Nerium Soars to #12 on Inc. 500|5000 List

Today, Inc. magazine announced its 34th annual Inc. 500|5000 List, and the exclusive ranking once again features several direct selling brands. The Inc. 5000 is a list of America’s fastest-growing private companies, with the Inc. 500 representing a special ranking of companies in the top 10 percent.

Eight direct selling companies are included in this year’s list, and they represent a wide variety of categories: consumer products, health, travel & hospitality and energy. The growth increase spans an even greater range from a very respectable 125 percent (Beachbody) to a whopping 16,617 percent (Nerium). Nerium has only been in business since August 2011, making this percentage growth number even more impressive.

Limited to U.S.-based, privately held companies, the Inc. 5000 measures revenue growth from 2011–2014.

The top 500 companies on the list will be featured in the September issue of Inc.

To view the entire list, please visit www.inc.com/inc5000.

12 Nerium International 16,617% $403M Consumer Products & Services
132 Plexus Worldwide 2,833% $310.4M Health
442  It Works! 1,060% $538M Consumer Products & Services
564 Jeunesse 811% $419.2M Consumer Products & Services
915 WorldVentures 491% $315.5M Travel & Hospitality
2210 Isagnenix 177% $725M Health
2814 Ambit Energy 128% $1.5B Energy
2864 Beachbody 125% $938.9M Health
Advertisements

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.

Origin

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!!

Plexus CEO Shares 4 Keys to a Successful Direct Selling Business

Photo above: Plexus’ executive team: Alec Clark, Tarl Robinson and Alfred Pettersen.


In April, Plexus Worldwide made its debut on the Direct Selling News Global 100 list of the world’s largest direct selling companies. In August, Inc. magazine ranked it No. 8 on its Inc. 500 list of the nation’s fastest-growing private companies. In a recent interview, CEO Tarl Robinson highlighted some of the strategies he feels have been key to that success.

Build a bond with your field.
Plexus prides itself in having a partnership-style relationship with its salesforce of Plexus Ambassadors. Robinson said the company relies heavily on an advisory board of seven Ambassadors, chosen by the company’s top leaders. The executive team is in contact with the advisory board at least monthly, with three in-person meetings each year.

Make quality hires internally.
Because Plexus has made a name for itself in the Scottsdale, Arizona, market as a company with good compensation and benefits packages—not to mention its alluring growth story—the company has had no lack of applicants as it has grown. “It’s a unique and exciting position to be in as a company, that we really get to be selective about who we place in a role and take a lot of time and effort and thought process around our hiring,” Robinson said.

Top people deserve top income.
Enough said.

Company culture is key.
Creating, and maintaining, a strong, positive culture is no easy task. “Focus in on what you want that to be from an internal culture of your company, an external culture of your company and a field or ambassador culture of your company,” Robinson said. “You have to buy into it 100 percent.”

For more from the DSN interview with Robinson, see the November issue.

 

Fast Growth Propels Direct Selling Brands onto Inc. 500

Inc. magazine has announced its 2014 Inc. 500|5000, and the exclusive ranking once again features several direct selling brands. The Inc. 5000 is a list of America’s fastest-growing private companies, with the Inc. 500 representing a special ranking of companies in the top 10 percent.

Limited to U.S.-based, privately held companies, the Inc. 5000 measures revenue growth from 2010–2013. This year’s list includes direct sellers Plexus Worldwide (No. 8); Jeunesse Global (No. 258); It Works! (No. 290);North American Power (No. 476); Ambit Energy (No. 2074);WorldVentures (No. 2333); Viridian Energy (No. 2381); 5LINX (No. 2916);YOR Health (No. 3528) and Isagenix (No. 3764). The full Inc. 500 list will appear in the September 2014 issue of Inc. magazine.

Plexus Worldwide, the highest ranking direct seller on the list, got its start eight years ago in Scottsdale, Arizona, and has since expanded into Canada and Australia. With a strong focus on weight-loss and pain-relief products, Plexus is the No. 2 health company in this year’s ranking. The direct seller generated 16,458 percent growth over three years, closing out 2013 with $159.8 million in revenue.

“At Plexus, our mission is to enhance the health, wealth and happiness of our Ambassadors and employees. And we’re seeing that happening across the country,” Plexus CMO Alex Clark shared in a recent feature for DSN. “Eventually we’ll see it happen across the world. I anticipate being here for a long time because what Plexus has is a true partnership between its executives and Ambassadors.”

Based in Altamonte Springs, Florida, Jeunesse Global recorded 1,788 percent growth over the past three years. Jeunesse has expanded aggressively into 92 markets since launching in 2009. The company’s personal-care and nutrition products generated sales of $224 million in 2013.

With three-year growth of 1,565 percent, It Works! ranked No. 290 in its fourth consecutive year on the Inc. 5000. The company generated revenue of $456.2 million in 2013 and recently upsized its corporate headquarters to a new facility in Bradenton, Florida. It Works! markets a line of health and wellness products anchored by its Ultimate Body Applicator, a 45-minute tightening and toning wrap.

In 2011, Forbes named North American Power to its list of America’s Most Promising Companies. The U.S. energy provider has lived up to its promise with 991 percent growth over the past three years. North American Power’s retail electricity and natural gas services generated $263.2 million in revenue last year.

