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


Beyond Brand: It’s about Community

Editor’s Note: The following article is excerpted from the latest 16-page insert produced by Direct Selling News for The Wall Street Journal. The complete insert was distributed to over 1.2 million WSJ subscribers. Reprints can be ordered here.

What is it that draws people to a particular product in the first place? Function, style and price can be part of the equation, but sometimes it’s the desire to be a part of something bigger. TOMS famously gives “one for one”—a pair of shoes is donated for every pair a customer buys. A shared value system and a sense of community buoy the most well-known and successful brands.

As millennials grow to be the largest sector of the workforce, a company’s focus on purpose will become even more important. A demographic known to prioritize meaning over money in choosing jobs, millennials want to be associated with causes that are life-changing.

Rather than being daunted by the world’s problems, today’s workers want to be a part of the solution. They want to give back. Workers are drawn to companies that build philanthropy into their mission, such as Nu Skin with its Force for Good Foundation. This nonprofit focuses on both helping its sales force to give back in their own communities and on improving the lives of children around the world through medical, educational, and agricultural support.Pick up your copies of The New Main Street Inserted in the Wall Street Journal

Having a shared sense of purpose centered on worthwhile values like helping others and promoting physical and financial health is what takes a group of individuals and turns them into a community. And it’s that sense of community that makes a job more than a paycheck—it becomes a shared vocation. “Much like teams in sports, communities have a goal in mind, and they will not rest until it’s met,” says John Parker, Chief Sales Officer at Amway.

Careers that offer people flexible hours and the ability to work from the beach or the ski slopes are appealing to this generation, but freedom from the cube alone is not enough. The real draw for millennials—and those of any generation who want to live meaningful lives—is being part of a community that shares their values.

Video Vision at Talk Fusion

by Barbara Seale

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

Company Profile

  • Founded: 2007
  • Headquarters: Brandon, Fla.
  • Top Executive: Founder and CEO Bob Reina
  • Products: Web-based video communications services

It has been said that the most successful companies fill a need in the marketplace. Maybe that’s why 7-year-old Talk Fusion has grown so rapidly. Talk Fusion Founder and CEO Bob Reina got a personal glimpse of the market’s needs while he was on vacation in North Carolina in 2004. He toured a vacation home and considered purchasing it. He took a video of the home and tried to email it to friends. No go. The 10-second video file was too large for AOL to carry.

Bob Reina

Bob Reina

Reina began to think of how many other people had probably been faced with the same frustrating experience. And as he did, his inner entrepreneur kicked into high gear. He realized that he was looking squarely at a business opportunity that could have massive appeal. When he returned home, he talked with a friend he calls “an IT genius.” The friend figured out how to create video email, and Reina figured out how to turn the idea into a business—not just any business, but a direct selling business. In his mind, there was barely any choice. For years he had supplemented his income from his day job as a deputy in the Hillsborough County Sheriff’s Office with a substantial secondary income as a distributor in several direct selling companies. Reina had fallen in love with the industry, and he had learned to build large organizations. He knew direct selling’s power and potential, and he saw a match between the excitement of cutting-edge video technology and the reach of thousands of enthusiastic, hard-working distributors. In 2007, he launched Talk Fusion, offering its initial product to both individuals and businesses.

Since that launch, Reina’s vision for the future of video has proven correct. Just check out these numbers:

    • 92 percent of mobile video viewers currently share videos with others.
    • Online video now accounts for 50 percent of all mobile traffic and up to 69 percent of traffic on certain networks.

Auto Responder

  • People now watch about 6 billion hours of YouTube videos per month.
  • Video communication is poised to make up 90 percent of all online traffic by 2015.
  • Online video users are expected to double to 1.5 billion in 2016.

In just seven short years, Talk Fusion has become a leader in video emails and video newsletters, and it is the eighth-largest online video content provider in the world—surpassing respected industry giants such as Yahoo, AOL, Viacom, CBS and MegaVideo, Reina says proudly. But it also offers social media tools, video auto-responders, mobile applications, video conferencing and more.

“Six or eight years ago, people laughed at this idea,” he recalls. “They said video would never catch on, that it was a short-lived trend. But now the whole world is continuing to move more and more toward video, and we’re continuing to develop cutting-edge video technology for today’s marketplace—both personal and business.”

Mass Appeal Made Easy

Video has become widely used today, and Talk Fusion is part of the movement. That’s partly because it continues to develop new video technology applications, but it’s also because it abides by the direct selling mantra: Keep it simple. Talk Fusion makes its products easy to demonstrate and use. The combination makes Talk Fusion’s products attractive to customers and creates a magnetic opportunity for the company’s army of independent associates.

Even though millennials love video, Talk Fusion seems to appeal to every segment of the population. Reina believes video was an inevitable part of the evolution of communication mediation, beginning with the spoken word on radio, then moving pictures on television, then email carrying the written word—and now email, smartphones and tablets that carry video. He believes that nothing helps people or businesses communicate better than video.

Video Newsletters

In just seven short years, Talk Fusion has become a leader in video emails and video newsletters, and it is the eighth-largest online video content provider in the world.

“One of the challenges when I started the company was what vertical market to target,” Reina says. “The answer was: none. Any business or any person can be considered a prospect—both product-wise and opportunity-wise.”

Talk Fusion has made it easy for individuals and businesses to get started. Every product is web-based. Customers register online, instantly get an ID and password, log on to the video communications center and start using their product of choice immediately. Product tutorials are available in more than a dozen languages, and the products themselves are translated for the market where they’re sold.

Associates and customers quickly become experts and find new reasons to use the services. Families who traditionally sent their holiday newsletter as a story typed into an email message may morph it into a video newsletter. Proud parents may mark their child’s special birthday or graduation with a video documenting everything from birth to the big day. Realtors can promote new listings through video email or send a quick home tour to their clients’ smartphones. A broad range of large companies such as Norwegian Cruise Line, Applebee’s Restaurants, DHL and CIGNA Insurance Co. all use Talk Fusion products to reach and connect with online customers using the power of Talk Fusion’s email marketing. So does West Point Military Academy and numerous police departments and charities.

The range of uses and applications is one of the key attractions for Talk Fusion prospects. “The irony is that our associates are not necessarily into technology,” Reina notes. “Our products are fun and easy to use. They appeal to people of all ages, from very young to older, so the marketplace for our associates is vast. We’re proud that every product is designed to be simple so that the average person can use it.”

Instant Service, Instant Pay

And since people usually join direct selling companies to earn extra money, the Instant Pay feature of the company’s compensation plan gets their attention. The company deposits compensation into its associates’ Talk Fusion-branded Visa cards or electronic bank accounts. When an associate makes a sale, the customer can begin using their product immediately, and the associate’s commission is loaded to their account within three minutes. Binary, matching bonuses and almost every other element of compensation is paid instantly. And because each service has a monthly subscription rate, commissions are recurring, providing associates with a regular, reliable monthly income.

“We developed Instant Pay because what gets rewarded gets repeated,” Reina explains. “It gives people money for pressing needs. We’ve been doing this for about two years. It validates the business, speaks to the financial strength of the company and also creates an excitement factor that people are attracted to when they consider becoming a Talk Fusion associate.”


“We developed Instant Pay because what gets rewarded gets repeated.” —Bob Reina, Founder and CEO

The lure of Instant Pay is also tempered with practicality. In Talk Fusion’s recruiting materials Reina makes a point to set realistic expectations for any prospective independent associate. He is upfront, saying that direct selling is only an opportunity. Hard work, diligence, leadership and the willingness to learn and then teach others are all required. Even then, he says, a new associate should expect to work their business consistently for 7–10 hours a week for at least a year before they can realistically evaluate their prospects for long-term success. That straight talk gives Talk Fusion street cred, and the company works hard to maintain that trust.

“In our culture we’re very transparent,” Reina says. “Because I was in the field so long, I know what it takes to become successful. I don’t want anybody to become disappointed. If people put hard work into it, they have an opportunity to become successful. But if someone isn’t willing to work hard, I tell them please don’t join.” He adds, “That advice doesn’t eliminate the get-rich-quick idea, but they know where we stand on the matter. I think it’s important for Talk Fusion and for the reputation of the industry as a whole.”

