Peeling It All Away to Build Again.
Founded / 1993
Headquarters / Flower Mound, Texas
Top Executive /
Alfredo Bala, President & CEO
Landen Fredrick, Chief Sales & Marketing Officer
Product Category / Health and Wellness
After months of introspective corporate soul-searching and fundamental internal and external change, Mannatech—which does business in 26 global markets and has $5.2 billion in total revenues over 28 years—is experiencing a self-made renaissance. The publicly-traded direct selling company has been through the proverbial ringer this past decade or so, and now seems poised to regain the momentum of its past with a new way of doing business that’s seemingly already impressed Wall Street investors.
Mannatech experienced double-digit sales growth across all markets—from their biggest to their smallest: South Korea, greater China, South Africa, Spain, Mexico and even North America—in 2021 and put a stop to a 7-10-year declining trend. They also had a stock surge over $30 from just $7 in March 2020. That equates to about 400 percent stock growth since the beginning of the pandemic.
President and CEO Al Bala, a 40+ year veteran of the direct selling industry, chuckles thinking back to October 2021 when Entrepreneur magazine touted Mannatech as an ideal momentum stock for those looking to add to their portfolio at year’s end. They were impressed by a stock acquisition repurchase program approved by the Mannatech Board of Directors, saying it demonstrated the robust financial health of the company.
Mannatech’s strong fundamentals were reflected in its power ratings and the stock had an over grade of eight, which equated to a strong buyer rating. They were ranked number one out of 71 stocks in the consumer goods industry.
A little dose of vindication? Maybe. But more accurately, an indication of how hard Bala and his corporate and field teams have worked to turn around a company that lost its story and subsequently lost its way.
The Back Story
Mannatech built the company based on a story about amazing products. They experienced incredible growth and momentum, especially in the early years. Company stock performed well and as the company grew, Mannatech attracted short-sellers, who typically create situations advantageous to their bets that stock prices will drop. Action by the Texas Attorney General in 2007 attached a stigma to Mannatech, and the requirements eroded confidence within their field.
“We saw our business go from $450 million to literally about $150 million. So, when you have that kind of drop in two to three years, it affects the psyche of the field, but then also affects the psyche of the company,” Bala shared. “Because at that point, we became very cautious, very conservative, which means that we really were very careful about how (our) story was told.”
The once sure-footed Mannatech, whose pitch centered on decades of experience, an amazing discovery, 154 patents, clinicals and science, had—in essence—lost their story. When the field asked corporate what story they should tell, Mannatech faltered and a vicious cycle developed keeping the company on a declining trajectory and inching them closer and closer to a belief growth might no longer be possible.
“Momentum solves 80 percent of all problems, right? Big Mo, we call it. We want to have it. When you have it, it’s like you can do nothing wrong. Everything you touch turns to gold, which tends to make us all a little bit more arrogant about what we know or don’t know. But on the other side, when you don’t have it, it’s painful, and it’s hard,” Bala said.
Mannatech struggled to regain momentum for years. They couldn’t just stand by and watch the business continue to decline. Sometimes their attempts helped a bit. Sometimes it made things worse. Then two years ago, Bala experienced a momentum epiphany—“It’s an inside job.”
He realized the psyche of the field and the company must come to the forefront. An almost spiritual element was lacking and to regain momentum, he felt Mannatech couldn’t and shouldn’t try to remedy it alone. They needed help from the outside—people that had the right framework to take the company back to the basics, peel everything away and start building again using industry fundamentals.
December 2019, Mannatech’s team discussed with Paul Adams and John Fleming how to create, grow, modernize, simplify, clarify and generate a gig economy focus. “Our culture was not ready, but we knew this change was needed,” Bala said.
They obsessed over customer experience and built an internal, cross-functional team to examine every single customer touch point. This not only improved tangible things, but also began shifting the employee psyche by focusing on creating the best possible customer and associate experiences.
According to Patty Anthe, VP of Customer Experience, the team’s goal was surprisingly simple and straightforward. “We wanted to make it easier to do business with Mannatech. We knew that we had to create a cohesive team internally first before we could create cohesiveness with our field.”
