The September 2016 issue of Direct Selling News is available!

Cover Story

Keys to Success part 1: Customer Acquisition

by Andrea Tortora

Of all the misinformation about direct selling, perhaps the most often repeated—even by those who work most closely in the field—is the description of direct selling as an industry. Read more…

Celebrating success is a hallmark of direct selling, and we have two opportunities for you to recognize the great work being done by your corporate teams. Read more…

Like the pink Cadillacs it awards to top sellers, today’s Mary Kay retains a classic feel while embracing innovative thinking and design. Read more…

When husband and wife team Mark and Tracy Jarvis set out to launch their own company, they had listened to numerous suggestions for the name until “zurvita” was proposed and immediately touched and won them over. Read more…

In the year 1855, Reverend J.R. Graves started a mail order company selling books, religious tracts and Bibles. Read more…

It’s another year and you’re gearing up for your convention. Read more…

Over the past decade, rapid developments in technology have fundamentally changed how direct selling organizations operate. Read more…

The speculation started immediately. As soon as the news—Herbalife Settles with FTC—began popping up on mobile alerts and news outlets early Friday morning, July 15, observers inside and outside the direct selling channel began scrambling to understand the bigger picture. Read more…

The U.S. Direct Selling Association held its Annual Meeting in Phoenix, Arizona, June 5 to 7, bringing together direct selling company executives, academics, suppliers and global direct selling leaders for collaboration and conversation about the trends shaping the channel. Read more…

The direct selling industry is at a critical juncture in its long history. Read more…

The role of the U.S. Direct Selling Association (DSA) has never been more clear: to serve as a “listening post,” a place to collect, analyze and address the aspirations and concerns of the direct selling channel. Read more…

For more great stories, please click on our subscription button and subscribe to DSN


The May 2016 issue of Direct Selling News is available!!

The May 2016 issue of Direct Selling News is available!!

Cover Story

Direct Selling: Our Unique Position in the YouEconomy

by Courtney Roush

A seismic shift is occurring right now in the American workplace. This shift is happening; there is no stopping it, and the impacts are not yet fully imaginable. Read more…

Publisher’s Note

Let’s Celebrate!

by Lauren Lawley Head

We’re wrapping up a month of celebrations at Direct Selling News, first with the April 1 publication recognizing our inaugural class of Best Places to Work in Direct Selling honorees and then just a few days later the seventh annual Global 100 Celebration. Read more…

The 17th annual SUCCESS Partners University, held at the Dallas Omni Hotel April 7-8, once again provided a platform from which C-level executives and guest speakers shared insights and information with the more than 600 registered guests. Read more…

It’s an oft-told sidebar in the retelling of the Scentsy story: How the multimillion-dollar international party plan company began in a 40-foot metal shipping container on a sheep farm in Meridian, Idaho. Read more…

A wonder kid of sorts that exploded onto the direct selling scene in 2009, LifeVantage has seen its fair share of exponential growth and powerhouse performance of its products. Read more…

On Jan. 5, Gary Young stood amidst the extreme devastation in Nepal, brought about by a massive earthquake a little over nine months earlier. Read more…

Every salesforce has its traditions, whether it’s a quick ritual to gear up for the week or a unique way of approaching follow-up calls.Read more…

If you ask 100 people “What is big data?” you would likely get 100 different answers. Read more…

I love the University of Georgia football team. I’m a big Bulldogs’ fan and go to every game I can. Like a lot of sports fans, I have some peculiar habits in relation to my team. Read more…

John Addison, now President and CEO of Addison Leadership Group and Leadership Editor for SUCCESS magazine, engages and inspires audiences with his relatable messages. Most recently, he served as Co-CEO of Primerica Inc., a company he joined more than 35 years ago. DSN Publisher and Editor in Chief Lauren Lawley Head had an opportunity to sit down with him this month to talk about his vision and the future of direct selling. Read more…

The direct selling industry today is at a critical juncture. Read more…

The theme for DSA’s Annual Meeting in Phoenix this year is Reimagine. I’ll provide some context. Read more…

Equal Access, Equal Adaptability: LegalShield’s Moral Imperative to Grow

by Beth Douglass Silcox

Click here to order the March 2015 issue in which this article appeared or click here to download it to your mobile device.

Company Profile

Founded: 1972
Headquarters: Ada, Oklahoma with Executive Offices in Dallas, Texas
Executives: Jeff Bell, CEO; Kathy Pinson, COO; Steve Williamson, CFO; Alan Fearnley, President of Consumer Marketing and Brand and Chief Commercial Officer; James Rosseau, President of LegalShield Business Solutions; and Darnell Self, Executive Vice President of Network and Business Development.
Product Categories: Legal and Identity Theft Services for individuals, families, and businesses

CEO Jeff Bell’s goal, as he sees it, is to make LegalShield a household name, much like direct selling giants Mary Kay, Avon and Tupperware did for their product categories. Admittedly, skincare, cosmetics and food storage are more easily understood concepts than the disruptive business model that powers LegalShield’s mission of equal access to equal justice for all, but Bell and his team aim to change that. In fact, he says, “I believe our growth is not just a business imperative, it’s also a moral imperative.”When LegalShield brought on a new CEO with consumer marketing and corporate leadership credentials the likes of Microsoft, Chrysler, Ford and NBCUniversal last summer, they once again affirmed the company’s adaptable nature. This pioneering, service-focused direct selling company has a long history in meeting the changing needs of the consumer marketplace with innovations like 24/7 legal counsel and identity theft protection, as well as rising to broader corporate and industry challenges.

Today, the 43-year-old company offers individual and family pre-paid legal and identity theft plans, as well as products for home businesses, small businesses up to 100 employees, and larger companies that elect to provide a LegalShield option within employee benefits packages. LegalShield’s memberships number 1.4 million covering 3.7 million lives, and its call center fielded 2 million member calls for legal assistance in 2014.

One Car Accident Away

LegalShield, originally incorporated as Pre-Paid Legal, arose from the rolling hills of Ada, Oklahoma, following Founder Harland Stonecipher’s head-on automobile collision in 1969. Despite insurance coverage for life, auto, and health, life insurance agent Stonecipher realized his family’s vulnerability to unexpected legal fees after being sued for an accident that was not his fault.

As he recovered, Stonecipher mulled over the fate of his family and the hundreds of thousands of other families who could fall into this gap at a moment’s notice. Surely something existed to provide assurance to everyday people needing legal counsel, but research proved otherwise.

So in 1972, he forged ahead on his own from a one-room office in a local mini-mall. Within seven years, the company offered connectivity to legal services in six states, and by 1982 had become the conduit between a membership network of people who needed access to legal help and an attorney provider base that could deliver it. COO Kathy Pinson, who has spent 35 years with the company, says, “The provider attorney system is our key competitive advantage today.”

