Nu Skin Enterprises Inc.: 30 Years of Innovation for an Anti-Aging Giant

by Barbara Seale

Click here to download this issue to your mobile device.

Company Profile

Founded: 1984
Headquarters: Provo, Utah
Executives: Truman Hunt, President and CEO
Products: Comprehensive anti-aging portfolio including both skincare and nutritional


Nu Skin

Truman Hunt

Truman Hunt

Joseph Chang height=

Joseph Chang

When a company reaches its 30th anniversary, it can bask in its maturity. But while 30-year-old anti-aging company Nu Skin Enterprises celebrates its decades of success, it revels in its history of innovation.

Innovation isn’t easy to achieve consistently, but it’s one of the key elements of the Nu Skin culture. From its forever-young business opportunity to its science-based approach to the development of its robust anti-aging product line, the company defies any stereotypes that getting older equals slowing down. It even had a jaw-dropping 49 percent annual revenue increase in 2013—a cool $977 million in growth, placing it in the No. 7 spot on the Direct Selling News Global 100 list.


Joseph Chang, Ph.D., Chief Scientific Officer and Executive Vice President, Product Development, believes that the company’s strategic focus on anti-aging has been the most significant product decision in its history.


All that innovation has helped the company succeed in one of its key areas of focus: increasing commissions to distributors. In its 30-year history, the company has paid more than $10 billion in total commissions and sales incentives. It is proud to offer what it calls one of the most rewarding commission structures in the industry, with 45 percent of revenue paid out in sales compensation and promotional incentives in 2013.

So how does it achieve such laudable success? President and CEO Truman Hunt, who this year alone received the Direct Selling News Bravo Leadership Award and was elected the new Chairman of the U.S. Direct Selling Association, points to three keys.

Secrets to Success

First, he notes that the company has worked hard to continually renew the vibrancy of its business opportunity throughout its 53 countries.

“We were one of the first companies in direct selling to offer sales leaders the opportunity to do business globally and be compensated for sales volume in their home market through our seamless global compensation program,” he recalls. “It’s a reflection of our commitment to innovation.”

Second, its anti-aging product line includes both skincare and nutrition product lines, and revenues are equally strong from each. In fact, Joseph Chang, Ph.D., Chief Scientific Officer and Executive Vice President, Product Development, believes that the company’s strategic focus on anti-aging has been the most significant product decision in its history.

“From a product perspective, we built a bridge between the two categories so that we have a single story and a single common thread that goes through skin care and supplements,” he explains.


“When people know what product is coming down the pike and can get behind it, we find we get more impact than when sales leaders show up not knowing and we surprise them. There’s great power in alignment.”
—Truman Hunt, President and CEO


Finally, the company’s unique product launch process has driven sales leaders and revenue growth. Nu Skin calls it their Limited Time Offer. Distributors learn about a new product a year in advance, rather than in a surprise convention announcement. That lets them get personal experience with the product, build a testimonial on it and align their teams around it. Then when Nu Skin launches the new product formally, it gets great attention and helps leaders move forward.

“With every launch we’ve learned new things that help us launch products with increasing impact,” Hunt says. “Perhaps one of the most critical insights we’ve gained is that it’s based on the power of alignment. When people know what product is coming down the pike and can get behind it, we find we get more impact than when sales leaders show up not knowing and we surprise them. There’s great power in alignment. We’ve always known this from a corporate perspective. To be able to transition that same principle has produced the magic of executing a great product launch.”


Nu Skin Employees

In June employees participated in Nu Skin’s annual Force for Good Day by volunteering to assemble school supplies for local students.an Hunt, President and CEO, for the company’s 30th anniversary celebration.

Nu Skin Products

Nu Skin founders Steve Lund, Executive Chairman of the Board, Executive Director of Nourish the Children, and Sandie Tillotson, Executive Vice President, join Truman Hunt, President and CEO, for the company’s 30th anniversary celebration.


Those launches are built on commitment that started 30 years ago with the company’s founders—Blake Roney, Sandie Tillotson and Steve Lund. They decided to build a company that would combine innovative personal-care products with ingredients that subscribed to the philosophy of “all of the good, none of the bad.” They were concerned that many artificial ingredients found in traditional skincare products weren’t actually good for the skin when used continuously. Some of the then-new company’s first products became so cherished by users that they are still being sold today in updated formulas.

