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Reinventing Yourself:  Young Company Focus:  Combine a 75-year-old, family-owned company nestled in the Swiss Alps, an Argentine businessman and his son and daughter, and the largest direct selling market in the world. What do you get? SwissJust USA, a Doral, Fla.-based party plan company that markets a broad range of natural products based on essential oils designed to stimulate physical and psychological well-being. From Brushes to Botanicals More than 75 years ago, Ulrich Justrich had a dream. He envisioned a natural approach to well-being and health using the beneficial effects of nature in harmony with the human body. Justrich founded Just (pronounced yoost) in Walzenhausen, Switzerland, near Lake Constance, and from the beginning he chose direct selling as his company’s distribution channel. “Ulrich started this company in 1930, selling natural bristle brushes through direct selling,” says SwissJust CEO Jacques Mizrahi. “When the Second World War came around, he ran out of natural raw materials to make his brushes. He was already into nature and aromatherapy, so he decided to turn this problem into a new opportunity: he would change his business to focus on products for well-being. This visionary man had the idea to make pure essential oils out of the best natural ingredients and sell them through direct selling back in the ’40s. That’s 60 years ahead of the trend!” Justrich built a nice business in Switzerland, but when his son, Ernst, joined the company, he had an eye for international expansion. Ernst first focused on Europe and chose a nontraditional way to move into new markets. “In some countries, like Switzerland, the Justrich family owns the whole companies; they manufacture, they sell, they do the whole thing.” Mizrahi says. “But as Just started moving into new markets, they tried to find a local partner with a strong heritage in direct selling.” The Justrich family—Just is short for Justrich—owns, develops and manufactures the products in their Walzenhausen factory, then ships the products to their partners in each country. “The country partner owns the right to sell, market and distribute the products in that country over a very long time,” Mizrahi says. “The clever part is this: If you’re the partner, say, for France, you are only allowed to sell Just products, you cannot be multibrand. On the other hand, the Just family can sell Just products only to the Just partner. So it’s a joint exclusive agreement—it is a true partnership.” Today the third generation of the Justrich family—Hansueli and Marcel—continues to develop Just products, which are sold in 35 countries through more than 100,000 independent consultants to the tune of nearly half a billion dollars. Expanding into the Americas SwissJust—the marketing, selling and distributing company in the Americas—began 17 years ago. At the time Just products were very popular across the whole of Europe.“My father Sam, who was running a fast-moving consumer goods conglomerate, was at a trade show in Germany and he met Ernst Justrich,” Mizrahi says. “Mr. Justrich had strong ties to Argentina, because his father had spent his youth there.” The two men developed a friendship that transformed into a partnership when they launched SwissJust in Argentina. The new venture took off quickly. “We expanded to Uruguay, then to Chile, and the next thing you know we became one of Just’s only multicontinent partners, operating in the whole of Latin America,” Mizrahi says. “Then we expanded northward, and Mexico became our biggest market.” SwissJust kept growing, reaching $50 million in retail sales 2001. In that same year, the company’s Swiss partners approached SwissJust about expanding into the United States. “We knew the U.S. market very well—that this was the most sophisticated market in the world,” Mizrahi says. “At the time we were offered this position, we were really busy growing Latin America and did not feel that we had the management resources to enter the United States properly.” Six months later, the Justrichs approached SwissJust a second time. “They came back to us and said, ‘We have an idea: You would love to do it in the future, but you don’t have the management resources to do it now. We would love you to do it, so we can be patient and wait for you, but why don’t we do a test market?’” Since SwissJust was already doing a huge business in Mexico and the southern United States has a large Hispanic population, many of whom were already familiar with SwissJust products, the company agreed. Using the marketing materials, career plans, software and host program already in place in Mexico, in 2003 SwissJust began to test the waters in the United States. Overwhelming Success The rapid growth SwissJust experienced in the United States took everyone by surprise. “We went from nothing to $3 million in retail sales in 18 months,” Mizrahi says. “We had a little distribution center, we had a little office. We imported our marketing materials, mainly in Spanish, from Mexico; it wasn’t like a full-fledged operation. The thing was, the brand is well-known in Europe and Latin America. Everybody has a cousin, an uncle, a friend or somebody in the United States who knows the products. So without us