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Direct Sales Companies are Taking Market Share from Legacy Names

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Direct sales companies are taking market share from Revlon—Learn how COVID-19 has impacted the makeup industry.

The COVID-19 pandemic has had a significant impact on several different industries. The makeup industry is one of many impacted, and it is causing some of the biggest brands to change their strategies. While Revlon has struggled and is even holding back an accidental payment of $900,000,000 from Citigroup others in the makeup industry are continuing to thrive—thanks to the direct sales model.

Revlon in the second quarter of 2020, had revenue decline 39 percent compared to the prior-year period. For the first six months, sales fell nearly 30 percent to $800 million and net losses more than doubled to $340 million. As they try to figure out how to make things work, others in the industry are finding ways to make it work and empowering women during these difficult financial times.

To survive, companies need to have a quality short-term plan while also keeping an eye on the future. How will the makeup industry change for the short and long term? This is a look at what to expect going forward.

Do-It-Yourself Makeup Options

More people than ever before are tackling all of their makeup issues on their own, instead of relying on professional assistance. While that might go back to normal to a certain degree, others will become comfortable enough to stick with do-it-yourself options for the long-term. This is due to a few different reasons connected to the pandemic.

For starters, professionals are just now starting to get back to normal and welcome customers back. There are still some adjustments that are necessary to use professional services, including being forced to wear a facemask and potentially having extended wait times.

This is enough of a change to keep people at home, and they are giving do-it-yourself options a try and, in a world, where Zoom meetings and Facetime have taken over it’s now more important than ever to make sure your face shines on camera. Companies such as Younique a Lehi, Utah based direct sales beauty company with more than 1 million members operating in 13 international markets noticed that they are selling more do-it-yourself makeup kits and all-in-one solutions that allow people to do work at home. Digiday attributed the company’s quick growth to its reliance on digital selling, compared to other direct selling brands’ reliance on in-person sales.

Another factor is that people are looking to cut their monthly bills down however possible. It is a luxury for some to get certain beauty-related work done professionally. By trying out products and watching online tutorials, some will become proficient enough never to return. People in general will take a harder look at their finances to make sure they are spending wisely.

Makeup Businesses, Influencers, and More Must Embrace Online

It is an evolution that has been going on for a while, but COVID-19 accelerates the online change. It is impossible in 2020 to survive without a solid foundation online. Companies have no choice but to have events entirely online now, and those who are trying to sell products and show off different looks must have that same energy on camera as they do in person. Where Younique is thriving is that they on board new sellers who purchase a starter kit for $99 or £69 to begin which includes 17 of Younique’s best selling products. They are not considered a multi-level marketing company even though it was incorrectly referenced as one once in The Guardian.

Even with relaxed restrictions, there will still be a lot of people hesitant to go back to makeup in the traditional manner. They might be more comfortable shopping and applying at home to the point they never return as the same shoppers in-person again. It is a change that will alter the long term, as some people are being introduced to a whole new world online.

Although online sales are on the rise, they are not offsetting companies that rely on in-store purchases. That is bad news for traditional companies that have been around for a while and have a presence inside major stores. However, for online companies like Younique, it is not hurting them as much since they are primarily based online already.

Companies must think beyond just a website to move products. An online presence in multiple locations will lead to more success. Shopping on the website is always going to be the top producer, but making social media and video easy to connect with makes sense as well. Younique makes it possible for customers to follow a direct link to order, whether their products are highlighted in a video, on Instagram, or anywhere else online. It simplifies the shopping process and makes it easier for impulse buys traditionally restricted to in-person stores.

Will people eventually return to in-store shopping options? It is hard to predict at this point, but early signs in China show that it could be a long, slow process back. Traffic has been slow to bounce back at this point, and most of the stores in China have been open to some extent for several months. This could very well have a lasting impact on the industry as people turn to online sales over shopping at stores.

Stocking Up

There are already plenty of reports out there that certain makeup, personal care, and other cosmetics are having

supply chain disruptions. This is a global pandemic, so just about every company is going to go through some difficulties in keeping normal production up. For those who rely on a few basics for makeup, that is forcing people to stock up.

Stocking up is only recommended to those who are well aware of what they like and what they use regularly. It is a way to ensure that a person can have up to a year of supplies without any disruptions. Some makeup products do not last as long when purchased in bulk, so make sure that they are adequately stored and capable of holding up during that time.

Unfortunately, some people have used limited supplies as an opportunity to make some money of their own. Some of the more popular products and makeup choices are hard to find, and people are selling on the secondary market at a higher price. It is the unfortunate reality of supply and demand being a bit off during this time. The makeup industry has not suffered from this as much as some of the others out there. To avoid this from happening, stock up as much as possible on what works.

A Focus Around the Mask

Generally speaking, people are spending less money and less time on makeup right now during the pandemic. There are fewer places to go out in public, and a covered-up face makes it less of a necessity to apply makeup.

For a more simplified approach, people are focusing more on what can be seen even with a mask. In particular, eye makeup tutorials and different products are becoming increasingly popular, especially if they are relatively straightforward to use. By highlighting eyes above the mask, it is giving people a sense of normalcy without having to go through a regular routine.

Lighter makeup options should also thrive in the setting, as people are looking for more simplicity and a natural look compared to caking products on, only to have it messed up with a mask coming on and off throughout the day. People are still investing in products that help keep their faces clean and

free of breakouts, so makeup that is healthy for the skin is more important than ever.

Finally, people who usually go to a physical location to get their hair and nails done are focusing on doing things themselves at home. While a lot of people will return once everything is fully open up and ready to go, some people are becoming good enough that they do not feel the need to return at a later date.

Final Thoughts

The makeup industry was already evolving to a certain degree, and COVID-19 should only accelerate some of those trends. The majority of consumers are looking for simplicity more than ever before. They are also forced to be more self-sufficient than ever, and that could be a change that is here to stay. The makeup industry is in a better situation than many other consumer categories, but the industry will evolve and look at COVID-19 as a significant turning point.

 

 

Mary Kay Inc., Mary Kay Foundation Join with UN Trust Fund, CARE USA to End Violence Against Women

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Mary Kay Inc. and The Mary Kay FoundationSM have partnered with CARE USA, a humanitarian global leader, and the United Nations Trust Fund to End Violence against Women.

More than one in three women around the world experience either physical and/or sexual violence in their lifetime [1]. These alarming statistics are exacerbated in times of conflict, natural disasters and crisis. UN Women, the United Nations entity dedicated to gender equality and the empowerment of women, which manages the UN Trust Fund on behalf of the UN system, has been tirelessly alerting and raising awareness of the alarming increase of violence against women during COVID-19 and its lasting consequences, putting women’s human rights at risk as nations work on rebuilding.