Fast Forward to the Future

That hard-working culture has produced a fast-growing company, and Reina is bullish on its future. Talk Fusion already does business in more than 140 countries and, though Reina didn’t share revenue numbers, he says the company grew in 2012 by 42 percent over the prior year. While the domestic market continues to expand, growth is gaining momentum in international markets, especially Mexico, Brazil and other Latin American markets. Reina laughs that translations are one of his largest budget line items. The company’s global reach gives associates a virtually unlimited marketplace in which to build their business.

The company is poised to introduce a series of new products and technology in the immediate future. Talk Fusion CONNECT, a powerful three-in-one live broadcasting, video conferencing and desktop share product, was launched late last year. Its users: primarily businesses. Reina describes it as the first of its kind and predicts that it will become the company’s flagship product.

His goal for Talk Fusion is to keep changing as many lives as he can and to continue developing cutting-edge products. That means staying ahead of the fast-moving technology curve—not an easy task. But the company keeps tabs on industry, consumer and business trends, and it already has technology development offices in two states.

“We’re growing as a technology company, and we own and develop our own products,” Reina says. “We’re debt-free, and we’re growing in revenue and in marketplaces. This is the most exciting time ever for us.”

A Culture of Generosity

Talk Fusion’s Founder and CEO Bob Reina believes in sharing the fruits of his labor, and he encourages the company’s independent associates to follow his example.

“With great success comes greater responsibility,” he says.

Talk Fusion’s success—it has expanded to operate in 140 countries over its seven years and grew more than 40 percent last year—has allowed Reina and his company to support a variety of causes in its home state and beyond.

Bob Reina presents a $45,000 check to SPCA Florida to support animal welfare.

Reina is an animal lover who shares his home with several pets and on most days also shares his office with at least one. Many of his philanthropic efforts support animal welfare, including his quest to help build the Humane Society of Tampa Bay Animal Health Center sponsored by Talk Fusion, which has become a reality. Reina and Talk Fusion made a $1 million donation, followed a few months later by a $100,000 donation that represented $1,000 for each of the Humane Society’s 100 years of saving animal lives. Those donations inspired additional contributions from Talk Fusion associates from more than 30 countries. Other animal organizations, such as the SPCA Florida and no-kill shelter Critter Adoption and Rescue Effort (C.A.R.E.), are also beneficiaries of Talk Fusion’s support.

Humans benefit from Talk Fusion’s generosity, too. The company has supported programs that help at-risk youth and athletic programs for young people in nearby communities, and has helped individuals in crisis. In addition to its financial support, Talk Fusion lends its video capabilities to nonprofit organizations to help them with marketing and fundraising efforts.

Talk Fusion and its associates also take care of each other around the world. During a recent sales convention in Russia, Reina and Vice President of Training and Development Allison Roberts reminded the sold-out crowd of Talk Fusion’s commitment to giving back, telling the story of a Ukrainian associate whose young son suffers from debilitating spina bifida. They announced that Talk Fusion was working with Russian charitable organization RusFond to help raise awareness of the needs of children with spina bifida. Then they donated $40,000 for the child’s much-needed surgery. Talk Fusion associates from around the world immediately followed their example, giving a total of more than $80,000.

The company’s major gatherings routinely include an opportunity to give back. In Indonesia, associates who attended a sales conference were so inspired by the announcement of $100,000 to build a local orphanage that they donated an additional $30,000.

In another instance, when a gold-level associate became seriously ill, Reina, on behalf of Talk Fusion, surprised the associate with a check for $10,000 to help defray her medical expenses. Upon hearing the news, associates everywhere quickly moved to show their support, raising a total of more than $22,000.

“Sometimes worthwhile causes choose me,” Reina observes. “There’s a need that’s brought to my attention, and if I can help, I try to. I also encourage associates, as part of their growth process, to care about others more than themselves. It’s neat to watch what happens to people.”

Philanthropy is so important at Talk Fusion that one of Reina’s goals is to develop a foundation to handle the company’s charitable involvement. It already raises awareness of philanthropic gestures and needs through its dedicated website,

Letter from John Fleming, December 2013

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

John Fleming

It is the close of another great year, one in which we can reflect upon so many contributions made in support of independent direct sellers/business owners who have chosen to participate in this channel based on a very diverse combination of motivations.

Technology continues to change and enhance just about every component of the business model, and more Gen Ys and millennials are attracted to the business of “build it on your terms and your time” versus the regimented rigor of the typical workplace. Growth continues to be the big story with so many companies that have found 2013 to be their best year ever!

When direct selling companies are growing, the people who have chosen to be a part of those companies are growing. When direct selling companies build new structures, they become lasting monuments to those who became partners of the brand as both consumers and business owners. When direct selling companies utilize the best in technology to support the back-office operations, consultants find the business easier to conduct and manage. Also, consumers gain the benefit of dealing with independent business owners who are better equipped than most of the sales people encountered in other consumer buying situations.

Companies like Amazon and Zappos still represent a new gold standard in terms of quality of service and timeliness of delivery and conflict resolution. However, the day is finally here where direct selling companies are competing on all fronts. No longer is there the wait of days or weeks for delivery of product. No longer is there the need for so much paper in the point of sale transaction. No longer are direct sellers “in the dark,” in terms of the status of their accounts or the ability to push out promotions, build and manage incredible databases, or be more personal than any competitor. Yes, it’s still word of mouth in so many ways. In fact, over 80 percent of industry messages are still dependent upon or enhanced by the support of word of mouth. However, the stories of the past year reflect an industry that is resilient when confronting some of its most prominent and misguided detractors, and one that is able to grow in spite of what others who do not know or understand the business model might claim.

The recognized market indexes such as the Dow Jones Industrial Average and the S&P 500 have reflected a rather good year for business with increases of 16.08 percent and 20.35 percent, respectively, since Dec. 31, 2012. However, the publicly held direct selling companies have experienced what can be described as an incredible year with an increase of 121.07 percent.

Register For Event - 2014 DSN Global 100 DinnerAll of what has just been mentioned plus so many other wonderful achievements in so many companies are now a part of the story of 2013. It’s a great story, one of learning and recently one of celebration for those direct selling executives and independent business owners who were invited by the Direct Selling Association to visit Washington D.C. They were able to share their stories and proclaim their commitment to business ethics, innovation and opportunity with those who represent us on Capitol Hill.

From our cover story, which explores the operational side of the business, and our coverage of the new Innovation Center at Nu Skin, to our company spotlight and recap of the Direct Selling Summit on Capitol Hill, we will reflect on 2013 as another year of learning, achievement and growth for the one business model that is truly one of the people and built by the people. Don’t miss the DSA Update as DSA President Joe Mariano provides his perspective on recent events.

With much gratitude for the opportunity to serve you, we now wish for you a most blessed and enjoyable holiday season!

Until next year… enjoy the issue!

John Fleming
Publisher and Editor in Chief

Direct Sales Draws Gen Y Entrepreneurs

In a job market where formulaic career opportunities prove scarce, Generation Y’s entrepreneurial spirit is flourishing in less conventional work environments. Direct selling companies are witnessing this trend firsthand, as a growing number of young people pursue the open-ended opportunity available through direct sales.

Amway, the No. 1 direct selling company in the world, has witnessed a steady rise in interest among the Gen Y demographic. In 2005, millennials represented about 10 percent of Amway’s global salesforce. That number climbed to nearly a third in 2012.

Australia’s Business Review Weekly recently featured Amway Australia’s growing number of Gen Y distributors. The company has been actively pursuing a digital strategy to cultivate “deeper and richer communication” with its Gen Y audience.

Amway, which previously distributed print magazines every month in Australia and New Zealand, is successfully gleaning data and connecting to young people through digital publications. Transitioning to digital platforms—Amway Australia currently has 35 active publications—has enabled the company to easily update and enrich the material.

Amway’s strategy for connecting to a younger generation also encompasses several social media platforms, particularly Facebook. “The sort of business we are in is very much dependent on word-of-mouth referrals, and in many ways it’s a hand-in-glove fit with social media,” said Michael Coldwell, General Manager of Amway Australia.