The Road to $1 Billion

by J.M. Emmert

DSN Cover, April 2014

When Inc. magazine named Ambit Energy America’s fastest-growing private company in 2010, the then 4-year-old company’s annual revenue already had reached $325 million, making it one of the 40 largest direct selling companies in the world.

A year after the Inc. article appeared, the revenue number had doubled to $664 million. And 24 months later, Ambit did what very few direct selling companies have been able to do: break the billion-dollar barrier.

Hitting $1 billion in revenue is a milestone for any business, and to do so in seven years puts Ambit’s growth on a trajectory in line with some of the most recognizable brands of the past few decades: Apple (six years), Facebook (six years), Amazon (four years), eBay (seven years) and Google (five years).

Technology certainly helped. Co-Founders Jere Thompson Jr. and Chris Chambless have pointed to the company’s data processing technology as a key factor in Ambit’s rapid expansion. And Ambit, like all modern direct sales companies, leverages the connectivity afforded by the Internet as well as social media platforms in its sales strategies.

Yet despite the ubiquitous nature of technology, the billion-dollar milestone remains elusive for many direct sellers. In order to better understand what it takes to break through that barrier, we decided to study some of the members of direct selling’s Billion Dollar Club: six from the United States—Ambit, Amway, Avon, Herbalife, Mary Kay and Nu Skin, as well as Germany’s Vorwerk, Brazil’s Natura and Peru’s Belcorp.

What is it that makes them billion-dollar companies? What do they have that other companies are still trying to learn and to possess? In our review, we identified four key drivers behind the members of the Billion Dollar Club.


Growth Comparison ($0-$1 Billion)


1. They were founded by outstanding leaders.

Which one would you invite to dinner: the visionary, the revolutionary, the dream-builder, the groundbreaker, the risk-taker, the mover, the shaker or the history-maker? In the Billion Dollar Club, you’ll find them all sitting at the table.

Take Amway’s Jay Van Andel and Rich DeVos, for example. Van Andel was a firm believer in and fierce advocate for free enterprise, and DeVos was among the first proponents of teaching distributors to start with believing in themselves.

“We were just two guys from Ada, Michigan, USA, who wanted to have a business of our own,” DeVos says on the company’s website. “We were two kids (it still feels like that sometimes) who were hungry for success and who wanted to give others the chance to be in business for themselves, too.”

The current generation at Amway is building upon that foundation. Co-CEOs Steve Van Andel and Doug DeVos have led the company to record sales growth marked by continued global expansion to more than 100 countries and territories.

Avon offers a similar lesson in the power of strong foundational leadership. As a salesman in the 19th century, David McConnell was far ahead of his time in recognizing that women could be successful sales professionals. Beginning in 1886 with Mrs. P.F.E. Albee, he tapped the power of a female salesforce to go door-to-door extolling the virtues of products from the California Perfume Company, the forerunner of Avon. By 1920, he had built a $1 million business, which adjusted for inflation would be nearly $12 million now.

Today, CEO Sheri McCoy, whom Fortune magazine ranks as among the 50 most powerful women in business, exemplifies McConnell’s vision of building the company for women. She joined the Avon team in April 2012, bringing with her 30 years of experience with Johnson & Johnson, and now leads a $10 billion business with more than 6 million independent sales representatives.

2. They offer distinctive, high-quality products or services.

Having bold, visionary leaders is critical to building a billion-dollar company. So, too, is creating products that bring true value to the marketplace. The club members reviewed here have done just that.

The United States has the largest cosmetics industry in the world, with estimated revenue of nearly $55 billion. Amway, Avon, Mary Kay and Nu Skin are all able to thrive because they continue to be at the forefront of scientific research, developing new products designed to enhance the lives of customers.

Nu Skin, for example, spent more than $46 million on research from 2011 to 2013 and has made several key acquisitions that brought new technology into the company. Its Pharmanex health supplements product line comes from the acquisition of Simi Valley, Calif.-based Generation Health Holdings Inc. in 1998. Since then, Nu Skin has gone on to purchase substantially all of the assets of Madison, Wis.-based LifeGen Technologies LLC in 2011 and Malvern, Pa.-based Nox Technologies Inc. in 2012, which added more anti-aging technology to the Nu Skin portfolio.

Avon significantly upped its research and development game in 2002, announcing plans for a state-of-the-art R&D center and a $100 million increase in research spending from 2002 to 2005. The company has continued that commitment, spending $67.2 million on research and development in 2013 and launching more than a dozen new products.

Unlike its personal consumer product peers, Ambit is using direct sales to introduce customers to a relatively new product category: energy. Deregulation in many utility markets is giving consumers a choice when it comes to purchasing their retail electric and gas services.

Since its launch in Texas in 2006, Ambit has used direct selling to spread the word. Co-Founder Jere Thompson Jr.’s mother and father were the company’s first customers, and received the first bill. Today, Ambit has more than 1 million active customers.

3. They target growing markets.

In order to hit the $1 billion mark, choosing where to sell can be just as critical as choosing what to sell. Of the nine companies in our report, six of them have a presence in more than 35 markets around the globe. Only Belcorp (16), Natura (seven) and Ambit (one) have managed to make the Billion Dollar Club with less.