 

“Mary Kay has a decades-long commitment to ending violence against women and girls everywhere, it’s part of who we are,” said Melinda Foster Sellers, chief people officer of Mary Kay Inc. “Today we join forces with the UN Trust Fund and CARE, two remarkable stewards of women’s rights, who have made extraordinary achievements through social impact on the ground, gender data collection and relentless advocacy work. Together, we are more determined than ever to achieve a world free of violence against women.”

Through the ongoing work of its four corporate foundations and these recent global partnerships, Mary Kay reaffirms its leadership in addressing and preventing violence against women and girls uniquely affected by the consequences of the COVID-19 pandemic. These initiatives manifest Mary Kay’s overall commitment to SDG 5: Achieve gender equality and empower all women and girls.

Through its partnership with the UN Trust Fund to End Violence against Women, Mary Kay will contribute to funding projects to protect women and girls in 70 countries and territories.

“Violence against women is the most widespread violation of human rights globally and knows no boundaries,’’ said Aldijana Sisic, chief of the UN Trust Fund. “It is the most severe expression of discrimination, a persistent pandemic exacerbated by the current COVID-19 crisis. The lockdown measures to curb the coronavirus together with an overburdened healthcare and law enforcement systems leave women and girls survivors of violence in a dangerous limbo. In this context, women’s organizations around the world play the pivotal role as first responders for survivors. Now is the time to join forces, step up and support them to ensure no woman and girl is left alone behind walls of silence. We thank our partners in Mary Kay for leading by example with its contribution to this work and walking this path together with us.”

Mary Kay will support CARE programs fighting against gender-based violence, contributing to transform the lives of women and girls in 100 countries and territories.

“Achieving real equality for women and eradicating gender-based violence (GBV) can transform the world in so many ways,” said Michelle Nunn, president and CEO of CARE. “In the world’s most marginalized communities, girls and women bear the brunt of injustice. The COVID-19 crisis alone may cause 31 million more GBV cases over six months of virus-related lockdowns. We know this staggering possibility is preventable, and we must address these horrific abuses before they happen. Investing in local women’s grassroots movements is among the highest and most powerful good that we can do to create social and societal change.”

Source: UN Trust Fund to End Violence against Women, Annual Report 2019.

Seldia Appoints Laure Alexandre New Executive Director

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The Board of Directors of Seldia, the European Direct Selling Association, today announced that Laure Alexandre has been appointed executive director.

Alexandre is an experienced EU public affairs specialist. She has 14 years of expertise in health and consumer policies, as well as in advertising principles, accumulated from previous positions at the European Advertising Standard Alliance and at Spirits Europe.

“I am confident that with her extensive background and professional experience, Laure will be an asset for Seldia and will lead the association with skills and professionalism,” said Seldia Chairman Philippe Jacquelinet.

Alexandre will be responsible for the Seldia office in Brussels. She will lead the organization’s strategy with the objective of defending the interests of its members, as well as promoting the direct selling channel as one of the main providers of independent job opportunities—a fact particularly relevant during these economically challenging times.

Five Lessons Learned (& Counting) from the COVID-19 Lockdown

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THE PANDEMIC HAS A LOT TO TEACH THE INDUSTRY, BUT ONLY IF COMPANY LEADERS ARE WILLING TO LISTEN.

 

LIFE LOOKS a lot different today than it did when the calendar flipped to reveal the first day of 2020. It feels nostalgic now to look back on days when masks were reserved for medical dramas on TV, and passports were for gathering stamps instead of collecting dust in the drawer. Those daily reminders of life interrupted extend into every corner of our lives, and work is no exception.

By now, most of us have learned how to run or attend a Zoom meeting, collaborate over GoogleDocs and connect with co-workers through a screen. We’ve managed to construct make-shift desks in the one room of our homes that offers both quiet and WIFI, and have learned that the mute button is everyone’s friend. There have been some humorous hiccups along the way, as we’ve witnessed pets and kids meander through the backgrounds of video conference calls, the once guarded home lives of our co-workers now on display. But as the chaos and confusion of those early days settled, a rhythm began to emerge that has allowed us to find success in spite of it all. And while the upheaval of this pandemic will surely be temporary, the lessons it has taught the industry and the external brands it commingles with will likely linger long after the lockdown subsides.

Lesson 1

BUSINESS AS USUAL IS A THING OF THE PAST

The way we work is different now. Even people who relished working from home found themselves chafing against the restrictions that lockdown introduced. Bustling coffee shops were no longer a safe haven for creative work or casual meetups with colleagues. Independent distributors who relied on large or small gatherings to share products or demonstrate training concepts were forced to rethink their processes and go to methods. Company headquarters and office buildings had to close their doors and pivot to virtual. In a matter of days or weeks, work as we know it drastically changed.

In the process, the typical working hours of most businesses have shifted, and with them, the way work is accomplished. But collaboration hasn’t stopped, and innovation isn’t on a break. Many companies report launching even more products and at a more rapid pace than normal, like Elepreneurs, who typically launches two products annually but by summer of this year had already launched three. The strategy sessions and creative teamwork behind what makes successful brands tick hasn’t been eliminated but has instead been heightened as this unusual time requires more of teams than ever before.

Face-to-face meetings can be highly productive and will surely resume when it is deemed safe to do so, but the lockdown has taught us that most meetings can be emails, creativity isn’t limited to the four walls of an office, and teams who were effective and efficient during the nine-to-five grind can almost surely be trusted equally when released from the boundaries of that schedule.

 

Lesson 2

AMERICA IS RECLAIMING ITS WORK-LIFE BALANCE

Eight-hour shifts and on-the-clock lunch breaks have not been eradicated, but companies that have lagged behind in embracing flexible working schedules are now catching up out of necessity. Now more than ever, employers are realizing that their teams can be made up of talent from around the globe and work seamlessly across time zones.

It’s a lesson that younger, cloud-based direct selling companies have been preaching for quite some time, championing the idea that the best and brightest can only be found when the applicant pool is not limited by location. There’s a difference between searching for the best chief financial officer in a specific metro area and searching for the best chief financial officer located anywhere in the world.

By liberating the employee pool from geographic limitations, companies will likely boost employee retention in the months and years to come. We know that employees who work from home are more satisfied at work. In a 2019 Owl Labs study reported by Inc.com, employees who worked remotely full-time reported being happy 22 percent more than employees who worked on-site full-time. Of those who chose to work remotely, 91 percent cited a better work-life balance as their reason.