Cosmetics giant Mary Kay has also focused on online tools to connect to younger consumers and salespeople. The company’s success is apparent in its U.S. distributor base, half of whom are under 35. In Canada, where The Globe and Mail recently reported that young workers are discovering a fresh opportunity in direct sales, millennials represent over 20 percent of the company’s salesforce.DSN Global 100 Exclusive 2013 Annual Report

“They have a very strong entrepreneurial spirit,” said Lynda Rose, Vice President of Marketing at Mary Kay Canada. “They’re saying, ‘We want to travel with our business and we want to have it at our fingertips.’ … Their income is reflective of the amount of effort they put into their business, and they love that.”

Read the full story from The Globe and Mail.

Study Finds High Satisfaction among Independent Workers

In the U.S. alone, 15.8 million people are currently participating in direct selling, and each brings his own motivation to pursue the business opportunity. A recent survey conducted by MBO Partners, a platform that supports independent consultants, provides some insight into what is driving America’s independent workforce—be they freelancers, self-employed or independent contractors.

The third annual State of Independence Report reflects an in-depth survey of workers spanning all age groups. At one end of the spectrum are millennials, who tended to describe themselves as freelancers, creative professionals or temporary workers. Mature respondents, on the other hand, were more likely to describe themselves as consultants or self-employed workers.

The number of independent workers has grown by 10 percent over the last two years, and the report projects that by 2020 about half the U.S. workforce will have engaged in independent work. Participation on that scale could occur in part because independents—25 percent according to the study’s findings—hire other independent contractors.

Taking into account all age groups, the average participant had been working independently for over 10 years—and that number is likely to grow. On a 10-point scale, 64 percent of independents rated their satisfaction as very high (8-10), and 20 percent rated it a 10. Of respondents who identified as self-employed or business owners, only 16 percent and 9 percent, respectively, expressed any interest in pursuing traditional employment.

Read the full story from Small Business Trends.

The Synergy of Successful Styles Between Party Plan & Network Marketing Companies

by Barbara Seale

Even though most direct sellers classify themselves as either party plan companies or network marketers, the truth is that the lines aren’t so clear cut.


DSN October, 2013Take a lingering look at many companies in the industry and you’ll find that many use predominantly one style or another, but they aren’t at all rigid about it. They’ve often adopted an element or two from the other style, and they don’t see it as so unusual. It just works for them. It’s all part of the big, blended direct selling family.

When asked about their practices, companies in this story proactively called themselves “hybrids.” But every company noted that their sales and recruiting styles were developed because they made sense for them. In fact, those practices have resulted in solid finances and growth that any company would covet.

Princess House President and CEO Connie Tang is a veteran in the industry, having held several executive positions before taking the helm at Princess House last year. She notes that party plan companies developed as an opportunity for women to earn a little “fun money.” The focus was on selling products at a home party, not on recruiting. While consultants did build teams, they often focused more on sales. But today’s party plan company, including Princess House—especially since Tang arrived—has evolved to look a little more like a network marketing company than it did a generation or two ago. The simple reason:economics.

“Part of what has continued to push that evolution is the need to be competitive from a business development and comp plan perspective,” Tang says. “This diversification came to fruition because of the need for companies to have long-term prosperity, so it’s been like investing in our own portfolio.”

Today’s party plan company has evolved to look a little more like a network marketing company than it did a generation or two ago. The simple reason: economics.

Recruiting Revolution

She notes that when party plan consultants broaden their practices beyond finding hostesses and holding parties—and they grow by building teams and coaching new recruits—they accomplish a couple of important things. First, they increase their immediate earnings opportunity beyond what they can produce by their individual efforts. Second, and just as importantly, they protect their business from unpredictable factors such as economic downturns. It’s good for the consultant and good for the company. Tang shifted the focus at Princess House to place more emphasis on recruiting, holding network marketing-style hotel opportunity meetings and training consultants to talk a bit more about the company’s earnings opportunity during parties, even as they sold its high-quality, durable products.

“We had to find ways to reach more consumers,” Tang says. “When we focus more on sponsoring, then we have more ambassadors out there building the business.”

That seemingly simple shift in focus produced impressive results. Princess House said Happy New Year in 2013 to 40 percent more consultants than it had a year before.

For Tastefully Simple too, recruiting gets started at parties where guests nibble from the company’s wide selection of convenient, easy-to-prepare foods designed to help people spend less time in the kitchen and more time enjoying the rest of their lives. Tastefully Simple has two types of gatherings. Relax and Savor is a traditional party where consultants share products and information and then take orders at the end of the party; and Mix and Mingle is a less-used and less-formal come-and-go gathering where guests and consultants float from product area to product area, socializing, snacking and sometimes selling each other on delicious products. In both, the focus is on product sales and social interaction.

“We’re clearly a party plan company,” says Travis Bautz, the company’s Vice President of Marketing. “We’ve done a fair amount of research on the whole party dynamic to try to understand where people draw value from it. For us, they’re social reasons, learning reasons and product reasons,” he explains. “The trick is how to deliver a great experience when people have increased pressure on their time.”

Even for a proud party plan company committed to group selling, one-on-one interactions are still part of the process.

Passive Sales, Positive Profits

Tastefully Simple relieves some of that pressure by offering something more associated with network marketing companies: an auto-ship program called Simply Stocked. With about 40 standard products included, the program is highly customer-centric. Users can choose whether their favorite products are shipped to them every two, three or four months, and they can change their order at any time. While most sales are made at parties, the Simply Stocked program adds an element of predictability to consultant commissions, making life even simpler for customers.

Bautz admits, though, that even for a proud party plan company committed to group selling, one-on-one interactions are still part of the process.

“That’s especially true on the business opportunity side,” he notes. “For us, those conversations often start as a party interaction and finish as one-on-one. At parties, there are small conversations—we call those ‘sprinkles,’ references to the business opportunity that lead to an opportunity to talk one-on-one with the guest later.”

As much as Tastefully Simple and Princess House are clearly party plan proponents, a few companies in the industry are harder to classify.

“We were hybrid when hybrid wasn’t cool,” says Arbonne Senior Vice President and Chief Sales Officer Heather Chastain. “It’s an example of how Arbonne has always been a little ahead of the times. We recognized 15 or 20 years ago that it isn’t just one or the other. We’ve always had hostesses as an element of our plan, but we eschew party language. We refer to them as group presentations. But our history is that we’ve always used a combination of methods.”

“When you’re offering multiple ways of doing business, you’re giving consultants great ways to overcome common objections.”
—Heather Chastain, Senior Vice President and Chief Sales Officer, Arbonne

Chastain notes that the flexible sales approach was developed to adapt to the needs of customers. Whether consultants talk to their customers one-on-one or in a group presentation, they’re making a business decision based on customer preferences. But whether the discussion is between two people or 20, Chastain notes that it’s still about people, products and opportunity. It’s just a question of emphasis.

“When you have those three things, it’s usually a matter of where you start,” she says. “A one-on-one conversation typically starts with opportunity. A party starts with products. But ultimately, from start to finish, you’re still hitting all the elements.”

Having options for how consultants run their businesses helps them be successful, and Chastain notes that most successful consultants run a pretty evenly balanced business. Arbonne’s data shows that about 60 percent of their business comes from individual discussions.

“When you’re offering multiple ways of doing business, you’re giving consultants great ways to overcome common objections,” she notes. “You don’t have to ask people to hold parties if they don’t want to. Make it work for you.”

Arbonne’s hybrid system works for them; 2012 net sales were $377 million, up from $353 million in 2011.

Party—A Lot

Self-proclaimed hybrid Vemma is a network marketer that builds its fast-growing business through get-togethers it calls home events, even though they’re often not held in homes. The language was carefully chosen to be inclusive and appealing to the broad demographics of its distributors, or Brand Partners, especially the youthful cadre that builds businesses on Vemma’s energy drinks. Their version of a “party” has revolutionized the term.

“The word meeting sounds boring to a lot of people, and a party, well, it’s much more than that to us,” says Mark Patterson, Vemma Executive Vice President, Marketing and Brand Development. “One of the biggest changes for us is the frequency of them. I just came from a big event where I heard kids saying, if you really want to ignite your business, have at least two home events a day. Many shoot for five. Lots of people hearing that would think they were crazy, but these kids are just actively seeking three to five people. They don’t plan the events. They just use social media to say things like, ‘I’ll be here, here and here today. If you’re interested in doing more or being healthier, meet me there.’ ”

While their fellow distributors from an earlier generation hold more traditional Vemma tasting parties, millennial distributors’ events may be as short as 15 minutes.

The “kids” Patterson is talking about are Vemma’s Young People Revolution (YPR), an exploding group of millennials whose leaders coined the term The Five M’s—More Meetings Make More Money. While their fellow Brand Partners from an earlier generation hold more traditional tasting parties, the YPRs move fast. Their events may be as short as 15 minutes. In addition to making heavy use of social media, they use Vemma’s business app to send texts—the preferred communication method for their generation—to their contacts. The text may include a video of an experienced leader making a simple business presentation. With the business side of the “home meeting” already in place, they can appear with their cooler of Verve products, tell their story, maybe show their new car and close the deal.

“Our recruiting effectiveness has skyrocketed by doing these kinds of things,” Patterson says. “Our new focus is on helping to foster and train new people coming in to be leaders themselves. The rapid personal development and the excitement among this group are amazing. The other benefit of frequent, small home events is that the more you do it, the better you become at it, and that makes you more effective.”

Even though many events are held on the go, Brand Partners actually do hold events in homes, as well as in larger public places, often collaborating with other distributors to maximize impact.

“We encourage people and teach them that we’re all on one team,” Patterson says. “When we’re united, we can do many more things. I’ve seen one of our stronger Brand Partners holding a big meeting and people from a variety of teams coming together. The combination of stories is powerful, and the meetings are very inspirational.”

Explosive Growth

Scott Schwerdt, Nu Skin’s President of its Americas Region, says that regardless of a company’s marketing methodology, it’s still all about customer acquisition.

They’re also inspiring explosive growth. Vemma recently announced that sales reached a record-breaking $20 million a month in July. After taking seven years to reach the $10 million monthly sales mark in July 2012, Vemma has now doubled that just 12 months later. In addition, Vemma monthly customer and Brand Partner enrollments reached the 30,000 mark for the first time this July.

Industry stalwart Nu Skin has always walked the party plan/network marketing line, driven by its lineup of demonstrable products. Scott Schwerdt, Nu Skin’s President of its Americas Region, says that regardless of a company’s marketing methodology, it’s still all about customer acquisition.

“For as long as I can remember—and I’ve been with the company for 25 years—our distributors have always used home parties to demonstrate products,” Schwerdt says. “That method is particularly applicable for products that provide immediate results. That’s been our hallmark from when we were founded in 1984 until today.”

Schwerdt says that the company doesn’t call itself a hybrid, though. Nu Skin is a social business model that uses network marketing as a method of compensation for customer acquisition. Host-driven home parties are simply part of the company’s business method.

“On their own, our distributors will take the initiative to provide gifts to hosts or to do trade shows,” he says. “They’ll use any initiative they can in order to get their business in front of customers.”

Nu Skin’s most profitable draw is its auto-ship program. An astonishing 72 percent of all shipments are on the auto-ship program. While that number indicates strong customer loyalty, it also provides both the company and its distributors a predictable income. And that creates what all direct sellers want: retention. The thriving auto-ship program was a happy side effect of web technology.

Tech Leadership

Nu Skin has provided replicated websites to its distributors for almost 10 years, but over the last year has migrated toward mobile devices and apps. It already offers several Internet-related tools and continues to expand its mobile platform, providing distributors with an increasing number of methods to know exactly what their customers are doing so they can respond appropriately. The mobile platform works hand-in-glove with other products that open doors. Take the Biophotonic Scanner, an innovative tool Nu Skin developed to measure blood antioxidant levels without actually taking blood—an irresistible way to pique interest in Pharmanex supplements. In its first generation in 2003, “You almost had to move into someone’s house to do a scan,” Schwerdt jokes. Now in its third iteration, it’s smaller and operates using an iPad and a Bluetooth connection, making it the perfect conversation starter for spontaneous one-on-one interactions.

“You can do a scan any place in 30 seconds now,” he says. “It’s an instant-on device they can pack in their purse or briefcase. We have distributors who are scanning on planes, even hotel lobbies.”

The combination of technology, group sales and a strong auto-ship program creates loyal customers as well as distributors who stick around. Everybody wins. That creates a strong revenue stream. In July, publicly traded Nu Skin announced that it is increasing its full-year 2013 revenue guidance by $320 million to between $2.83 billion and $2.86 billion. Revenue in 2012 was $2.17 billion.

Train for Success

Blended styles that result in fast growth arise from effective training. These companies make sure that their distributors know how to party and that they also know how to recruit. But Princess House ran into a challenge that every company would love to have. For years, the company had stellar skills at retaining distributors, giving it an experienced salesforce. When it started placing more emphasis on recruiting, its success in attracting so many new consultants changed the face of its salesforce. Consultants with relatively little experience needed to learn skills from the ground up—how to hold a party that results in sales, how to work with hostesses and also how to recruit. Princess House consultants typically recruit during individual conversations after a party, but less experienced consultants had to learn how to plant the opportunity seeds while they ran a party—a skill that can be tough to master. The company responded by revamping its training completely.

“We promote that talk about the opportunity happens throughout the course of the party. That allows people time to process and develop questions. It’s a very different goal than ‘I have to close the sale.’ ”
—Connie Tang, President and CEO, Princess House

“We just launched to our leadership group a completely new consultant success system that fine-tunes coaching on party behaviors,” Tang explains. “We promote that talk about the opportunity happens throughout the course of the party. That allows people time to process and develop questions. It’s a very different goal than ‘I have to close the sale.’ Planting those ‘whys’ in the conversation throughout the evening is one of those difficult, intangible skills to acquire, but that conversion is very important. That’s what we’re trying to teach.”

The skill is the same one Tastefully Simple teaches so its consultants can effectively drop “sprinkles” throughout a party.

“We train to that,” emphasizes Tastefully Simple’s Bautz. “We have a structure we recommend for the party with lots of examples of language and ways they can use ‘sprinkles’ and other techniques. The most value is to new consultants.”

Then when consultants follow up to talk opportunity individually, Tastefully Simple provides them with numerous tools—both print and online—to increase their comfort and to support the conversation.

No matter which camp a company identifies with, if they adopt a technique from the other method, it’s a practical decision that they adapt to fit their own culture. And why not? Direct selling is an industry that freely shares information and where member companies learn from each other.

Vemma’s Patterson says it well: “I don’t think people are opposed to adopting good ideas, no matter where they are. I think we’re in a society now where we’re very used to change, and this industry as a whole doesn’t mind adapting.”

No Lines

Retention | RevenueTwo-year-old Chloe + Isabel (C+I) defies description, at least in traditional direct selling terms. Neither party plan nor network marketer, it has an omni-channel approach, according to its Founder and CEO Chantel Waterbury. The company doesn’t just color outside the lines; it erases them.

“When I speak with people, even investors, about C+I, I say that we’re disrupting the direct sales industry,” Waterbury says. “But we are similar to other direct selling companies in that we’re an income opportunity for people. When I think about the heart and soul of the industry, they’re all offering opportunity through products.”

C+I’s distributors, called merchandisers, disrupt not only the direct selling industry but also the brick-and-mortar retail industry. They sell C+I’s jewelry primarily through online storefronts, social media, pop-up shops that provide a temporary physical presence, in-home parties if they wish, and by building an individual clientele. Most use a blend of techniques.

Waterbury developed C+I with tech-savvy Gen Y in mind, and virtually all merchandisers—average age of about 26—sell online through the company’s unique e-boutiques. The branded websites are completely customizable, allowing the merchandiser to choose collections, individual pieces of jewelry, or even tips on how to style the jewelry. As a result, every merchandiser’s site is unique, even while they maintain the Chloe + Isabel brand.

The company invests a lot in each merchandiser. First, prospects apply to become a merchandiser, and C+I interviews them to be sure they’re the right person for the opportunity. The next consideration is the market. C+I doesn’t want to oversaturate a given market and place merchandisers in competition with each other. About 15 percent of applicants are selected. The new merchandiser gets lots of corporate-led training. College students, whose needs are unique, get enrolled in a special training program called GEM, Growth and Empowerment through Merchandising. Every new merchandiser is assigned a mentor, who does everything from providing moral support to answering ad hoc questions, to connecting the new merchandiser with a like-minded community of other merchandisers. The mentor is an experienced merchandiser who has been promoted to that position.

“Through that process, we’re making sure they’re fully thinking about what this opportunity is, why they are choosing Chloe + Isabel, what their goals are and why they would be successful,” Waterbury explains. “We’re focused on everyone succeeding.”

The results? Just look at direct selling’s two Big R’s, retention and revenue.

“Let’s just say we’re not having a retention problem,” Waterbury says. “It’s so easy for [a merchandiser] to remain active. She is highly engaged with our community, so she’s going to be producing and selling. When she first comes to us, we’re asking, ‘Why are you here?’—they need to really clarify their ‘why.’ In that environment, there’s a difference in how someone treats it. They’re successful because they’re here for a reason. And with online boutiques, it’s easier to sell when you don’t have to do it in person all the time. She can wake up in the morning to an order.”

And the bottom line: revenue. Chloe + Isabel’s revenue in Q2 of 2013 was double that of the previous quarter.
For Chloe + Isabel, selling without borders is a successful way of life.

Entrepreneurship on the Rise among Millennials


Over at Entrepreneur, the up-and-coming Millennial generation is the subject of an infographic depicting the rise of entrepreneurship among young workers.

Based upon research compiled by Rasmussen College, the graphic shows that “freedom” is the No. 1 factor driving Millennials to quit their day jobs and pursue entrepreneurial endeavors. Among respondents, 71 percent indicated that they would prefer working for themselves to working for others at a regular job, and 60 percent said they will likely do so within two years.

The graphic also shows the explosion of popular collaboration tools like Skype and Dropbox, as well as the increase in entrepreneurial programs offered online and at colleges.

For further reading on Millennials in direct selling, check out our recent cover story on generational dynamics in direct selling and company spotlight on how Millennials are bringing new energy to Vemma.

See the full infographic from Entrepreneur.

Vemma: Energized by Millennials

by Barbara Seale

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


Company Profile

  • Founded: 2004
  • Headquarters: Scottsdale, Ariz.
  • Top Executive: Founder and CEO BK Boreyko
  • Products: Liquid nutrition beverages, energy drinks, weight-management products

[“Vemma” is an acronym for Vitamins, Essential Minerals, Mangosteen and Aloe.]

Whether you call them millennials, Generation Y, or even Generation Next, every direct selling company wants to attract them—those 80 million young people born between 1980 and 2000. Vemma—a company that’s still a kid itself—has been so successful recruiting them that they have transformed the company.

BK BoreykoBK Boreyko

Vemma has always had solid growth, even during economic slumps. Launched in November 2004, its product line has expanded to include three of the biggest consumer market segments in the United States: the $27 billion dietary supplements industry, the $60 billion weight-loss market and the $12 billion energy drinks market segment—all strong even as stand-alone business lines. But one of these behemoths let Vemma’s growth take off like a rocket when young people discovered the company’s healthy energy drink, Verve®. Their impact was life-changing for the young company, as smart students and recent college grads started their own Vemma businesses to meet demand.

Offered in the majority of the 50 countries where Vemma does business, Verve now represents half of first-time Vemma orders. In 2012, the company’s sales of all products grew 30 percent. The largest growth occurred in the U.S. market, where the number of new business owners grew by a jaw-dropping 85 percent, fueled by the energy of Vemma’s Young People Revolution, or YPR.

In 2012, Vemma’s number of new business owners in the United States, its highest growth market, grew by a jaw-dropping 85 percent, fueled by the energy of Vemma’s Young People Revolution, or YPR.

Their appearance was a bit of serendipity, but once these young people started to show up, Vemma amped up its support with updated branding as well as cool, effective business tools and more magnetic products that kept them coming.

The story actually started at the company’s launch in 2004, when Vemma offered its eponymous product as a liquid antioxidant that made it simple and tasty for people to get their daily vitamins and minerals. The very name “Vemma” is an acronym for Vitamins, Essential Minerals, Mangosteen and Aloe. The company grew steadily, backed by clinical studies that were strongly supported by no less than Dr. Mehmet Oz almost eight years ago.

Healthy Option, Youthful Brand

VerveThen Vemma Founder and CEO BK Boreyko read an article on energy drinks—at the time a $5.2 billion market category that is now expected to explode domestically to $21 billion within four years. Numbers like that are hard for an entrepreneur to ignore. Plus, Boreyko was committed to offering healthy products, and energy drinks are known as cans of concentrated sugar and caffeine. But the opportunity stayed in the back of Boreyko’s mind.

“Two weeks later I was in the shower thinking about it,” he recalls. “The problem is that this market segment has no healthy option. They’re making bad decisions because there’s no good one. I thought, what if we put a full dose of Vemma [Vitamins, Essential Minerals, Mangosteen and Aloe] into a can and made a healthy energy drink?”

Boreyko presented the idea to his Chief Scientific Officer Yibing Wang, M.D., Ph.D., who basically said, no problem. Soon Verve joined the Vemma product family.

BK Boreyko and Mark PattersonBK Boreyko and Mark Patterson

Boreyko hoped to attract a younger demographic—the primary consumers of energy drinks. But for a couple of years, Verve was the baby boomers’ energy drink, embraced by Vemma distributors and their boomer customers. Then Boreyko’s new Vice President of Marketing Mark Patterson, recently named Executive Vice President, Marketing and Brand Development, suggested that Vemma should be rebranded to help it appeal to a younger demographic. Initially, the idea took Boreyko by surprise, but the business case for attracting millennials was undeniable. The world’s 80 million millennials outspend the 76 million baby boomers. Plus, millennials are the future direct selling distributors and customers. Boreyko told Patterson to bring him some ideas.

“When you’ve had a product for a couple of years, you’ve invested in all that photography, packaging, websites and so on,” Boreyko explains. “Rebranding is expensive. But when Mark brought me the proposed new Verve can we’re using now, I had to say, that’s hot! He did a great job on the branding, so we launched it.”

In addition to the can, the company shifted the photography, video, music, even the way they talked about Verve. Eventually they even redesigned the Verve Lounge in the US Airways Center—Verve is the official energy drink of the NBA’s Phoenix Suns and WNBA’s Phoenix Mercury.

If You Build It…

Making Mama Proud

For Vemma Founder and CEO BK Boreyko and his sisters, Karen and Lauren, the mission to make a positive difference in the lives of others is both a tribute to and a legacy left by their mother, Dottie Boreyko.

Dottie BoreykoDottie Boreyko
Karen BoreykoKaren Boreyko
Lauren BoreykoLauren Boreyko

With her husband Ben and their four children, Dottie built a multimillion-dollar network marketing company. Their success allowed Dottie to share her gifts with thousands, while supporting countless charitable organizations and reaching out a helping hand whenever she encountered someone in need. Watching their parents, her children soaked up the direct selling industry, the value of personal development and their dedication to philanthropy.

But despite their success, tragedy struck. In 1994 Dottie was diagnosed with a brain tumor and died within months.

Dottie had taught each of her children that the only thing you actually keep is that which you give away, and true success can be measured by the difference one makes in the lives of others. And, as her son BK tells it, she had a heart for children. So Vemma regularly showed that same heart through its support of philanthropic projects. Then in 2011 he and his sisters honored her by establishing a foundation in her memory, the Dottie Boreyko Foundation.

Through the foundation, Vemma helps improve the lives of children around the world by partnering with three major philanthropic initiatives.


Co-founded by heart surgeon and Emmy Award-winning talk show host Dr. Mehmet Oz and his wife Lisa Oz, HealthCorps serves as a unique research laboratory to explore the complex, underlying causes of the obesity crisis, to discover and communicate solutions and to bring health education to America’s classrooms.

Children’s Miracle Network Hospitals®

This nonprofit organization works to save and improve the lives of children by raising funds for more than 170 children’s hospitals around the world. Vemma supports the hospitals by donating a portion of the proceeds from purchases of Vemma NEXT and collecting cash donations.

Vemma NEXT Helping Now Project

Through this project, the company donates a month’s supply of Vemma NEXT, the company’s nutrition drink for children ages 2–12, to a child in need for each month’s supply sold. By partnering with reputable nonprofit agencies such as Feeding America® food banks, free medical clinics and other agencies serving families, Vemma is able to get good nutrition into the hands of children who need it most, giving them a shot at better health.

Around the same time, established Vemma Brand Partner—what Vemma calls its distributors—Marty W. recruited 21-year-old Alex M., as a favor to his parents. They were hoping the experience would help Alex gain focus. Alex became friends with another distributor, Brad A., now age 27, a top-ranking Pinnacle leader and the son of the company’s top distributors. Brad had been working in the business for a while, but when Verve caught his eye everything went into warp speed. Together, Brad and Alex became Ground Zero for a movement they started calling the Young People Revolution, or YPR. They recruited a handful of other millennial leaders, and the movement transformed Verve into Vemma’s top product and at the same time launched an extreme makeover for the whole company.

“Their leadership skills developed so fast,” Patterson notes. “They weren’t having meetings once a week. These kids were doing it every day, and not just one a day. Sometimes three or four a day. Their mantra is the five M’s: More Meetings Make More Money. And they changed the way a network marketing meeting happened. It became 15 or 20 minutes in a dorm, restaurant or even just on the street. They honed their skills to be able to speak in a short time. They’re true leaders. With the brand changed and these young people getting excited, a culture shift started to happen.”

Verve was such a dominant product that in May its worldwide sales exceeded the combined sales of all Vemma products 18 months ago.

Vemma spotlights the Platinum Club during its Revolution Convention in Las Vegas this year.
Vemma spotlights the Platinum Club during its Revolution Convention in Las Vegas this year.

Energized Sales

The impact of the YPRs is hard to overstate. Led by their energy, Vemma achieved 2012 sales of $117 million and jetted into theDirect Selling News Global 100 at No. 81. In his regular monthly conference call in June, Boreyko congratulated distributors for achieving seven months of record growth in both sales and recruiting. The 26,000 new Brand Partners who joined Vemma in May translated to 230 percent growth in the United States, Vemma’s strongest market, and 186 percent annual growth worldwide. Monthly sales reached an impressive $19.3 million, a year-over-year growth rate of 256 percent. Of that, $7.8 million came from Verve, energized by the wildly successful launch of Verve Bold. Brand Partners and their customers loved it, and they sold 2 million cans of it in the first 100 days, even causing the company to run out of Verve Bold cans. Verve was such a dominant product that in May its worldwide sales exceeded the sales of all Vemma products combined 18 months ago.

But as high-impact as Verve has been, its sibling products also carry clout. Take Vemma Bod•ē, the company’s weight-loss product line, endorsed by celebrity weight-loss coach Chris Powell of TV’sExtreme Weight Loss. Boreyko predicts that the Vemma Bod•ē Transformation products will become a $100 million business on their own and could easily take over the No. 1 sales position from Verve.

What do Vemma Bod•ē and Verve have in common? Two important things. First, both Verve and Bod•ē products are fortified with the exclusive, clinically studied Vemma formula of vitamins, minerals and antioxidant phytonutrients. Vemma forms the nutritional foundation for all the company’s products.

Products BK Boreyko addresses the crowd at the Vemma Revolution Convention in Las Vegas.BK Boreyko addresses the crowd at the Vemma Revolution Convention in Las Vegas. Products

App Experts

Young People Revolution (YPR) sales leaders (pictured from left) are Brad A., Josh N., Jovana S., Alex M., Brock M., Andrew B. and Noelle R.Young People Revolution (YPR) sales leaders (pictured from left) are Brad A., Josh N., Jovana S., Alex M., Brock M., Andrew B. and Noelle R.

And second are its free, award-winning apps: the Vemma mobile business app and Vemma Bod•ē app. While any Vemma Brand Partner could use the mobile business app, it’s clearly inspired by the needs of the YPRs whose businesses are Verve-centric. With the business app, they scroll through their phone contacts and Facebook friend lists. A couple of clicks later, they’re sending a text with a video of a YPR leader briefing their prospect on the Verve concept. When the prospect watches the video, a push notification is sent back to the Brand Partner, letting them know the prospect is watching, and the prospect will be moved into the Brand Partner’s Hotlist. The app turns a cellphone into a portable business office. It allows YPRs to enroll new Brand Partners right from their phone, check their current rank, see their teams’ sales results and view action items needed to qualify for the month. The app even lets Brand Partners offer product samples. When the customer or prospect says yes, the company’s fulfillment center ships it out. Thousands already use the app, which is available in nine languages.

“The challenge that’s plagued me my entire career has been the amount of time that it takes from when a new person says yes to when they actually start talking to prospects,” Boreyko says. “We’ve solved that dilemma with our business app. Young people will download the app and will send out 50 texts in 20 or 30 minutes.”

“The challenge that’s plagued me my entire career has been the amount of time that it takes from when a new person says yes to when they actually start talking to prospects. We’ve solved that dilemma with our business app.” —BK Boreyko, Founder and CEO

Chris and Heidi PowellChris and Heidi Powell

The free Vemma Bod•ē app, available for iPhone or Android, is consumer focused. It helps users by delivering text reminders, suggested recipes, and 84 daily video clips directly from Powell and his wife Heidi. The videos are delivered daily over 12 weeks—the time period of Vemma’s Bod•ē Transformation Plan. Also, the app features six daily “push” notification messages to keep the user on track to reach their weight-loss goals.

The apps are heating up business activity for all Vemma Brand Partners, causing Boreyko to believe that his initial 2013 sales goal of $200 million is too low. With more Verve products set to launch and Vemma Bod•ē attracting more attention every day, sales in June tallied five $1 million-plus days.

An example of Brand Partner enthusiasm is Verve Central. While YPRs hold lots of short, informal meetings in a variety of locations, in some areas, they also hold large gatherings. Boreyko had offered the lobby of a company-owned building to them for meetings. They responded by holding three or four meetings a day there, so Vemma supported them by adding branding and furniture to the area, naming it Verve Central. The idea caught on and Brand Partners across North America who needed larger meeting spaces began opening their own Verve Centrals. Vemma started providing the artwork to support them. One Brand Partner even opened a Verve Central in his home. Multiple YPRs often collaborate on the gatherings, with one bringing products to serve and several speaking. It’s all the result of a company that’s on fire.

“When I look at the Vemma Brand, I only see it getting more popular,” Boreyko predicts. “I see us taking the Verve brand and coming out with new coffee, tea and half-caf products. And Vemma Bod•ē can be a billion-dollar brand on its own. It’s now in 33 markets around the world. We’re one of those rare companies with multibillion-dollar potential.”

Diversity = Opportunity

by Barbara Seale

Direct Selling News • July 2013

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

What do age differences, ethnicity and even cultural practices have to do with your business? Everything, but only if you want to secure a thriving future.

The Latino, African-American and Asian populations are responsible for more than 90 percent of the population growth in the United States, with annual buying power of almost $4 trillion—more than the combined economic buying power of Brazil, Russia and India—according to Miriam Muléy, CEO of marketing consultancy and research company The 85% Niche LLC. Since almost three-fourths of direct sellers are white non-Hispanics, those statistics translate into the word that this industry loves the most: opportunity.

The Latino, African-American and Asian populations are responsible for more than 90 percent of the population growth in the United States, with annual buying power of almost $4 trillion.

To racial diversity, add age diversity. Since 2000, the average age of direct sellers has slowly been skewing younger, according to statistics from the U.S. Direct Selling Association. But in the last couple of years most companies report that more millennials are becoming direct sellers. They’re driven by crushing student-loan debt combined with poor job prospects. The industry has responded by providing them with everything from products to mobile apps, all designed to create an irresistible opportunity for young people—one that the traditional direct selling population is learning to love, too.

Put it all together, and you can almost envision that door to the future opening wide. The companies who spoke with Direct Selling News about how they address diversity in their salesforces offered insights and ideas on attracting and retaining this new sales field, all while integrating them with the women and men who have already made those companies successful.

Three of the companies have unique salesforces within the industry, with muscular ethnic representation that started unintentionally and then grew organically.

Princess House, which celebrates its 50th anniversary this year, has a consultant PHamily, as they call it, which is more than 75 percent Hispanic. Twelve-year-old 5LINX doesn’t track the ethnicity of its distributors, but a quick glance at the company’s website reveals that all of its Platinum Senior Vice Presidents are people of color, primarily African-Americans, and 5LINX has launched a focused effort in the Hispanic community. Belcorp USA’s field is 60 percent Hispanic—mostly women who take pride in the company’s Peruvian roots. And while PartyLite’s salesforce had a more traditional industry profile for most of its life, its vigorous support of younger recruits is changing the face of the company.