“Historically we know that natural ingredients are good for the skin without causing potential side effects,” Chang notes. “Natural ingredients are still our major focus, and we couple that focus with additional insights through scientific studies.”

Nu Skin’s commitment to products backed by scientific research and testing is a key method for maintaining product innovation. It’s also one of the main reasons Chang became part of the Nu Skin management team. He was an executive at Pharmanex when Nu Skin acquired it in 1998. Previously he had served as both President and Chief Science Officer at Binary Therapeutics and at OsteoArthritis Sciences Inc., not to mention that he held various executive research management positions at Wyeth-Ayerst, Rhone Poulenc Rorer and other biotech companies with numerous articles, reviews and books to his name. With his impressive credentials, he could have worked anywhere in the world if he had decided to make a change. But Nu Skin’s commitment to science convinced him to stick around.

“The promise they made was that Pharmanex would be a great strategic fit with Nu Skin because of its robust research and development organization and the scientific engine we had built to support products. That engine would be equally applied to the skincare line, as well,” Chang recalls. “That promise was what drew me, and the company has always kept that promise. The R&D budget and investment have always gone up. When an acquirer makes a promise, it often dissipates over time, but Nu Skin hasn’t gone back on its word. That’s critical, because to innovate you need to do R&D.”

Innovation = Growth

Today the company’s full team of in-house scientists conducts research on the ingredients that go into Nu Skin products. They collaborate closely with the Nu Skin marketing team, which keeps tabs on trends and consumer needs. When marketing identifies a need in a particular product category, they bring that need to the scientists.

“That type of collaboration between marketing and scientists has driven us to focus on the anti-aging category,” Chang points out. “That has led us to be a leading anti-aging company, both in skin care and supplements.”

The most visible result of that collaboration is Nu Skin’s ageLOC family of skincare and weight-management products and supplements. The science behind the products—a genetic approach to product development—combined with the company’s brilliant product launch process created the company’s most successful product launch ever. Since the line was introduced in 2008, the ageLOC family of products has delivered $3 billion in sales. Customers are so committed to ageLOC and other Nu Skin products that many subscribe to them through auto-ship. The predictability is good for the publicly held corporation and equally as good for distributors.

Culture of Integrity

If innovation is Nu Skin’s muscle, its mission to be a force for good throughout the world is its heart and circulatory system.

“It’s so much a part of our culture that sometimes we take it for granted,” Hunt says. “It’s how we define our very existence. It’s our mission statement. Those elements really have been part of our DNA from the very beginning. Our founders were people of such strong character and values that we have always wanted to make sure that when people encounter Nu Skin, they have a good experience and come away a better person. Whether through our product integrity, the opportunity we offer or the culture we promote, we try to be a force for good.”

He adds, “I recall a quote by one of our founders Blake Roney: ‘Being a force for good may be only 5 percent of what we do on a daily basis, but it’s 95 percent of who we are.’ That whole notion of ultimately overcoming skepticism by being people of sound character and values is part of what has enabled us to survive and thrive for 30 years.”


If innovation is Nu Skin’s muscle, its mission to be a force for good throughout the world is its heart and circulatory system.


And indeed, Nu Skin has thrived. The company announced 2013 revenue of $3.177 billion, a 49 percent year-over-year improvement. So how did it celebrate those impressive accomplishments on its 30th anniversary? How else? By doing good things around the world. Starting at this year’s annual sales convention, a gala attended by sales leaders raised $2.2 million for the Force for Good Foundation, Nu Skin’s philanthropic organization. Then on June 5, Nu Skin celebrated its official 30th Anniversary and annual Force for Good Day by donating children’s books and assembling school supplies into learning kits to benefit local schools with high percentages of disadvantaged children. Throughout June, distributors around the globe continued the celebration, individually and collectively doing everything from picking up trash to raising funds for worthy causes. Just a few of the projects: In Southeast Asia distributors continued their long-term support of the Children’s Heart Fund by raising funds for heart surgeries for children whose families don’t have the means to pay for the surgeries; in Russia they helped in an orphanage; in Malaysia distributors took gifts to children in hospitals; distributors in Northern Europe raised 32,000 Danish Krona (US$5,800) to buy 30 beds for a Romanian orphanage; and Canadian distributors made lunches for homeless families. (See sidebar for more information on Nu Skin’s philanthropic efforts.)

