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Headquarters: Plano, Texas
Top Executive: Brian Connolly, Interim CEO
Products: Health and wellness
2014 Revenue: $494 million
North America 50 Ranking: No. 17
In the direct selling space, nutritional supplements and weight-management products are a highly competitive business. In this crowded race, how can a contender pull ahead from the pack? If we take a lesson from the companies in the channel who have stood the test of time, we learn two things: One, that ingredients and the results they deliver are everything; and two, that a culture with an uncompromising set of principles will carry the day.
AdvoCare’s product lineup includes nutritional, weight-management, sports performance and skincare products, and targets a range of consumers: professional athletes, exercise enthusiasts, weekend warriors and those who merely want to look and feel better. If you’re a sports fan, the name AdvoCare likely isn’t a foreign one. From sponsoring collegiate and professional events to its roster of big-name endorsers like New Orleans Saints Quarterback Drew Brees, the AdvoCare brand has garnered quite a bit of attention during its 23 years. The athlete endorsements and sports marketing sponsorships give the company and its distributors exposure and credibility while generating excitement among distributors. But it’s not just professional athletes that AdvoCare is after. Quite a few of their ads feature “regular folks” who just want to feel better and have more energy.
Former CEO Richard Wright led the company from 2007 to 2015 before announcing his retirement. In November 2015, AdvoCare announced the appointment of Interim CEO Brian Connolly who brings to AdvoCare a 30-year wealth of knowledge honed at a billion-dollar direct selling company as well as at the Direct Selling Association. His arrival at AdvoCare marks a new effort for this 23-year-old company, signaling that while the brand has enjoyed tremendous success to date, it is ready to push itself to a new level.
AdvoCare presents a check to the FC Dallas Foundation.
An Enduring Legacy
Founder Charlie Ragus was no stranger to direct selling or to the disciplines of health and fitness when he started AdvoCare, a name he created to signify “advocates who care.” Formerly a regional vice president for Fidelity Union Insurance and an independent distributor on separate occasions for Herbalife and Omnitrition, Ragus also was a defensive end for the Kansas City Chiefs in the 1960s. Along the way, he developed an appreciation not only for the results that nutrition could have on performance, but also the power that direct selling had to help people discover and achieve their potential. “AdvoCare was the product of Charlie’s considerable experience. He left out things that didn’t work and weren’t durable. He had such clarity about this business,” says Rick Loy, Vice President of U.S. Sales Training and Field Development.
|AdvoCare Founder Charlie Ragus.|
What did work, Ragus believed, was an investment in the personal development, growth and training of employees and distributors—not just as a one-time expression of good faith, but for a lifetime. And he was adamant that his company would be built upon the quality and reputation of its products, which would rely on rock-solid science.
To make good on that pledge, Ragus would oversee the establishment of a Scientific and Medical Advisory Board, represented by experts in the fields of medicine, nutrition and science; and a Sports Advisory Council, comprised of strength and conditioning coaches and athletic trainers who would consult with AdvoCare on product development.
Ragus passed away in 2001, leaving behind his wife, Peggy, and their three daughters, Debbie, Jenni and Stacey, all of whom continue to play an integral role in moving AdvoCare forward while preserving the 10 principles Charlie established to guide his company’s direction. Posted on the company’s website, those principles cover a lot of ground, but share common themes, such as dignity, integrity, honor and trust, along with a commitment to AdvoCare distributors to help them realize personal and financial growth and, ultimately, freedom.