“I believe our growth is not just a business imperative, it’s also a moral imperative.”

—Jeff Bell, CEO

Competitive Advantage

LegalShield’s provider attorney system hinges on extensive vetting and long-term contracting with a single, large and established law firm within each U.S. state and Canadian province in which they do business. Average length of service for a LegalShield firm is 14 years with attorney experience levels averaging 20 years.

Because that firm represents all LegalShield members in that state or province, LegalShield’s business can comprise a big part of the firm’s overall business. According to Alan Fearnley, President of Consumer Marketing and Brand, this creates a scenario whereby attorneys become “almost evangelical” in their support of the business model, which in turn generates fantastic customer support for members, assures LegalShield members receive legal guidance from experienced professionals, and establishes vital connectivity between law firms and the field, which makes LegalShield’s various services easier to sell.

“The provider attorney system is our key competitive advantage today.”

—Kathy Pinson, Chief Operating Officer

“The very way that we’re set up allows us to have additional quality measures over those attorneys that no one else has,” Pinson says.

LegalShield quantifies member experiences with attorney providers, effectively putting a number to their “bedside manner” and holds lawyers accountable for the service they render. LegalShield has experienced a considerable rise in their Net Promoter Score® (NPS), a customer loyalty scale used to measure overall satisfaction with a brand or product. The scale ranges from -100 (everyone is a detractor of the company or product) to +100 (everyone is a supporter of the brand or product). Attained by survey, any score above zero is somewhat positive; a score of 50+ is excellent. Fearnley happily reports that Legalshield’s score, which ranged in the mid-40s a few years ago, now stand at 57. He says, “By allowing attorneys to see that score and by training around it, our service levels are really terrific and that’s helped the quality of the business.”

From the view of LegalShield’s associate field, where Darnell Self, Executive Vice President of Network and Business Development, spent 15 years, the attorney provider network is something competitors just don’t have. Decades in the making, the time and resources necessary to put the right law firms and communications in place, Self says, makes it unlikely to be duplicated. That’s a highly sought after attribute for those seeking direct selling opportunities.


A Mission for All

“We deliver products that promote peace of mind,” Bell says. “We believe that our mission applies both to our members and our sales associates. We want to improve their lives by teaching them life-transforming skills, giving them peace of mind and confidence in a world oftentimes uncaring and selfish.”

In fact, Harland and Shirley Stonecipher’s founding mission centered on … Read the full story at Direct Selling News.

Hy Cite: The Recipe for Growth

by Barbara Seale

Click here to order the February 2015 issue in which this article appeared or click here to download it to your mobile device.

Company Profile

  • Founded: 1959
  • Headquarters: Madison, Wisconsin
  • Executive: Chairman and CEO Erik Johnson
  • Products: Cookware, air and water filtration systems, juice extractors, dinnerware, cutlery

Family-owned direct seller Hy Cite Corp. is a master chef when it comes to cooking up growth. They do it by actively and enthusiastically embracing a community that many direct selling companies seek to engage: the Latino community.

Peter O. Johnson, Founder

Peter O. Johnson, Founder

Erik Johnson, Chairman & CEO

Erik Johnson, Chairman & CEO

Hy Cite’s engagement constitutes far more than simply speaking Spanish. Some 90 percent of its market and distributors are Hispanic. This demographic grew from three Hispanic distributors—two on one coast and one on the other—who were extremely successful in the early 1990s. Their legacy plus the commitment of Hy Cite managers to listen closely to the needs of distributors and consumers has resulted in a company that has grown by more than 15 percent average annual growth since the year 2000. In fact, except for the two toughest years in that economic period, growth has been closer to 20 percent.

Hy Cite was founded in 1959 as the Hope Chest Club (HCC) by Dave Johnson, but it was Peter O. Johnson, an unrelated college student, who carried the company into the future. Peter paid his college expenses by selling the company’s products to young women who collected its cookware, china and flatware as they anticipated their marriages. After college Peter worked for another cookware company for a short time to learn more about the cookware business. He was a fast learner, and he rejoined HCC as a partner in 1961. Dave eventually left the business, but Peter carried on. He grew the business and evolved it as the country’s culture changed and the “hope chest” market shrank. He expanded the original vision, and with that expansion came a name change.

Some 90 percent of Hy Cite’s market and distributors are Hispanic.

“As folklore has it, we realized we needed a different name, but we had a lot of letterhead that said HCC,” explains Hy Cite’s Chairman and CEO Erik Johnson, Peter’s son. “Things were tight right then, but the top managers had ‘high sights’ for the future. So they had a meeting and came up with a name that would let them maintain the corporate brand: HCC—Hy Cite Corporation.”

Erik wasn’t in that meeting in 1974. He hadn’t even had his first of many part-time jobs at the company: working in the warehouse during the summer at age 12. Throughout high school and college he continued to work in most departments, but, like his father, he went to work at another company after college. He spent five years at Procter & Gamble. Then he returned to his family business in 1995 as a project manager focused on improving its business systems. When Peter retired in 2000 Erik was named Chairman and CEO. He and his brother Peter, Hy Cite’s President and COO, continue to run the company.

Andrea Legarreta, a well-known TV personality in the Hispanic market, is the Brand Ambassador for the Royal Prestige® line of cookware.Andrea Legarreta, a well-known TV personality in the Hispanic market, is the Brand Ambassador for the Royal Prestige® line of cookware. Founded in 1959, Hy Cite has expanded into 20 countries over the last two decades.Founded in 1959, Hy Cite has expanded into 20 countries over the last two decades.

Erik says that much of the company’s success is product-based. It has three brands of cookware—Royal Prestige, its first and biggest brand of top-quality products, especially in the Hispanic market; NutraEase, a high-quality stainless steel line sold at in-home dinner parties; and its latest, Kitchen Charm, which was introduced in early 2014 and is focused on the bridal market. Each includes supporting products, such as water filtration units, juice extractors and air purifiers, but the core product in each line is cookware. Both distributors and consumers know the company by its cookware brands, rather than by the corporate name. Distributors focus on … Click here to read the entire at Direct Selling News.


Executive Connection with Erik Johnson, Chairman and CEO, Hy Cite

Stream: A New Face

by Barbara Seale

Photo above: Stream and Ignite’s recent Ignition event.

Company Profile

  • Founded: 2004
  • Headquarters: Dallas, Texas
  • Executive: President and CEO Mark “Bouncer” Schiro
  • Products: Life-essential services, including electricity, natural gas, mobile phone service, identity protection, tech support and credit monitoring services.

Stream Energy
When Stream reinvents itself, it doesn’t fool around. As it approaches its 10th anniversary, Stream settles into a new brand, redefines itself by offering new services, and jumps from seven energy markets to national scope, all in one bold move.

