90 Days of Direct Selling – Day 73

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Scentsy Inc.

2013 Net Sales: $485 million

Country: USA

Scentsy Inc. is an international party-plan company dedicated to creating a social shopping experience that gives Consultants and customers variety, value and a level of personalization they can’t find anywhere else. Scentsy Inc. owns the Scentsy Family of brands, including Scentsy Fragrance, a complete line of home and personal care fragrance products; Velata, a line of simple and stylish kitchen products; and Grace Adele, a style system of women’s accessories featuring handbags and coordinating jewelry.

 

2012 Rank: 23
2012 Net Sales: $560 million
Sales Method: Party plan and group sales
Compensation Structure: Multi-level
Products: Accessories, food and beverage, home décor, kitchenware and appliances
Markets: 8
Salespeople: 120,971
Employees: 968
Headquarters: Meridian, Idaho
Executives: Orville and Heidi Thompson
Year Founded: 2004
Website: www.scentsy.com

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Scents with Sense: A Strong Commitment to Giving Back Provides a Culture of Sustainability

by Lin Grensing-Pophal

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

Scentsy

Company Profile

  • Founded: 2004
  • Headquarters: Meridian, Idaho
  • Founders: CEO Orville Thompson and President Heidi Thompson
  • Products: Wickless candles, home décor, kitchenware, and clothing and accessories

Sometimes those closest to financial ruin are those who find a clear path out and, perhaps unexpectedly, also discover along the way an opportunity to contribute to others in a big way. That’s the place that Orville and Heidi Thompson found themselves back in 2004.

“We got into Scentsy and wickless candles because we were desperate and we needed something that could save us from financial ruin,” Orville says. At 35, the Thompsons had been working for a number of years but were not finding success in their work. It was a turning point for them, Heidi says. “That’s when we came together as a couple,” she says. “From then on we’ve been a great team.” They both acknowledge their partnership brings a solid mix of “head and heart” to the company.

They’ve come a long way in 10 years. Back in 2004, they were at the end of their ropes, concerned about where the next house payment would come from and how they would keep themselves and their family clothed and fed. They launched their company in an ocean shipping container—their first home office. They had no money, no credit, no catalog, no software and, perhaps most notably, no experience. What they did have though was a great product, a strong work ethic and the will to succeed. And they had some passionate support from others who believed in what they were doing.

Fast-forward 10 years and it’s hard to believe that these extremely successful entrepreneurs were once near despair. Their wickless candle company, fueled by the direct selling model, has grown to 120,000 consultants worldwide, with global annual sales revenue in 2013 of about $480 million.


Scentsy Inc., fueled by the direct selling model, has grown to 120,000 consultants worldwide with global annual sales revenue in 2013 of about $480 million.


Growth came quickly and challenged the Thompsons’ ability to keep up with the growth through infrastructure, policy and communication. From 2007 through 2013, the company was hiring on average one new employee every day. They grew from a 6,000-square-foot facility to nearly 1 million square feet of space in three states and two countries. There was a technology explosion to keep up with it all.

Despite the success, these were stressful times; growth, however welcomed, can be challenging. Still they persevered. And they learned that all of the space and technology in the world does not a strong company make. What really matters is culture and commitment, and that’s something that Orville and Heidi have a wealth of and something they nurture in both employees and consultants.

They don’t share the wealth of both their financial and cultural success just internally, though. In part because they vividly remember the trying years and the many people who came forward to support them, and in equal part because of their strong personal commitment to giving, the company has a strong commitment to helping others help themselves.


“As a mom I thought, wouldn’t it be beneficial to our employees if we had some programs to make things easier?”
—Heidi Thompson, Co-Owner and President


Orville and Heidi ThompsonOrville and Heidi Thompson Scentsy’s new Commons Kitchen offers meal options for employees as well as the public.Scentsy’s new Commons Kitchen offers meal options for employees as well as the public. Rally for the Ranch 2013 participants stuff backpacks for back to school.Rally for the Ranch 2013 participants stuff backpacks for back to school.

A Philosophy of Helping Others Help Themselves

Summer Giving: A Tradition Since 2009

Since 2009, Scentsy Inc.’s Summer Giving program has impacted a broad range of local organizations and individuals. Here is a summary of these activities:

“Contribute” (2009)

  • Helped 40 small, family-owned businesses in Idaho’s Treasure Valley
  • Each employee got $100 to spend (and kept their purchases)
  • $100,000 was spent in a cash mob in a single day

“Six Pack Give Back” (2010)

    • Susan G. Komen Race
  • 2,200 racers
  • $171,000 donated
    • Paint the Town
  • More than 120 employees, consultants and friends participated
  • 1,000 hours of time donated
    • Vein Ambition
  • Red Cross blood drive
  • 140 pints of usable blood was collected
    • Fashion Forward
  • Clothing drive for Women’s and Children’s Alliance and Dress for Success
  • Several hundred pounds of clothing was donated
    • Change Challenge
  • Spare change for Wednesday’s Child adoption
  • $16,000 was raised
    • Contribute 2010
  • Employees were given $50 to spend at 20 businesses
  • $50,000 was spent in the community

“Halt the Hunger” (2011)

  • Idaho Food Bank matching donation of $300,000
  • The money raised provided 1.9 million meals in Idaho
  • Raised $638,973—exceeding the goal of $600,000

“Spending Spree for Refugees” (2012)

  • Community/Employee/Consultant Cash Mob
  • Consultants in more than 20 states took part
  • Idaho employees shopped at refugee vendor fair
  • Generated $30,000 in sales

“Rally for the Ranch” (2013)

  • Mentoring day with Idaho Youth Ranch YOUTHWORKS! Program—hosted 10 trainees for a day with employees and executives giving them work ideas and skill sets
  • Stuff the Truck—employees donated clothing and household items to IYR
  • Back to school backpacks—employees stuffed 50 backpacks for at-risk youth in transitional housing

The ability to experience both significant financial highs and lows has provided a perspective that shapes the Thompsons’ approach to giving. Unlike many, their focus is not on “giving back.” It is on “contributing more than you take.” As Orville notes: “What if someone had come to me in 2004 when we were $700,000 in debt and feeling broken as businesspeople and given us a winning lottery ticket for $1.5 million, and what if we took that ticket and cashed it in and paid off all of our debts? Would we have had what it took to build Scentsy? How many people would have been hurt because we did not go through the experience that we went through because we were given a handout to solve our problems, instead of a hand up to solve our problems?”

The Thompsons say their experience weighs on them every time they decide how to spend extra resources on others—they ask themselves if what they’re doing is actually contributing to someone’s benefit or forfeiting a better opportunity to get resources or experience that would provide greater gain in the long run.

That philosophy is reflected in the way they give. It’s a philosophy built around the core principles of Simplicity, Authenticity and Generosity, with Generosity meaning “contribute more than you take.” Heidi points to a favorite quote from Thomas S. Monson, an American religious leader and author: “He who gives money gives some, he who gives time gives more, and he who gives of himself gives all.” The Thompsons have all bases covered.

In 2009 they founded the Scentsy Family Foundation and, since that time, have embarked on a strategic, comprehensive and multifaceted approach to giving that involves employees and consultants. The Foundation offers philanthropic support through a combination of scholarships, direct donations toward individual efforts and community-based causes, and charitable cause products.

Each year the Foundation’s charitable cause products involve consultants in the nomination of a charitable cause or organization to support through the creation of a distinctive new product in honor of that cause. In Spring 2014, the “Charitable Cause Buddy” is Roosevelt the Rabbit, created to support the March of Dimes imbornto® campaign; from the sale of each Roosevelt the Rabbit, $6.50 is contributed to the March of Dimes in the United States and $7.50 to the Starlight Children’s Foundation in Canada.

But, importantly, Orville and Heidi recognize that without strong support from their employees and consultants the success they have achieved and now share would not be possible.

Giving Back from the Inside Out

It all starts from within. From 2004 to 2009 much of the company’s focus was on managing the growth they were experiencing, building an infrastructure to support that growth, and ensuring that employees and consultants had the resources and support they needed.

Importantly, during this time, there was also a strong focus on defining, refining and reinforcing the culture they desired.

“Authenticity is very important,” Orville says. “We are who we are, and we don’t try to be somebody we’re not.”

Perhaps because of their own early struggles, the Thompsons recognize the unique challenges that employees often face as they attempt to navigate both the challenges of work and family life—and they have taken steps to ease some of those challenges.

