Photo above: LifeVantage President and CEO Doug Robinson addresses the crowd at a recent company event.
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Headquarters: Salt Lake City, Utah
Executives: President and CEO Doug Robinson
Products: Wellness, anti-aging and energy products that use Nrf2 science to reduce oxidative stress at the cellular level
Many executives have had the experience. They launch or join a young company that is growing quickly, but over time the momentum slows. That was the story at LifeVantage Corp., and its experience has made it a believer in the necessity to embrace change. Its first major change was relaunching as a direct selling company. And within the last year the company has taken numerous steps to re-energize its brand, product line and distributors.
LifeVantage launched in retail stores in 2003 with a single, innovative nutritional supplement, Protandim. The science behind the product is still compelling today. Its natural, indirect antioxidants actually signal the body’s genes to increase production of antioxidant enzymes that work together as the body’s first line of defense against free radicals. In 2005, ABC’s television news magazine Primetime featured an overwhelmingly positive segment on a human clinical study of Protandim. They reported the results of the study, which showed that the product decreases oxidative stress by more than 40 percent.
What happened next was every company’s dream. Sales skyrocketed. So did the price of the company’s OTC stock. But there was a hitch. The young company was still small and wasn’t set up for the surge. They didn’t have the infrastructure to keep up with orders, and quickly its sudden multimillion-dollar monthly sales volume trickled down to about $250,000. Its income statement was never in the black, and the dream quickly became more of a nightmare. But it was also a turning point. Executives who were already sold on the product’s potential for health had seen its massive commercial possibilities. But what could they do about it?
The answer: direct selling. In 2009, its first year as a direct seller—and with a single product—LifeVantage saw revenue almost triple and then continue to grow. In 2011 it hired new President and CEO Doug Robinson, who had joined the LifeVantage board of directors about six months after it became a direct seller, bringing his 25 years of health care business management expertise. He injected the company with the operational discipline he had learned over the years.
“The next year we were at $39 million in topline revenues,” he recalls, “but more important to me, we turned the operations of the company around and were finally $4 million in the black.”
A growth chart like that one is hard to sustain, but Robinson was determined to nurture it and ensure that LifeVantage had a vibrant future. He believed that an injection of new ideas, expertise and energy was needed in the management team. Robinson started bringing in solid leadership in key roles and moved the stock to the NASDAQ (symbol LFVN) in 2012.
Two of those new executives, Chief Sales Officer Dave Phelps and Chief Science Officer Shawn Talbott, Ph.D., joined the company within the last year. They have introduced additional products and sales initiatives that are infusing new enthusiasm into distributors and opening new markets that weren’t available in the past.
Talbott’s first step was to crystallize the company’s product strategy. He was familiar—and impressed—with the science behind Protandim even before he joined LifeVantage. He believed that Protandim alone could be the foundation for a billion-dollar company. But he foresaw that the science behind it could do even more. Infused into other products that help people feel, look or perform better—the company’s product strategy—Protandim could drive the creation of other effective products that worked synergistically and also opened new demographic doors.
Talbott explains, “If you want to help people feel better, perhaps by increasing their energy, you could give them caffeine or sugar. But the problem is that if you haven’t gone upstream biochemically and their oxidative stress is out of balance, they’ll always be out of balance.”
So how does that knowledge suggest new products? Talbott notes that there’s no demand in the market for a product that addresses oxidative stress, at least not in those words. But people do want other things: youthful-looking skin, more energy, better mood, a thinner body and improved sports nutrition. Products can deliver those by reducing oxidative stress, using the same Nrf2 science contained in Protandim. Within the last few months LifeVantage introduced products that address some of the conditions that arise from oxidative stress, but which people identify by other names.