Mark “Bouncer” SchiroMark “Bouncer” Schiro

The change may seem sudden to outsiders, but planning and market trials have been underway for a year and a half at Stream, which direct sellers have known as Ignite since 2005. Its army of about 270,000 independent associates built their businesses switching customers to Stream Energy—electricity and natural gas—starting in the company’s home state of Texas and then expanding as energy deregulation went into effect in Georgia, Pennsylvania, Maryland, New Jersey, Washington, D.C. and New York.

But in 2014, Stream started signaling changes. The slow progression of deregulation gave way to the introduction of a new suite of HomeLife Services, including identity theft protection, computer tech support and credit monitoring, which associates could offer throughout the country. Stream priced the services so that customers got more affordable rates with each additional service. At the same time, it rolled out its Free Energy Program, allowing customers to earn free electricity and natural gas in exchange for referring other customers. And for the last few months, it has used the Stream and Ignite logos together like the biceps on two well-muscled arms. The longest-tenured network marketing energy company in the world was sending a message: Look out. We’re changing.

Associates have been seeing the changes on the horizon for a few months, but at the company’s national convention, which has been named “Unleashed,” it launches the series of changes that will transform almost everything about it.

Building Brawn

The changes are monumental, beginning with the brand. Stream Energy has always owned Ignite, and in January the parent brand will absorb the Ignite brand, which will no longer be used. According to President and CEO Mark “Bouncer” Schiro, the incorporation was done to unite the brands, and by using a single name it strengthens that name, which is important as the company brands all its other products. With the advent of new products, the Stream Energy brand becomes simply Stream. But the most powerful change—the one that will change the face of the company—comes in late January when Stream begins offering mobile phone service nationwide, focusing initially on NFL markets because of their large size. According to Schiro, it’s just the beginning.

“Your mobile handset is the remote control of the future,” he explains. “We are providing you a platform to purchase and control the services you need every day that you’ve already been purchasing. We are giving you a great value proposition so you can be comfortable promoting the services to your family and friends, as well as using them yourself.”

That’s key, because Stream also will expand its Free Energy concept to all its other products. Mobile is a centerpiece because it offers the opportunity to double the number of customers Stream serves within two years.

“I will be a failure as CEO of this company if I don’t have more non-energy customers than energy customers by the end of 2016.”
—Mark “Bouncer” Schiro, President and CEO

“I will be a failure as CEO of this company if I don’t have more non-energy customers than energy customers by the end of 2016,” Schiro states. “On average, there are three mobile phones per household. If I can get just 20 percent of our current customer base to switch their mobile service to Stream, that will increase our customers by 60 percent and double our customer count in the next two years.”

While Schiro prefers to talk in terms of customers rather than revenue, he notes that by the end of 2014, Stream will be knocking on the billion-dollar revenue door. Then when mobile service goes into effect, he anticipates that the company will add about 100,000 subscriptions a month, whether in mobile service, energy, or one of its other product categories.

Stream headquarters, located in the Infomart building in downtown Dallas. Stream headquarters, located in the Infomart building in downtown Dallas.

Stream headquarters, located in the Infomart building in downtown Dallas.


Tools and Training

New products aren’t the only fuel Stream is throwing on the growth fire. It has also created “The Stream Way,” an umbrella term for the process that provides associates with step-by-step incentives and training to help and encourage them to advance in their careers. The first incentive is You and Two, which rewards new associates with an e-tablet when they recruit two additional associates whom they mentor to recruit two additional associates. The tablet, which Schiro calls their “electronic tool box,” comes loaded with business-building tools: Stream apps, their back office, a savings calculator and more that help them carry their mobile Stream business with them, ready to present at a moment’s notice. As associates gather customers, they also work their way toward receiving their own Free Energy when they have 15 customers, along with compensation on those customer bills and on recruiting. The compensation plan’s focus is on … Click here to read the full article

LifeVantage: Adding Sizzle to the Steak

by Barbara Seale

Photo above: LifeVantage President and CEO Doug Robinson addresses the crowd at a recent company event.

Click here to order the December 2014 issue in which this article appeared or click here to download it to your mobile device.

Company Profile

Founded: 2003
Headquarters: Salt Lake City, Utah
Executives: President and CEO Doug Robinson
Products: Wellness, anti-aging and energy products that use Nrf2 science to reduce oxidative stress at the cellular level

Doug Robinson

Doug Robinson

David Phelps

David Phelps

Shawn Talbott

Shawn Talbott

Many executives have had the experience. They launch or join a young company that is growing quickly, but over time the momentum slows. That was the story at LifeVantage Corp., and its experience has made it a believer in the necessity to embrace change. Its first major change was relaunching as a direct selling company. And within the last year the company has taken numerous steps to re-energize its brand, product line and distributors.

LifeVantage launched in retail stores in 2003 with a single, innovative nutritional supplement, Protandim. The science behind the product is still compelling today. Its natural, indirect antioxidants actually signal the body’s genes to increase production of antioxidant enzymes that work together as the body’s first line of defense against free radicals. In 2005, ABC’s television news magazine Primetime featured an overwhelmingly positive segment on a human clinical study of Protandim. They reported the results of the study, which showed that the product decreases oxidative stress by more than 40 percent.

What happened next was every company’s dream. Sales skyrocketed. So did the price of the company’s OTC stock. But there was a hitch. The young company was still small and wasn’t set up for the surge. They didn’t have the infrastructure to keep up with orders, and quickly its sudden multimillion-dollar monthly sales volume trickled down to about $250,000. Its income statement was never in the black, and the dream quickly became more of a nightmare. But it was also a turning point. Executives who were already sold on the product’s potential for health had seen its massive commercial possibilities. But what could they do about it?

The answer: direct selling. In 2009, its first year as a direct seller—and with a single product—LifeVantage saw revenue almost triple and then continue to grow. In 2011 it hired new President and CEO Doug Robinson, who had joined the LifeVantage board of directors about six months after it became a direct seller, bringing his 25 years of health care business management expertise. He injected the company with the operational discipline he had learned over the years.

“The next year we were at $39 million in topline revenues,” he recalls, “but more important to me, we turned the operations of the company around and were finally $4 million in the black.”

Sustaining Success

A growth chart like that one is hard to sustain, but Robinson was determined to nurture it and ensure that LifeVantage had a vibrant future. He believed that an injection of new ideas, expertise and energy was needed in the management team. Robinson started bringing in solid leadership in key roles and moved the stock to the NASDAQ (symbol LFVN) in 2012.

Two of those new executives, Chief Sales Officer Dave Phelps and Chief Science Officer Shawn Talbott, Ph.D., joined the company within the last year. They have introduced additional products and sales initiatives that are infusing new enthusiasm into distributors and opening new markets that weren’t available in the past.