The lockdown has proven what we already knew to be true but were too reluctant to enforce: that work is not one-size-fits-all. Gen Z and the young professionals that follow will be heirs to the fruits of this strange season and will enter the workforce with a shared understanding that work can be arranged to accommodate life, instead of the other way around.

Lesson 3

BRANDS ARE ONLY AS STRONG AS THEIR DIGITAL GAME

When almost the entire world pivoted to virtual at the same time, it became glaringly obvious who had done their digital homework and who was trailing behind. For the last decade, direct selling companies have applauded their own technological advancements, pointing to back-office improvements and the introduction of mobile apps as their edge over the competition. But it was those who made digital the foundation of all of their processes which truly outperformed their competitors when face-to-face operations ceased. Instead of an ornamental app that served only as a tool for checking inventory and metrics, these leaders in the digital space offered distributors the ability to run every aspect of their business from their phone. Their broad functionality meant samples could be shipped at the touch of a button, educational training resources could be accessed on the go and new customers or team members could be entered without missing a beat.

As the ability to meet in person stopped, the demand for training, product demonstrations and mentor relationships did not. If anything, the need for distributor support increased. Under the pressure of a global pandemic, the strengths and weaknesses within each company’s digital strategy proved inescapable. Moving forward, the capacity to operate entirely virtual will be essential. Digital is no longer a fringe benefit or cherry on top—it’s the lifeblood of any company that endeavors to succeed in a post-lockdown reality.

Lesson 4

THE A-TEAM (& C -TEAM) IS NOW OBVIOUS

This time working separately has served as a sort of truth serum for many companies, determining what—and who— works well without the hand holding that comes from an in-person work environment. And although there are certainly still org charts and office cliques in place, advantages like proximity to the boss’ office or the special treatment that comes from being invited to lunch with the decision-makers in the room is on hold for now. In some ways, remote working has leveled the playing field.

Who works well with others, who has a talent for leadership, who is a self-starter, who delegates without micromanaging—all of these character traits have been clarified by this condensed and distilled work model. Any lackluster performance that could be hidden under the veil of group work is now visible, and the true visionaries who ignite original ideas have been given more room to run.

This brief moment in history, although it feels enduring, has offered leaders uncommon insight into the assets and shortcomings of their team’s composition. Utilizing this awareness moving forward means leaders must be ready to shift people into new roles that are better suited for their gifts, promote the often overlooked, recognize the leaders that this period of adversity has created, and provide support for the underperforming.

Lesson 5

BRANDS MUST STAY AWARE OF AN ALL-TOO FAMILIAR CYCLE: CLAIMS

Direct selling has long been the answer to people desiring to exit the corporate world in search of a more flexible and sometimes a more profitable opportunity. But now, more than any time in recent history, people are turning to direct selling as a result of unemployment. As of June 20, nearly 33 million Americans were receiving jobless benefits. That number is five times that of the peak of the Great Recession, according to a July CNBC report.

Recessions have historically been growth years for the industry, as was proven during the Great Recession, when distributors increased from 15.1 million to 18.2 million in number from 2008 to 2014, and the same is proving to be true during the current pandemic. In early June, the DSA conducted a study of 51 companies, of which 51 percent described the pandemic as having had a “positive” impact on their 2020 revenue. That number grew to 59 percent in a later survey.

With such a rapid influx of new faces, the direct selling industry is confronting an increased demand for education and training in a time when interactions are limited. Earnest new recruits, on fire to sell the products they are passionate about, can put companies in hot water with the FTC through false or exaggerated claims about products and earnings.

This explosive distributor growth followed by unsanctioned online behavior is an unfortunate cycle the direct selling industry knows all too well, but one it can learn from. More training and education will be essential, and a more rigorous policing of these unauthorized claim  will be necessary to survive in the future.

As each month leaves our nation hoping for a light at the end of the tunnel, this unanticipated pandemic and its accompanying lockdown likely still has many lessons left to teach. And just like new distributors, companies and the executives who lead them could have a lot to learn—if they’re willing to listen.

From the Publisher: Patricia White Takes Reins from Todd Eliason

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HELLO! It is nice to have this opportunity to speak to all of you again from the publisher’s chair. I was invited to be a guest contributor for this month’s issue to share an announcement on the leadership of the magazine as well as some thoughts on DSN’s mission as a trusted news source.

Todd Eliason, publisher and editor in chief of this publication since April 2018, has decided to move in another direction along his career path. I have known and observed Todd for many years, much of it during his association with DSN’s parent company before it assumed the current SUCCESS Partners name. Todd has always been a person who brought more than his skills to his work. He brought tremendous passion and commitment, and this is why I was personally enthused when I heard he would be succeeding Lauren Lawley-Head (who succeeded me in the role).

Todd, we salute you for a job well done and thank you for the many contributions you made during your tenure at DSN. Patricia White now takes the baton from Todd and is the new torchbearer for Direct Selling News.

You likely have seen Tricia’s name in the masthead of the magazine as she has served as DSN’s managing editor for the past two years. She has a background in education and banking and is well-suited for her new role in leading the magazine, having excellent project management skills and extensive experience in producing publications. We know she will continue to bring new ideas and innovative thinking to the table in support of the brand you look to for information and inspiration.

Stuart Johnson, founder of Direct Selling News, had a vision for a publication that would serve the executives of the direct selling business model. Stuart made it possible for the vision to become a reality and since 2004, the Direct Selling News platform has been telling the stories that need to be told. Committed to a philosophy of positive journalism, DSN strives to keep readers apprised of important happenings in the channel as well as trends affecting all businesses. It does this daily through news posted on the website and monthly through the informative articles in the print version.

We celebrate the many suppliers who make DSN possible. As I review each month’s issue, I often think about how this publication got started—particularly the brands that trusted the mission of DSN enough to advertise in the magazine. I know Tricia will look forward to getting to know each of you.

As always, we also celebrate you, the reader, the audience this publication serves each month, each week, each day. We celebrate you because it is you who are leading your companies through some of the most challenging times ever, making possible a wonderful channel of distribution that enables people from all walks of life the opportunity to engage and benefit from the rewards and recognition you make possible. The hundreds of thousands of independent contractors who have chosen direct selling to meet certain needs, or short- or long-term goals, inspire all of us to do what we do. We are all blessings to each other. We are grateful.

Watch for Tricia on this page next month.

 

Enjoy the issue….

LimeLife by Alcone: Defining Empowerment

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Giving women the tools to create an inspired future.

BEAUTY BRANDS HAVE long laid claim to empowering women through their products because great skin and flawless makeup can make us feel confident and powerful. But it takes much more than a bright lip and a bold brow to truly empower a woman.

A BEAUTY LEGACY

The Alcone Company of today has roots in the professional beauty industry that were planted in the early 1950s in the heart of New York City’s growing theater scene. Originally founded to sell theatrical makeup and showgirl lashes to Broadway starlets, Alcone would eventually be purchased by the Mallardi family in 1982 to complement their own theater-serving business—Mutual Hardware, a provider of professional hardware used in both stage and screen productions.

Today, both Alcone Company and Mutual Hardware are still serving the entertainment industry led by members of the Mallardi family. When Michele Mallardi Gay made the dramatic career shift from science teacher to leading the family beauty business as CEO of the Alcone Company, she saw an opportunity to try something new.

“When I realized that I was staying long-term in this family business leadership role, I started thinking about ways that we could build more community for professional makeup artists,” she says. “We thought, what if we just took our best products that we sell to professional makeup artists that they use all the time and put them in one line? So rather than sending their customers to Alcone with a shopping list, the makeup artists could actually sell them the product right there and earn a sales commission.”

Michele and her team understood professional makeup artists—Alcone’s professional line of makeup has a cult following in the industry and can be seen on famous faces all over the world, from Jennifer Lopez to Kim Kardashian. Makeup artists are like family to Alcone, and Michele was determined to find a way to generate an income stream that was independent of an industry that can often be feast or famine.

“When we started running the reports of what that would look like, it really wasn’t going to give them a significant enough revenue stream,” she explains. “Basically, what we did is we built a direct sales model backward. We asked the question, ‘How can we help makeup artists receive a real significant revenue stream as a supplement to their career?’ And where we ended up was direct sales.”

With no direct sales experience, Michele started doing “Alcone at Home” parties with a few close friends and family, introducing the products to women and learning as she went.

“We started to get all these other people who didn’t know what they were doing, but they had strengths in all walks of life,” she shares. “And because none of us knew what we were doing, we had no direct sales background. We actually were able to build a culture that felt authentic to us.”

Alcone at Home would soon become LimeLife by Alcone, and Michele would be joined by her niece and LimeLife co-founder, Madison Mallardi.

“When we started, we only had about 50 Beauty Guides, and every time we got a new starter kit order, we would ring a bell because we celebrated every single Beauty Guide that joined,” shares Madison. “And then over time it just started picking up, and we were ringing the bell and ringing the bell. And that’s what we’ve been doing ever since. We still ring a hypothetical bell every single time someone joins, because it’s just so exciting when someone puts their trust into the company and in us as leaders.”

MORE THAN MAKEUP

Michele and Madison launched LimeLife with eleven of Alcone’s most popular makeup products but quickly expanded to skincare as well. Today, LimeLife offers a comprehensive selection of skincare, makeup, men’s products, beauty tools and accessories. A field team of over 30,000 Beauty Guides in nine countries share both LimeLife products and the business opportunity around the world.

“We create products that we would want to use and that professional artists need,” says Madison. “The way we develop our products and the way we define what to develop solely comes from our sales field. It’s really about finding products that are going to be staples in people’s lives and that people are going to hopefully become loyal to, to the point where they can’t turn back, and creating classics.”

While LimeLife offers an exceptional line of products, both Michele and Madison see LimeLife’s business opportunity as the best thing the company offers.

“My ‘why’ is for women to understand their worth and be paid for it,” adds Michele. “The basis of our mission is in empowering women, and we do that in three ways: from a personal angle, from a business angle, and from a financial angle. At the end of the day, making sure that our compensation plan is paying out the absolute amount that it can possibly payout and getting as much money into the hands of women as we can.”

But Michele wanted more than a generous compensation plan. She wanted to empower women to think beyond the money they could make with LimeLife today and tomorrow to investing and managing wealth that could affect their families for years to come. Her own experience with seeking out funding for LimeLife would inspire her next move.

THE FEMPIRE FUND

Creating the direct sales arm of Alcone required funding, and a lot of it.

“I had mortgaged everyone’s house, and I had mortgaged our businesses,” shares Michele. “But the risk for my family was way too high—I’m talking about my siblings, my four siblings and my father. We got some outside funding from friends and family, which was great, but we were still growing way too fast.”

A chance email from the beauty giant L’Occitane would change everything. Chairman Reinold Geiger requested a meeting with Michele and Madison, believed in what they’d created at LimeLife and invested in the business.

“He invested in LimeLife immediately,” says Michele. “And he says, ‘I want you to have complete control, complete decision making. I’m just giving you money. I want to see what happens. I believe direct sales is the future.’ This was a blessing from nowhere, and when I started looking into how many female entrepreneurs get that blessing, it’s so few.”

She developed an idea that could realize two dreams at once—The Fempire Fund— an investment vehicle that could simultaneously provide funding for up-and-coming female entrepreneurs and reward high performing LimeLife Beauty Guides. Once a Beauty Guide hits a specific rank, LimeLife rewards them with a share in a bonus pool that is used to fund a portfolio of entrepreneurs. As the fund grows, their gifted investment grows.

Additionally, qualifying Beauty Guides are given their first $5,000 in investment returns as a predistribution, with encouragement to diversify.

“I encourage them to put it in the stock market or in something that has long term growth,” she explains. “Basically, what I’m trying to show them is direct sales is a compounding business, and you can take your earnings from that and further compound it in the financial institutions that we’re so blessed and lucky to have access to.”

EMPOWERING WOMEN—EVERYWHERE

The partnership with L’Occitane allowed LimeLife to expand internationally at breakneck speed. In two years, LimeLife expanded into eight countries outside the United States— Canada, U.K, France, Italy, Ireland, Germany, Spain and Australia. Jacob Hyzer, CEO of Emerging Markets, has been with LimeLife from the beginning, building teams focused on compliance, training and support for Beauty Guides.

“A challenge was finding, in a short time of such vast expansion, how do we maintain our vision for the culture of the company,” he shares. “For Michele, Madison, and myself that was such a huge, important priority—maintaining the culture of the company.”

Jacob and his teams created similar protocols across the countries in which new Beauty Guides chose from one of two starter kits and then begin an onboarding process that involves online learning, live trainings and interacting with other Beauty Guides through Facebook groups.

“Our Beauty Guides are so incredible because they work in such a collaborative way,” he explains. “There are Guides who aren’t even on the same team, who don’t make any money off of each other at all, who are so willing to jump over into someone else’s team to do trainings, to offer coaching, to offer feedback, to offer insight and how to do it.”

