Direct seller Arbonne has given itself a healthy, high-speed makeover that mirrors what the premium botanical ingredients in its product lines do for the company’s consultants and clients.
Kay Napier, CEO
In just five weeks last year, Arbonne’s parent company, Natural Products Group, successfully implemented a debt restructuring plan from start to finish. It emerged with 80 percent less debt. Its healthier balance sheet gives it financial flexibility to invest in growth and to continue developing new business tools and innovative products. Arbonne’s new Chief Executive Officer Kay Napier led the company through the process. She showed just how competitive she and Arbonne are when she learned that the company’s 37-day turnaround tied for the world’s record with CIT Group Inc., one of the biggest lenders to small and midsize companies that pulled itself out of bankruptcy. If she had known they were that close, she said, she’d have pushed even harder so Arbonne could have captured the record.
“The biggest challenge for me was making it happen quickly so there would be minimal damage to our consultant base, but also getting the consultant base to believe it was a good thing for the company,” she says. “I was brand-new, so why should they trust me? And trust is everything. I had to spend quite a bit of time understanding what was happening and then transferring that information to them.”
Napier must have done an outstanding communications job. Almost every top field leader stayed. One of the stalwarts told her, “I hate to say this, but I think I’m excited about going into bankruptcy.”
Arbonne celebrated its makeover with a high-energy national training conference. Executives wanted to make it the company’s best ever, and attendees said they succeeded. The conference also commemorated the company’s 30th anniversary in the United States.
Arbonne was founded in Switzerland in 1975 by Petter Mørck, who brought the company to America five years later with 19 original products that reflected Swiss quality and an integrative approach to beauty, health and wellness. The company did well for years, but during the recent tough economy began a decline. The restructuring created the turnaround that put it back on course.
To maintain that course correction and keep the company on a growth trajectory, Napier established five synergistic strategies: Provide the field with state-of-the-art sales tools; build brand awareness; improve infrastructure; expand internationally and grow the Hispanic market; and strengthen the product portfolio to support business building.
The first strategy is also her first priority, providing consultants with strong, useful tools to assist them in “achieving greatness.” She has recruited the help of top leaders to advise her team as they create top-notch tools.
Second on the priority list is strengthening the Arbonne brand.
“We still have only 1 percent brand awareness where we’ve measured it in the United States,” Napier notes candidly. “That provides us with a tremendous upside. But I don’t think the answer is to buy millions of dollars of TV advertising. Instead, that money should be spent rewarding the business model.”
And she says that is where social media comes in, providing one method that will model how unique Arbonne consultants are.
“Most of what Petter created was an environment where the people who wanted to join were special people,” Napier observes. “They’re smart people with one important thing in common: They’re positive leaders. Even CEOs in other direct selling companies have told me how special our consultants are.”
She says that public relations efforts supporting the company’s unique products are paying off. Those products get support from IT and product supply infrastructure that make sure they reach consultants and clients in a timely manner. Technology, including Web-based systems, is a big part of the process.
While Arbonne now operates in the United States, Canada, the United Kingdom and Australia, Napier notes that once the strategies create growth and systems stability, she is eager to get into additional countries.
Finally, she wants to optimize the product portfolio.
“We want to ensure that Arbonne products are the best in the market through testing and product development so that we make sure we maintain the product heritage that Petter created,” she says. “We’ve been botanically based forever. We were way ahead of our time.”
Although he died in 2008, about two years before she joined the company, Napier talks about Arbonne’s founder as though he is an admired and respected friend. Maybe that’s because she knows his son Stian Mørck, who recently returned to Arbonne as Managing Director after a three-year absence. Both employees and consultants welcomed him home enthusiastically.
“All the three years I was gone, Arbonne was always there in my heart,” Mørck says.
He and Napier met when he and his mother joined company employees and consultants to celebrate Arbonne’s 30-year anniversary. When they met again earlier this year to discuss how he might become part of the company’s revitalization, they found that their mutual love of Arbonne created a strong connection. She knew that Mørck could bring a sense of culture, continuity and corporate history that no one else could. It would be priceless as new executives figured out how to maintain Arbonne’s magic even as they beautified the brand.
“I knew he would connect with the field because they’ve been asking for him,” Napier says. “And employees were very excited. They cheered when we announced his return. I and many of my reports are new, and culturally, we needed that perspective.”
Mørck is the newest member of a mostly new management team, even though he virtually grew up at Arbonne. He says he is impressed with the executive staff.
“We’ve always had great people at Arbonne, but the caliber of people we have now—I’ve never worked with anyone so smart, committed and passionate,” he says. “The great company I left is in some ways even better now. And we have many of the same people in the field, as well as new people who are wonderful. If we can stay focused on who we are at our core, we’ll make it even better.”
Napier says she is proud of her management team. They have a synergistic combination of experience in network marketing as well as in consumer products, marketing, manufacturing and distribution. Napier’s own professional heritage includes such high-profile companies as Procter & Gamble and McDonald’s. Her executive team comes from some of direct selling’s largest, most respected companies, as well as non-industry companies ranging from Office Depot to eBay.