Talbott’s first step was to crystallize the company’s product strategy. He was familiar—and impressed—with the science behind Protandim even before he joined LifeVantage. He believed that Protandim alone could be the foundation for a billion-dollar company. But he foresaw that the science behind it could do even more. Infused into other products that help people feel, look or perform better—the company’s product strategy—Protandim could drive the creation of other effective products that worked synergistically and also opened new demographic doors.

Talbott explains, “If you want to help people feel better, perhaps by increasing their energy, you could give them caffeine or sugar. But the problem is that if you haven’t gone upstream biochemically and their oxidative stress is out of balance, they’ll always be out of balance.”

So how does that knowledge suggest new products? Talbott notes that there’s no demand in the market for a product that addresses oxidative stress, at least not in those words. But people do want other things: youthful-looking skin, more energy, better mood, a thinner body and improved sports nutrition. Products can deliver those by reducing oxidative stress, using the same Nrf2 science contained in Protandim. Within the last few months LifeVantage introduced products that address some of the conditions that arise from oxidative stress, but which people identify by other names.

LifeVantage has introduced products that address some of the conditions that arise from oxidative stress, but which people identify by other names, such as aging skin, lower energy and depressed mood.

Product Prowess

First, it introduced TrueScience™, a beauty system proven in a clinical study to visibly address the signs of aging by combating oxidative stress in the skin. Then it went a step further with the introduction of AXIO, the company’s brand of two energy drink powders that deliver better mood and improved mental focus. By entering the energy drink market, LifeVantage expanded the marketplace for its products to millennials, but the drink’s promise for improved mood and mental focus as well as quick and sustained energy gave it baby boomer appeal.

Talbott notes that AXIO fits into LifeVantage’s product portfolio strategy by helping users both feel and perform better. He adds that the company’s original focus in developing the product was to attract millennials, but his experience since then has shown him that AXIO’s promise of multidimensional energy resonates with every age.

Recognizing that AXIO would attract a younger demographic than Protandim or even anti-aging skincare line TrueScience, LifeVantage prepared by developing and offering a three-day seminar it calls “Rules of Engagement.” The new seminar is designed to teach, train and mentor young distributors, a group it calls Young Entrepreneurs for Success, or YES. It was offered first in September with presentations done by eight of the company’s top distributors in the millennial age group. Chief Sales Officer Dave Phelps describes it as “monumentally successful. We’re already getting requests to do it every three months.”

The strategic reinvention of LifeVantage includes simplified messaging, a greater emphasis on recruiting distributors, an infusion of leadership development, and finally, a big dose of excitement.

The seminar is just one element of a four-point reinvention strategy designed to reinterpret the company’s solid science by injecting sizzle and energy.

“Any company that isn’t able to reinvent itself doesn’t have as much success as when it is able to adapt and to love change,” Phelps says. His strategic reinvention of LifeVantage includes simplified messaging, a greater emphasis on recruiting distributors, an infusion of leadership development, and finally, a big dose of excitement. In many areas, such as training for millennials, the areas overlap. As young leaders learn, they can also invite prospects, helping them to develop a knowledgeable and excited team.

Phelps describes the company under reconstruction as LifeVantage 2.0. He says that for too long the company’s messaging was too complex, relying on scientific information and results from clinical studies—topics that, unless they are simplified for the average listener, can be hard to understand and then relay to others. Both sales presentations and science education are being simplified and presented in a language anyone can understand.

The Duplication Dynamic

“One of the great hallmarks of achievement of LifeVantage 1.0 was …” Click here to read the full story.




It Works!: Taking It to a Whole ‘Notha Level

by Jeremy Gregg

Click here to order the November 2014 issue in which this article appeared or click here to download it to your mobile device.

Photo above: The official ribbon-cutting at the new It Works! headquarters in Palmetto, Florida.

Company Profile

Founded: 2001
Headquarters: Palmetto, Florida
Executives: Mark Pentecost, CEO; Pam Sowder, Chief Networking Officer; Mike Potillo, Chief Sales Officer; Doug Nooney, CFO; Chris Burns, CIO; Don Klein, COO; Janne Heimonen, President of International Operations; Don Hamilton, Senior Director of Operations.
Products: Skincare and Nutrition

Founded in 2001, It Works! is one of world’s fastest-growing skincare and nutrition direct sales companies. Ranked at No. 290 on the Inc. 500 list for 2014, the company has enjoyed an impressive 1,565 percent growth rate over the past three years.

Originally based in Grand Rapids, Michigan, It Works! recently invested over $10 million to build a new global headquarters in Palmetto, Florida. Reaching across the U.S. and into at least 17 other countries, the company has amassed 90,000 active independent distributors, supported by the 100 full-time employees of It Works!.

Of the company’s 32 different products, the largest seller remains its first offering: the Ultimate Body Applicator, a non-woven cloth wrap that is infused with a powerful, botanically based formula. The company’s distributors—called “Wrapreneurs”—primarily market this product through home parties that offer their friends and families a way to achieve a tightened, toned and firm body in as little as 45 minutes.


Before It Works!, Mark Pentecost was a high school teacher and basketball coach living in the small town of Allegan, Mich., with his wife, Cindy, and their three children. Around 1995, the Pentecosts had joined a home-based business in the telecommunications industry, through which Mark Pentecost had become a top-10 earner. While they did not know it at the time, the Pentecosts’ success in direct selling had given them a vision for the future of It Works!.

In 2001, It Works! was founded on Pentecost’s belief in the impact of operating “debt-free” as an individual, but also as a company. He embraced the opportunity to share this message with the company’s distributors. “Debt Free Is the New Sexy” then became the mantra to align the field with the corporate philosophy of debt freedom.

It Works! achieved a 1,565 percent three-year growth from 2010 to 2013, placing it at No. 290 on Inc. magazine’s annual list of the 500 fastest-growing privately held companies in America.

Growing through a Tough Economy

It Works! was entering a major growth period when the economy began to fall off the cliff in 2008 and 2009. Catastrophic economic events were leading many other businesses to retreat in their expansion plans, take on enormous debt to maintain existing operations, or both. Despite these trends, Pentecost and the leadership team at It Works! were inspired to go against the grain: Pursue rapid growth while becoming debt-free.

The move paid off. Unencumbered by debt, the company grabbed a new vision for its future. It Works! achieved a 1,565 percent three-year growth from 2010 to 2013, placing it at No. 290 on Inc. magazine’s annual list of the 500 fastest-growing privately held companies in America.

“I truly believe we have a great team in our field leaders and corporate,” Pentecost says. “I’m confident in our strategic plans to grow both our U.S. and international markets. It Works! will be a recognizable force around the globe.”

Mike Potillo, Mark Pentecost and Pam Sowder welcome guests to the new It Works! headquarters.

