Known for its powerful skincare products and exponential growth rates, NEORA continues to innovate, both inside their company and now on behalf of the industry—as they take on the FTC.
Creating multitasking products for multitasking customers is how NEORA got its start. Before changing its name and rebranding in 2019, the company (then known as Nerium International) was a skincare giant who brought the concept of multipurpose, high-end products to market with a curated approach. Investing a lot of time and financial resources to research and develop their simplified skincare product lines, NEORA focused on creating anti-aging, holistic products that combine the benefits of many products into a few streamlined offerings.
“We took everything we learned in skincare and applied it to haircare.”
—Amber Olson Rourke, NEORA Co-Founder & Chief Sales and Marketing Officer
Their foothold in the crowded skincare category has since expanded to include wellness and now haircare, with the introduction of the NEORA ProLuxe Hair Care System. All of these additions fit into what NEORA Co-Founder & Chief Sales and Marketing Officer Amber Olson Rourke describes as the company’s “sweet spot” of clean meets performance.
The Natural Next Step
The company’s transition from skincare to a holistic wellness company mirrors what they are seeing in their customers. “We believe strongly that more and more consumers are thinking about their total wellbeing in a more holistic way,” Amber says. “Additionally, people want clean formulas that give them results.”
That approach has led to a product portfolio that feels integrated and intentional. NEORA’s complete wellness line complements the skincare line, which became the foundation for the new haircare line. The idea is that nothing happens in isolation: The foods we eat and the supplements we take have an impact on our bodies and skin; the quality of sleep we experience affects the health of our cells. That integrative wellness approach of clean-meets-performance allowed the company to seamlessly cross over from being a singular market company to one that engaged in multiple categories without the appearance of being a trend chaser.
Most recently, their launch into the haircare space with professional, salon-grade products was met with enthusiasm and the sales to prove it. “Doing a brand-new launch in the middle of a global pandemic is not the easiest thing to orchestrate,” Amber says, “but it has been one of our most successful launches to date in terms of product acceptance and sales.”
In part, that acceptance comes from a distributor and customer base who are already familiar with the concept of holistic personal care products and NEORA’s formulations philosophy. The company’s positioning as a resource for people seeking anti-aging products for skin became the basis for their introduction to haircare, stating that just as the signs of aging can make skin feel different than it used to, the same can be said of damaged hair that lacks its once youthful bounce, body and shine.
Using ingredients from their skincare lines, NEORA took the same anti-aging concepts they are known for and applied it to the scalp to develop their product that removes buildup, repairs damage and rebalances oily or dry hair.
“We took everything we learned in skincare and applied it to haircare,” Amber says. “Hair health really begins at the scalp, and what is scalp? It’s skin.”
Fixing the Learning Curve
The success of their new haircare line has bolstered the company amid the pandemic and the scramble every organization is currently making to switch from an in person format to all digital. NEORA, too, has spent the last few months focusing on moving their field toward a more e-commerce-driven social selling approach, including Zoom Real Results parties. “We were already building a company that would survive and thrive in an online marketplace,” says NEORA Co-Chief Executive Officer Deborah Heisz. “When the pandemic emerged, and people were spending more money online, it accelerated where the world was already going.
But an enthusiastic and independent workforce who use the internet to share their results comes with its own set of challenges. In November 2019, the Federal Trade Commission sued NEORA and company CEO Jeff Olson, listing one dozen examples from 2015-2017 of social media posts from distributors who touted the benefits of EHT. NEORA had already dealt with the old posts and determined stronger compliance policies. The FTC law suit came on the heels of NEORA filing suit on the FTC alleging that the FTC is attempting to improperly change direct selling laws.
“We believe strongly that more and more consumers are thinking about their total wellbeing, in a more holistic way.
—Amber Olson Rourke
Amber says the company is committed to creating a workforce that understands compliance but admits it is a daunting task. “Our biggest focus is to have clear and strict compliance policies and monitoring services,” Amber says. “Policing social media is a complex thing and gets more complex every day. We have utilized Field Watch for years to help with this monitoring. We continue to educate and take enforcement action. We have already been doing that, but we are now doubling down.” Aside from constant and consistent reinforcement of what is and is not appropriate online, NEORA has ramped up their offerings of social media graphics to brand partners to provide compliant materials that keep them on the right path.
Of all the allegations in the FTC lawsuit, the most damaging blow has been the FTC’s attempt to declare NEORA a pyramid scheme. But NEORA is fighting back. The company retained Dr. Walter Vandaele, a renowned econometrician and previous Assistant Director for Regulatory Evaluation and Economic Advisor at the FTC’s Bureau of Competition, to conduct an analysis of the company’s data. His findings established that 77 percent of commissions paid by NEORA from 2012-2017 were for sales of product to ultimate end users—far exceeding the legal standard.
“We have a large customer business,” Deborah says. “Customers represent 75 percent of sales every month. It’s a focus for us. Our recruiting has been up, but for every brand partner we bring in each month, we bring in eight to 12 new customers.” Those increases in recruitment are due, in part, Deborah says, to a larger portion of the population working from home with additional free time, but the company has also radically altered their preferred approach to enrollment marketing, choosing now to accentuate the $50 enrollment kit instead of the $500 product selection kit.
This smaller investment is easier to swallow for many individuals and has led to an increase in brand partners, who bring with them new customers, exposure and revenue. As a result, the company’s monthly sales have been trending upward. May’s monthly sales loomed 80 percent larger than those in January, with significant growth coming from markets that have yet to launch the new haircare line, like Mexico.
In addition, NEORA has filed a countersuit, alleging that the FTC is attempting to improperly change direct selling laws. “We are obviously closer to the FTC and what they are saying than most people—since we’ve been talking to them for a long time, and this is not a NEORA issue,” Amber says.
“We believe the FTC is trying to eliminate multi-level marketing.”
—Deborah Heisz, NEORA Co-Chief Executive Officer
NEORA is in the midst of a transformation, but there is more at stake than simply their own rebranding or survival in their battle with the FTC. NEORA’s lawsuits with the FTC, Deborah believes, represent the future of the industry as a whole. “Other companies need to pay attention to the fact thatthe FTC is truly trying to redefine our industry,” Deborah says. “We have a high customer volume, and we have never reclassed brand partners to be customers based on their buying habits.
We ship directly to consumers, and we have a customer focused compensation plan. I keep getting questions from other company leaders asking what they can do differently, and I don’t have an answer because we did everything we were supposed to do. We followed the rules.”
As the company prepares for the future, the goal will be continued innovation in their space of holistic, synergetic products. Emphasizing how products that promote mental and physical wellbeing are interconnected, Amber says, “Everything we do impacts another part of us.”
Those words take on new meaning in an industry that seems to be experiencing FTC scrutiny like never before. Every company, regardless of their customer-to-distributor ratio, compensation plan or compliance, is within the FTC’s sights, Amber believes. And like its own product lines, which seek to concentrate the efforts of many products into a curated few, NEORA is pushing back, hoping their individual efforts will benefit the industry at large. “We’ve been very open to what the facts are,” Deborah says. “This is not about NEORA; it’s about the industry. The industry is under attack and unless everyone advocates, it is a potential issue for every single company, regardless of what your numbers are. There is no one who can say they are FTC-proof.” DSN