“We keep each other honest and on the straight and narrow path,” she says. “There’s no hesitation to say what you think, but there’s mutual respect. I’ve been told that I have one of the most diverse teams anywhere. I set out to hire the best and the brightest, and as it turned out, we have a mixture of women and men, Latino and Asian, but all super-smart people who are willing to roll their sleeves up. We’ve cleared some high hurdles over the last 20 months.”
That team is responsible for leading the five strategic initiatives that are restoring and re-energizing Arbonne, with responsibility for the top focus on selling tools falling to the marketing and sales staff. Vice President of Sales Gina Murphy says it’s an area near and dear to her heart. Her first plan of attack: Develop a core training curriculum for every level of the consultant career track.
“We’re dedicated to developing core curriculum materials to train new consultants so they can grow a thriving business, learn the basics and then duplicate it with others. Then, when they decide to sponsor new people, they have the recipe for success,” Murphy says.
She says training at every level offers a roadmap for success that guides consultants along the way. Interactive Web-based tools and apps are being developed that will enhance and replace the current print-based materials. If a consultant wants to learn how to make a presentation to a group, the training is there. Need to brush up on selling one-on-one? That’s there, too. Of course, product knowledge is key, and Murphy’s team is also developing online modules on product features and benefits.
“We’ve been a little late to the party in supplying training pieces that all fit together,” she admits. “But now we’re laser-focused. Every month we try to connect the dots. Sales promotions, consumer offers and training are all tied together so consultants understand how to leverage those and make them work in their business.”
Sales and marketing also seek opportunities to raise awareness of the Arbonne brand through sponsorships at high-profile events such as the Oscars and to gain publicity in print magazines and social media. Arbonne’s Facebook page already has close to 90,000 fans. So publicity efforts seem to be paying off. The company just won a “Best Masque” award for its new RE9 Advanced Cellular Renewal Masque.
But all the PR, great presentations and sales tools will only take any company so far. It must have great, appealing products, too. Arbonne’s premium botanically based skin-care products, color cosmetics and wellness products fill the bill beautifully. Arbonne has always been an innovator in its field, producing botanically based products long before they were the trend.
Dr. Peter Matravers
“We enhance our cutting-edge science with know-how from both the East and West, combining various healing methods from around the world,” says Dr. Peter Matravers, Arbonne’s Senior Vice President of Product Development. “For the last 30 years, we’ve wanted our products to have the highest purity and safety, as well as to provide maximum benefits. That’s one of Arbonne’s unique commitments.”
Arbonne combines its knowledge from Western science with the traditions of Eastern healing, then adds the heritage of plants from the Amazon that are only now being discovered to create unique skin-care, cosmetics and wellness products.
To show off beautiful skin to its maximum advantage, Arbonne has a full line of color cosmetics for face, eyes and lips. The company’s website carries a series of mini-movies featuring professional makeup artists who rave about their results and how easy Arbonne cosmetics are to apply.
In January, the company launched a new line of nutritional supplements called Arbonne Essentials. True to its heritage, the line uses botanicals to create beautiful skin from the inside out. Arbonne Essentials are formulated for maximum absorption.
Napier’s synergistic strategies seem to be hitting on all cylinders. All of the changes—new products, improved balance sheet and improved sales tools—are paying off. Even in today’s slow economy, Arbonne produced annual sales growth. Napier notes that a different, more subtle growth may be just as important.
“We’re growing from a psychological standpoint and through how people are feeling about the business,” she says. “Our consultants are growing in momentum. That’s what has driven overall revenues for the last 12 months. More important, we’re seeing growth in some key consultant metrics. True business builders—people dedicated to the Arbonne opportunity—have been the focus since I’ve been here. If you can get people with longevity to be productive, and if they develop people below them to be productive, the rest takes care of itself.”
The Direct Selling Difference
When executives from outside the industry join a direct selling company, they’re often startled by the key differences between direct selling and a company based on a more traditional business model. Whether or not they can shift their paradigms concerning the salesforce often determines their level of success in leading, particularly through stressful situations for the field.
Luckily for Arbonne, Napier is a quick learner and understood the differences right away. She believes that what she learned can guide any company through bad times or good.
“I learned two key things,” she says. “First, I joined Arbonne thinking I was joining a company with a premium botanically based product line that happened to be sold by consultants. I found out that I was joining a company with an opportunity that was improving the lives of people who happened to be selling great products. It was a major shift. When I realized that and understood how you drive growth, it allowed me to shift my attention in that direction.”
Her second epiphany was an outgrowth of the first.
“You have to listen to your consultant base,” she says. “They hold the secret to your success. In my other companies, I had to come up with good ideas. Here, our consultants have them. Great ideas tend to come from the field.”
So now, when consultants talk, Arbonne listens. But executives don’t wait. They form task forces and make a point of regularly talking with Arbonne’s field leaders about everything from the tools they need to which products open doors, to whether or not sales campaigns are working.
Napier gets it: Consultants are the heart of the business.