Offering a Different Kind of Incentive

In January 2012, It Works! formalized its debt-free concept with the launch of the G.O.O.D. Bonus, which stands for “Get Out of Debt.” Based on performance, the bonuses have ranged from $10,000 to $75,000 on top of commission. Qualifiers are encouraged to use the money to pay off student loans, mortgages, credit cards and other debts.

Pentecost states: “The world today needs to hear about fiscal responsibility. At It Works!, we …”. See the full story on at Direct Selling News!!

Gold Canyon: Turnaround Toward Growth

by Barbara Seale

Company Profile

Founded: 1997
Headquarters: Chandler, Arizona
Executives: Managing Directors Lynae Parrott and Gail Gioffredi
Products: Scented candles and accessories

After a season of sluggish sales, the sweet smell of success seems to be returning at Gold Canyon. The scented-candle seller and manufacturer has instituted sweeping changes that have boosted both morale and sales. Led by a new management team that streamlined everything from the product line to the sales process, Gold Canyon looks like a happier, more fun version of its former self.

Earlier this year the company appointed two new managing directors, Lynae Parrott and Gail Gioffredi, who lead Gold Canyon with a combination of company experience and new eyes. Parrott has been with Gold Canyon since its early days, starting in its field sales organization. In 2000 she was asked to join the corporate staff, where she learned the full scope of the headquarters organization by holding positions in several departments before leading its marketing efforts. Gioffredi joined Gold Canyon in January 2012 after gaining expertise in several other direct selling companies. Parrott explains that while she primarily leads the company’s internal team and Gioffredi predominantly focuses on external sales, the two work in lockstep to push the company into the future and to focus on creating the best possible opportunity for the field sales organization, which it calls Fragrance Consultants.

“One of the first exercises Gail and I did was to evaluate our vision of the company, and we quickly identified that our business was overly complicated,” Parrott explains. “It needed to be more simple, more fun. That was the premise of a lot of the changes we started to implement immediately.”

Lynae Parrot and Gail Gioffredi

Lynae Parrot and Gail Gioffredi

Simple, Substantial

They asked themselves what they wanted the company to represent and what its mission was. Their answer: to empower others to create their own destiny.

They also identified the four core values that drive the company—both now and into the future:

  1. Do the right thing.
  2. Continually improve.
  3. Give back.
  4. Have fun!

The leaders embedded their mission and values into three key projects that would turn the company around. They emphasize proudly that throughout the turnaround Gold Canyon has been profitable, even increasing its profitability each month. But they believe that its new branding, enhanced career plan and Simple Selling System™, along with improved technology, will re-launch the company toward the growth it previously was struggling to achieve. Parrott and Gioffredi initially hired consultants to develop the bones of the career plan, but the Gold Canyon team fleshed it out, along with the rest of the turnaround plan.

The first step—because it had to be in place to launch others—was rebranding the company. The new look, revealed in February, had to work hard. It needed to reflect the company’s mission and values, but it also had to attract a younger demographic of Fragrance Consultants and customers.

In June the company had 79 promotions to leader and above, as well as 27 percent sales growth.

“We wanted the new brand to be happy, open, communicative, authentic, transparent, friendly, energetic—all those words resonate differently with different people,” Parrott elaborates.

Because a brand is more than a look, it had to have the backing of employees, too. So Parrott and Gioffredi worked hard to make sure that the staff was on board and understood what the brand stood for.

“They are our brand ambassadors,” Parrott says. “For us to achieve our strategic initiatives, they must be on board. We have been very open with them about what this brand stands for. Not only have we given them presentations, but then we have made a very conscious effort to walk the talk. When we talk about being happy and communicative, we are!”

Earning Trust

Both managing directors understood that employees had heard management promise open doors and open communication in the past, but follow-through had failed. The new executives had to earn trust. To follow up on their promise, they hold management meetings every two weeks, and they also created a Culture Club aimed at breaking down barriers and opening the lines of communication throughout the headquarters organization, including manufacturing. The group has already surfaced and addressed practices that were out of alignment with the company’s vision.

The workplace, including the 250,000-square-foot manufacturing and distribution facility, got a face-lift that reflects the new branding. The playful lettering and polka dots that adorn new marketing elements are also on company walls. Employees now enjoy a social area called the Company Lounge, complete with television, Wi-Fi, a pingpong table and a coffee bar where people gather. The objective: Create happy employees who are building relationships with each other while demolishing communication barriers among functional areas. In less than a year, the small steps have yielded big results. The formerly quiet work space now buzzes with life and laughter.

Gold Canyon’s new managing directors emphasize that throughout the turnaround Gold Canyon has been profitable, even increasing its profitability each month.

The energy filters into the field, too. Happy, more engaged employees help provide better service to the salesforce, whether they’re answering calls or fulfilling orders. Fragrance Consultants experience the energetic new brand beginning with catalogs and the starter kit, which is now dubbed the Dotty Box. The energy extends through the language of everything the company does. Parties are now called Mixers, a key printed piece in the starter kit is called the Know-It-All Guide, and the annual convention is called Palooza. The fresh, modern approach has pumped up sales leaders, who help drive home the company’s messages throughout their downlines.

Complementing the rebranding is a new compensation plan they refer to as their “enhanced career plan” that Gioffredi says simply makes more sense.

“The old career plan had unnecessary levels, complexities that didn’t serve a purpose and requirements that were too difficult,” Gioffredi says. “When the field doesn’t understand something, they freeze. Sales and sponsoring stop. A consultant’s long-term happiness is achieved by growth. We get there by rewarding the right activities and getting new people to join the business.”

Show Me the Money

Because growth comes from the bottom up, the new plan increases the income of early and mid-level leaders. First, they created an initial leadership level, simply called Leader. The new compensation plan gave that group a 40 percent increase on their Level One recruits’ results. Two levels up, team leaders received a 100 percent increase on their Level One recruits’ results, as well as an increase on Level Two. In June the plan also simplified the company’s luxury car program to make it more achievable for leaders to drive their choice of Mercedes. That month alone, the company had 79 promotions to leader and above, as well as 27 percent sales growth. July growth, especially sponsoring, was also strong. The company currently has about 200,000 Fragrance Consultants.

Parrott and Gioffredi emphasize that Gold Canyon’s internal team executed a flawless launch of the plan—the first in the company’s history.

“There were absolutely no technical hiccups,” Parrott points out. “Everything transitioned perfectly. Our inside IT department has created our own genealogy and commission structure. We now own that platform, which helps us control our own destiny. We believe that’s not only our purpose in the field, but internally as well.”