Whatever projects employees or distributors chose, each reflected their pride and gratitude in being part of a company that has provided opportunities and a better life for people around the world for 30 years.


“We at Nu Skin don’t feel we’ve arrived yet where we want to be, even though we’ve enjoyed record levels of growth, commissions paid to the salesforce, and the good we’re doing for society through our corporate social responsibility initiatives.”
—Truman Hunt


“We at Nu Skin don’t feel we’ve arrived yet where we want to be, even though we’ve enjoyed record levels of growth, commissions paid to the salesforce, and the good we’re doing for society through our corporate social responsibility initiatives,” Hunt says. “Our ambition is to be the world’s leading direct selling company by generating more income for our sales leaders. We have the goal of being a $10 billion company by the year 2020. That will enable us to pay between $4 billion and $5 billion to our salesforce. As we look at the environment, we believe that we can generate that level of success.”

A Foundation of Goodness

When Vice President of Public Affairs Ruth Todd joined Nu Skin Enterprises Inc. in January, she had heard the company’s mission statement, “to be a force for good.” But when she experienced it herself, she was dazzled.

“Our commitment to being a force for good is baked into every decision on every level,” she says. “As a new person, it was impressive to see that the commitment lives in the company from day to day.”

While that culture permeates the company’s actions, nowhere is it more front-and-center than in Nu Skin’s philanthropic projects. From the Force for Good Foundation to the Nourish the Children initiative, Nu Skin reaches out with its money, its products and its efforts to make life better—to create smiles, as they affectionately say—around the world.

In 2013 alone, the nonprofit Force for Good Foundation and its charitable partners contributed nearly $5 million to improve the lives of children throughout the world by offering hope for a life free from disease, illiteracy and poverty. The foundation is funded by Nu Skin distributor and employee donations, as well as by 25 cents from the sale of each Nu Skin Epoch product. Nu Skin covers all administrative and overhead costs, allowing 100 percent of donations to be used for humanitarian and charitable causes.

Its Nourish the Children initiative recently surpassed 350 million donated meals. Since its inception in 2002, Nourish the Children has been supported by a steady stream of VitaMeal purchases and donations from generous Nu Skin employees and distributors. Nu Skin produces VitaMeal, specially formulating it for malnourished children and their families.

The efforts of the Nu Skin Force for Good Foundation and the Nourish the Children initiative converge in Malawi, Africa, where in 2007 the School of Agriculture for Family Independence (SAFI) was founded. Many residents were small-scale farmers, and the drought drained the natural resources they relied on to survive, creating a crisis for families who were forced to travel from village to village just to find food. SAFI initially recruited mothers and fathers from 30 families, housing them and their families on an acre of land in the SAFI village for a year, and teaching them agricultural techniques, animal husbandry, and nutrition information that helped them better use the natural resources available to them. During that year, their children attended school. The experience and knowledge they gained completely changed the families. When they returned home, they were able to improve their agricultural yields by as much as 700 percent. Just as importantly, they now teach others the techniques they learned.

Nu Skin then collaborated with government agricultural workers to develop Brighter Future, an extension of the original program, which teaches many families at one time in villages throughout the region.

“We partnered with locals and asked, ‘What do you need and how can we be helpful?’ That set us apart from the beginning,” notes Kara Schneck, Nu Skin’s Senior Director of Corporate Communications. “Where Nu Skin is especially strong is in its direct selling model that helps people run a business and then turn around and help others do the same. We’ve used a similar model in Malawi as we help families learn life-saving agricultural skills and then empower them to share their skills with those in their community.”

Nu Skin philanthropies are as far-reaching as its 53 markets, and the future is unlimited.

“Going forward, we have a great foundation and a company with a great mission,” Todd says. “When you talk about the circle of entrepreneurship, what’s unique about it at Nu Skin is there is a consistent level of charitable donations. The economy may be up or down, but we have a very giving, compassionate group of distributors and sales leaders who are able to be a force for good and help children around the globe.”

Advertisements

About Direct Selling News
Direct Selling News Magazine has been serving direct selling and network marketing executives since 2004. Each issue of Direct Selling News offers content on topics that shape the dynamics of our industry.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: