Mannatech President Al Bala Takes on CEO Role

Photo: Mannatech President & CEO Al Bala.


Mannatech Inc. announced Wednesday the promotion of company President Alfredo Bala, who will now serve as president and CEO of the nutrition company. According to Mannatech Chairman J. Stanley Fredrick, Bala’s appointment is part of an intentional shift of focus to the brand’s independent sales Associates and international growth.

“In Al Bala, Mannatech has a leader with a deep understanding of the daily effort it takes to succeed in the direct sales industry, as well as someone who knows how to build internationally,” Fredrick said in a statement. “We’re fortunate to have that person serving Mannatech as its President, and delighted to also have him now serve as CEO.”

In 1992, Bala left a position as manufacturing plant manager for Bose Corp. to launch a full-time direct selling career. Before joining Mannatech corporate in 2007, he was a field sales leader at a leading direct selling company, where his team launched operations in more than 65 countries. Bala’s expertise in building international markets has helped Mannatech expand into 15 countries in the past eight years.

“I am wholly focused on the success and care of our outstanding sales Associates around the globe,” Bala said of his new role, effective immediately. “Mannatech is already renowned for having some of the best technologies in the world in our nutritional supplements and skincare products, and it is my vision for Mannatech to also be known for having the best rewards, recognition, support, tools and training in the direct sales industry.”

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The New Talk Fusion Launches with Fresh Designs, Offerings

Moving at the speed of technology, Talk Fusion has overhauled its web-based business with fresh designs, product offerings and incentives. This week the video communications company unveiled its new look—and its new “Better with Video” slogan—during a Talk Fusion Dream Builder Broadcast by the company’s Founder and CEO, Bob Reina, and Vice President of Training and Development, Allison Roberts.

“At Talk Fusion, we’re constantly innovating, we’re constantly pushing the envelope to keep our video communication products exciting and ahead of the technology curve,” Reina told DSN. “This gives our Associates a huge competitive advantage with hot technology that’s the talk of the Internet.”

Talk Fusion’s newest offering is CONNECT Video Chat, an industry-first product that utilizes WebRTC to enable real-time video communication between any web browsers. Customers can try a free product demo via one of Talk Fusion’s newly redesigned websites, which introduce the company through videos in multiple languages.

The redesign extended to Talk Fusion’s full CONNECT suite of products, which features Video Email, Video Newsletter and Live Meetings as well as the chat tool. With its video communications technology, Talk Fusion has surpassed industry giants such as Yahoo, AOL, Viacom, CBS and MegaVideo to become the eighth-largest online video content provider in the world. Now in 140 countries, the company is setting its sights higher with a fresh look and innovative product offerings.

“Ultimately, our relaunch goal is to maximize the Talk Fusion brand worldwide, which has the additional benefit of helping our Associates achieve greater financial freedom,” said Reina.

As they build their businesses, Talk Fusion Associates will have the opportunity to earn new rewards for their work. The company has also revamped its compensation plan with incentives like Rolex watches, gold and diamond rings for milestone achievements, and a purchased Mercedes-Benz.

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.


Direct Selling Cannot Be Defined by Words or Numbers Alone

DSA

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


In some respects, there has been an unprecedented amount of attention focused on direct selling by media and the financial community lately. This has also been a unique time for in-depth research undertaken by the Direct Selling Association in an effort to quantify many aspects of the business model. Beginning with the Consumer Attitudes Survey in late 2012 and continuing in 2013 with the annual Growth & Outlook Survey, National Salesforce Survey and Sales Strategy Survey, DSA took a 360-degree look at the sales channel.

The result will be an enhanced ability to address misstatements and misinformation in the marketplace that can so easily cloud the perception of a sales channel that relies primarily on word-of-mouth instead of catchy advertising jingles and expensive retail shelf space.

But at the heart of all of the averages, percentage breakdowns and statistical analysis remain the stories of 16 million Americans—and millions more around the world—who look to direct selling to fulfill a particular need, whether financial or otherwise. While we stock our arsenal with facts and figures, we must not lose sight of the personal, human stories that form the basis of direct selling.

The following are but two examples of real stories that bring DSA’s research to life:

What the numbers say:
Fifty-seven percent of direct sellers report having signed up with their company to get the products at a discount, while 62 percent report continuing as a direct seller for this reason. Forty-eight percent of direct sellers report becoming a direct seller because they were seeking long-term supplemental income, but 62 percent report continuing as a direct seller for that same reason. Further, 23 percent of sellers said they started in direct selling hoping to make it a career, but 41 percent of sellers report continuing with direct selling as a career.

What sellers say:
Anita R., Battle Creek, Mich.: “I joined to get the discount, and what I found was a full-time job!”

What the numbers say:
Seventy-eight percent of direct sellers say direct selling has met or exceeded their expectations, and nearly the same percentage of direct sellers say they are likely to recommend that a friend or family member become a direct seller.

What sellers say: 
Suzy F., Hudson, Wis.: “My experience with direct selling/network marketing has been nothing less than positive. I must admit that I was skeptical at first. However, I decided to educate myself about the industry and have determined it is a worthy profession that offers many personal and professional rewards.”

These findings and the complementary “real person” stories are of little surprise to those who have seen and experienced firsthand how direct selling changes lives. Numbers alone may be able to accurately describe some industries, but for a sales channel that is defined by so much more than profits, to omit the personal anecdote is to remove the essence of the direct selling experience.

Perhaps this is one of the reasons direct selling is so often undervalued and criticized by Wall Street, while 16 million people and their customers embrace it on Main Street. To this end, DSA is committed to a proactive campaign of pairing recent research findings with the real-life stories of those whose lives have been changed by direct selling, including highly influential legislators, regulators and business community leaders who support the channel.

Direct selling cannot be described with words or numbers alone. Each provides context for the other. We are all well-served to share these stories, to represent the men and women who rely on their independent direct selling businesses for income and personal achievement. It is our job to understand their needs and to recognize that, for so many, the intangible benefits of a career in direct sales mean so much more than the tangible rewards. And so often those intangible benefits go unreported and unappreciated. We hear so much about earnings statements, stock ratings, and recruitment and retention figures that we lose sight of what makes this industry so special. In 2014, join DSA in its efforts and rededicate yourself and your company to telling the story of direct selling.


Joseph N. Mariano

Joseph N. Mariano is President of the U.S. Direct Selling Association.