planning, and with the efforts of our passionate founding consultants, it became much bigger than we thought it would.” Buoyed by the inroads they were making with the U.S. Hispanic market, in 2005 SwissJust considered going after the English-speaking population. “The growth in the Hispanic market showed huge potential; the momentum of the business building was crazy,” Mizrahi says. “On the other hand, we still knew that we needed to do the proper studying and work to adapt to the market. We knew this could possibly change the business in some significant ways, which would require great adaptation skills for the people who started the business the way that it was.” Instead of trying to replicate what they were doing in Latin America (at the time approaching $100 million in sales), Mizrahi says SwissJust decided to approach their entry into the English-speaking U.S. market as if the company were starting a company from scratch. “In each of the countries where we operate, we are a local company,” Mizrahi says. “People know we are across eight or nine markets, but if you go to our Colombian operation it is a Colombian company. So we wanted our U.S. company to be a U.S. company within an international company. “We joined the Direct Selling Association and hired the best suppliers we could find,” Mizrahi says. “We studied the market to death before changing even a single piece of the program we had, which was still working.” Faced with the choice of changing the existing U.S. business little by little or all at once, SwissJust chose the latter and relaunched the company in July 2006. “We changed almost everything except our mission, our values and our product,” Mizrahi says. “Compensation plan: completely new. Marketing materials: completely new—everything bilingual, of course. Host program: completely new. We set up the whole IT infrastructure as if we were an established company, even though we were small at the time, and we launched a new training program. From a human resources perspective, we invested in hiring the best people we could find to help us lead the development of a new salesforce in the English-speaking market while still supporting our Hispanic/European base.” Explaining Change Change can be difficult, even when it is change for the better, Mizrahi points out. To prepare its consultants for the relaunch, SwissJust developed a change program to explain the reasons behind the transformation to its salesforce. “The logic behind the program was to help our people understand that there was a bigger game to be played than the one we were playing,” Mizrahi says. “If we learned together how to play the bigger game, the potential of the business would be much bigger. Instead of us topping out as a $25 million Hispanic company, we could become a $200 million company with a $30 to $50 million Hispanic side to it.” SwissJust flew its 16 top leaders to Miami and took them through the change program. “We explained in-depth why we were doing each thing in a workshop environment— allowing them enough time to react and understand,” Mizrahi says. “From there, we went to the next level and did the same program for our top 60 people at our summer conference in Las Vegas.” Next, SwissJust traveled to other large cities and made the announcement to almost 500 people within 10 days. “We tried to make sure that everyone had the information available to help them understand the change. That it was change for a better life.” While the first few months following the announcement were difficult for SwissJust and it lost some consultants, the support of the company’s leaders and its large customer base kept the business going. And finally, Mizrahi says, the new program began to pay off. “From Day One, we started growing our English-speaking base like crazy,” he says. “After eight months, it has almost tripled. And our activity levels, our average parties, our retention rates of new people—all the basic indicators—are doing really well.” The Magic of Direct Selling Today, SwissJust USA has a salesforce of almost 1,500 consultants and nearly 30 percent of its sales are generated from English-speaking consultants—up from 6 percent before the relaunch. And Mizrahi has high hopes for the future. “I expect to enter into the stage where the magic of direct selling kicks in and we start seeing growth without the huge amount of effort it takes when you’re very small,” he says. “We are approaching the stage where you have a solid base, the people in your base know how to do the business and are doing well and they start duplicating.” And for Mizrahi, who’s relatively new to the direct selling industry, it’s watching those people succeed that makes the challenges of the last eight months worth it all. “Once you join this industry and you start to discover it, you get an emotional kick out of it—which is very difficult to explain to anybody outside the industry,” he says. “We are in this business because we help people and empower them. It makes you very humble.” Nancy Laichas is Managing Editor of Direct Selling News. E-mail her at nlaichas@directsellingnews.com. To read more about her conversation with SwissJust CEO Jacques Mizrahi, visit our blog, Inside Direct Selling News, at www.directsellingnews.com/dsnblog.html. Jump to: |
