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Driving Growth: People or Brands?
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Driving Growth: People or Brands?
by Barabara Seale
What drives growth for direct selling companies-their brand or their people?
At some companies, the question seems like the proverbial chicken-or-egg issue. For others, the answer is straightforward. But all agree that both their brand and their people play important roles in supporting sales and offering the opportunity.
At BeautiControl, the skincare and cosmetics company, its 100,000 sales consultants have been in the driver's seat for the company's 25-year history. "You always have to focus on growing the salesforce and the marketing opportunity like it's your No. 1 product," says BeautiControl President Kristi Hubbard. "One of the very important supporting elements is the brand. Ironically, people drive growth, but the brand may be the customer's first impression of the company. Then the first actual experience is through the consultant and the products. That experience has to be positive on all fronts-the products, the salesperson and the experience that sets up introducing the opportunity."
While Hubbard believes that growth depends on consultants, she acknowledges the role of the brand, too. "It's all part of a consultant's impression of the company. If her impression and experience are positive, she'll share the opportunity with someone she knows. Consultants have to have a high degree of confidence in all areas of the business to share the opportunity. That's why we have to do everything we can to help them create a great customer experience and to offer rewards and training that's the best. If all those elements are in place, they'll share the opportunity. When they do, sales go up."
Hubbard says BeautiControl's brand is focused on serious skin care solutions. She describes BeautiControl as a high-quality skincare, spa and cosmetics company. The foundation of the brand is providing a service. "We've always felt that having a service that enhanced the brand provided value to our consultants, as well as to our clients. In the '80s the value-added service was a complimentary color analysis. Then came a process for determining the skin's condition. Now we offer Spa Scapes-a relaxing, pampering experience that is an enhancement to skin care. Hopefully, when we invite prospective clients to try some of our unique spa treatments, we can lead them to skin care."
We're No. 1
Mary Kay, the 43-year-old cosmetics company, claims the title, "America's Best Selling Brand." According to Kline & Company Inc.'s Cosmetics & Toiletries USA 2005 study, Mary Kay was the best-selling brand in the combined categories of facial skin care and color cosmetics, as well as the best-selling brand in the individual categories of facial skin care; lip color, which includes lipstick, lip gloss and lip liner; and eye makeup remover, in the United States in 2005. And while cosmetics and skin care products are the merchandise the company offers through 1.6 million independent beauty consultants in more than 30 markets worldwide, Mary Kay's Senior Vice President of Corporate Brand Strategy and Sales Support Rhonda Shasteen says that the Mary Kay brand is all about enriching the lives of women.
"It started with Founder Mary Kay Ash's desire to give women unlimited potential for business and financial growth and to teach women how to take care of their skin," Shasteen says. She believes that the company's beauty consultants, employees and brand combine forces to create growth. "You can't separate one from the others. Like any direct selling organization, we rely on recruiting new representatives for growth. But if barriers exist regarding the brand, it affects retention and productivity. You could put a lot of effort into recruiting new beauty consultants. But if when they started to approach consumers about Mary Kay products and the consumers were reluctant to purchase, then the consultants wouldn't be successful. They wouldn't make money and stay in the company. The money we spent on recruiting would be wasted, in essence. Likewise, if we spend money on the brand front but not enough to educate and help the salesforce embrace, understand and be strong brand advocates, we've wasted our brand money."
Shasteen's comments are more than opinion. They're based on research.
"Our recent research indicates that our brand image is more affected by our sales consultants than by packaging or products," she explains. "They're a huge contributor to our brand image. A beauty consultant adds value to our products above and beyond any a customer can get by going to the store to pick up a cream. She does that by bringing the personal touch, knowing something about the customer, knowing how the products fit her needs, being able to answer a question about the products, and just by being a friend."
Should Direct
Sellers Advertise?
Most direct sellers don't do media advertising, choosing instead to rely on distributors to spread their message. They take the same position that Herbalife President and Chief Operating Officer Greg Probert states so succinctly: "Our distributors and employees are our best brand ambassadors."