The enhanced career plan is designed to support Gold Canyon’s Simple Selling System, introduced in February. Preparing for that system required the company to reduce its unwieldy product line by 25 percent. Then with a more streamlined but harder-working collection of products, Gold Canyon introduced a three-step shopping guide to help customers choose the candles and accessories that matched their personalities and home décor. Step 1: A quiz guides customers to the scent category that fits them best, simplifying the process of navigating the 100 fragrances Gold Canyon offers. Step 2: They “shop the studio,” deciding whether they want their fragrance in traditional scented candles or wickless candles, like scent pods. Step 3: They choose their own style of candle holders and accessories to embellish their products.

“We’re creating the BLT: Believability, Likeability, Trustability. And we’d rather our consultants love us than like us!”
—Gail Gioffredi, Managing Director

The system encourages larger orders, as well as increases the net proceeds from each mixer, while it creates a fun, interactive, rewarding experience for attendees and hosts. Everybody wins.

In September, the company introduced a new scent-select candle that complements the Simple Selling System. Gold Canyon produces—to order—a jar designed with the customer’s choice of pattern and filled with a candle in the specific scent the customer chooses. The combination of scents and printed patterns generates some 250 customized options for Gold Canyon Fragrance Consultants to sell.

Philanthropic Re-Focusing

Giving back came early in Gold Canyon’s history. By its third year in business, Founders Curt and Karen Waisath started the Prayer Child Foundation to make a difference in the lives of children with physical and emotional challenges. Over its lifetime, Gold Canyon has donated $2.7 million. Later the company began donating to two different organizations that support U.S. and Canadian military troops, donating $30,000 to the two groups. More recently, it partnered with the Breast Cancer Research Foundation, contributing $205,000.

The company is proud of its commitment to charitable donations and has sustained the financial flow through the sale of specific candles dedicated to each cause. As the company identified its core values, it also looked at every aspect of the company to ensure that they were reflected, including philanthropy—not to reduce it, but to be sure that contributions were being made to the organizations closest to the hearts of its Fragrance Consultants.

At the time Managing Directors Lynae Parrott and Gail Gioffredi spoke with Direct Selling News, they had just asked Gold Canyon’s field sales organization to provide feedback on its philanthropic projects. They posted an online survey asking consultants to tell them the organizations and causes that are most important to them.

“We’re going to realign with our field to make sure we are all in agreement about the type of organizations we’ll support in the future,” Parrott explains. They also announced that they want consultants to walk the philanthropic talk, giving back through volunteering, serving others or—one of the company’s core values—just bringing happiness to others. And Gold Canyon will reward their efforts.

“We just launched a new philanthropic award process that will recognize the give-back philosophy,” Parrott says. “Consultants will be able to nominate other consultants for the award. Honorees will be on stage at Palooza next year, and Gold Canyon will give a donation to the organization they support.”

For the first time in the company’s history, Gold Canyon also will incorporate give-back efforts on sales incentive trips.

The new philanthropic practices will be one more step toward aligning all of Gold Canyon’s programs with its mission and core values.

Investing in Growth

Offering all those new options required Gold Canyon to invest in some new manufacturing machinery, and the company made sure it could deliver customized products accurately and in the same timeframe that existing customers and consultants had come to expect.

“We have done lots of test runs that have been very successful to make sure we’re up to production,” Parrott says. “We anticipate no delays. In our research of customization, we learned that it usually demands a 60 percent surcharge, but we aren’t passing the customization fee on to customers. With the efficiencies delivered by our focus on technology, we kept our cost in line. The price point remains the same as other candles in the same look and feel.”

The improvements are intended to have long-term benefits in sales and recruiting by creating more committed consultants.

“We’re creating the BLT: Believability, Likeability, Trustability,” Gioffredi notes. “And we’d rather our consultants love us than like us! Those are successful company ingredients. That’s what we’re building on. If consultants are excited and happy, they’ll spread the word.”

Even though Gold Canyon launched major improvements in the first half of 2014, it announced even more to come at its August convention, Palooza. Some changes, such as redesigned outer shipping boxes, were minor, but other announcements will change the face of the company over time. For example, it announced a soft launch into the Hispanic market, starting with new Opportunity Brochures and product catalogs in Spanish.

The company also announced the next phase of its technology upgrades: updated personal websites. The websites will be milestones on a number of levels. They will continue the company’s new commitment to controlling its own destiny by building its technology internally.

“One of the attributes we’re building is being tech savvy,” Parrott says. “As a company, we don’t have a high-tech reputation. It’s probably our biggest weakness. When Gail and I came into this, we knew we needed to build our own platforms. The ones in place at that time had Band-Aid on top of Band-Aid. Long term, that wasn’t sustainable, and we’re improving our technology dramatically.”

The new websites will be enhanced with features consumers have become accustomed to, such as mobile platforms, wish lists, social media links and customer reviews.

At the same time it upgrades its technology, Gold Canyon also will upgrade its human touch. The company’s service department, called Partner Support, will have extended hours. And with the expansion into the Hispanic market, the company added its first bilingual field development manager to support consultants and leaders.

Quality Continues

The numerous changes are built on the company’s strong foundation of candle manufacturing. Gold Canyon is proud to produce The World’s Finest® scented candles, using pure fragrances that waft throughout the home; cool, food-grade wax; and self-extinguishing wicks. Having its own manufacturing facility gives Gold Canyon more than a recognizable scent in its hometown. It also gives it a competitive edge.

“It allows us to respond to what consumers ask for,” Parrott says. “Our product development team and manufacturing team work together to get new ideas for products that set us apart from the competition. And that’s a great story for our field to tell. They’re not just offering a candle that is made in some unknown spot somewhere in the world. Instead, they’re proud that what they’re selling keeps people in America employed. And our Canadian consultants love it because the wax is from Canada.”

The Simple Selling System drives up the amount of the average order, as well as the net proceeds from each mixer, while it creates a fun, interactive, rewarding experience for attendees and hosts.

The managing directors believe Gold Canyon’s strong foundation and recent improvements are setting the company up for future success. They’ll know they are successful as they see Gold Canyon become a household name. Achieving their objective business goals—sustained double-digit growth, quadruple their sales field count, and international expansion—will make that happen.

“When Lynae and I took on this awesome responsibility of providing leadership to the company, we knew that many people were relying on us, from investment groups to vendors and the sales field,” Gioffredi says. “We have to balance them all and make sure that our Fragrance Consultants are successful. If they’re successful, we will be. We’re aligning everything to create that success.”

Amway: Rising to the Top

by Barbara Seale

Click here to order the September 2014 issue in which this article appeared or click here to download it to your mobile device.

Company Profile

Founded: 1959
Headquarters: Ada, Michigan
Founders: Rich Devos and Jay Van Andel
Products: Nutrition, wellness, beauty and home products

Amway watchers have many things to admire: an impressive 55 years in business, sales growth of almost $1 billion in 2012 and 2013 combined, and brands that are among the leaders in their category. The company’s 2012 sales allowed it to climb to the top of the Direct Selling News Global 100 list, where it remains. Last year sales reached $11.8 billion.