Loy began his career with AdvoCare in 1998, when he says the company was starting to hit its stride. He reflects on his initial impressions: “The company looked exactly like Charlie. Strong, passionate leaders attract committed people. Charlie said that our greatest product is hope, and he was a source of hope for so many people. The times I saw him get emotional were when he heard stories, for example, about a mother who now had the energy to get off the couch and play with her kids, or a young couple who had been struggling financially but now were able to earn a little extra income with their AdvoCare business. Those were the scenarios where you saw his great passion come out.
|The Founding Family: Peggy Ragus (second from left) with her three daughters Debbie, Jenni and Stacey Ragus.|
“What continues to motivate me,” Loy continues, “is the reason I came to AdvoCare in the first place. Charlie never promoted big money. You don’t have to be a salesperson when you have fabulous, rock-solid products and a duplicable system, and you value people. Of course we’re here for profit, and we’ve enjoyed incredible success, but it’s easy to get your head turned by big money. The longer I’m here, the more I realize how unique Charlie’s legacy is. The biggest factor for success is the enduring strength of our founder’s vision and messaging. Charlie was adamant that this building doesn’t generate one red cent—our distributors do. Let the distributors win first, then the company wins. He was crystal clear about what this could be. And those guiding principles he created are still front and center. His exact language still overlaps everything we do.”
Companies launched by such legendary icons can lose touch with those legacies when their founders have left the building. The Ragus family, however, remains involved with AdvoCare at the board level, providing governance, attending distributor events, and providing education and motivation for distributors. “While they don’t run the day-to-day, they embrace the purpose and they stay engaged. It’s extremely important to protect this company and their father’s legacy,” says Allison Levy, Vice President and Chief Legal Officer.
Connolly adopts this viewpoint whole-heartedly. “When Stacey, Jenni, Debbie and I had our first conversation, we found that we were aligned in our values,” says Connolly. “This is an unbelievable company with an amazing culture. The core of this company, the values that Charlie laid down, are pristine. My simple theory of leadership is that, to develop a vision for the future, you must study the past.”
Connolly is working in partnership with AdvoCare leadership, including Ragus’ widow and three daughters. On his immediate radar are a series of priorities aimed at capitalizing on the company’s existing strengths, primarily its reputation for science and innovation, social media presence, and the wealth of online and mobile education resources made available to AdvoCare independent distributors. The result, Connolly hopes, will establish AdvoCare as a legacy company ready to adapt to meet the needs of its customers and distributors as well as reach new ones.
In 2014, AdvoCare ranked No. 35 on Direct Selling News’ Global 100 list, with annual revenue of $494 million, up from $460 million in 2013. To date, “the efforts of our employees have been focused on keeping up with demand,” Connolly says, “and they’ve done an excellent job.” Now, with the hope of increasing that demand and equipping the company to accommodate it, Connolly has identified three priorities: First, further strengthen the company’s product-to-market process; second, do a complete renovation of its digital strategy by second quarter 2016 with the goal of becoming best in class; and third, develop a comprehensive, mobile-optimized education and training system for independent distributors. Collectively, these goals have the potential to boost distributor confidence and increase retention rates while appealing to more prospective customers and, ultimately, distributors from all age groups united in their desire for more energy and a better quality of life, physically, mentally and financially. The company remains firmly on home soil, with some 618,000 distributors throughout the United States and its territories.
As AdvoCare continues to grow, staying laser-focused on the individual, in accordance with Charlie’s principles, becomes more challenging, but technology is helping the company connect with its ambassadors. “Today, with the sheer pace of growth, we know there’s a population of distributors who are deep down in the ranks, and we may never see them,” Loy says. “We have a massive number of live events by invitation only, and we have around 15 employees who are always in the field engaging with distributors. This has served us well, but things have moved so quickly that now we need a universally accessible system. Virtual training is a critical component with live streaming and pre-recorded education categorized by stage in business, and seamless for mobile. We have to build today for what we want to be tomorrow.”
