Azuli Skye: Engineering a Better Home Party

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Azuli Skye

Company Profile

  • Founded: 2008
  • Headquarters: Apex, N.C.
  • Founders: CEO Deb McNaughton and President Allan McNaughton
  • Products: Sterling Silver and Fashion Jewelry

Imagine that it is early 2008 and you are an engineer working for a Silicon Valley-based software company. You are married to a statistician who teaches part time at Stanford, and together you are comfortably raising your family in the small Southern town of Apex outside of Raleigh, N.C.

One weekend, your wife tells you that she is going to a small get-together with some friends. She mentions something about jewelry, but you are playing with your kids and miss the details. She heads off, and you go about your day.

Over the weeks that follow, you notice that your wife is wearing a bracelet with your children’s names on it. You also notice that some of her friends are wearing similar pieces of jewelry. When you ask, she tells you that she made them—and many more have been ordered. Your eyes widen, and then she says something that will forever change both of your lives—and the lives of many others who will follow you:

“Allan, I have more demand for my jewelry than I can possibly meet by just doing this on the weekends. I want to turn this hobby into a business.”

Built from Scratch

This is the story of Azuli Skye, a successful home jewelry party business that is the brainchild of Deb and Allan McNaughton.

Co-Founders Deb and Allan McNaughton
Co-Founders Deb and Allan McNaughton

“I was managing a group of engineers when Deb told me that she wanted to launch this company,” says Allan McNaughton, President of Azuli Skye. “I have a lot of faith in Deb and in her intuition, so I said yes, but let’s start slowly and figure out how to build this business.”

In the beginning, Deb, Azuli Skye CEO, was making all of the jewelry by herself. She quickly learned that she did not want to build a business that trained others to make jewelry, but the demand was increasing so much that she had to find a better way to meet it. By the time she approached her husband about launching the business, she was making much more than just the custom name bracelets—which remain some of Azuli Skye’s highest-demand items. She was getting requests for necklaces, earrings and more.

“I was also making everything from sterling silver and Swarovski crystals, and we launched the business right at the time that silver jumped to $50 per ounce. So we had to quickly explore ways to make the business more efficient,” Deb says.

That was when they discovered direct sales. Neither had any experience in the industry, but the McNaughtons instantly saw its potential for their business. At the same time they were learning how to build a jewelry design and manufacturing business; they also took on the challenge of creating their own direct sales program. Allan later admits that the process involved “trying a lot of things up front that didn’t work.”

Originally launched in September 2008, the company did not join the Direct Selling Association until 2010. Deb shares: “It was only four weeks before their annual meeting when I learned about the DSA. I did everything I could to get there—and it turned into one of the best things that we ever did for our company. Had we joined in the beginning, we would have known so much more up front.”

While it has presented challenges, this “do-it-yourself” mentality has also been one of the keys to Azuli Skye’s success. For example, when they launched the company, Allan leveraged his experience in the software industry to develop a custom solution for their back-office systems and website.

While it has presented challenges, a “do-it-yourself” mentality has also been one of the keys to Azuli Skye’s success.

The experience allowed him to finely tune the software for their unique needs while gaining a valuable perspective on what drove the company’s key metrics. Of course, with the tremendous advances in off-the-shelf technology that are now available to the industry, Allan advises, “I would probably not recommend our path for people who are not hardcore techies.”

Driven by Data

The Stars in Azuli Skye:

Key Differentiators

  • Products are customizable and offered in a variety of colors.
  • Customers can personalize jewelry with a loved one’s name.
  • Training is almost entirely done by video, not live events.
  • Marketing materials feature QR (Quick Response) Codes, including on consultants’ business cards.
  • Hostess “Bonus Buys” offer deep discounts on every page of the catalog to entice other potential hostesses.
  • Customer Specials provide incentives to customers, not just consultants.

Azuli Skye may be in the industry of selling beautiful pieces of jewelry, but its business model is driven far more by scientific analysis than artistic inspiration.

“We capture a lot of data!” laughs Deb, whose bubbly personality belies her background as a statistician. Speaking with her, it is hard to imagine her combing through spreadsheets and crunching numbers.

Allan, on the other hand, comes to life when talking about data. “We run a daily update on our website to prioritize the items that are the highest selling. Every 90 days, we analyze what is most popular and revise our entire catalog to ensure that we are keeping up with trends.”

This analysis has also allowed them to refine their website’s SEO (Search Engine Optimization) to maximize their online marketing efforts. These efforts have allowed Azuli Skye to attract consultants from all over the country without a significant amount of infrastructure.

“We have been national since the beginning, so we never really built a big local presence anywhere,” says Deb. “This means that we don’t do much live training, and are focused much more on video training and conference calls.”

“We make a lot of videos,” she says multiple times during our hour-long chat. This has been crucial to helping the company train their core market of consultants: “mompreneurs” whose full-time job is typically raising a family or having a traditional career. According to Allan, the company’s short videos have enabled their consultants to easily watch them on their smartphones during breaks in their day. Despite the lack of live training, Azuli Skye has seen rapid growth in both the number and productivity of its consultants.