Those imposing figures are just the latest in a history that includes growth in 13 of the past 14 years. The secret to its recent success? A strategy it calls Growth Through Innovation.

“[Our rigorous testing of products] gives Amway Business Owners confidence in the quality of the products, validates the health benefits of the products as part of a healthy lifestyle and helps them explain ‘why Nutrilite, why Amway?’ ”
—Audra Davies, Vice President of Nutrilite Product Development and Analytical Science

Now seven years into the strategy, the company has approximately doubled its size—its original goal. In fact, Amway executives can point to many successes. Most of its top 10 markets grew in 2012 and 2013, despite political turmoil and economic crises in some of them. As the company grows, its manufacturing capability grows, too. Amway is in the middle of a $332 million global expansion of it manufacturing and research and development, including four facilities in the U.S. that support the Nutrilite® brand, a new manufacturing facility in India, a second manufacturing site in Vietnam and an R&D center in China.

Amway has fueled its growth by focusing on the basics, providing products customers want to buy and creating an experience that satisfies the entrepreneurial needs of its 3 million Amway Business Owners (ABOs). Along the way, Amway has learned to customize its approach so that it creates success in many markets at the same time.

“The priority we’ve set around the world is on the experience of both customers and Amway Business Owners,” says Amway Chief Sales Officer John Parker. “We try to ensure that we’re providing the right support, tools, products and training to create an environment that helps people achieve their goals. It takes hard work, and there was no silver bullet—not one single product or initiative. Achieving growth around the world has required getting the right portfolio of strategies in place, strong partnerships in our regional organizations, and executing effectively.”

Global R&D expansion was one of the goals met by Amway’s Growth Through Innovation strategy.

Cultural Customization

In China, a fairly new market where the country’s unique regulatory environment requires direct sellers to adapt their traditional business models, Amway focused on brand-building, lots of training and ensuring that its products meet the unique needs of Chinese consumers, where nutrition and herbal remedies are a core part of the culture. The work is paying off. Amway earned about 40 percent of its 2013 revenue in China.

In stark contrast with China, the company’s business in Japan is more developed. Parker says that some of Amway’s most innovative work in the last few years has been done in Japan. Though it has been a challenge, a stagnant economy coupled with uniquely demanding, sophisticated consumers tests every company.

“Achieving growth around the world has required getting the right portfolio of strategies in place, strong partnerships in our regional organizations, and executing effectively.”
—John Parker, Chief Sales Officer

John ParkerJohn Parker

“For our business in Japan to get on a growth track, we needed to understand the unique nuances of the Japanese consumer,” Parker says. “One issue is the level of service they demand. As Americans, it’s hard to appreciate the service demands there, but our team there did a fantastic job of understanding where we weren’t delivering against service expectations and raising the bar uniquely in Japan. Again, it wasn’t just one magic bullet, but the right combination of initiatives: delivery, customer service, and the type of experience we offer in training centers and brand centers in Japan. Product launches created growth there, and the launches of skincare products that appealed to Japanese consumers have been very successful.”

Amway coupled product launches in Japan with training, tools and innovative events in clubs and on beaches that focus on brand-building, but without the traditional business presentations. Many initiatives are especially focused on achieving the right combination of initiatives for ABOs, and a focus on customer satisfaction drove excitement in the under-35 demographic of consumers
and ABOs.

“At the end of the day there are certain things we’ll do well at headquarters and certain things we must empower our teams around the world to do,” Parker explains. “We had to figure out the formula.”

Now seven years into its Growth Through Innovation strategy, Amway has approximately doubled its size—its original goal.

Market Domination

The second half of the formula revolves around products, especially the company’s star brands—Nutrilite and Artistry®—which open doors for ABOs around the world.

Nutrilite, the company’s line of wellness products, pre-dates Amway itself. This year Amway celebrates the 80th anniversary of Nutrilite. In fact, Amway founders Jay Van Andel and Rich DeVos started their direct selling careers in 1949 as Nutrilite distributors. The brand was already 15 years old. Rich has said that without Nutrilite, there would be no Amway. Jay and Rich introduced the Nutrilite brand to Amway distributors in 1972 when they acquired a 51 percent interest in Nutrilite. They gradually acquired more and more of Nutrilite stock until 1994, when they purchased Nutrilite Products in full. According to Euromonitor International Limited, today Nutrilite is the world’s No. 1 selling vitamins and dietary supplements brand, accounting for almost half of Amway product sales. One of the earliest wellness products, Nutrilite Double X®, is still the company’s flagship nutrition product.

Nutrilite, the company’s line of wellness products, pre-dates Amway itself. This year Amway celebrates the 80th anniversary of Nutrilite.

The company’s other mega-brand is Artistry. Also according to Euromonitor, for years the product line has been in the world’s top five largest-selling premium skincare brands, and among the world’s top 10 largest-selling premium cosmetic brands. The product line was born in 1959, the same year Amway was founded. Today it includes 250 products that are sold in 50 countries around the globe. Some 25 percent of Amway product sales are Artistry products.

Amway founders launched the company with one of the first biodegradable products, L.O.C.™ (Liquid Organic Cleaner) Multipurpose Cleaner. Today the L.O.C. name has morphed into the LEGACY OF CLEAN® brand, which includes an extensive line of products made with naturally derived ingredients. The company also offers eSpring water treatment and purification systems—now the world’s No. 1 selling brand of home water treatment systems*—as well as XS® Energy Drinks. While Amway offers all these product lines, its revenue workhorses are the Nutrilite brand of nutrition products and Artistry skincare and cosmetics. With some 450 individual products, Amway is a beauty and wellness powerhouse, offering products and the Amway opportunity in more than 100 markets around the world.

Family Features

Artistry and Nutrilite share some characteristics beyond their goliath revenue-production abilities. They’re both backed by science and developed by robust research and development teams. They have the support of Scientific Advisory Boards. And they were birthed by entrepreneurial creative teams comprising the founding families at Amway and Nutrilite Products. Today their legacies continue. Dr. Sam Rehnborg, son of Nutrilite Founder Carl Rehnborg, is now President of the Nutrilite Health Institute, while Steve Van Andel and Doug DeVos follow in their fathers’ footsteps, serving as Chairman and President of Amway, respectively.

A look at Amway’s approach to the Nutrilite brand reflects the way it manages others in the company. It starts with Amway’s commitment to innovation and quality in all of its products.

Kanan BanerjeeKanan Banerjee

“The secret is if you are true to your roots, that commitment becomes part of your DNA. It’s second nature to every employee,” says Kanan Banerjee, Vice President, Global Brand Management, Nutrition and Wellness. “No matter which function you talk to, it’s our benchmark, as well as our legacy.”