According to a September 2013 DSN report, advanced markets—the United States, Japan, Korea, France, Germany, the U.K., Taiwan, Italy, Canada and Australia—accounted for $89 billion in retail sales in 2012. Emerging markets such as China, Brazil, Mexico, Malaysia, Russia, Colombia, Thailand, Venezuela, Argentina, Peru, Indonesia, India and the Philippines accounted for $65 billion. Those markets, however, are home to 85 percent of the world’s population; gaining a foothold there now establishes a foundation for future growth.

Take Brazil, for example. Natura has established itself as the biggest cosmetics company in its home country. The No. 2 cosmetics name in Brazil? That was U.S.-based Avon, which counts Brazil as one of its largest markets and where it keeps some research and development operations.

4. They invest in their people.

In the end, while leadership can create a desired path, quality products can help establish a business, and new markets can help bring a company’s story to a worldwide audience, it all comes down to the people who say yes to the opportunity to represent the brand.

The nine companies in this report have more than 20 million salespeople combined across the globe. Those salespeople are of every age and ethnicity, with diverse educational backgrounds and diverse reasons for wanting to be an entrepreneur. In fact, according to the U.S. Direct Selling Association, most people who join direct selling come for one of five things: supplemental income, recognition, rewards, social connections or product discounts.

Six of the nine companies currently have more than 1 million salespeople who, for the most part, are compensated on a multi-level structure. The most-frequently used sales method is person-to-person, which accounted for 80 percent of sales in 2012. Vorwerk, Mary Kay and Belcorp employ the party plan method as well.

The founders and leaders of the Billion Dollar Club companies recognize and value the diversity among their salesforces. Family men like Belcorp’s Eduardo Belmont and the brothers Carl and Adolf Vorwerk have shown that fostering a culture of love and respect brings in the greatest returns on investment. Motivators like Herbalife’s Mark Hughes and Natura’s Luis Seabra set out to help people change themselves so they could, in turn, change more lives for the better. And Nu Skin’s Blake Roney, Sandie Tillotson and Steve Lund are among the many philanthropists in direct selling who have reached out a helping hand to those in need.

A key to becoming a billion-dollar company is to have people talking about it. So whether the talk comes from the standpoint of a 150-year-old legacy or a new, spirited startup that has re-energized the industry, happy salespeople translates to happy customers; and happy customers is always a winning formula.


Origami Owl: A Company with Heart

by Jennifer Workman Pitcock

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

Origami Owl


Company Profile

  • Founded: 2010
  • Headquarters: Chandler, Ariz.
  • Founder: Bella Weems
  • Products: Custom lockets, tags, bracelets and other jewelry.

Like most seniors in high school, 17-year-old Bella Weems is weighing her options. “I’m definitely going to college,” Bella says. She has yet to choose a school or a major, but she’s excited about the possibilities. “Wherever my journey takes me will be an amazing opportunity,” she says.

Her journey has already taken her places most people don’t go in a lifetime. Just three years ago, she was a typical 14-year-old. When she told her parents she wanted a car for her 16th birthday, they said she would have to buy it herself. They suggested she start a business, which she did and named Origami Owl.

Bella Weems

Bella Weems


Bella’s parents matched the $350 she had saved in babysitting money, and with the funds she purchased some clear lockets and charms to go inside. Her goal was to earn $3,000–$6,000 to buy a used truck. But Bella’s Living Lockets caught on. Wherever she took them—to house parties, church bazaars, and eventually a kiosk in the mall—people couldn’t get enough. She was making thousands of dollars, and there was no end in sight to the demand for her lockets.

By 2011 the Weems realized Bella’s Living Lockets were more than a passing fad. They adopted a direct sales model to help them grow the company in a way that aligned with their mission: to be a force for good. Rather than providing people with minimum-wage mall jobs, they could offer people the opportunity to own their own businesses and achieve their own dreams.

Since then, Origami Owl has grown exponentially. In a little more than a year, the company has gone from fewer than 5,000 designers with a waiting list to join to over 60,000 designers. They’ve moved their fulfillment into an 80,000-square-foot building, and the corporate office will follow. Their earnings for 2013 are projected to hit the $250 million mark.


Origami Owl’s earnings for 2013 are projected to hit the $250 million mark.


Strengthening Infrastructure

So how did this small family-run company so quickly become a force in the direct sales industry? About a year ago Bella’s mother and Origami Owl’s co-founder, Chrissy Weems, saw that Origami Owl was outgrowing its family management team. She contacted Robin Crossman, who has extensive industry experience, having worked with a roster of well-established companies.

Crossman began consulting, and within six months had joined the company as its CEO. Immediately, she began adding expert staff to help manage the company’s rapid growth. Crossman also began working to get Origami Owl’s infrastructure and processes in order. “We’ve recently opened a state-of-the-art distribution center, and our throughput increased threefold immediately with an accuracy rate of 99.7 percent.”

Supporting the Field

Once Origami Owl’s infrastructure was in place, the company was able to let all the designers-in-waiting officially join Origami Owl. As the numbers grow rapidly, the company now has the necessary resources to support them.