The company’s explosive growth shows no signs of slowing, with upcoming product launches, a new leadership training program, and its first virtual annual convention, which will allow even more Beauty Guides from around the world to participate. As LimeLife looks to empower more women in more countries, Michele holds fast to her “why.”

“Real female empowerment is helping women define an inspired future themselves,” she says. “And to give them the tools to actually create that inspired future.”

IT WORKS! Dreams for a New Season

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Mark Pentecost is living proof that a coach will always be a coach, whether he’s on the court or leading an industry. His tenacious, “whole ’notha level” approach to leadership has already driven nearly 20 years of success at It Works!, the direct sales business he dreamed up with his wife Cindy in 2001. Today, with his entire family on his team, he’s ready to take on a new season with new products and new vision.

MARK AND CINDY PENTECOST WENT FROM managing their one-income family on a high school coach’s salary to achieving the highest rank of a well-known direct sales company in the mid-1990s. Experiencing this life-changing success inspired the couple to start their own direct sales company. The Pentecosts launched It Works! in 2001 with a one-of-a-kind body wrap that, to this day, has no competitors in the industry.

“We wanted (our company) to be a vehicle of hope for people,” says Mark. “To allow them the time with their family, the debt freedom, and the potential for more for their lives.”

“We wanted (our company) to be a vehicle of hope for people,” says Mark. “To allow them the time with their family, the debt freedom, and the potential for more for their lives.”

Over the last 19 years, It Works! has grown from a mostly self-funded venture to a global enterprise with over 100,000 team members across 24 countries. Have you tried that crazy wrap thing? provided a momentum that sustained the company for years, but today, the Pentecost family has a new game plan, designed around a younger than-ever group of savvy social sellers.

Today’s It Works! line is designed to help customers feel as incredible as they look, packed with products designed to achieve measurable results.

“We reinvented ourselves and are now not only known for our Skinny Wrap, but also our Skinny Brew, a fat-burning coffee,” explains Mark. “Both are results-driven products that are backed by science. The goal is to help our customers achieve results with natural ingredients, incredible flavor and a fun experience to use.”

“We believe you can have your cake and eat it too,” adds Pam Sowder, It Works! Chief Networking Officer who has been part of the company since its inception. “We’ve seen our product line expand over the decade, but we’ve stayed consistent in the belief that life’s about balance, and our products help customers achieve that.”

With Skinny Brew leading the product line, It Works! offers an extensive collection of nutrition, weight control and energy products, as well as a premier skincare line developed by Beverly Hills plastic surgeon, Dr. Paul Nassif.

“We’re offering essential products that people want, need and will continue buying no matter what the economy looks like,” says Mark. “Our goal is to help people sleep well all night and slay all day.”

THE NEXT GENERATION

While It Works! made its name in households across America through “Wrap Parties” where guests could see the Ultimate Body Applicator in person, Mark and his team could see the virtual tide turning.

“We saw the desire in the world for work-from-phone opportunities, even prior to the happenings of 2020,” he says. “We’ve gotten so young, and it’s fun! This younger generation of distributors builds almost solely on social media. They find their preferred platform that allows them to be authentic and genuine—then they take off sharing our products. We’ve come up with a great tool to train and build through social media. It’s a simple, proven concept we’ve brought mainstream to the market today.”

“To make social sharing even easier for this younger demographic of It Works! distributors, the company launched an innovative sampling system,” explains Kami Pentecost, Senior Vice President of Field Development. “It gives loyal customers a quick taste of our key products and provides distributors a simple way to earn cash.”

“Prior to the launch of Skinny Brew, we offered keto coffee,” says Kyler Pentecost, Vice President of Sales. “People would literally make their own sample bags, go to the Post Office and spend five to eight dollars on shipping. It was the most horrendous process—so much time and effort. By bringing on the sampling app, it was a very natural fit with who we are as a company. All you have to do is focus your time on that next relationship, that next connection and then you’re sending it through your app. So, it makes it super simple, super affordable and right in your pocket, which is what most millennials and Gen Z are doing.”

The sampling app is only one part of the company’s strategy to use digital solutions to get new distributors up and running quickly.

“Typically, new team members in the field feel like they have to wait for their Business Builder Kit to arrive on their doorstep,” says Mark. “We said, ‘No more!’ We had to get innovative. How can we get our team making money their first day in business? That’s when we introduced the digital Business Builder Kit and sampling program. Skinny Brew sample credits are applied to new team members’ accounts on day one. They can sell them and earn cash immediately—day one, you’re profitable.”

This new generation of social selling distributors is joined by a new generation of Pentecost leaders as well. Mark and Cindy’s children have all joined the business in recent years—Kyler is joined by his sisters Kindsey Pentecost, International President and Chief Marketing Officer and Kami Pentecost, Senior Vice President of Field Development. The younger Pentecosts are loving the company’s focus on empowering an increasingly younger field.

“I think younger generations are realizing, ‘I want my dreams now and I can achieve that,’” says Kindsey. “They see how network marketing is a career to get them those goals.”

“You’ve got a lot of millennials that are learning that they can work from home,” adds Mark. “They can be debt-free. I love seeing the next generation joining the business. It’s bringing in fresh ideas and pushing us out of the comfort zone. We continue to evolve together!”

A WINNING CULTURE GOES GLOBAL

Even though his days of coaching basketball in Michigan are long behind him, Mark’s approach to leading It Works! still has “coach” written all over it. But how do you translate that same team mentality to an international field? You model it.

“People told me that our culture wouldn’t play well internationally, but it very much does,” he shares. “One of our biggest countries is France. We would talk about how to stay humble and how we give our staff permission when someone’s getting a little too big of themselves to call that out. It’s kind of getting a yellow card in sports. You better check yourself. We also gave each other permission to have fun with that but be really intentional of who we want to be and how we want to model to all of our teams. It was exciting for me to see that our cultures could have a lot of fun and a lot of humor.”

It Works! is currently operating in 24 countries with distribution centers in Europe, Korea, Mexico, Hong Kong, Philippines, Australia, Canada and the U.S. Every customer worldwide has access to customer support in their unique language and time zone.

“We’ve put corporate field development leaders around the world to support global growth,” says Mike Potillo, It Works! Chief Sales Officer. “This allows us to unify our product offering while establishing a simple system that can adapt to the nuances of that market. Nearly 80 percent of our business is still in the U.S. Our international expansion has just begun, and we have big plans!”

BUILT TO LAST

This year has seen the release of new products, including Sleepy Tea, a relaxing bedtime blend of magnesium and melatonin, as well as new customer incentive programs that are already gaining traction.