All those companies look at every facet of their business through the lens of the diversity of their salespeople. Whether it’s products, communications, events, training or any of the other elements of creating a successful salesforce, diversity is a consideration. And not just today’s diversity, but the composition of tomorrow’s salesforce, as well.

Come for the Products

Princess House says that its strength lies in its diversity, and the company goes to great lengths to ensure that it embraces diversity in all its forms. President and CEO Connie Tang notes that the company’s strategic decisions typically take consultants’ ages, cultures, backgrounds and language preferences into consideration. For example, when the company recently launched new dinner service products, it considered the needs of several audiences.

“We made sure the collection had standard white table settings, but we accessorized with tapas-style plates that are more colorful to target a younger audience and maybe single, apartment dwellers,” Tang explains. “Though tapas is Hispanic in origin, it’s becoming very popular. They all stack on the footprint of the platter, which makes them space saving. So we’ve created something that appeals to a younger age group, as well as an ethnic population. And the smaller plates might also appeal to someone a little older or who is watching her weight, because they help with portion control. So depending on who we’re talking to, we can adjust our message. From a merchandising point of view, we also show the plates with a variety of foods depending on the target audience.”

Products were the key element that attracted 5LINX’s ethnic salesforce. One of its initial product offerings was a Voice over IP Video Phone.

“We were blessed because the people who originally saw the opportunity and took it seriously happened to be people of color or from other parts of the world.”
—William Faucette Jr., Vice President of North American Sales, 5LINX

“We didn’t set out to create an overwhelmingly ethnic salesforce. We just wanted to create a successful one,” says Vice President of North American Sales William Faucette Jr., who started his 5LINX career as a distributor. “We were blessed because the people who originally saw the opportunity and took it seriously happened to be people of color or from other parts of the world. They went to people they know, who are like them ethnically and otherwise.”

Thanks to the worldwide connections of its salesforce, 5LINX quickly began shipping video phones all over the world. And distributors began telling their friends—people like them—about the opportunity.

With its Latin heritage, cosmetics company Belcorp USA has a keen understanding that the “Hispanic” marketplace is actually composed of several different markets.

“We don’t approach it as one block,” explains General Manager Mona Ameli. “We approach by country of origin and by the generation. For example, a first-generation Mexican is very different from a third-generation Colombian. They’re both of Latin origin, but the different countries have different cultures and different approaches. And first generations—people who are the first in their families to immigrate to the United States—are quite different from later generations who were born in this country. First generations often don’t have bank accounts, and they are not as technologically advanced, so their use of computers and the Internet is more limited. They also are more strongly identified with their husbands. But the second generations that are born, raised and educated here are very independent and will make the same use of technology as anyone else raised in this country. First-generation consultants have a high degree of comfort with a company from their home country. They buy the products and resell them. Second and third generations have more leadership, and they grow the business.”

With its Latin heritage, cosmetics company Belcorp USA has a keen understanding that the “Hispanic” marketplace is actually composed of several different markets.

She notes that product preferences are pronounced. Mexicans choose a color palette that is vibrant and colorful. Peruvians and Colombians prefer more subdued colors. Even their fragrance selections are different. And because they continue to identify with and take pride in the cultures of their countries of origin, those preferences persist across generations.

Welcome to the Diversity Party!

As much as direct sellers hope to attract ethnic distributors, many of them have an even broader view of their diversity goals and the strategies they use to achieve them. PartyLite, for example, is seeing its traditional salesforce broaden to include Generation Y and, perhaps most surprisingly, men.

More than 68,000 PartyLite Consultants hold parties to show the company’s candles, candleholders, home fragrances, accents and food from its Two Sisters Gourmet division. The company has taken a traditional approach to its business since its beginning 40 years ago. But recently, it began to modify its methods.

“Six or seven years ago we had an epiphany about what diversity is and what we want our salesforce to be,” says Vice President of Sales for the U.S. Karen Conkey. “We thought about what we offer people—the opportunity to earn income, and not a specific kind of income. At one time our approach was that people should work this as a career and earn a six-figure income. But we learned to open our thinking and position ourselves as a business where people can earn $50 or $500,000, and that opportunity is open to everyone. That’s different than thinking that we want to attract more Hispanics or Asian-Americans.”

PartyLite also recognized that as its leadership got older, it needed to attract a younger group of consultants.

“It has always been our task to be in the 25–35 age group, and we recognized that they demand a very different working environment than a 55-year-old.”
—Michael Norris, President, PartyLite Americas

“For the survival of any company, it’s essential to reach out to a younger generation,” observes Michael Norris, President of PartyLite Americas. “It has always been our task to be in the 25–35 age group, and we recognized that they demand a very different working environment than a 55-year-old. They execute sales in a lot of different ways, not just in a sitting room. They’re the drivers of our future, so we knew we needed to invest in the right tools—social media and apps for smartphones and tablets that allow for ease of doing business and provide training.”

Their overriding strategy: Be welcoming. As simple as that sounds, the strategy extends far beyond smiles and snacks to include all online activity.

“Over the last seven years, we’ve really embraced our online business,” notes Tracie Graham, PartyLite’s VP of Sales & Administration in Canada. “When we started attracting a group of savvy online users, we knew we needed to provide options for how both customers and consultants want to do business. We’re embracing the next generation of not just party plan but direct selling men and women. Ultimately, what’s exciting about PartyLite is they don’t have to pick or choose. If you want to have a party, great. But if you want to do business online, you can do that, too.”

Even the company’s language changed. They realized that “opportunity meeting” and “income opportunity” were alien words to Generation Y, so they changed their marketing jargon, tailoring it to their audience. Catalogs and online materials are now heavy on images and light on text. Customer service includes a “chat” function that is widely used by younger consultants, and communication options include Gen Y-friendly text alerts.

The strategy is paying off. In the United States, some 25 percent of its business is from people who only do an online business, and on a recent incentive trip, 40 percent of the people enjoying the rewards of their hard work were under 35 years old.

It’s still important, however, to recognize the significant portion of consultants who might prefer the traditional or “offline” approaches. For example, on the other end of the age spectrum, PartyLite is noticing more post-retirement consultants. They come for several reasons. They don’t have the income they need to live the lifestyle they want, or they’re simply not ready to settle into full retirement. Their PartyLite business gives them lifestyle flexibility, and it keeps them social.

PartyLite provides those retirees, as well as longtime consultants, with the traditional tools they need, but they also introduce them to newer ways to build their business. They’ve found that seasoned consultants and leaders have begun to embrace online opportunities as a key part of their businesses.

“I’ve been pleasantly surprised by conversations with seasoned leaders and Regional Vice Presidents about how they’re using the online space in their business,” notes Joan Connor, Vice President of eCommerce & Marketing. “The PartyLite Preferred loyalty program also has been beneficial to them. It lets hosts, guests, online shoppers or anyone who purchases at a party join the program and earn rewards on their first purchase. They can redeem the rewards exclusively online for a full-price product.”

PartyLite’s opportunity is also becoming gender-neutral. The people who invite friends into their home have universally become “hosts.” In fact, Norris noted that he recently attended a gathering of leaders in Quebec where seven of the 20 attendees were men.

Products reflect that male influence, with more masculine fragrances, diffusers and candleholders. Women buy them for the men in their lives, and men buy them for themselves. Connor says that she helped her college-age son decorate his new apartment with the most masculine candle warmer and fragrance she could find. Soon he asked for more.

Overall, PartyLite’s primary approach to diversity is to support its emerging populations, rather than to actively target a particular group. Service and their welcoming strategy cross all boundaries.

“Once you start attracting a certain type of person, they’ll attract their circle,” Connor observes. “As a company, when we start to see that trend, we support it. We acknowledge them and make sure we’re sensitive in responding to their needs.”

Taking the Next Step

When product passion transforms into entrepreneurship, even more thoughtful tailoring begins. Take recruiting, for example. 5LINX began a concerted effort to expand its Hispanic marketplace by aggressively helping its current Hispanic leadership advance to the next level. They’re targeting their efforts in the heavily Hispanic communities of Miami. They learned that while Spanish was essential, they also had to learn to speak the language of flexibility.