One of Crossman’s hires was Ann Raulston, Vice President of Field Sales. Her plan for continued growth and retention of the field includes the addition of regional directors. “Currently we have a team of four, and their job is to model and mentor leaders in the field,” Raulston says.

This takes many forms: team meetings, larger meetings with team field leaders, individual meetings with leaders to help them maximize the career plan, and supporting them as they’re moving forward through the career plan. The regional trainers have a minimum of 10 years’ experience in that corporate role. All have been distributors at some point as well.

“It’s very important to have walked the talk, because then you have the heart and understanding to walk alongside these leaders,” Raulston says.

Additionally, Origami Owl recently upgraded to a new back office system. Along with the usual training videos, the back office has tools that enable designers to improve their businesses. “They now have access to a back office ‘coach’ that helps them to understand how they can maximize their earnings every month, and that’s motivating them,” Raulston says.

The company also is planning to roll out a mobile app soon.

For Raulston, there are two important keys to keeping the field engaged. The first is to keep the field in touch with the mission and culture of the company. Every week in her webinar, Raulston makes sure she’s not only giving updates and information, but also focusing on how the field is connecting to the heart of Origami Owl: “I try to make sure that I highlight a leader or designer who is exemplifying the ‘force for good’ model,” Raulston says.

The second is to spend time in the trenches and really listen to the field. “I’ve seen it before, where you get so engrossed in the corporate machinations and in where you are going as a company that you lose touch,” she says. “We can’t forget that our field is who we are. We have to go out and listen to their stories and ask, ‘How can we better help you?’ ”



“One thing I’ve talked about [with young entrepreneurs] had to do with building your brand and being able to stand out in your community not only for dressing well and looking good, but also for being a force for good.”
—Bella Weems, Founder


Owlettes Ambassador Circle

A unique feature of Origami Owl is its focus on developing young entrepreneurs. Girls ages 14–17 may join the company with a parent or other trusted adult as a partner. These young teen designers are called Owlettes and are part of the Owlettes Ambassador Circle (OAC).

This program is especially dear to Bella, who leads it. Once each month she connects with these girls on a training call that lasts 30–60 minutes. The goal of the program is to inspire the girls to be strong leaders within their peer groups and schools. It teaches them finance, how to run their own businesses, how to be confident and successful, and to realize that, like Bella, they can reach their dreams.

“We’re training them by our mission statement,” Bella says. “Every call has a theme. One of the last ones that I did was about confidence and building your brand. One thing we talked about had to do with building your brand and being able to stand out in your community not only for dressing well and looking good, but also for being a force for good.”

Mother’s Day Challenges


“It’s very important to have walked the talk, because then you have the heart and understanding to walk alongside these leaders.”
—Ann Raulston, Vice President of Field Sales


With Origami Owl’s rapid growth, there have been some bumps along the way. As an example, nothing could have prepared the company for Mother’s Day. That week, the company received double the orders it had in the previous year. “I’ve worked with the finest forecasters in the field of direct sales, and no one could have predicted that. We were in trouble with our IT, and we crashed our server,” Crossman says. “We were backordered on products as well. Our team reacted quickly and was able to implement a new party tab in record time.”

Origami Owl also stopped adding new designers for a few weeks, and when they began adding again, they did so slowly to make sure that they were supporting the growth. “Never underestimate the power of the field,” she says. “And make sure you have extra capacity beyond what you dreamed you might need.”

A Product with Heart

Origami Owl has added a TAGGED line that utilizes tags and dangles in addition to the lockets, and it recently launched a bracelet line. But the Living Lockets remain the company’s most popular products.

Taryn Gosch, Origami Owl’s Public Relations Director, thinks that’s because of what the lockets symbolize. “We have a product that allows people to create their journey in a piece of jewelry that’s their own legacy, that they can proudly wear,” she says. People choose charms that represent them—from birthstones to tiny fashion item like shoes and purses, to hobby items like a tiny football or knitting needle. There are literally hundreds to choose from.

“We’re not asking people to come to a jewelry bar and buy a piece of jewelry. We’re saying, ‘Come experience a jewelry bar and create a piece that’s going to inspire you or others.’ That’s why I believe it does so well,” Gosch says.

This desire to inspire others is at the heart of the company and its culture. “Origami Owl’s culture is what drew me to the company,” Gosch says.

“We take culture so seriously that we actually have a VP of Culture, Yvette Dickson. Her team’s main job is to make sure that employees are well taken care of and inspired to live out the Origami Owl mission.”

Raulston agrees. “It doesn’t matter what position you hold within the company, there’s this incredible warmth and joy and thrill about being a part of it. You come through the door, and you feel it.”

She says, “The desire to share this culture with the field is so strong that members of the culture team are part of our training. We call it ‘Love From the Nest.’ It’s a very important part of retention and keeping people connected.”

Country Music Awards

It’s not unusual to hear someone singing as you walk through the headquarters of Origami Owl. Bella loves to compose, sing and play her own music, and that has permeated the company culture. Origami Owl just culminated a yearlong partnership with Big Machine Label Group. During the course of the year Origami Owl created limited-edition tags for two of the label’s bands, Rascal Flatts and The Band Perry as part of their TAGGED collection.