But perhaps the most exciting announcement of the last few weeks is a new form of virtual connection for It Works! team members. As the global COVID-19 pandemic began to affect businesses worldwide, Mark and his team realized they needed something new. That is when they decided to develop new streaming platform called Impact TV. This new streaming tool will allow the It Works! team to share positive and inspirational content, created to impact distributors around the world.

“Impact TV is a place for our team to find media that motivates and inspires them,” shares Mark. “I believe we should reimagine our world to instill confidence in everyone that ‘you are made for more!’”

Mark and Cindy didn’t build their business with the immediate future in mind—their sights are always off in the distance. They could never have imagined a 34,000-square-foot waterfront headquarters or sunsets from their private island in the Gulf of Mexico, but they know that the best has yet to come.

“When people join our team, they have the security of an established business, but the opportunity of a new company. We are introducing new product lines, teaching how to gain huge success through social media and becoming a customer-generating machine. We have the best of both worlds.”

 

“We have the security of a 20-year-old company that has been through the ups and downs of growth,” says Mark. “We’ve seen a financial and economic crisis. We’ve learned how to work through a global pandemic, and we are still growing. When people join our team, they have the security of an established business, but the opportunity of a new company. We are introducing new product lines, teaching how to gain huge success through social media and becoming a customer-generating machine. We have the best of both worlds.”

Thirty-One Gifts/Kanbrick Investments: What is the Story Here?

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ON JULY 15, 2020, Katherine Chiglinsky splashed the news on Bloomberg; Thirty- One Gifts, founded by Cindy and Scott Monroe in 2003, a direct selling company, now had a new partner.

Kanbrick, the new investment firm founded by Tracy Britt Cool and Brian Humphrey, had taken a stake in Thirty-One Gifts. Kanbrick, recently founded in 2020, is brand new to private equity investment, and Thirty-One is their very first deal. For those of us who follow the direct selling model, we knew what the key questions would be: What’s behind the story? What is the story here?

Whenever privately held companies enter into agreements with each other, we may never know the story, but this is an attempt to tell the story from a perspective that has been closer than most. I was invited to share a perspective because the editors at Direct Selling News knew that I had served in Cindy Monroe’s advisory group for several years. While we engaged in the typical quarterly conversations, review of some reports, and business strategy, we were never involved in decisions relative to the financial investments or potential partnerships. However, through several years of evolvement, it became obvious that Cindy and Scott had a vision for Thirty-One that went beyond the offering of great products designed to fill the needs of women.

The quotes below, by Cindy Monroe, are lifted from the Thirty-One Gifts website, and they tell part of the story:

“I founded Thirty-One Gifts in 2003 with one simple goal in mind—to help women by giving them the opportunity to run their own successful business. That goal remains our No. 1 priority today.
“Not only do our fashionable, functional products make life easier—they also help independent business owners across the country support their families and reach their dreams.
“Over the past 15 years, our sales Consultants have held over 6 million parties. Along the way, we’ve also been blessed to give back to organizations that share our mission in North America and around the world.
“We all have a ‘why’—a reason for doing the things we do. Maybe yours is Family, Friends, Faith, Flexibility. Maybe it’s just having fun. Our why is to help you reach yours.”

Thirty-One Gifts has always been about empowering women as they introduced innovative products, marketing and selling them through a sales organization of independent consultants, utilizing a direct selling model. Tracy Britt Cool also has experience in leading a direct selling company. She worked for Berkshire Hathaway for over ten years, working directly under the tutelage of Warren Buffett and gaining the recognition of protégée. While at Berkshire Hathaway, she held a variety of roles, including financial assistant to the chairman, board member of Kraft Heinz, and chairman of several Berkshire Hathaway companies. Most notably, in 2014, she was tapped to become CEO of Berkshire Hathaway subsidiary Pampered Chef, and… she was only 29 years old!

On September 19, 2019, DSN carried an article about Tracy stepping down. Noteworthy is what the DSN Staff wrote about Britt Cool at that time to describe her five-year tenure at Pampered Chef: “Over the last five years, Pampered Chef focused on rebuilding the foundation of the business and creating new engines for growth through a renewed focus on the independent consultant base, a refreshed brand, enhanced product innovation, expanded international footprint and significant digital channel growth. Following more than a decade of decline, the company has meaningfully grown sales and earnings over the last five years. It has grown into a strong and diverse business with more than 50 percent of Pampered Chef’s business now coming from digital sales, up from approximately 10 percent in 2014.”

In the same article, Warren E. Buffett, chairman and CEO of Berkshire Hathaway, was quoted as saying: “Five years ago I asked Tracy to redirect and re-energize Pampered Chef. Direct selling was encountering new challenges, and Pampered Chef’s sales and earnings had been declining. Under Tracy’s leadership, major financial gains have been achieved. Even more important, our corps of consultants is rapidly growing and prospering. Tracy is handing Andrew (Andrew Treanor, the former COO who was elevated to CEO) a company infused with excitement and momentum.”

During her five years as CEO at Pampered Chef, Tracy focused on rebuilding the foundation of the business, innovation, expanded international footprint and significant digital channel growth. This was a lot to take on, and evidently, the type of challenge Tracy embraced. Following more than a decade of decline, Pampered Chef appears to have grown into a strong and diverse business. Pampered Chef has shared that more than 50 percent of the business now comes from digital sales, up from approximately 10 percent in 2014. Most significant about the previous statement is the growth in digital sales reported in 2019, well before COVID-19.

Doris Christopher, founder of the Pampered Chef had this to say about Tracy: “As a founder, I couldn’t have asked for a better leader and partner in rebuilding Pampered Chef than Tracy. She has played a critical role in leading the company’s transformation and building a strong team to continue our growth. I’m confident in Andrew’s leadership and Pampered Chef’s growth, and I’m excited for what Tracy will do next. I know she will be successful in building even more companies and will be a strong partner to founders, entrepreneurs and management teams.”

Tracy Britt Cool left the Pampered Chef to plan her next steps. She did not go back to Berkshire Hathaway. Her new investment company, Kanbrick, was looking for its first deal, and they chose Thirty-One Gifts. There are also clues to the answers to the questions we presented earlier: What’s behind the story? What is the story here?

When Tracy left Pampered Chef, digital sales had grown from 10 percent to 50 percent. Obviously, this would make it easier for Pampered Chef Consultants to share their products and build their businesses beyond a physical party plan sales environment. Pampered Chef is, or was, a party plan company.

