On paper it doesn’t seem like Xyngular’s math should work. The company’s equation for weight loss? Become less to become more. Its algorithm for financial stability? Bring in a few hundred dollars more a month, not millions a year.
Headquarters: Lehi, UT
Top Executive: Russ Fletcher, CEO
Annual Revenue: $100 Million
But the numbers are adding up for the nine-year-old direct selling business in Lehi, Utah. In the last three years, its revenue has tripled to $100 million, landing it at No. 99 on the 2018 Direct Selling News Global 100 list. It has been recognized by this magazine and by Inc. 500 for its strong company culture, and CEO Russ Fletcher was an Entrepreneur of the Year finalist this year. In the crowded health and wellness network marketing segment, Xyngular is distinguishing itself by positioning weight loss as the way to gain a sense of higher purpose and by focusing on the value of generating moderate extra income.
“You’re always in the act of becoming. Weight loss is just the front door to that story.”
— Russ Fletcher, Xyngular CEO
Fletcher says the company’s message is that Xyngular products and opportunities are not just about becoming wealthier or healthier or fitter. “They’re about finding more meaning in your life,” he says. “You’re always in the act of becoming. Weight loss is just the front door to that story.”
Xyngular’s tale began when founders Rudy Revak and Marc Walker came together in 2009 after decades as executives at other companies in the direct selling industry. They wanted Xyngular to be a values-rich organization that gave customers and distributors a chance to start changing their lives on day one.
Xyngular is distinguishing itself by positioning weight loss as the way to gain a sense of higher purpose and by focusing on the value of generating moderate extra income.
Their ideas took hold quickly, and growth in the early days was rapid. Revenue reached $39 million by year five. Sales did take a hit in 2013 after some key executive changes, but company leadership reset and in 2014 Fletcher transitioned from board member to CEO, a position that has allowed him to build on the founders’ vision and create a strategy for continued growth. Since then the company has attracted over 15,000 distributors and close to 300,000 customers and has generated year over year sales increases.
While managing high-percentage growth can be challenging, Jeff Wasden says Xyngular is comfortable with it because it’s coming from so many meaningful transformations. “We’re okay growing this quickly because of the stories we hear,” says Xyngular’s Senior Vice President of Marketing. “I met a customer a few months ago who lost 227 pounds in 14 months. She had a very active two-year-old son but was confined to a chair. After loosing the weight, she was able to be the mom she always wanted to be. When you see those types of things you think, ‘How can we scale the business up to reach more people?’”
Success Within Reach
Wasden has been in the supplements business for almost 20 years and says he’s never seen a weight loss system like Xyngular’s. Bodies hold on to pounds for many reasons, but most diet products and plans target only a few of them, he says. In contrast, Xyngular’s Ultimate System combats 15 common diet derailers—from slow metabolism to high stress to poor sleep. It also provides tools to build a mental and emotional support network that customers need to achieve and maintain a healthy weight.
Strengths & Challenges
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It’s that maintenance that can be the hardest part for many people, Fletcher says. So Xyngular helps people change their mindset about weight. “Your health is a journey, not an event,” he says. “And everyone’s journey is different.” Xyngular’s products allow a customer to design an ongoing nutritional support plan tailored to his or her body’s unique needs.
Sustaining a healthy weight shouldn’t be the end goal. “The real goal is what you can do with your health,” Fletcher continues. “Carrying around even 20 pounds of extra weight can keep you from doing whatever that is for you, whether that’s getting on the floor and playing with grandkids or a mom getting home at the end of the day and having the energy to do things with her family.”
Another differentiator for Xyngular, executives say, is its compensation philosophy, which is about helping distributors quickly start to make “life-changing money”—and they’re not talking about lottery-sized money. They’re talking about $500 a month. “It’s not the big paycheck,” Fletcher says. “It’s money to pay a bill this month that you couldn’t pay last month.”
“Just because you’re the CEO doesn’t mean you can trump somebody if your idea isn’t better.”
— Jeff Wasden, Xyngular Senior Vice President of Marketing
A distributor can reach that level of income with sales of about five Ultimate Systems a month, Curtis Call, Xyngular Chief Sales Officer says, and the volume requirement to be eligible for a share of the global sales bonus pools is not much higher. “A lot of companies will have bonus pools at only top ranks,” he says. “We have them starting at the first rank.”
New distributors also get to rub elbows with higher-rank distributors during their initial training period, giving them the advantage of learning from Xyngular’s most successful. While sponsors and upline leaders bring beginners up to speed, the company supports those efforts with online training tools and regional training events throughout the United States and Canada. All distributors have access to other tech-based training throughout the year. “We leverage multiple social media channels for training in sales and compliance,” Call says. “As the shift toward on-demand content accelerates, we are pivoting to identify the best ways of engaging our customers and distributors on their schedule. We try to meet them where they are.”
Like many direct selling companies, Xyngular also has a mobile app that allows distributors to access business reports, place orders and enroll new members, the majority of whom (75 or 80 percent) don’t make the choice to become distributors, Call says.
Xyngular does not disclose how much of its budget it allocates for operational segments such as technology, but both Fletcher and Call say the company has “invested heavily” in business intelligence to help it develop data-driven strategies. For example, Fletcher says, the company might combine demographic, product and distributor data to help determine what domestic region to target next and then use that region as a point of comparison when looking at expansion to a certain international market.
Can’t Help Falling in Love
Xyngular executives say they love what this company does for distributors and customers who want to change their health to change their lives. They also just plain love the company, saying that the values and walk-the-talk culture drew them here and keep them here.
“I’ve been in companies where they have values they hang on the wall but they never live by them,” Wasden says. “Here, I hear a value referred to almost on a daily basis. ‘No ego-ness’ is one of those values. Just because you’re the CEO doesn’t mean you can trump somebody if your idea isn’t better.”
Call says he was attracted to Xyngular for the same reasons. “I grew up in a family where we were encouraged to serve others. The mission and purpose and values of this company spoke to me. They put family values and a supportive community and culture in place to help people improve their lives.”
Xyngular’s values are rooted in the founders’ intention to build a company that is “ethical, valuable and successful,” Fletcher says. Company leaders measure every decision and action against those standards. “We say all the time, ‘What’s the right thing to do? Not, ‘What’s the most cost-effective or the thing that looks the best?’”
“If we looked back 50 years from now on what the company’s value has been to the world, we would want it to be a company that improved lives in every community that it touched.”
— Russ Fletcher, Xyngular CEO
As Xyngular expands to more regions in North America, it has had the opportunity to do the right thing in many of the communities where its distributors live. The company doesn’t have an official philanthropic program, but it has contributed to several natural disaster relief efforts in the last few years in communities where it has distributors—including after last year’s hurricane in Puerto Rico as well as floods in West Virginia, and wildfires in Oklahoma and Kansas.
“If we looked back 50 years from now on what the company’s value has been to the world,” Fletcher says, “we would want it to be a company that improved lives in every community that it touched.”