“Back in the early days,” Heidi says, “when we worked long hours, ate a lot of macaroni and cheese and ramen and things you could microwave, I remember thinking ‘I wish there were some way that you could quickly make dinner and have the time to sit down as a family, because we were missing that.

“As a mom I thought, wouldn’t it be beneficial to our employees if we had some programs to make things easier?” As they celebrate their 10th anniversary, Heidi says: “It’s a dream come true to offer this convenience to help busy families like ours.”

Their new facility includes a kitchen—the Scentsy Commons Kitchen, operated by Guckenheimer, offering staff- and family-friendly food options, including ready-made dinners and sack lunches that parents can pack for their children. The programs are designed for the company’s 750 Idaho-based employees and are also available to the general public.

Besides a prepared dinner option, employees—and the public—also have the ability to visit the cafeteria to create “packed lunches,” choosing from ready-made sandwiches, apples and other nutritious items. For those employees whose children go to schools without hot lunch, or who prefer to bring their own lunches, this is a convenient and cost-effective option. A buffet of child-sized portions of entrees, sides and drinks is set up Monday through Thursday afternoons so that parents can pack their kids’ lunches for the next day at a cost of about $2, depending on the items selected.

In addition to building in-kitchen facilities, the Thompsons took advantage of their new construction to introduce a number of energy efficient options, and they’ve been recognized for their efforts.

Respecting the Environment

The newly constructed Scentsy Campus consists of seven buildings on 73.35 acres in Meridian, Idaho. In addition to the on-site corporate restaurant, the campus includes an outdoor amphitheater, more than 8,000 square feet of outdoor patios and three miles of walking paths.

Construction followed the standards of efficiency, energy conservation and environmental sustainability held by the Green Globes Initiative, including the use of sustainable, recycled products, a high-efficiency HVAC system, low-flow plumbing, drought-tolerant landscaping and an LED lighting system that adjusts based on the availability of natural lighting.

For their efforts, Scentsy was recently awarded “Four Green Globes” for the campus’ office tower—the highest designation possible—by the Green Globes Initiative. They are one of only 12 facilities in the country to achieve this honor. The Scentsy Distribution Center was awarded “Three Green Globes,” and the campus received an American Society of Landscape Architects Merit Award for the beautification of the grounds and the use of sustainable design features.

Scentsy’s respect for the environment and initiatives to ensure that it is conserving energy and preserving green space represent just the beginning of the company’s commitment to community and efforts to ensure that it is a good corporate citizen.

Building Community

Scentsy Inc. and its employees are strongly supportive of their local community of Meridian, Idaho, through programs like Summer Giving (established in 2009).


“Authenticity is very important. We are who we are, and we don’t try to be somebody we’re not.”
—Orville Thompson, Co-Owner and CEO


In 2009, the Summer Giving program “Contribute” provided $100 for each employee to spend, positively impacting 40 local, family-owned businesses. In what may have been one of the first-ever “cash mobs,” Scentsy contributed $100,000 to the local community and provided a cash infusion to small businesses during the peak of the recession. Since then, a wide range of activities have connected Scentsy, its employees and the community in creative and impactful ways.

For example, in 2012 Scentsy organized a Spending Spree for Refugees event. Idaho has been a refugee settlement community since 1975 and every year receives hundreds of refugees from many regions of the world. The economic downturn was particularly hard on this population. With this event, Scentsy set up an outdoor market on its campus and encouraged employees and community members to buy from local refugee-owned businesses.

Scentsy Consultants are also engaged in these efforts. Incentive trips incorporate opportunities to interact with various communities while providing services that impact those communities in positive ways. In 2014, Scentsy Consultants will have the opportunity to help out at a school and a senior citizen facility in the Bahamas. These types of activities have been organized since 2008 in settings like Cancún and the Dominican Republic.

While all of these initiatives certainly have a positive impact on the organizations and communities served, Scentsy and its employees and consultants benefit as well, according to the Thompsons.

They say supporting good causes in communities builds camaraderie and reinforces that contributing more than you take is not only part of Scentsy’s culture, but it’s also fun to do and makes life more enjoyable.

As Scentsy celebrates a decade of service to customers, communities, employees and consultants, it can look back on some significant ways that its activities have provided a hand up for literally thousands of people in communities located many miles away from the small community of Meridian, Idaho, where it all started. It was there that the Thompsons, aided by those who offered them a hand up, were able to realize their dreams through hard work, persistence and the commitment to a sustainable philosophy of contributing more than they take.

The Inseparable Nature of Infrastructure and Infraculture

by Orville Thompson

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

Photo above: Scentsy’s new headquarters in Meridian, Idaho.


About a year ago I had a conversation with the founder of a new direct selling company. We discussed the treacherous road that must be traveled to establish a successful and enduring company in our channel. We discussed the difference between the companies that have grown and died quickly, grown and then faded away, and those that have grown, contracted and grown again. We observed that just as many companies fail because they lose touch with their salesforce as those that lack necessary business acumen.

How often have we seen promising young companies “professionalize” their people and processes only to lose what made them attractive to their distributors? On the other hand, we witness others go out of business because they can’t find financing, control their supply chain, comply with basic regulation or manage the egos of founders and employees. Inside boardrooms and executive teams, forces that promote measured results, efficiency and strong financials compete with ones that promote engagement, passion and strong culture. Too often one is sacrificed for the other: Engagement, passion and culture are difficult for MBAs to measure, and discussing IRR, ROI and EOQ as they relate to giveaways at a distributor event is enough to send the sales team running. MBAs get infrastructure; direct sellers get infraculture. Great companies bring infrastructure and infraculture together.


Great companies bring infrastructure and infraculture together.


Scentsy aspires to be a great company that brings value to the world. Our story is far from finished—and greatness is still an aspiration—but our journey provides insight into the establishment of infrastructure and infraculture.

In 2004, when we launched our direct selling opportunity in an ocean shipping container (our first home office), we had very little infrastructure. We had no money, no credit and no chance of an investor. We had no catalog, no software and no experience. We did have a great product and a few passionate consultants. Little by little, party after party, we made money and could invest in sales materials, software and facilities, but we held firmly to our humble beginning. It allowed us to co-write the Scentsy story with our growing number of consultants and their customers. Collectively, we created the underpinnings of a cultural sense of place, or infraculture. The values of simplicity, authenticity and generosity started to define not only our products and processes but also our people. It was easy for consultants to invite others to join them in their business because they participated in creating the culture in significant ways.

Heidi and Orville Thompson, Co-Owners of Scentsy Inc.

Heidi and Orville Thompson, Co-Owners of Scentsy Inc.


Early on, Heidi and I did what we could to support them. Rules weren’t very important; fairness wasn’t much of an issue. If someone needed our help, we gave it if we could. If we were traveling, we’d stop in at a team meeting or call people up to go to dinner. We held events and training calls whenever we could. The consultants themselves rallied around each other, supported one another, cooperated wherever possible and tried to live as best they could according to our motto of contribute more than you take. Who wouldn’t want to be a part of that? Recruiting boomed and sales kept pace with recruiting. We had the proverbial tiger by the tail.

But behind the scenes we were struggling to keep up. From the beginning of 2007 through 2012 we hired, on average, one new employee every business day. Our facility needs grew from a 6,000-square-foot, flex-space office/warehouse to nearly 1 million square feet in three states and two countries. Our technology struggled to handle the explosion of data. Our customization requests burdened our vendor’s ability to support other clients. Sales development efforts were met with accusations of favoritism when we couldn’t reach everyone equally.

In late 2009 our weak infrastructure caught up to us. A software deployment went bad, our call center broke down as consultants tried to get answers their websites weren’t providing, and the lack of good data from previous years contributed to shortages of product and massive backorders. Just as our consultants’ hard work was paying off for them, we let them down. Instead of celebrating a successful selling season, we were answering questions about when orders would ship and spending all our efforts supporting home office employees who were working around the clock to make things right. In short, our lack of infrastructure was undermining our hard-won infraculture.

Beginning in 2010 the forces inside our executive team advocating for capacity, efficiency and financial stability began to dominate. We poured massive energy into infrastructure, technology, facilities, systems and programs that expanded the opportunities for our consultants. We launched new countries, new brands and new programs. New facilities were opened on a regular basis, and we were performing as a well-run business. Shipping worked like clockwork, system uptime was extremely high, backorders were virtually nonexistent and call-center metrics were enviable. Orders were up, recruiting was up, costs were down, and all was good.