Under Tracy’s leadership, Pampered Chef embarked upon a different future for a party plan company, a future that embraced more use of digital platforms in support of how products and services are marketed and sold to consumers.

The comments by Warren Buffett and Doris Christopher reveal clues when they refer to: “new excitement and momentum…the leadership and partnership Tracy brought to Pampered Chef.”

From this perspective, Thirty-One is a party plan company ready for innovation and possibly reinvention that will be accelerated by Tracy and her team at Kanbrick. Thirty-One,quite similar in many ways to Pampered Chef, is a family founded business, focused on strong principles and values along with innovative products and missions to empower women. Tracy knows this deal! The Thirty-One business family is expected to benefit from both acceleration and innovation. Elizabeth Thibaudeau, a seasoned executive with contemporary direct selling experience, has already been designated as the new chief executive officer at Thirty-One.

When I reached out to Cindy to capture a few more thoughts, she also shared:

“I believe that Thirty-One Gifts partnering with Kanbrick will bring new thinking and skills to an already strong brand and culture. I am most excited about the long-term commitment to growth and opportunities that this partnership can offer our Thirty-One consultants as well as our industry.”

Tracy also shared: “We created Kanbrick to provide business owners and founders a long-term home for their businesses. We are excited to welcome Thirty-One to Kanbrick. Thirty-One has a great history, strong brand, and a differentiated sales model, and we look forward to partnering to support the sales field to grow their businesses and to provide more opportunities to expand their selling opportunities digitally.”

I believe this story is another of the stories we will learn from. It is the beginning of a new story, and that is the real story!

On Opportunity, Freedom, and Equity for All…

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This year has landed us all amid events larger than any of us as individuals, community members, and businesspeople might have imagined, not the least of which is the galvanized awareness of inclusive diversity and equity issues across the country.

Years ago, thoughtful industry leaders established the DSA Diversity and Empowerment Committee as a permanent part of the DSA Board with the goals of broadening the opportunity we offer and better reflecting our constituents (who come from every background and skin color) in company, industry and Association leadership. We have made progress, but it hasn’t been enough. The events of recent months have highlighted the need for all of us, including direct sellers, to take the next necessary steps to ensure that the American dream of opportunity, freedom, and equity that direct selling embodies, is a reality for all.

That is why I have been so gratified to see the universal commitment to these ideas, in theory, and practice, being espoused by direct selling leaders in our initial discussions among CEOs and the DSA Board. As a result, DSA had committed itself to providing resources to direct selling companies as they work to ensure that we are the best examples of equal opportunity and inclusion for all, regardless of race or other considerations.

Our Diversity Council, chaired by Jeff Reigle of Regal Ware, and a committed team of DSA and DSEF management executives, have embarked on the first steps of an ambitious program of activities to support the industry in its efforts, including:

• data gathering on racial demographics for benchmarking,

• coordination with other business groups committed to diversity,

• creating a forum for direct sellers to publicly announce their commitments and actions,

• educational programming for direct selling companies about inclusive diversity and equity,

• support of minority-owned small businesses and suppliers, and

• fostering industry commitment to enhancing minority leadership in our companies and in our Association.

To that end, DSA is collaborating with Ameli Global Partnerships. Founder and principal Mona Ameli is not only nationally certified in Diversity & Inclusion and a globally certified Cultural Transformation consultant, but she also knows our industry intimately. She has 20-plus years of executive experience with several large and medium-size companies and served as the Chair of the DSA’s Diversity and Empowerment Council for three consecutive terms. She has been committed to and a leading voice in our industry’s diversity and inclusion efforts.

Mona, Jeff, and a wide array of DSA member company executives have begun the hard work of turning their commitment into concrete, measurable action through a series of webinars and discussions designed to provide member companies with tools to assist them in efforts to successfully increase and retain participation of a more diverse base of employees, field members, and suppliers. These sessions are our first step in a series of tangible activities and resources the DSA is providing all its members to keep our ongoing commitment to this cause and to provide direct sellers with the tracking and strategic tools to measure the business efficacy of company D&I initiatives.

Ultimately, though, our efforts aren’t about merely dollars and cents, SKUs or productivity rates. Ultimately, this is about what has always been at the heart of direct selling—our commitment to the American dream and promise of inclusion, equity, and opportunity in which everyone can share. #stronger together #community

Metrics Global announces the appointment of Lenny Crotty as President

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Metrics Global has announced the appointment of Lenny Crotty as President.

Crotty will be assuming responsibility for overall business growth, go to market strategy and day-to-day operations for one of the leading global payments and fintech companies serving the direct selling industry.

He brings 20+ years of worldwide direct selling experience to Metrics, and he is well known and widely respected within the industry.

 

THE RE-EMERGENCE OF CUSTOMER-CENTRIC

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Standing up to Customer Expectations, Regulatory Scrutiny and Sustainability Goals

History circles back on itself. The commonplace gets modified over time with newer methodologies, but transformation—even in the world of direct selling—meanders through trial and error and sometimes re-emerges closer to the beginning than we expected.

Door-to-door sellers of the late 1800s introduced innovative, useful and pampering products to often isolated and ever-curious customers. That’s how the direct selling industry was born.

Selling products direct—where retail couldn’t or wouldn’t stretch—lightened consumers’ already heavy load. Quality products earned a loyal customer base for the sellers—often with regular routes—and the companies that would become household names: Fuller Brush, J.R. Watkins Co., Stanley Home Products, and later Tupperware, Avon, Mary Kay and the like.

As more than a century of industry transformation unfolded, the focus on customers waxed and waned. Never completely out of mind, customers sometimes fell down the list to other business model priorities. Some direct selling companies and their independent distributors experimented with financial growth strategies that became problematic, controversial and subject to scrutiny by regulators.

Amid the switchbacks taken by some companies, however, legacy direct selling businesses flourished by focusing on selling and servicing customers and sponsoring people who wanted to do the same thing. Central to their success was a business model based on actual customers buying real products.

Today, these types of companies identify as customer-centric—a newer label for something that’s been around in direct selling as long as the industry itself. Customer-centric companies possess really attractive products that disrupt traditional businesses to the benefit of the consumer, and they represent a 21st century direct selling business model that stands up to the expectations of customers, regulatory scrutiny and the sustainability goals for companies and the larger industry.

“As we march into a very different future, one where technology has changed the game, a new type of focus on customer acquisition and retention just makes sense. No business succeeds and achieves sustainable success without a strong base of real consumers,” says John Fleming, owner of Ideas and Design Group, LLC; former DSN Publisher and Editor-in-Chief; and former Avon executive.