And in November, Origami Owl co-sponsored Big Machine Label Group’s after-party at the Country Music Awards in Nashville. At the party, stars were invited to make a personal keepsake locket for themselves, as well as one to give to a child in the hospital. The following day Bella went to Vanderbilt Children’s Hospital and donated 250 necklaces, accompanied by handwritten notes from celebrities.

A Force for Good

That culture of giving, of paying it forward, comes naturally to Bella. She didn’t spend her 17th birthday celebrating with friends but rather chose to spend the day giving back. She took toys to a couple of centers for abused children, then went to a local children’s theater and spent time with the children there, pledging to help provide for the program for the next six months. After that, she sought out a designer who shared her birthday and surprised her at her home with a gift. “She’s somebody who thinks about others all the time,” Gosch says.

This spirit of giving is such a part of the company culture that Origami Owl is constantly seeking ways to be generous. “Origami Owl is so blessed, and we want to share with others, especially those in need,” she says.

While this has included lots of opportunities for employees and designers to give within the community, the company wants to give back in a much bigger way. “In the new year we are excited to announce a new charity partnership with a national organization where we will be able to make a very big impact,” Gosch says. “It is important that we continue to be a force for good and spread the love.”

Bright Future


Origami Owl ranked No. 35 on Inc.magazine’s Hire Power List for creating 341 jobs in the past 18 months.


Already, Origami Owl is beginning to receive recognition for its success. The company was recently honored by Chandler’s Chamber of Commerce and, more notably, ranked No. 35 on Inc. magazine’s Hire Power List for creating 341 jobs in the past 18 months. They expect to break into the 2014 DSN Global 100, as well. In the future, Origami Owl plans to expand into other countries.

And what about Bella? As she looks ahead, she sees herself with Origami Owl. “Or maybe I’ll be helping other businesses grow,” she says. “I know that I definitely love being in business and I love direct sales, so I see myself in the direct sales industry for a very long time.”

Operations and Processes: The Keys to Creating a Successful Experience

by Barbara Seale and DSN Staff

Click here to order the December 2013 issue in which this article appeared or click here to download it to your mobile device.


DSN December 2013, Cover.

Direct selling companies know that behind every successful consultant stands an army of people who are working hard to ensure the total customer experience is a highly successful and positive one.

No matter how wonderful a product is or how fun an event has been, once the order is placed the customer experience is taken out of the hands of the consultant and turned over to those behind the scenes—the customer service rep, the warehouse manager, the picker/packer and the IT team member—who ultimately determine the overall satisfaction level of the customer.

The foundational functions of a business—from order processing to supply chain management to IT systems—are critical to success. A company’s operational elements must be continuously maintained and constantly updated or the company eventually grinds to a halt. Routine meetings and efficient distribution and delivery processes aren’t the sexy part of the business, but they literally make or break the business. Without them, the consultant might lose confidence in the company and could leave in frustration.


The foundational functions of a business—from order processing to supply chain management to IT systems—are critical to success.


So what is the total customer experience? It encompasses much more than attending a party and ordering products. A recent article in the September 2013 Harvard Business Review (HBR) reported that customers don’t think of businesses in terms of individual touch points such as websites or shipping or even gatherings. Instead, they measure their satisfaction through their entire experience. Well-run, frequent parties held by a top consultant can be trumped by slow product delivery to the customer. And since direct selling companies actually have two layers of customers—the consultant and her final customer—the effect becomes twice as important. According to HBR, the quality of those cumulative interactions, called the customer “journey,” shows up in the bottom line.

    • In measurements of customer satisfaction performing just one point better than peer companies on a 10-point scale corresponds to at least a two percent better performance on revenue growth rate.
  • The gap between the top- and bottom-quartile companies on journey performance was 50 percent wider than the gap between top- and bottom-quartile companies on touch point performance in one of the surveyed industries.

Think of your own experience, and the survey rings just as true for direct selling as for other industries. Have you ever discontinued a popular product, replacing it with another that was truly improved, only to receive complaints from consultants that their customers were leaving them? Customers still had access to a top-notch product, the same great service as always and your money-back guarantee, but they were disgruntled nonetheless—and so were your consultants. Their view of the company is based on their whole experience, which is fueled by every element of your operational system and all your processes. While customers and consultants are practically unaware of these things because they’re mostly behind the scenes, to them you’re the sum of all your parts.

That’s why so many direct selling companies are currently putting a lot of focus on the operational side of the business, making substantial investments to ensure the field has those systems and processes in place to help them be successful.

“We’re committed to making sure that our field tools work well, our back-office systems are efficient, and every phone call, every ticket and every order shipped is the best it can be,” says Al Richey, Vice President of U.S. Operations at Nerium International. “That only helps cause satisfaction and retention. The last thing I ever want to do is lose a customer because operations dropped the ball. We set a high bar, but it’s our bar.”



“The last thing I ever want to do is lose a customer because operations dropped the ball. We set a high bar, but it’s our bar.”
—Al Richey, Vice President of U.S. Operations, Nerium International


Processing the Order

In 2011 Scentsy was named to Inc. magazine’s annual 500 list of the nation’s fastest-growing private businesses. The party-plan company’s 2010 revenues of $382 million and three-year sales growth rate of 2,904 percent had it placing 85th on the list.