But somewhere along the way the old stories seemed to lose their luster. The infraculture that held together our early leaders seemed distant to the Facebook generation of direct sellers that were filling our ranks. Cooperation that came easily when everyone was on a personal basis turned to competition as consultants turned each other in for policy violations and leaders tried to outdo each other with bigger team meetings, recognition awards or monthly team incentives. Our story, once told in person in informal situations, was now told by tens of thousands of people we hadn’t yet met. The mechanism of sending an announcement to more than 100,000 consultants in different countries speaking different languages slowed the process and squeezed out the fun and informality we were known for.


Scentsy wickless candle warmerScentsy wickless candle warmer Velata fondueVelata fondue Scentsy Layers bath and body careScentsy Layers bath and body care

We started to realize that infraculture and infrastructure were a lot like software and hardware. I remember the days when Intel would come out with a new processor that held so much promise. Microsoft would follow with upgrades to Windows and Office. Then graphic and gaming software would soon push the limits of the new hardware. Software waited on better hardware. Better hardware inspired new software. This process repeated itself over and over in the ’90s and 2000s. Underlying it all is the fact that the best software in the world will not work on bad hardware, and powerful hardware is worthless without good software. Both are inextricably linked. The same can be said for the infrastructure and infraculture of a business.

Grace Adele fashion bags

Grace Adele fashion bags


Infraculture is the underpinnings of a cultural sense of place.

At Scentsy, success took away the luxury of being a small company with an invincible infraculture. At the same time, investments in infrastructure have allowed us to better confront the forces that undermine our infraculture. Better workspace enhances cooperation, better technology improves training, recognition and incentives, and better research and development improves product offerings. A company’s infraculture may be strong, but if it lacks the infrastructure to spread that infraculture, it will not grow. Underlying the enthusiasm of every consultant of a sizable company is the question, “How long will this last?” When the taglines Exclusive Product, Ground-Floor Opportunity, and Fastest-Growing no longer apply, only businesses with a strong infrastructure can compete.

This month we are moving into our newest, and hopefully last, home office. The six-story office tower is the centerpiece of our 80-acre campus, Scentsy Commons. Construction has been a labor of love for Heidi and me. We met weekly with architects and contractors, deciding everything from what pavers to use on the sidewalk to where departments would sit, to what color of tile we should put in the bathroom. In the design and layout we incorporated the values of simplicity, authenticity, and generosity. We worked hard to physically represent the ethos of the Scentsy Family.

We often wondered if this was the best use of our time and money. Before moving in, we used the building to host our SuperStar Director Summit—the annual meeting of our top sales leaders. We heard over and over that they felt like they were coming home. This was their place. Scentsy Commons and the infrastructure it represents is the physical sense of place to match the Scentsy Family cultural sense of place they helped establish. It is a physical representation of our commitment to the aspirations and values that have driven our company since the days of the ocean container. For us, it is the bringing together of infrastructure and infraculture.

A company’s infrastructure allows it to execute functional plans, drive efficiency and measure productivity. A company’s infraculture allows it to inspire greatness, drive passion and enhance satisfaction. Just as hardware and software compete for resources and develop around the weakness of the other—yet are interdependent—infrastructure and infraculture are inseparable. Companies that aspire to be great must develop both.


Orville ThompsonOrville Thompson is CEO and Co-Owner of Scentsy Inc. Its family of brands includes Scentsy Fragrance, Velata fondue and Grace Adele fashion accessories. He is also Chairman of the U.S. DSA Board of Directors.

Inc. Magazine Honors Scentsy with “Hire Power” Award

Inc. magazine has named Scentsy Inc. to a prestigious list of employers credited with creating the most jobs in the United States over a three-year period. The magazine’s December issue ranked Scentsy No. 20 on the inaugural “Inc. Hire Power Awards” list for creating 699 full-time jobs from 2008 to 2011. In addition, Scentsy ranked No. 1 in job creation among consumer products and services companies and was the largest job creator in Idaho.

Inc. compiled the list of 100 privately held, U.S.-based companies, which it called “the real heroes of the American economy for rebuilding lives and putting Americans back to work.” Scentsy is among the 10 largest companies on the list with 2011 revenues exceeding $500 million.

Scentsy Inc. is an international party-plan company headquartered in Meridian, Idaho, and dedicated to creating a social shopping experience that gives consultants and customers variety, value and a level of personalization they can’t find anywhere else. Scentsy Family owns the fragrance brand Scentsy; the fondue brand, Velata; and the fashion brand, Grace Adele.