First, it introduced TrueScience™, a beauty system proven in a clinical study to visibly address the signs of aging by combating oxidative stress in the skin. Then it went a step further with the introduction of AXIO, the company’s brand of two energy drink powders that deliver better mood and improved mental focus. By entering the energy drink market, LifeVantage expanded the marketplace for its products to millennials, but the drink’s promise for improved mood and mental focus as well as quick and sustained energy gave it baby boomer appeal.
Talbott notes that AXIO fits into LifeVantage’s product portfolio strategy by helping users both feel and perform better. He adds that the company’s original focus in developing the product was to attract millennials, but his experience since then has shown him that AXIO’s promise of multidimensional energy resonates with every age.
Recognizing that AXIO would attract a younger demographic than Protandim or even anti-aging skincare line TrueScience, LifeVantage prepared by developing and offering a three-day seminar it calls “Rules of Engagement.” The new seminar is designed to teach, train and mentor young distributors, a group it calls Young Entrepreneurs for Success, or YES. It was offered first in September with presentations done by eight of the company’s top distributors in the millennial age group. Chief Sales Officer Dave Phelps describes it as “monumentally successful. We’re already getting requests to do it every three months.”
The seminar is just one element of a four-point reinvention strategy designed to reinterpret the company’s solid science by injecting sizzle and energy.
“Any company that isn’t able to reinvent itself doesn’t have as much success as when it is able to adapt and to love change,” Phelps says. His strategic reinvention of LifeVantage includes simplified messaging, a greater emphasis on recruiting distributors, an infusion of leadership development, and finally, a big dose of excitement. In many areas, such as training for millennials, the areas overlap. As young leaders learn, they can also invite prospects, helping them to develop a knowledgeable and excited team.
Phelps describes the company under reconstruction as LifeVantage 2.0. He says that for too long the company’s messaging was too complex, relying on scientific information and results from clinical studies—topics that, unless they are simplified for the average listener, can be hard to understand and then relay to others. Both sales presentations and science education are being simplified and presented in a language anyone can understand.
The Duplication Dynamic
Heating up the Product Story: Science to Sizzle
With such rock-solid science behind the products, the steak will always be the main course. Expanding on the innovative Nrf2 science that helps the body produce its own antioxidants that combat oxidative stress at the cellular level, future products are building on that foundation to include additional science-based benefits. What’s new is the way the company talks about it. Chief Science Officer Shawn Talbott, Ph.D., has a new take on how to position those products to the company’s 68,000 distributors—about 65 percent of them in the Americas—and the consumers they reach.
“What we’re seeing in the marketplace is a convergence of several industries at the same time,” Talbott says. “Foods, supplements and pharmaceutical drugs are all coming into this gigantic feel-better bucket. The common theme is that people are selecting products—antidepressant drugs, energy drinks, coffees, donuts, junk foods and others—when they don’t feel well. They’re depressed, fatigued or they have brain fog and can’t concentrate. When I think of the characteristics involved with feeling your best, there’s mood, mental focus, stress levels and energy levels. To me, that’s one category. For the next couple of years, product development will focus there.”
The ability to discuss science and LifeVantage products in terms people can understand is a key skill Talbott seeks when he hires his staff. He seeks scientific storytellers.
“I have brought in people who are experts at scientific communication—information people can consume,” he explains. “That’s especially important in the network marketing environment. From my perspective, you get to develop the coolest products in network marketing because you’re able to tell a story.”
With more simplified product and opportunity descriptions comes a greater ability to recruit and build teams. LifeVantage distributors, sold on the science, had focused on product sales rather than on recruiting.
“One of the great hallmarks of achievement of LifeVantage 1.0 was the dramatic enrollment of customers by the tens of thousands because of the strength of the Protandim product,” Phelps says. “We’ve needed to change their mindset and ingrain the power of duplication. We’ve seen an enthusiastic response from the distributor field—a distributor enrollment revolution. They’ve realized that it’s a great thing to acquire customers, but it’s a triple-great thing to enroll distributors. We’re not at 100 percent yet, but a lot of people are thinking differently. As we continue to train and mentor, we’ll continue the positive results we’ve started to see.” Following the successful prototype first used in the Rules of Engagement program, the company held its first-ever Hispanic event in November in West Palm Beach, Florida. LifeVantage already has a large core group of Hispanic leaders in the United States and Puerto Rico, and it has expanded support to them by offering materials prepared in Spanish, along with hiring either native or acquired Spanish speakers.