But growing at such a pace brought with it some very real concerns—mainly, how do you keep pace with the demand for product? Scentsy’s IT Department, headed by Chief Information Officer Matt Cooley, was tasked with improving and refining the company’s front-end system. Utilizing key software platforms from Microsoft and SAP technology, they developed an e-commerce and fulfillment platform that allows consultants to quickly place orders and track order progress.

The SAP system, which was launched in January, allows Scentsy to deal with the various demands of an e-commerce business—such as placing last-minute orders, handling surges in volume, doing custom calculating for commission structure and helping project commissions.

At Ambit, co-founders Jere Thompson and Chris Chambless recognized the IT challenge as they built the company. They invested in a proprietary, robust, scalable system called BlueNet™ that could handle rapid growth. The company’s Chief Information Officer, John Burke, recruited expert staff members to build a system that could flawlessly perform all the functions a traditional energy company needs, as well as pay commissions to the company’s independent energy consultants—plus, it had to be able to grow along with the company. They also chose a headquarters location with an open environment that fosters communication among all staff members.

“BlueNet is the reason we’ve been able to grow to where we are today,” says Eric Johnstone, Ambit’s Vice President of Marketing and Field Services. “We had to put a lot of systems and processes in place before we had our first customer.”

Salt Lake City-based USANA uses Odyssey, a proprietary logistics technology system, to track associates’ past and current orders across its 18 markets as well as rank advancement and contact information. In a typical month, the company handles 82,000 orders.

USANA has also embraced mobile technology: Its online shopping cart, online enrollment and auto-orders can all be accessed from mobile devices, and its True Health Assessment showcases the use of Online Enrollment and Shopping on an iPad. USANA has full-order tracking online from the shopping cart, from the USANAtoday back office and through automated emails.

Distribution Centers

Even though robust operational infrastructure is universally acknowledged as one of a company’s must-haves, some companies have found that rapid growth can overwhelm it. Thirty-One Gifts discovered that it had an enviable problem a few years ago when growth threatened to outpace the ability of the company’s business processes, systems and overall infrastructure to support it. The company made a bold decision. With more than 5,000 new consultants joining the company each month, it froze recruiting for four months in 2011 to allow it to beef up its infrastructure and processes.

“We knew that implementing the recruiting freeze was something we had to do,” explains Thirty-One President Andy Neri. “We started the company with a commitment to our consultants to give them the opportunity to be successful, but we also knew we had to have critical business processes and infrastructure to not just keep pace with growth at that time, but to get us out in front of it to be foundational for the future.”


With more than 5,000 new consultants joining Thirty-One Gifts each month, it froze recruiting for four months in 2011 to allow it to beef up its infrastructure and processes.


The company used the pause to expand into a new personalization and distribution center; to upgrade warehousing and order management systems; to improve training for consultants; and to add staff at its call center.

Today, the distribution center in Columbus is automated and systematically controlled. Picking is done there at the center, with conveyer belts taking products up to the mezzanine level where monogramming is completed (which can add one to two days to the delivery process). The distribution center ships an average of 740,000 units per week, and according to COO John DiCecco, 99.8 percent of the orders are 100 percent correct. Approximately 16 percent of all orders are shipped directly to the customer and 84 percent are shipped to the consultant/hostess; 99.6 percent of all customers receive their orders complete, without backorders.

Scentsy has also invested heavily in distribution centers to help handle the surges in volume. In a typical month, the company processes approximately 365,000 shipments in North America, but that number can flex during peak seasonal volume to over 600,000 shipments a month.

In September 2011 the company opened a 190,947-square-foot distribution center on the Scentsy Campus in Meridian, Idaho, and announced plans for a 150,000-square-foot distribution center in Texas, where more Scentsy products are sold than any other state.

The Coppell, Texas, center handles approximately 27 percent of Scentsy’s orders in the United States and has reduced shipping times to customers in the south and central U.S. from three to four transit days to one to two days. The center also has a custom-built pack station with a dedicated packer, as all Scentsy distribution centers do.

“Because of the intricacies of our packs, we invest heavily in our packers,” says COO Tabb Compton. “We need the highest quality of packs and the highest quality of fill rates and accuracy to that pack. Rather than using more automated systems, we want that true team-member touch because they are the last person to touch the consultant before the delivery is made.” Scentsy boasts nearly 100 percent accuracy on items selected to items shipped.

Speed of Delivery

Nu Skin has been in business for almost 30 years and now operates in 53 countries. Logistics for such a company is a huge undertaking, and at Nu Skin, that complex function is overseen by a Vice President of Logistics. Scott Schwerdt, President of the Americas Region, estimates that operational coordination occupies about 50 percent of management’s time internally, purely because of its complexity and significance.

“Getting products into 53 countries, with different formulations and different regulations is such a significant part of our business because it can make or break us,” he states flatly. “Failure to have products on the shelves for distributors is tantamount to putting them out of business. Or if they can’t order directly from the company, it impacts their confidence. If any one of the operational legs of our business falls down, it can stop them dead in their tracks.”