They sought input from corporate teams, field leaders, legacy leaders and others. Then, 632 pages later, they learned Mannatech lacked focus, follow through and there was plenty of frustration to go around.
“People loved us, but we had pushed the limits of their grace. Technology, shipping, lack of focus, trust, belief, confidence—all lagged internally and externally, putting unnecessary stress on the call center,” Bala explained.
By May 2020, the course correction started in earnest. “Every department, every team was involved. We gave people the ability to actually be able to make decisions and solve problems. Over a short time, progress showed up. Customer service improved dramatically,” Bala said.
Mannatech became easier to do business with and built trust internally and externally, something they needed for the deep dive into the corporate mission, vision and values that came next. Debating, sharing, defining and creating something they could stand behind and be held accountable for, Mannatech emerged with a “get better together,” principle-centered leadership culture.
As Anthe explains, “We learned that creating a more customer-focused organization is a journey, not a destination. Now we evaluate, survey, listen and create an environment of trust both at corporate and with our field leadership.”
Then came a global look at their brand. What did it need to attract and speak to today’s and tomorrow’s customers? How could they clarify and create a story that mattered? Past rebranding lacked accountability and left Mannatech’s organizational identity murky and undefined.
“We started attracting raving fans who are passionate and enthusiastic about our products enough that to this day they are sharing with everyone they know,” said Landen Fredrick, Chief Sales and Marketing Officer. “How does a company create an army of raving fans? It’s about becoming customer obsessed in every facet of the business: Seeing the world as your customer sees it and delivering industry leading products that make an impact on their lives.”
By clarifying their mission and vision, they shifted away from a nearly exclusive product science focus toward the customer; their drive to purchase; what they expect to receive; and the feeling they hope the product will create. In so doing, Mannatech took ownership of a new story to be shared by the field.
Last spring, Mannatech took a look at how they stacked up against the rest of the direct selling industry with messaging, tools, social media, pricing, position, compensation and the like. Now they’ve addressed their gaps, and it’s making a profound difference.
The Take Aways
The whole of Mannatech learned valuable take aways on their journey back to the basics of direct selling. They were reminded that the internal machine—the processes and the people—are key to the ultimate goal, which is massive duplication. Recruiting campaigns or blitzes never measure up to the power of a lot of small things done right.
“We are now engaged in a process of focusing on becoming better leaders, and not just the executives. We want everyone in the company to join us…It’s not random. It’s clear. It’s focused to help create better outcomes together—having the difficult conversations, holding each other accountable. Now we are all rowing in the same direction,” Bala said.
The idea that Mannatech’s way back was an “inside job” will remain with Bala for the rest of his life. “Now we understand that you can’t sit back here and hope and pray that the field is going to get it done or worse, complain that they’re not getting it done…until you’ve looked inside.”
And getting to that realization is tough because it means that a company has to be honest and sometimes admit they can’t solve it alone. It takes vulnerability to get the job done. Iron sharpens iron. There are people out there who have seen more, have different perspectives, and have the courage to tell you what’s wrong without sugar coating it. It may not be pleasant to hear, Bala shared, but it’s worth it.
“We are still a work in progress. It is continuous work, but we know we are working on the right things. The foundation is sound. The results are showing up. The team is better. The leadership is better. And we are more prepared than ever to become the company we really want to be and continue to push results even higher.”
Mannatech’s Seven Tips to Regaining Momentum
1 / Don’t lose morale
Inspire and make people believe in themselves by encouraging, teaching and trusting them.
2 / Be patient with your business
Go from failure to failure without losing enthusiasm and know something positive will happen if you stay steady at the task.
3 / Go back to the basics
Rediscover the basics of network marketing and the stories that support and edify the channel.
4 / Get a different perspective
Realize you can’t figure it out on your own and seek outside help. Don’t be afraid to take a good look at the competition.
5 / Evaluate your own leadership
Commit to creating a new culture of learning and growing together. Embrace needed change within yourself and the organization.
6 / Get an external focus by reaching out to customers
Get clear and diverse input because that’s the real world.
7 / Be bold with the company vision
Keep momentum by constantly having greater goals.
From the February 2022 issue of Direct Selling News magazine.