Borders bookstore is a familiar example of a traditional company that was blindsided by environmental factors that changed market demand and, ultimately, led to its demise. It’s not the first organization to fall prey to the advent of technology or disruptive innovation; Blockbuster may face a similar fate. And other companies—like Kodak—have had to change their business models to stay abreast of technology and shifting demand.
Direct sales companies are not immune to these pressures. Any company can rise to phenomenal success while riding the wave of a hot trend and then find themselves struggling to hold on as competitors emerge and market pressures shift.
Creative Memories is one of these companies.
Founded in 1987 by Rhonda Anderson and Cheryl Lightle, Creative Memories has helped literally thousands of people reclaim and preserve their histories through photos that were often relegated to boxes stuffed under beds and into closets. In July 1987, the first consultant signed on and the rest, as they say, is history. But the path to success took a downturn as the company entered the 21st century and found itself facing competition from multiple fronts—from small, local “mom and pop” shops to large retailers like Michael’s and Target that moved to take advantage of emerging interest in scrapbooking.
Technology also had an impact. As consumers moved from traditional photography to digital options, demand for Creative Memories’ traditional scrapbooking products shifted.
In November 2008, Creative Memories entered into Chapter 11 bankruptcy, emerging as a reorganized entity (an LLC) in January 2009. After this refocus the industry took notice because this spring, Creative Memories was a runner-up for the Direct Selling Association’s Success Award. The company also won the 2011 “Brand Madness” competition sponsored by the Minneapolis-St. Paul Business Journal, beating out such notable competitors as Target and Mayo Clinic for the title of Minnesota’s Best Brand.
Scrapbooking Is Not Dead—Just Different
Aleksandar Bogdanovski, President, U.S., for Creative Memories and new to the family, says he is sold on direct sales—and on Creative Memories, whose mission is to help families across North Americas cherish, celebrate and preserve their memories. Bogdanovski says there’s just something powerful about people buying from people and, in the case of scrapbooking, it’s the ongoing relationships between distributors and their customers—who often become lifelong friends—that make magic happen.
He joined the company in March 2011, bringing his own experience in direct selling from another company in the industry where he previously worked as Vice President for the United States and Canada.
Bogdanovski tells of an encounter he had with a woman, an ESPN executive, on a flight shortly after he joined Creative Memories. When she learned where he worked she enthusiastically proclaimed her awareness and love of the company and told about her recent wedding engagement when friends had each designed a traditional scrapbook page of their life with her that they assembled into a storybook as a gift for her bachelorette party. “She said it was one of the most amazing gifts she’d ever received and she’s now duplicating the idea for her friends,” Bogdanovski adds.
“It gave me a very strong signal of the resurgence of interest and that this company is as relevant as it’s ever been in being able to make special moments for people,” he says.
Even Bogdanovski’s 7-year-old daughter is “into” scrapbooking, he notes, pointing out the skills that such endeavors can develop in young children—from bonding with their parents to learning about layout, design and the presentation of information.
But, while an interest in preserving memories is likely to be evergreen, the way those memories are being preserved has been shifting dramatically. Known for its traditional approach to scrapbooking, Creative Memories needed to reposition itself in the minds of consumers.
“Our objective in our turnaround is less about reestablishing what Creative Memories was as it is attempting to establish what Creative Memories can be in what we call the ‘post-digital transitional world,’ ” says Chris Veit, CEO of Creative Memories. The opportunity for Creative Memories, he says, is to be able to give people the ability to preserve and celebrate their memories in whatever media they desire.
“As we move into the digital age our objective is to create a business model that works for the consultant, for the customer and, ultimately, for the company,” Veit says. One of the best aids in that endeavor, he notes, is Facebook. “The root of Creative Memories has always been a page—a traditional scrapbook album page that really tells a little mini story about some event in someone’s life. That page, once made digital, is very easy to put up on Facebook and can be transported anywhere in the world.”
Creative Memories’ partnership with Entertainment Tonight co-host Nancy O’Dell has resulted in a collection of products designed to make albums both fun and fast.
Turnaround efforts are never easy and some companies fail in their attempts to rebuild and rebrand themselves, but Creative Memories executives feel they are headed in the right direction. “We have our work cut out for us,” acknowledges Veit. “We’ve been rebuilding the company from the bricks up in many ways. I’m very pleased and proud of the work we’ve done rebuilding our brand, rebuilding our product development engine and maintaining a high reputation for quality.
“I think we’ve done a lot of things very well,” Veit adds, “We still need to really get to where we actually have that positive upward momentum—that’s what we’re ultimately looking for. We know we have a lot of work yet to do.”
Still, notes Veit, “Our field has really responded to what we’ve done so far; we have so many avenues and so many opportunities yet to explore in terms of how we get out to market and really get the message out. We think we have a tremendous opportunity in front of us.” Creative Memories, he says, is “about halfway through” its journey—about a year and a half into what he believes, based on his experience, is typically a three-year process.
Throughout this process, Creative Memories’ leaders have focused on listening and learning to help the company better meet the needs of consumers, consultants and employees.
Listening and Learning
Loren Castronovo, Chief Marketing Officer for Creative Memories, says extensive research—both qualitative and quantitative—has helped Creative Memories better understand and focus on customer needs. “I like to say we heard the good, the bad and the ugly and we were ready to face all of that,” she says.