Schwerdt notes that Nu Skin’s sophisticated SAP logistics and sales system software tracks the complicated movement of products throughout the company and to their eventual destination, providing management with a complete picture of operations at any point in time. Daily logistics meetings and weekly global operations meetings let managers look at every issue affecting the business and then take any necessary steps to make sure they’re delivering on their commitments.


“Failure to have products on the shelves for distributors is tantamount to putting them out of business. Or if they can’t order directly from the company, it impacts their confidence.”
—Scott Schwerdt, President of the Americas Region, Nu Skin Enterprises Inc.


Operational systems usually work best when a business is predictable. Some innovations aid that process. At Nu Skin, its enviable auto-ship program is one of the keys. Most of its monthly shipments are generated by its auto-ship function, allowing the company to predict each quarter’s results with almost 100 percent accuracy.

USANA delivery can vary depending on the ship zone and method used for shipping. Products are shipped directly to customers from USANA’s corporate headquarters in Salt Lake City, and on average the process can take anywhere from two days to 10–14 days. The company boasts a 99.9 percent accuracy rate on delivery.

For Mannatech, 99 percent of orders are shipped directly to the consultants, and the average delivery time is 2.4 days, with a 99.8 (plus or minus 0.15) percent accuracy rate. If an order is shipped short by mistake, the customer calls to notify the company and Mannatech sends out a comp order to correct the shipping mistake. The inventory for the comp order is actually accounted for when the next cycle count is done, which results in a wash of the inventory level for that item. Mannatech absorbs the additional cost to ship out backorders.

At Scentsy, 70 percent of products are sent to the consultant and 30 percent directly to the customer the consultant represents. The company has worked hard to be able to get to all contiguous U.S. locations within three days; the actual transit time is 2.2 days. The timeframe from the date that Scentsy receives the order to delivery is two to three business days. So, overall, the company operates under a five-day business model, which might be extended during the holidays and at the end of the month when volumes typically increase.

Scentsy is very diligent about tracking missing items and has a missing items ratio of .02 percent of total units shipped versus units reported missing to its customer support group. It has a 99.9 percent ratio on fill rates. The company spends a lot of time to ensure the items being promoted in the catalog are available at any point in time. If items are backordered, Scentsy will process the order the moment the product is replenished under a first-in, first-out model, without charging additional shipping.

Handling Service Issues

Even with the best in operations, service issues inevitably arise and must be handled quickly and efficiently.

The perfect storm can converge, and one did earlier this year at Ambit. On a Saturday—prime time for part-time direct sellers to work their business—Ambit’s consultant back office, Power Zone, went down. The Ambit team immediately began communicating through emails and texts to its field sales leaders, who then cascaded the information to their teams. The problem turned out to be an external issue that was resolved within four hours.

“We had a post mortem the next morning and let consultants know what had happened,” says Johnstone, Ambit’s Vice President, Marketing and Field Services. “The issue turned out to be minor because we tackled it right away and quickly informed everyone who needed to know or take action. In our culture, titles aren’t important. You do what you need to do and think like an entrepreneur in this organization.”

As harrowing as an operations crisis can be, it’s also an opportunity to improve. “You can do all the due diligence in the world and prepare, prepare, prepare,” Johnstone reflects. “But there can be something that wasn’t communicated properly to us, and one little thing can affect another. We always have lessons learned from every market.”

USANA has two call centers in the U.S. handling calls for North America, Europe and the Caribbean Islands. The company believes it is important to provide a convenient and personalized avenue for the associates and customers to place orders, answer questions or receive help with their business needs. The average call wait time is 36 seconds.

USANA’s customer service team is available through all media, including phone, email, Facebook, chat, and through the mail. All attempts are made to personalize the service each customer receives. On average, USANA’s customer service department handles talk time—for eight different languages—in about 294 seconds. However, USANA’s customer service team does not set talk-time limits and encourages its Customer Service Reps (CSRs) to remain on the call as long as the customer needs them to handle the situation with One Call Resolution.


“You can do all the due diligence in the world and prepare, prepare, prepare, but there can be something that wasn’t communicated properly to us, and one little thing can affect another.”
—Eric Johnstone, Vice President, Marketing and Field Services, Ambit


Mannatech has an in-house call center, and CSRs are available via phone to assist customers with placing their web orders. Customers have a tracking number for each order that is placed. The company accepts issue reports via phone, email, mail or fax. Most issues are addressed immediately over the phone or email by the CSR. More complex issues are answered within 24–48 hours.

“We are constantly searching for ways to wow our customers,” says Landen Fredrick, Vice President of Global Operations. “Whether it is initiatives to decrease hold times or to improve the overall experience each Associate has with our representatives, we are always in a state of constant improvement. Overall our goal is for the customer service we provide to be a distinction that sets us apart.”

Scentsy has a company owned and operated Customer Care Center on its Meridian campus. The Customer Support Group tracks speed in answering and first-call resolution. The call wait time is 30 seconds to 1 minute, and the goal is that all solutions are provided within 24 hours.

Excellence is one of USANA’s four core company values and is emphasized through customer service’s weekly trainings, mentoring sessions, one-on-ones and call monitoring feedback. Excellence is tracked through a Compliment vs. Complaint scorecard with the goal to maintain at least 10 times more specific compliments than complaints, which the company has been able to achieve year after year. This year USANA’s customer service department has recorded 20 times more compliments than complaints.