In addition, it is also planning an initiative to recruit women and provide them with specific leadership development. Phelps notes that, unlike at most companies where some 70 percent of distributors are women, at LifeVantage men and women are equally represented. In early 2015 LifeVantage will hold Empowering Women, a business-forward, women-only event designed to attract more women to the company. Like the millennial and Hispanic events, it will be open to prospects. Female leaders are already telling Phelps that they plan to bring every woman they know.
“I have a gigantic vision for what this will mean for our company,” Phelps says. The Young Entrepreneurs, Empowering Women, the Hispanic initiative—together, they’re bigger than life, and they are being embraced by the LifeVantage family in a dramatic way.”
Phelps’ long direct selling career taught him that direct selling is leadership development disguised as a business. As soon as he joined LifeVantage in late 2013 he launched leadership training.
“In my network marketing experience, whether a company has an outstanding compensation plan, a compelling product story or great management, its success ultimately rises and falls on the strength and development of leadership in the company,” he says. “We’re going to transform LifeVantage into a world-class leadership development company with teaching, mentoring and training. You can’t expect people to become leaders without a leadership track, and that’s in process now.”
Through its ongoing partnership with nonprofit Families Helping Families, LifeVantage Legacy builds and furnishes houses in poverty-stricken areas of Mexico during a recent Volunteer Service Trip.
Finally, working in concert with the other strategies, the company is pumping up the volume everywhere, and adding sizzle to the LifeVantage steak.
Phelps explains, “LifeVantage used to be viewed as boring, conservative, and not very exciting, but always solid, and always rooted in great science. It had a couple of S words: solid and science. The two S words it didn’t have were sexiness and sizzle. But we’re transforming the company to have a lot more sizzle and excitement, more wow, more cool. It’s happening as we speak.”
For example, LifeVantage 1.0 launched products with PowerPoint presentations and information. LifeVantage 2.0 still has plenty of information, but in radically different packaging. The change is evident in events, training and even product education. Take events, for example.
“In the past, our events were more boring and functional. Now they’re dynamic, they grab you by the heart and imagination so you understand the possibilities with the company,” Phelps says. “When we launched AXIO, for example, we required people to think in a way they had never thought before. We launched our energy product in a loud, raucous, effective way with music and special effects. It was a sight to behold. This is a business about emotion, and when you put that emotion side by side with stellar information, you have a winning combination.”
The company also delivers sizzle through the new MyLifeVenture program, launched this year. The company invested $1.6 million in the launch of the program, which stimulates distributors to view LifeVantage as the road to their dreams. The key symbol is the Jeep, a vehicle that represents adventure, freedom and fun—all attributes of the culture the company is working hard to develop. Mid-level distributors and above can earn the title to the car, paid in full. At the time LifeVantage spoke with Direct Selling News in late October, 24 families already had earned a Jeep.
All the new initiatives should keep the company growing strong. Its track record is already drawing attention. In late October MountainWest Capital Network, which recognizes the 100 fastest-growing companies in Utah, ranked LifeVantage No. 3 on its 2014 list, based on revenue percentage growth from 2009 through 2013. It was LifeVantage’s third consecutive year of being honored on the list. The award symbolizes the legacy that CEO Robinson wants LifeVantage to have.
“We talk a lot about responsible growth, and we’re in seven countries today. We’re building this company for generations to come,” Robinson says. “That means that our distributors can go all in and be assured that the company will be there for them through thick and thin, good times and bad. The more distributors we attract, the bigger growth engine we’ll have.”