But a handful of direct selling companies boldly go where no-well, very few-companies have gone before: to the television audience. Avon runs periodic product or brand commercials, and Quixtar promoted its opportunity on television earlier this year. Mary Kay advertises and has research that proves the ads work. "It warms the market for the salesforce," Senior Vice President of Corporate Brand Strategy and Sales Support Rhonda Shasteen says. "We did a major brand advertising campaign last fall in the United States, and we did pre- and post-flight consumer testing. In every metric we measured, we saw positive increases."
BeautiControl President Kristi Hubbard says that the company doesn't advertise currently, but doesn't rule it out in the future. "It's not where we choose to spend our dollars right now, based on BeauiControl's size," she explains. "A salesperson's incentive has a bigger impact, so we put our budget into our career plan. At some point in the future, we may need to advertise to position ourselves competitively."
Nu Skin advertises selectively. "Direct sales traditionally relies on person-to-person communications to tell its story more effectively than a commercial or print advertisement can," says Daniel Chard, Executive Vice President of Distributor Success. "That being said, we do engage in brand advertising activities when and where appropriate. For example, we have recently enjoyed much success with a coordinated brand-building campaign for our g3 nutritional drink in Japan." |
No Boundaries
At Nu Skin, which offers skin care products and nutritional supplements through its 757,000 distributors and preferred customers, executives believe that company growth requires a strong bond between brand and people.
"Our products and distributors would not thrive without their interdependence-one could not do well without the other," says Daniel Chard, Executive Vice President of Distributor Success. "Our products are second-to-none in quality and serve as the foundation of our business. Our people, in turn, build on that unique foundation. Nu Skin employees and distributors work tirelessly throughout the world to bring our life-changing products and our unique business opportunity to others. This creates a unique culture-a family-of like-minded people with similar goals that helps the business to roll forward into the lives of others."
Chard notes that Nu Skin's brand is based on its desire to be a force for good in the world through the business opportunity, products and culture the company offers. He says the company prides itself on unique, science-based products that offer a measurable difference to customers. The Nu Skin product brand came about when company founders set out to develop a superior skincare product line that contained only beneficial ingredients. "Initially, manufacturers said it would not be possible," Chard says. "They said it would be too costly and we would not be able to compete against other large companies. However, the founders believed in the products and believed Nu Skin could be successful. With hard work and determination, Nu Skin Enterprises has grown from its humble beginnings into the billion-dollar company it is today."
Herbalife President and Chief Operating Officer Greg Probert believes brand and people can't be separated and form part of an intricate web of growth drivers. "The business opportunity we offer is one of the best. And as more people become Herbalife independent distributors, our brand grows. There are several factors that affect growth, such as increasing our brand's visibility. We have become involved in sponsoring sporting and athletics events around the world. This year the Herbalife brand was seen at more than 45 events."
Probert says the Herbalife brand stands for healthy nutrition. "It's one of passion and opportunity," he says. "Our goal is to be the No. 1 nutrition company in the world, and to develop the brand so that when someone sees our leaf logo, they think active, healthy lifestyles."
Communication Is Key
Every company that Direct Selling News interviewed said that they constantly communicate with their salesforce to reinforce how distributors and the company's brand depend on each other and help drive growth.
"We do our best to convey a sense of 'team'-that what each of them does in their daily lives affects how others perceive us," says Herbalife's Probert. "We recently introduced our vision, mission and values to our independent distributors after a successful employee introduction. Our values discuss ethics and other daily behaviors that will help shape our future. Everyone wants to be part of a winning team, so of course a higher positive profile and more visible brand make it easier for our independent distributors to recruit, retail and retain."
Shasteen says Mary Kay consultants have a thirst for knowledge, so the company's management team takes every opportunity to educate their salesforce. "We share the results of research with our salesforce. That tells them selling tactics that consumers are looking for today, how they add value through the services they provide, and even why we don't offer certain products. Their context is different than ours, and they want to understand the 'whys' that drive the business decisions we make."
Growth Through
Employee Support
When direct sellers talk about the ways that their people drive growth, they aren't thinking only of their salesforce. Employees are part of the equation, too.