“While we love the compliments, complaints are also welcomed so USANA can continue to grow and strengthen its services,” says Chief Communications Officer Dan Macuga.

Honoring the Consultant

“Operations can’t grow a business, but it can kill it,” notes Nerium International’s Richey. “The most important way to make sure we’re driving operations to the best of our ability is to get out from behind email and the other things that can distract us, and get together face-to-face, focusing on the thing that needs to be done.”


At Scentsy, there is rarely a refinement, process improvement or quality initiative brought to the executive team that does not get approved if it clearly would impact the consultant in a positive manner.


He notes that Nerium is set up as two organizational groups that collaborate regularly. “The biggest thing is open communication,” he emphasizes. “No boundaries. Being collaborative. It doesn’t matter who gets credit. As long as we’re taking care of our Brand Partners and customers, we’re getting the job done.”

At Scentsy, there is rarely a refinement, process improvement or quality initiative brought to the executive team that does not get approved if it clearly would impact the consultant in a positive manner. The company is always looking out for its consultants, finding ways to help them succeed.

“Showing our consultants that we are doing everything we can in operations to ensure their success is probably the most important aspect of this business,” says Compton. “Over-delivering on their expectations is the investment we make to ensure that we can meet the service standard of our consultants. They are the lifeblood of this organization.”

Teacher Turned Entrepreneur Shows How It Works!

Photo above: Mark Pentecost (left), Founder and CEO of It Works! Global, accepts the Bravo Momentum Award from DSN Publisher and Editor in Chief John Fleming.

In the early 1990s, Mark Pentecost was teaching math and coaching varsity basketball in Grand Rapids, Mich. Today, he is putting his number-crunching and coaching skills to use as President and CEO of It Works! Global.

Pentecost, who co-owns It Works! with his wife, Cindy, began his sales career in the early 1990s with Excel Communications, reselling long-distance deals for landline phones. His natural skill as a salesman soon became apparent, and just two years later Pentecost quit teaching to work his business full time.

During his time at Excel, Pentecost developed an enthusiasm for entrepreneurship in general and direct sales in particular. That enthusiasm reignited in late 2000 when he became aware of the instant-result toning wraps that now anchor the It Works! product line. It Works! launched in 2001, but gained traction slowly. The pace changed when the company hit profitability in 2005 and growth began to come in leaps and bounds. It Works! paid all its debts by 2008 and rocketed from sales of $46 million in 2011 to $200 million in 2012.

At the DSN Global 100 Celebration in April, Pentecost accepted the Bravo Momentum Award in recognition of the company’s significant growth, as well as its achievement of the most significant first-time ranking on the DSNGlobal 100 (It Works! debuted on the list at No. 56). This year, Inc. magazine ranked It Works! No. 436 on its Inc. 500 ranking of America’s fastest-growing private companies.

Read the full feature from Forbes.

Vivint Solar Builds Market Share through Direct Sales

Just two years after launching its residential solar offering, Vivint now claims a 9 percent share of the U.S. installation market. The company’s door-to-door sales strategy has attracted investors and enabled Vivint to thrive in the rapidly growing solar industry.

Parent company Blackstone Capital acquired Vivint Inc. for $2 billion last year. Blackstone’s Peter Wallace, who oversaw the investment, told Reuters that the company’s direct sales strategy stood out as a “unique and attractive” customer acquisition model. The company’s unique strategy and rapid growth have also attracted impressive funding—since August, Vivint has raised $740 million to develop its solar projects.

Following upon its exponential growth, Vivint has received recognition from Inc. magazine as one of the nation’s top job creators. The 2013 Hire Power Awards honored Vivint as the No. 2 job-creating private company in America. From a founding team of three, Vivint Solar has grown in the last two years to employ 900 in seven states—growth achieved without tapping into Vivint Inc.’s 750,000 existing customers.

Read more on Vivint’s direct sales strategy and financed solar model from Reuters.

Direct Sellers Among Inc.’s Fastest-Growing U.S. Companies

Inc. 5000

Several U.S. direct selling companies have earned a spot on Inc. magazine’s annual 500/5000 ranking. The Inc. 5000 is a list of America’s fastest-growing private companies, with the Inc. 500 representing a special ranking of companies in the top 10 percent.

 

 
Direct sellers among this year’s Inc. 5000 include It Works! Global (No. 436); Zija International (No. 504); J.Hilburn (No. 605);  Initials, Inc. (No. 762); YOR Health (No. 1052); Ambit Energy (No. 1996); 5LINX (No. 3009); STEMTech International (No. 3986) and Isagenix International (No. 4556).

Introduced in 1982, the Inc. 5000 ranks companies according to percentage revenue growth over a four-year period. To qualify for the 2013 ranking, each company had to be U.S.-based with a privately held, independent status as of Dec. 31, 2012.

The Inc. 500 | 5000 Conference and Awards Ceremony celebrating the 2013 honorees will take place Oct. 10-12 in Washington, D.C. Click through to read more on Inc.’s methodology and view the full list.