Building the Brand
The direct selling channel proves time and again that a strong foundation of integrity is the best insurance policy for success. But it’s a crowded marketplace out there, and competition is stiff.
|Daytona 500 Champion Trevor Bayne drives the No. 6 AdvoCare Ford Fusion in the NASCAR Sprint Cup Series.|
“What first struck me,” Connolly says, “is that AdvoCare is the best-kept secret in our industry. My job is to unlock that secret. On our scientific board are renowned scientists and doctors credited with some of the most significant discoveries in medicine. We’re asking ‘How do we do better at getting the word out?’ ”
With the intention of reaching an active, health-conscious demographic, AdvoCare has made considerable investments, particularly in the last decade, in television advertising, sports sponsorships and, more recently, digital advertising. Collectively, those efforts have generated visibility for the brand on ESPN, Fox News, The Weather Channel, Food Network and HGTV, among others. “Our philosophy is that if we support our distributors and give them great tools, they’ll do amazing things,” says Patrick Wright, Vice President of Marketing. “We have two goals: to build the AdvoCare brand far and wide and enhance our distributors’ confidence and credibility in the marketplace.”
AdvoCare maintains a roster of endorsers including athletes from soccer, football, hockey, basketball, baseball and bodybuilding to golf, swimming, motor sports and CrossFit® competitors, plus an extensive list of coaches. At the same time, the AdvoCare brand has taken center stage at events like the AdvoCare Invitational (the college basketball tournament formerly known as the Orlando Classic); the No. 6 Sprint Cup entry in the NASCAR 2015 season; the V100 Texas Bowl, an annual and highly followed Southeastern Conference/Big 12 college football showdown; and a multimillion-dollar partnership with the FC Dallas Soccer Club, recently extended through 2020.
“It’s such a shot of energy and confidence for our distributor base to see these ads and sponsorships,” Loy says. “It sends the signal that we’re willing and able to invest money for distributors’ benefit, and these placements create great talking points for them.”
There’s no question that AdvoCare resonates with a youthful, high-energy demographic, but the company also enjoys a strong following of baby boomers who aren’t looking to be high-performance athletes, but rather just want enough energy to keep up with their grandchildren. Regardless of age, AdvoCare distributors are united in their value of relationships, augmented but not replaced by social media. “Social networking enhances our sense of community, but we still are fundamentally respectful of the power of one-on-one, of looking people in the eye,” Loy adds. “We maximize the technologies that are available, but it’s not ‘either or’; it’s both.”
‘Protecting the Health’
Nobody can discount the power of social media to build brands. At the same time, however, companies now have the great responsibility to monitor their online reputations around the clock. Health and wellness products and their purported benefits are, of course, areas in which companies have to tread lightly, and “we have a high number of high-profile endorsers with massive social media followings,” Loy says. “It’s an enormous challenge to retain the integrity and continuity of our messaging.”
The antidote to this conundrum, Levy says, is to return to that fundamental AdvoCare principle: Invest in people. It’s critical to educate them about the ethics and the standards of compliance that will continue to protect the opportunity they enjoy. And while AdvoCare stands by the quality and efficacy of its products, the company underlines the distinction that its products play just one part in a long-term, healthy lifestyle.
“As a nutritional dietary supplements company, you have to be careful,” adds Levy, who describes her compliance team’s job description as “protecting the health” of AdvoCare. “We know that dietary supplements can support good diet and exercise habits. Good health comes with intention and effort.”
Another important distinction in the company’s messaging has been its ongoing mission to help distributors eliminate debt. Charlie Ragus was a big believer that direct selling was a vehicle not for attaining the trappings of wealth, but rather for helping families establish freedom from debt by making the money they earned work for them. Maintaining that debt freedom was the key to unlocking the door to all other freedoms, Ragus’ vision for AdvoCare was to create an opportunity in which people could help themselves while helping others. To that end, the company created a DebtBuster® program to show distributors how to whittle away their debts, one at a time, in part using their AdvoCare earnings, or “momentum money,” to achieve those goals.
When Connolly speaks of the journey ahead, it’s clear that the road will be paved by the mutual trust between company and distributors, those “who actually live the AdvoCare brand.” Charlie Ragus left the building 15 years ago, but his principles continue to inspire distributors to reach for the best version of themselves. The tagline of “We Build Champions” is about much more than sports; it’s about creating and upholding a standard of excellence in the game of life, and giving people the tools to live up to their potential.