When Amway develops Nutrilite products, it ensures that they are rooted in nature, differentiated by their phytonutrient story, and best-in-class. To that foundation of plant-based ingredients, Amway adds science, which often allows products to provide a targeted benefit, such as memory support. And Amway ensures that products are relevant, conducting research into key consumer needs.

“With the number of scientists we have, the number of ideas for products can grow exponentially,” explains Audra Davies, Vice President of Nutrilite Product Development and Analytical Science. “We must prioritize all those ideas, so the criteria of consumer relevance, combined with science, combined with our nature story, create a winning combination.”

Part of the product-science combination includes the publishing of basic scientific research, such as a report published in August. Released by the Nutrilite Health Institute of Amway, The Global Phytonutrient Report highlights a significant shortfall in fruit and vegetable consumption in global diets, preventing individuals from receiving crucial health benefits. It reveals that the majority of adults worldwide would have to at least double their current consumption of fruits and vegetables to meet the World Health Organization’s minimum recommendation of five servings per day. The vast majority of adults worldwide—60 to 87 percent across 13 geographic diet regions—fell short of this recommendation.

Audra DaviesAudra Davies

The research indicates a global gap between the recommended amount of fruits and vegetables and what adults are actually eating, despite a growing body of research, which suggests that eating foods rich in phytonutrients—organic compounds found in fruits and vegetables—provides a range of health benefits, such as supporting the body’s antioxidant defenses and immune system.

Reports such as this one help reinforce the relevance of Amway products. Davies regularly takes the story of the science behind Nutrilite products to meetings of ABOs. She believes that they value the company’s commitment to science.

“It differentiates our brand and validates our product offerings in the marketplace,” she notes. “Sometimes products have gone through hundreds of thousands of tests before being launched. That gives ABOs confidence in the quality of the products, validates the health benefits of the products as part of a healthy lifestyle and helps them explain ‘why Nutrilite, why Amway?’ ”

“The secret is if you are true to your roots, that commitment becomes part of your DNA. It’s second nature to every employee. No matter which function you talk to, it’s our benchmark, as well as our legacy.”
—Kanan Banerjee, Vice President, Global Brand Management, Nutrition and Wellness

Amway ensures that ABOs have access to communications and sales tools that meet the needs of both the ABOs and their customers. Tools such as videos, unusual events, free training, digital apps for a variety of functions and even endorsements all increase credibility and ease the sales and prospecting process. And realizing that the under-35 demographic is becoming a larger part of the salesforce, Amway is developing new methods and frequencies of recognition.

“We haven’t cracked the code yet,” Parker says, “But I think we will need to adapt our recognition programs as a company to deliver more recognition earlier and in new ways—online, for example. Likewise, we need to empower leaders in the field to help them provide more recognition earlier in the Amway experience. We’re thinking about how we can build recognition into social media platforms. Those things are part of the psyche of the next generation, so we have to figure out how to deliver there. It’s not going to be a nice-to-have. It’s a requirement.”

Such efforts reflect the customization in Amway’s global business these days. Parker believes that the next 10 years will see Amway focused on getting the right growth initiatives implemented in the right markets based on local entrepreneurs and consumers.

“For a big company like Amway, it would be easier if we had the same three initiatives around the world. Sometimes that will be the case, sometimes not,” Parker says. “We’ll meet consumers where they’re at with products and messages that resonate. We measure our success based on the success of our business owners—how many people are achieving the goals they set in their Amway business each year; how compelling are the products, training and events we’re doing every year; and we have to add the social dynamic into the mix as well. If we can create an atmosphere where people are enjoying what they’re doing, that’s an important part of the equation for our business. It might look different around the world, but the outcome is the same.”

Nutrilite: Celebrating 80

Photo on left: Amway Co-Founders Rich DeVos and Jay Van Andel (bottom row, second and third from the right, respectively) pose with Nutrilite Founder Carl F. Rehnborg and his wife Edith Rehnborg, in 1956. (Amway) Photo on right: Carl F. Rehnborg in his Buena Park, California, office, circa 1950. (Amway)

Dr. Sam RehnborgDr. Sam Rehnborg

Eight decades of success deserves a party, and Amway is celebrating the 80th anniversary of Nutrilite by launching the second edition of The Nutrilite Story: Past, Present and Future. The first edition was published five years ago. The update, which Amway published as an ebook, adds five chapters that chronicle the brand’s tremendous growth from 2009 to 2014. That growth reflects advancements in research that drive innovative product development, investment to expand global manufacturing capabilities, and the unique global agribusiness approach that supports Nutrilite organic farms. The book also adds entries from more than 100 top-selling Amway Business Owners.

The book’s author, Dr. Sam Rehnborg, is the son of Nutrilite creator Carl Rehnborg and the President of the Nutrilite Health Institute. “Dr. Sam,” as he is affectionately known throughout Amway, inherited his father’s passion for creating optimal health through a plant-based diet and plenty of exercise. And like his father, he recognizes that people around the world simply don’t live the lifestyle needed to reach their optimal health. Supplements help fill dietary gaps. That’s been the role of Nutrilite for 80 years.

“It gives me intense pleasure to see people awakening to the connection between nutrition, health, and disease prevention,” Dr. Sam says. “The heart of the Amway business is exactly what my father was after—people taking charge of their lives. When you do, you take responsibility for your health, your wealth and the health of the planet.”

He points with pride to the Amway sales model—also his father’s brainchild—which is based on satisfied customers getting excited about the product and sharing it with others. And he is proud that the products themselves are supported by scientific research and ingredients harvested at Amway farms—over 6,400 acres in the U.S., Mexico and Brazil. Nutrilite is the only global vitamin and mineral brand to grow, harvest and process plants on its own certified organic farms.

Proceeds from the sale of the book benefit the Nutrilite Power of 5 Campaign, which partners with nonprofit organizations to provide a micronutrient supplement to malnourished children through Nutrilite Little Bits, a one-gram nutrient powder packet containing 15 vitamins and minerals that can be sprinkled onto any food.

Dr. Sam explains, “Recent research has shown that if you can provide children through 5 years of age with good nutrition, they have a chance to fulfill their potential. If they’re malnourished, children will never be able to achieve their ultimate potential.”

Linked to the Nutrilite anniversary celebration and the Power of 5 Campaign is a ribbon cutting and open house on Sept. 17 that will showcase the newly designed Center for Optimal Health and rooftop replica of Carl Rehnborg’s historic Quonset hut, which served as his early home and lab. The ceremony is one of a series of events at more than 100 locations where Amway distributors have invited guests to donate their handprint to help in the fight against childhood malnutrition. For every handprint received, Amway will contribute $1 and match donations up to $400,000 to CARE International to support the Power of 5 Campaign.

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 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.”