one to better serve a demographic that already shopped on the go, spent time socializing online, and looked to blogs and magazines for cosmetic and skincare solutions.
Those once-discarded whiteboard ideas and strategically targeted customer demographics produced an innovative virtual party plan business model anchored in social media that promotes products and recruits Presenters and loyal customers willing to share. By creating this new virtual party plan model, Younique bridges aspects of direct selling’s traditional home party business model with the potential reach and impact of social media platforms.
“A Younique virtual party provides seemingly endless selling opportunities. We do not require in-person parties, nor is it restricted,” Gill says. But Younique’s virtual parties do expand guest lists infinitely, allow connections with people outside geographic boundaries, and provide wider windows of opportunity for orders and recruitment.
On their own time, virtual party guests click on social media links to videos that explain Younique products, teach methods for mixing stylish cosmetic applications, and prompt new product orders or Presenter sign-ups. Virtual parties allow nearly limitless sharing within an online environment that customers and Presenters have already grown accustomed to.
“Younique’s systems are built to plug into where people are and what works best for them. Why force people into switching their mental model to fit within YOUR system?” Toscano says. “We build for the behaviors, goals, needs and motivations of our Presenters and their customers.”
“Our Presenters have their own connections and relationships, and we use a variety of social media and technology tools to facilitate those interactions and purchases where they would naturally take place,” says Tracey Vlahos, Executive Vice President of Sales.
First launched on Facebook because that’s where the company’s demographic hangs out, Younique’s virtual parties are wildly successful and have facilitated tremendous growth for company sales—5,145 percent year-over-year between October 2013 and October 2014.
The company also successfully leverages a corporate organized and managed “Presenters Only” Facebook Group to share news, promotions and multimedia assets directly to Presenters as Facebook notifications. Presenters easily share these messages with their own online social networks. The efficiency and simplicity of this quasi-private online community is not only an effective corporate-to-field communications tool, but also allows Presenters to get acquainted and share best practices with each other.
Today, Facebook is but one part of Younique’s overall social media sales strategy that includes diversification into other social media platforms like Twitter and Pinterest, but its stunning success cannot be understated. By Younique’s second anniversary in September 2014, their Presenter roll call totaled 100,000. Today that marker stands at over 183,000, in great part thanks to the success of virtual Facebook parties.
Presenters of the Social Media Variety
Innovative products bring many of Younique’s Presenters into the fold. Besides their enthusiasm for beauty, makeup and 3D Fiber Lashes, these women—usually between 20 and 50 years old—are intrigued with building an income and a business.
“We are a virtual party company, which allows our Presenters to cast a wide net when it comes to whom they reach and how. When someone becomes a Presenter, she is onboarded from the very first welcome email and then has access to a variety of virtual and in-person trainings,” Vlahos says.
Younique believes in validating and building leaders. “Leadership is not about managing people; it’s about coaching people,” Vlahos says. The company wants leaders who feel strong, secure and stable because when a leader’s cup is full she feels ready to take on the activities necessary to advance to the next level.
A corporate/field partnership exists and includes constant field communication, validation and input. The company teaches field leaders to practice servant leadership and to lead by example by staying in tune with their own personal businesses, holding parties and sponsoring new Presenters. Solid performers, Younique believes, best teach and help others progress in their businesses.
Simplicity, whether it’s Presenter training, an internal process or a customer-facing promotion, is key. Even Younique’s compensation plan, which pays out 42–45 percent like most other direct selling companies, is simple and generous. Instant Royalties allow Presenters to get paid within three hours of making a sale on personal websites. Younique’s compensation plan is structured to benefit the largest number of people possible and eliminates waiting. Funds deposit into a PayQuicker debit card account from which Presenters receive, transfer or spend the earnings in any way they like. The business boils down to “Share a link, have a party, get paid,” Gill says.
During a recent event, Younique demonstrates proper application of its makeup products.
Corporate Complexities and Challenges
Keeping it simple for Presenters day-in and day-out is actually a corporate complexity. Behind the scenes Toscano says, “Our motivation is to offer contextually meaningful experiences to Presenters and their customers, and to do it in the simplest way possible. Support the goal, deliver on the expectations and don’t let the technology get in the way of that. The technology itself is never at the forefront of a good experience. It’s there to support the motivations and goals of a real person on the other end. If we do it right, the underlying technology is almost invisible.”
For a company with a foundation rooted in technology, Younique’s in-house team was poised to meet tech-based challenges from the outset. But when the company was faced with accelerating growth, they stared down a major obstacle in manufacturing, supply chain and distribution.
“We were aggressive in our predictions, but they continually proved to be not aggressive enough,” Huscroft says. With no background in these vital areas and fearing devastating backorder issues, Younique brought in supply chain expertise and headed off the pains associated with fast-track success.
“As a hyper-growth company, strategically sourcing products is something that can make or break your supply chain,” says Reggie Rappleye, CFO and COO. “We have invested in having the right people assist us in finding the best suppliers available. This has allowed us to supply products with fantastic quality, while also allowing us to scale these products to hundreds of thousands per month.”
In short order, Younique experienced its first $25 million (retail sales value) month and surpassed its $300 million, five-year expectations for the company’s cumulative sales. In 2014, they moved into their current corporate headquarters and opened a 75,000-square-foot warehousing facility, both in Lehi, Utah.
The company’s global e-commerce platform enabled it to open international markets on a very short timeline beginning with Canada in 2013 and following in 2014 with Australia, New Zealand and the United Kingdom. “Rapid and seamless international expansion is a key component of Younique’s growth strategy,” says Matt Schleiffarth, Executive Vice President of International and General Counsel.
Presenters in these international markets already account for 20 percent of Younique’s sales and have the company on an internal record-breaking pace. Continued expansion of the company’s e-commerce platform will drive international growth in 2015, including a Spanish language website aimed at welcoming U.S.-based Latinas to the Younique Family. Later this year, special features will enable growth in the French Canadian market, as well as expansion into Mexico and Germany.
“Yes, we are unique! We originated the 3D Fiber Lashes, are pioneering the virtual party, are paying Presenters quickly, and constantly innovating with our products,” Gill says. But, at its heart, Younique is a direct selling party plan company with an amazing suite of social selling tools that help facilitate parties and sales through online social media, at home and beyond.