Re-energizing Growth, By Re-thinking Crises
Something not altogether good was brewing in direct selling in late 2019. The Direct Selling Association reported flat-line global sales performance of $35.2 billion, down slightly from 2018. China’s 100-day reviews of nutritional products halted companies from selling in China, surprising everyone. Continued compliance pressures in China clearly stressed sales in the channel. The domestic regulatory environment brought new challenges as well. And for many companies, sales just weren’t where they needed to be for continued market expansion. Pressure everywhere was building, but no one could foresee what was around the corner.
C-suite strategic planning, course corrections, realignment of corporate spending, new compensation structures, and the like were underway throughout the industry when pandemic struck in early 2020. COVID-19 could have compounded lingering 2019 circumstances, but that is not what happened for these seven direct selling companies.
With the benefit of time and distance, 2020 sales numbers and some hindsight, these industry leaders take a short, retrospective look inside their companies during a year like no other. In so doing, they help the direct selling industry re-think crises while telling the stories of how their teams met disruptive challenges and leveraged 2020’s new business reality to create a renewal that re-energized their field organizations and helped solidify their growth trajectories for 2021 and beyond.
COVID-19 could have compounded lingering 2019 circumstances, but that is not what happened for these seven direct selling companies.
This industry leader takes a short, retrospective look inside Herbalife during a year like no other.
Founded / 1980
Top Executive / John Agwunobi, Chairman & CEO
Products / Personal Care & Wellness, Food & Beverage, Cosmetics
Herbalife Nutrition plotted a strategy more than three years ago to continue the development of high-quality, science-based products that leverage global consumer trends and local preferences. Simultaneously, they’ve provided their distributors with the tools and tech necessary to efficiently run their businesses, all while focusing on world-class training and education that creates the Herbalife “distributor difference” in terms of organizational leadership and customer service.
Herbalife headed down this familiar and fortuitous path as they rang in 2020. When the challenges and opportunities of the next 12 months were behind them, theirs was an unprecedented year.
“2020 was our best year ever. Our full-year 2020 results of 14 percent net sales growth exceeded our pre-pandemic expectations,” John Agwunobi, chairman and CEO, says.
Demand for Herbalife’s nutrition products, combined with the entrepreneurial spirit and tenacity of its field of distributors, led to 2020’s record sales. But the strength of this distributor base is not new. In fact, they delivered year-over-year net sales growth in nine of the company’s top 10 countries during Q4 2019.
“One thing that is truly special about Herbalife Nutrition is the way our staff and distributors come together in the face of a challenge,” Agwunobi says.
That was, perhaps, never clearer than during 2020.
It didn’t take long for Herbalife to shift their thinking in a pandemic-driven world. A series of quick decisions required employees to work from home where it was feasible, instituted safety measures at factories and distribution centers, partnered them with suppliers to ensure continued production, and leveraged relationships with technology providers to increase capacity so they could stay connected with each other and with distributors around the world.
“Once we addressed the critical short-term situation, we began to think more long-term. We shifted to a completely virtual environment for our distributor events around the world, considered how we might leverage those events to motivate and inspire distributors who may not otherwise have been able to attend and continued to focus on our proven strategy,” Agwunobi says.
Every decision they made had the health and safety of their distributors and employees at the forefront. Virtual meetings and trainings of all sorts replaced in-person gatherings, online ordering and take-out replaced in-person nutrition club consumptions, and online workouts with distributors and experts replaced exercising in fit clubs and other locations.
But the largest virtual undertaking was their annual Honors event for 5,000 top distributor leaders. In a matter of weeks, during the early days of the pandemic, Herbalife engaged a production company to help them take the event virtual, and they set about leveraging the potential tied to this new digital business reality.
In the end, Agwunobi says, “We have been able to reach approximately two and a half times the number of distributors with our virtual events than we did when we held them in person.”
Keeping up with product demand as sales soared, however, did present its challenges. But Agwunobi says Herbalife’s second-to-none operations team continued to supply distributors with products with little or no disruption.
The events of the past year have confirmed several things for Herbalife, not the least of which is the dedication, passion, and innovative spirit of its distributors and employees, who offered up flexibility, resiliency and can-do attitudes throughout 2020.
“During this most challenging time, our employees and distributors came together to support their communities and each other. Whether it was providing good nutrition to frontline workers, donating products and resources to feed those in need, or simply checking in on fellow teammates, our care for others was at the forefront of our response. I’m extremely proud to say that helping others is the hallmark of our company,” Agwunobi says.
Now, they also more thoroughly understand the important role Herbalife plays in the daily lives of millions of people. They were reminded over and over in 2020 that providing quality nutrition products to help people become healthier and offering a business opportunity that can generate supplemental or full-time income for those wanting to create their own businesses changes lives and improves communities all around the world.
“We have always thought of ourselves as leaders in the industry. Throughout 2020, I think we have proven that is true,” Agwunobi says.
And based on Herbalife’s 2020 results, it is clear their strategy to focus on compelling products, powerful technology and enhanced distributor education is working. No doubt, they will continue to execute against this strategy throughout 2021.
Excerpt from the Direct Selling News May 2021 Cover Story: “Renewal, Re-energizing Growth, By Re-thinking Crises.”