“It’s about leadership and who in your leadership is having success,” says Executive Vice President of Marketing Jeb Tyler. “We really focused on supporting their success by gearing marketing materials to that group’s needs. And we hired three individuals whose backgrounds reflect those of our Hispanic representatives to support that market.”

They developed a Hispanic logo, a Spanish-language company website and Facebook page, a DVD, a marketing magazine, and webinars and weekly meetings in Spanish. They also established an advisory group composed of Hispanic leaders who have helped 5LINX modify materials and processes so that individuals can envision themselves as 5LINX independent marketing representatives, whether their country of origin is Mexico, Puerto Rico, Cuba or elsewhere. 5LINX runs Spanish-only regional meetings and business opportunity meetings, and the corporation sometimes subsidizes the cost of a booth at a trade show or an important meeting.

Special events in the emerging Hispanic communities are typically shorter, start later in the day and are highly social.

“Sometimes the corporation has to help them get their feet off the ground with marketing dollars or support for that market,” Tyler notes, “whether it’s a brochure they need or a product that they really see helping that market, like our credit-card processing product.”

Special events in the emerging Hispanic communities are still packed with all the same elements that 5LINX provides at their international events, but they have their own special flavor. They’re typically shorter, start later in the day and are highly social. And leaders who usually drive the events have had the chance to teach both Tyler and Faucette a little salsa dancing!

The efforts have paid off. Last year alone, 5LINX tripled its number of Spanish-speaking leaders.

Belcorp USA’s Ameli notes that training Hispanic consultants, as well as providing them support, is as social as the events they attend. And consultants—especially first-generation—don’t hesitate to voice their concerns when their social, familial cultures aren’t practiced.

“They know someone in customer care, and they have a relationship with them,” Ameli explains. “Phone calls begin with updates on the consultant’s children and families. They really appreciate that. Occasionally I’ll get a call about a new customer service agent from a leader, who says, ‘Mona, she’s too sales-y. She goes right to business. You need to train her.’ For them, being social is part of our culture and part of their culture. It’s not just about business.”

She notes that training is often face to face. Belcorp USA has hired a field development team whose backgrounds reflect those of their consultants to deliver training and support to Hispanic consultants across the country. The company’s commitment to diversity is getting attention too. In April the National Diversity Council recognized Ameli among the 2013 Most Powerful and Influential Women in the state of California, based on the professional success and empowerment of multicultural minorities in the United States.

The Language of Flexibility

DiversityFaucette has noticed cultural diversity that is geographic in nature. For example, he says that the building block of the 5LINX business is the private business reception in someone’s home, and hotel meetings typically offer a second look at the opportunity. For regulatory and professional-presentation purposes, the company mandates that certain information is presented. But flexibility is the name of the game when it comes to style.

“In some parts of the country, you won’t see a presenter in a suit,” he observes. “He or she will have teams in T-shirts and jeans. That may differ from area to area. The amount of audience participation also varies culturally. Meeting length varies both culturally and geographically, along with the music you may hear. Some meetings are more relaxed and more of a social gathering than others. We allow all those things. At the end of the day, the leader is driving his or her business and income. As long as nothing is a poor reflection on the company or the rest of the salesforce, we’re flexible. They’re not going to do anything that they haven’t found to work.”

Connie Tang, President and CEO of Princess House, believes that the Asian community is an untapped market in the United States, particularly Filipinos and Vietnamese, who she describes as “primed for entrepreneurship.”

Hotel opportunity meetings play an important role at Princess House too, and Tang says that the nice venues create credibility—a key factor for a first-generation immigrant population. The meeting doesn’t emulate a home party, but products are on display because they’re part of the Princess House story and credibility. Support tools show that prospects won’t be in business by themselves.

“Most important is making sure you have consultants speak, not people from the corporation,” she explains. “We bring in people from that community who have been with the company for a while. They explain how they started and where they are today. In-language is important, but language is not the only factor to consider. The pictures you show in your presentation and the leaders attending are extremely important. Make sure you know and understand who you’re targeting. If you understand the leader you’re partnering with, they’ll know who will show up.”

Tang believes that the Asian community is an untapped market in the United States, particularly Filipinos and Vietnamese, who she describes as “primed for entrepreneurship.” Still, she notes that the Asian community is a difficult target market, beginning with the hundreds of languages and dialects involved. Creating supporting literature and customer support in so many languages is an economic challenge. And a party-plan company faces some inherent difficulties because culturally most Asians don’t typically invite strangers to their homes.

But Tang and other direct selling executives agreed on one core principle: Diversity is essential for the future of their companies.

“Diversity is the norm,” Tang states flatly. “Look at the schools our kids go to. Look at the shopping malls. We’re a diverse society. If you’re not attuned to it, you’ll have limited growth.”

The Business Case for Diversity

When Miriam Muléy talks about diversity in business, she cuts straight to the bottom line.

“Diversity offers a tremendous upside for growth, especially as the traditional mainstream markets begin to decline in size and begin to age,” she says. “There are multiple ways to look at the benefit of diversity, and the first is ROI. There is a huge positive impact on profit margin, market share and increased sales revenue.”

Muléy, CEO of strategic marketing consultancy and research company The 85% Niche LLC, and former General Manager at Avon Products Inc., points to a study by sociologist Cedric Herring that was published in the American Sociological Review. Herring found that companies reporting the highest levels of racial diversity brought in nearly 15 times more sales revenue on average than those with the lowest levels of racial diversity. Gender diversity accounted for a difference of $599.1 million in average sales revenue. Organizations with the lowest rates of gender diversity had average sales revenues of $45.2 million, compared with averages of $644.3 million for businesses with the most gender diversity. Herring also found that racial diversity is a better predictor of sales revenue and customer numbers than company size, age, or the number of employees at any given work location.

Muléy explains that the concentration of ethnic populations varies tremendously from one region to another, so she suggests that company leaders think locally. Companies can support distributors in those heavily ethnic markets with training materials or even connections with grassroots organizations where they can build trust.

“If companies do not get their arms around diversity and the opportunity it presents for enhanced ROI and incremental sales to a vibrant segment of the consumer and distributor market, they are leaving money on the table,” she predicts. “Geographic areas where consumers are largely diverse are a huge opportunity for incremental business. Added to this is the fact that diverse consumer groups, especially Asians and African-American women, are better educated than ever. U.S.-born Hispanics are increasingly well educated also, providing an opportunity for direct sellers to reach a discriminating buyer and seller at the same time.

Growth is so fast in ethnic populations that Muléy refers to them as the “emerging majority.” And they often shatter the myths about their incomes and buying habits. For example, Muléy reports these traits:

    • 4.2 million African-American, Hispanic and Asian households earn at least $100,000 annually.
    • There are 1.3 million multicultural millionaires.
    • The buying power of women of color is $1.5 trillion and will grow to $1.7 trillion by 2017.
    • Apparel purchases by this emerging majority of women are 3.5 times more than by non-ethnic consumers, and personal-care purchases are three times more.
  • A disproportionate amount of beauty products, as well as health and wellness products, are purchased by Latina, African-American and Asian consumers.

Muléy says, “This opportunity is too large for corporations to overlook or tiptoe into. A proactive, sustained commitment to growth is needed to compete and win with emerging majority consumers.”

“This opportunity is too large for corporations to overlook or tiptoe into. A proactive, sustained commitment to growth is needed to compete and win with emerging majority consumers.”
—Miriam Muléy, CEO, The 85% Niche LLC

Her advice for recruiting in ethnic communities: Look at every tool you use and ensure that it reflects the face of America. From websites to catalogs, and from opportunity presentations to parties, integrate the cultural considerations of the populations you want to attract. For example, when you invite family-oriented Hispanics to meetings or parties, don’t be surprised when they bring their children. And if necessary, have a translator. Food is always welcome at direct selling events, as it sets a tone of “family” and sharing among diverse groups. In addition, she notes that role modeling and mentorship are important to retention, including field leadership as well as staff and management teams.

“To the extent I can see myself reflected in the leadership of the organization,” Muléy says, “I will believe it’s possible for me to make it and even exceed that level of performance.”