In terms of the good, Castronovo adds: “We certainly have a reputation for quality and for being very mission-oriented. Our field and our customers truly believe we make a difference in people’s lives and that’s because we are invited into their homes to share and document their lives.”
But there were also opportunities for improvement, she notes. “We also heard there was this perception that we were old-fashioned and that we had this militant perspective on scrapbooking—the Creative Memories way or the highway,” she says.
The research helped to identify various market segments with different needs and interests, says Castronovo. Two in particular stood out—the traditional scrapbooking segment and an emerging market more interested in quick and easy solutions. Profiles of these segments were developed: “Katherine,” representing the traditional scrapbooker, and “Allison,” representing the newer segment that “is not going to spend the weekend at a scrapbooking retreat and play around with stickers and all of that.”
Based on their research, says Castronovo, “we determined that we needed to focus on three key areas—innovation, building strategic partnerships and refreshing our brand.”
Innovation and Partnerships
Creative Memories has taken a renewed focus on innovation and Research & Development, Castronovo says. “We’re building that capability and we are introducing some really exciting new products,” she says. “We understand that you have to allocate resources to innovation—it doesn’t just happen.”
Strategic partnerships are an important part of this process. “We realized that the way to move forward was to work with other people, so we’ve got a list of strategic partnerships,” Castronovo says. Nancy O’Dell has been a key partner. O’Dell is one of the country’s leading entertainment journalists and TV hosts. Formerly anchor of Access Hollywood for 13 years, O’Dell joined Entertainment Tonight as a co-host in 2011.
But most notably, O’Dell has been an avid scrapbooker since childhood. Her love for photos and stories, says Castronovo, makes her the perfect partner for Creative Memories.
From a marketing standpoint, Creative Memories also realized that it was time to refresh the brand, says Castronovo, who admits that it was a tough thing to do, but the right thing to do. “We had consultants telling us they were embarrassed to put our logo up when they went to a trade show—it looked really old-fashioned and it signified something that we were not anymore. We needed something to show that it’s a brand-new day at Creative Memories.”
The new logo was just the beginning.
Bogdanovski adds that an awareness campaign is critical to Creative Memories’ ultimate success. “People need to become aware of the Creative Memories brand and understand the level of quality that we bring into this space, versus some of the inferior options that are out there.” Awareness must occur both from a consumer perspective and among potential distributors, he notes.
And, adds Castronovo, “I really believe that rebranding is not just a logo, but it’s about exuding who you are through everything that you do. We’re going to touch every piece of our business to make sure that we convey that we are friendly, fun and approachable.” That effort starts internally.
Joy Linsday is the Executive Vice President for Human Resources and Learning at Creative Memories. Her responsibilities include sales training. “We just started focusing on what I like to call the how,” she says.
“The sales training team is really focusing on core competencies and helping our consultants get really, really good at their jobs—how to recruit, how to capture a booking, how to be successful. Those are all areas that we’re focused on along with a new and refreshed party that we’ve been rolling out over the course of the last couple of months.”
Bogdanovski adds, “Our refreshed party is one of the best host programs in the industry, in terms of the incentives as well as the rewards and recognition for our hosts. Creative Memories’ party is refreshed, new and exciting and is bringing together the best of the foundation of our company as well as the progressive, new digital space.”
While Creative Memories’ outward face is certainly important in its transformation, its relationships with employees and its salesforce are equally critical. “We’ve taken a very strong and intentional focus on all things engagement-related here inside the walls of Creative Memories,” says Linsday. That started, she says, with the basics—asking for input and listening. “In some cases it was painful to get the answers,” she acknowledges, but adds it’s been an effort that has paid off.
Leaders celebrate their success in high style at the Showcase National Convention Leadership Banquet.
Bogdanovski says that over his career he has learned that a significant barometer of success in the direct sales industry is the salesforce’s response and attendance at events. “We call it the thermometer of the business,” he says. If that’s the case, Creative Memories is hot. “We’re proud to have achieved a 50 percent increase in the number of attendees who have registered for our event next year,” he says. With more than 3,400 currently registered, the event has been sold out and the company is currently looking for a larger venue to accommodate additional registrants.
Sushila, one of more than 31,000 Creative Memories consultants, has been with the company for 15 years. She’s been through the downturn and is excited to see where the company is headed. “Now that we’ve weathered this Facebook effect and have recognized that the Creative Memories party isn’t just sitting around the living room, I feel like we’re indestructible,” she says. “I find it almost incomprehensible that we have this quality of experience at Creative Memories that we never had before.”
Bogdanovski also believes the future holds great promise for Creative Memories, and he is excited about its mission and its potential. “There is a great need in North America for families and households to preserve their memories, and we have the broadest range of options of high-quality archival means through which they can do this—from digital solutions to the best in traditional scrapbooking solutions,” he says. Bogdanovski’s vision is to grow the company to the point that every family in North America creates one album per year. It’s an ambitious but, he believes, realistic goal.
“Unlike other direct sellers where you can sell a product and then try to sell the next product or a new product, we provide a product that customers continue to have a need for on an annual basis for their own immediate family needs and for occasions like weddings, graduations and all of the celebrations that occur in life,” he notes. The suggestion of one album per family per year, he says, “is really just a starting point for our potential.”