Deb reports that sales jumped 240 percent from 2010 to 2011, with continued strong growth in 2012. So far this year, their traditionally slow month of January had sales equivalent to their highest month in 2011.

“We attribute this good performance to offering double Customer Specials in January,” says Deb. “Most companies offer extra hostess incentives in January, but we chose to excite our hostesses by offering more incentives to their friends.”

Constantly Evolving

Azuli SkyeAzuli Skye’s management team is just as focused on securing qualitative feedback as it is on tracking hard numbers.

As Allan says, “Getting the pulse of customers and actively seeking their feedback has been incredibly important. We use social media, but direct conversations with our consultants have been the top way we have learned what to do and where to take our company.”

For example, after hearing from their consultants that their customers were interested in more Pandora-style jewelry, the company added its “Mimzi” line of special beads. Mimzi customers have become repeat customers, as they return to buy more and more beads to customize their pieces for different occasions.

“Getting the pulse of customers and actively seeking their feedback has been incredibly important.”
—Allan McNaughton, President

Azuli Skye also recently added fashion jewelry in response to customer demand for more affordable options than the sterling silver jewelry, and the response has been unprecedented. While the McNaughtons expected fashion jewelry to become around 20 percent of their revenues, it has already grown to over 40 percent.

Like all things, this customer-oriented focus was something that the company had to learn over time. As Deb expressed: “We used to do everything ourselves. We used to make the jewelry in-house. All of it. We used to handle our own catalog production. We even built our own software. We did everything ourselves!”

“We finally realized that we weren’t in the business of building jewelry … ” begins Deb before Allan interjects, “We’re in the business of selling it!”

Azuli Skye now acquires most of its jewelry from other manufacturers. The custom bracelets are still manufactured in North Carolina; while they provide little revenue, they are one of the company’s best ways to recruit hostesses. As Deb says, “Every mom wants a piece of jewelry with her baby’s name on it!

“We have made it very easy for our consultants to recruit party hostesses. Nearly every jewelry party business includes free jewelry for hostesses, but we’ve added special discounts on premier items and our Hostess Exclusive items have been very successful at recruiting new hostesses.”

Deb continues: “These Bonus Buys help us the most. Anyone who sees that savings wants to host a party themselves!”

The company also recently refined its very successful Customer Specials to drive more revenue to the bottom line. Like many of its peers, Azuli Skye used to offer a discount on multiple purchases. Earlier this year, this became a promotion that allowed customers who purchased larger amounts to become eligible to purchase special pieces that were otherwise not available for purchase.

For example, customers who spend a certain amount can become eligible to buy one Customer Special. If they spend a certain higher amount, they can buy four items. These one-time items are promoted in monthly flyers and on the company’s Facebook page, creating a sense of urgency that draws attention to the website and helps the consultants to develop repeat customers.

Increasingly Social

Azuli SkyeAzuli Skye’s marketing program is laser-focused on a single goal—driving recurring traffic to the website.

Consultants get their own web pages, and Allan and his team are working to deepen the social media integration within the catalog for individual consultants. “They will soon be able to go to the catalog and share a specific piece of jewelry with their Facebook friends, and be able to get credit for the purchase,” he says.

The company posts regularly throughout the week on its Facebook page. At the end of the week, all consultants receive an email with a recap of all of that week’s postings. Combined with the company’s blog and Pinterest page, this makes it easy for consultants to share the company’s updates and product features with their contacts.

Consultants can also have online parties by allowing hostesses to simply share a link with her contacts. As Allan describes, “We are working to create as personalized and ‘hands off’ a marketing program as possible to make it easy for our consultants to sell products.”

Focused on the Future

Azuli Skye expects to continue growing as consultants build teams that spread across the United States. Expansion will be easily supported by the company’s existing training infrastructure, which relies on videos and conference calls rather than live training events.

The latter has been particularly effective at recruiting younger members of Gen Y. Deb explains that companies like Azuli Skye tend to have a “very diverse customer base but a fairly homogenous consultant base, mostly comprised of moms in their 30s.”

However, Azuli Skye’s recent marketing efforts are successfully attracting people in their 20s. This includes adding a QR (Quick Response) code to all of their materials, including to their consultants’ business cards, catalogs and car magnets. These codes allow anyone with a smartphone to use their camera to access a consultant’s website.

Deb says, “These young people don’t necessarily want to host an event at their house, but they want to get together with their friends. They are all on social media. When they see the QR code, they know that we are reaching out to them and not to an older generation.”

The company’s internal promotions are similarly aimed at consultants whose lives are deeply embedded in social media. One example is the “Stars in the Azuli Skye” program, where top performers have their names displayed on stars in the company’s headquarters. Every month, the company broadcasts a video of the new stars that they are adding. The series has been so successful that it will be prominently featured at the company’s annual conference this month.

When asked about the company’s name, Deb shares that Skye is their daughter’s middle name, which they selected to show that the company is built around the family. The word Azuli, though?

Deb laughs: “I invited some girlfriends over and gave them some martinis. I told them that one part of the company’s name was Skye but we needed another word. Within 10 minutes, we had made up the word Azuli!”

Who knew that a statistician and an engineer could have so much fun?

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