At Mary Kay, Senior Vice President of Corporate Brand Strategy and Sales Support Rhonda Shasteen says that the company's beauty consultants, employees and brand combine forces to create growth. A team is currently at work on an initiative to build brand ambassadors among employees. "I learned early that marketing programs are only as good as the supply chain that backs them up," she says. "I can create a great program and have a great forecast. But if sales blows the doors off but the supply chain can't meet the need, it doesn't matter how great the program was. A great brand communication plan is a matrix that is very broad and very deep. One of the biggest challenges that companies have is to successfully implement and maintain the vigor of their brand. It is literally everything-not just the products and advertising but also the building we occupy, our signage, the way the phone is answered."
BeautiControl's President Kristi Hubbard believes the same techniques that help consultants understand their role in growth also work with employees. "Consistency of message, education, recognizing and rewarding the behaviors you want-they're all key with associates. We try to make sure they understand that they're part of the team. It's a partnership between the home office associates and our consultants. One will not be successful without the other."
Nu Skin's Chard echoes Hubbard's focus on consistency. "Through consistent goal setting and communication with our internal employees, we work to help each employee understand his or her role in the overall success of our distributors and the company," he says. "We also hold regular employee events where we provide interaction between distributors and our employees and focus on individual aspects of our corporate mission, our vision, our competitive advantages and our force-for-good culture."
Herbalife wants to ensure its employees see themselves as part of the growth team. "We respect each other, succeed as a team, and value a sense of humor. Employees are important brand ambassadors," President and Chief Operating Officer Greg Probert says. "We communicate regularly about company developments, we recently started a Wellness for Life program to help them improve their health, and we show them how to walk the talk. We conduct product-usage lessons, so they fully understand product benefits. And we offer free products to all of our employees in our break rooms so they have access to them." |
"We make sure we communicate the company's vision, mission, values, positioning and why our products and opportunity are better," BeautiControl's Hubbard says. "Key points are consultant training and new-leader training. When the messages you deliver through communication, training and recognition are all the same, distributors will sell the brand in the manner you want. When everyone is saying the same thing, your voice is louder." And she adds that the communication goes both ways. "If you listen to your salesforce, they'll tell you everything you need to know. We make a point of keeping in touch with the pulse of our salesforce. They're a huge part of our partnership. So we ask for and listen to their input."
Chard says Nu Skin works hard to help distributors understand how their actions reflect on the company, their upline and downline, and on the entire industry. He adds, "Our distributors take responsibility a step further. Their generosity has provided more than 67 million meals to undernourished children through our Nourish the Children Initiative. This force-for-good culture helps us create an environment where compassionate, results-oriented leaders can emerge and thrive, and where we can continue to attract motivated, hardworking and honest sales leaders."
Just as the salesforce changes over time, brands evolve, too, driven intentionally by company efforts to stay in touch with the marketplace.
"Our brand has evolved numerous times, but the foundation and purpose have never changed," reflects Mary Kay's Shasteen. "It's important that the brand is relevant for women around the world and continues to meet their constantly changing needs. It's not about conformity, but individuality and self-expression. And above all, we want women to perceive that Mary Kay is a brand they can trust." She notes that, with few exceptions, the perceptions of Mary Kay's brand are amazingly consistent around the world. "For example, we've done brand research in the United States and in China within the last six months. If you took the results from the United States and China from the report and laid them on the table, you couldn't tell which was which. We've been in China for 10 years and in the United States for 43, but the issues are almost verbatim. But our closest neighbor to the south, Mexico, is different than any other market."
For BeautiControl, the basic brand proposition stays the same, but the special services that beauty consultants offer change over time. "The cornerstone of our brand has always been serious skin care solutions," Hubbard says. "But the value-added service has to be contemporary, based on where the market is and what people want now. That refreshes the brand and provides attractiveness to the marketplace."
For Nu Skin and Herbalife, it's all about growth. Emphasizing Herbalife's goal of being the world's top nutrition company, Probert says, "We just announced that we'll soon begin doing business in our 63rd country, Peru, and we are actively planning to enter new markets. As more people become Herbalife independent distributors, our brand grows."
Nu Skin's goal is even bigger. "Our goal has always been, and remains, becoming the leading direct selling company in the world," Chard says. "We will get there by helping our distributors succeed. As our company and its products grow in prominence and demand continues to increase, we come closer and closer to realizing this goal." |