WHAT CUSTOMER-CENTRIC LOOKS LIKE TODAY?

Customer-centric companies embrace their ability to fill a void in today’s marketplace, taking aim outside the channel to compete through product efficacy, value, impact and service. Product performance, pricing, packaging, marketing, customer service, shipping time and costs, loyalty programs and rewards—all of it aims to benefit, engage and retain the consumer. These companies invest in, focus on, track, and measure every facet in order to meet today’s consumer expectations.

“This is worth getting good at! The benefits to the company and the field organization can be massive, long-lasting and far-reaching. Repeat customer purchases create repeat sales and increased revenues. Customer-centric growth is typically more profitable and stable,” says Garrett McGrath, president of Elepreneurs.

Bouncer Schiro, CEO of Kynect, says the lifetime value per customer is exponentially greater as well. But the customer centric approach isn’t without its hurdles. “In the early days, our biggest challenge was that we were simply growing too fast. Our systems couldn’t keep up, but we solved most of those issues by listening to and focusing on the needs of our customer.”

“A quality product that provides high value is essential to get the consistent ongoing purchases from your ever-growing customer base. The most significant elements to get us there were first of all to ensure that our compensation plan was focused on customer acquisition and ongoing customer sales.

Secondly, we needed to have direct and consistent communication with our customer base around what about our products they like, what new products they were looking for and how we enhanced our preferred customer program,” says Stuart MacMillan, president of MONAT Global.

Customers are empowered these days, and their expectations are evolving. They find products and services at a click or with a simple voice command through e-commerce platforms. Most growing direct selling companies have robust customer acquisition and retention abilities online, as well as sophisticated point-of-sale systems that capture customer information and feeds data for all sales motions back to the home office.

“Direct selling companies that recognize themselves as platforms and provide the digital tools which enable distributors to market in a more personal manner will support a redefining of the direct selling model,” says Fleming.

QUICKENING THE PACE OF TRANSFORMATION

Technology is facilitating a transformation of the direct selling model, but it’s regulatory scrutiny that is—or should be—quickening the pace of companies to lean in to their customers.

The MLM regulatory landscape shifted in the U.S. with Federal Trade Commission lawsuits filed against Vemma Nutrition (2015) and Herbalife (2016), and more recently AdvoCare and Neora. These cases reflect a heightened scrutiny of both MLM compensation structures and unsubstantiated earnings claims. Companies have paid hundreds of millions of dollars in restitution; spent millions overhauling operational systems; restructured compensation plans; and in AdvoCare’s case, dismantled its MLM structure entirely.

While this type of scrutiny is not new, Brent Kugler, attorney with Scheef and Stone, says, “Today’s MLM company must have a compensation plan that in structure, practice and terminology emphasizes compensation and rewards based upon bona fide retail sales activity. Just as importantly, MLM companies should accurately and transparently disclose the earning or lack of earnings of all program participants, not just the participants who earned commissions in a given time period.”

The FTC has made clear that it intends to hold companies responsible for improper earnings claims made by their distributors and to expect aggressive scrutiny of MLM compensation plans that include threshold-based and duplication-based rewards.

Older comp plans that define volume and base rewards on distributor purchases need revision and rewriting to emphasize retail sales and rewards to distributors for verified retail sales activity instead. Calculations of distributor commissions, likewise, should generate from retail sales to non-distributors and omit personal purchase volume because it no longer counts in rank advancement. MLM purchase requirements should also change to minimum sales requirements.

“In the current regulatory environment, every MLM company needs to be taking a hard look at its compensation model and how it is deriving its revenues,” says Kugler. Recent FTC rulings indicate that companies—to remain compliant and not be labeled as pyramid schemes—must demonstrate actual retail demand for its products and services. This means a healthy majority of company revenues should be generated from bona fide sales to actual, non-distributor customers. Ideally, a customer-to-distributor ratio of 5:1 or higher is the aim, says Kugler.

DISTINGUISHING BETWEEN ICING AND CAKE

“The customer purchase decision must be able to stand on its own as a ‘fair trade,’ and then the personal touch by a caring consultant and the opportunity to earn by also supporting customers’ purchases is the icing, not the cake,” says Orville Thompson, co-owner and co-CEO of Scentsy.

Direct selling business models need to distinguish between icing and cake in order to remain FTC compliant. Customers do not have a representation agreement in place with a direct selling company. Distributors do have an agreement in place with a direct selling company. Differentiating and tracking purchases of active customers and distributors is vital because “actual” customers engage, purchase and continue to do so for enjoyment, not for the purpose of qualifying for some component of a compensation plan.

“The entire validity of direct selling is predicated on real customers, buying real products at real prices. By focusing on the customer and the product or service value being provided to them, companies can make decisions that bring sound business results while enhancing the direct selling environment,” says Thompson.

“If the product is relevant, distinguished and desired, then people will want it without having to start a home-based business. Indeed, if a direct sales company truly loved its distributors, it would ensure they succeed by having a high percent of their business done through retail sales,” says Jeff Bell, CEO of LegalShield.

“The only real money in direct sales is from a consumer who is engaged, satisfied and retained. Having a model focused upon signing up distributors is not only reckless but potentially illegal,” he adds.

“I believe that the days of just selling opportunity are long gone and that we have to lead with customer experience, customer education, and customer value,” says Brian Underwood, owner and CEO of Prüvit.

“If education and growth aren’t the focus and you build it based on the deal or opportunity, there is always another million-dollar deal out there, right around the corner. It doesn’t create any real new value or innovation,” he adds.

THE BENEFIT OF RAVING FANS AND CUSTOMERS

Distributors need valuable and innovative products and services to build a strong book of business. A high level of consumer experience generates repeat sales of in-demand products, and those loyal customers become the heroes of customer-centric direct selling companies.

“It Works! is a customer generating machine!” says Mark Pentecost, CEO. “This year, we’ve hit record sales with 75 percent of all of our sales coming from customers. That is industry changing!” They boast a 9:1 customer -to -distributor ratio.

“I think every company that has succeeded at a massive level is because of the benefit of having raving fans and customers. Raving fans share their passion with other people, which helps continue the company’s growth,” says Underwood.

“If you focus first on the value you’re offering your customers, your business proposition becomes more powerful and sustainable. Kynect’s customer-to-Associate ratio is 9:1, not because of the FTC’s influence but because our main focus is creating value for our end users. Then we worry about the business opportunity,” says Schiro.

“Customers have always been important to sustainable business growth. In our space—and in these unprecedented times—companies who produce impactful, affordable products and serve their customers well are outperforming those who are not. FTC Guidelines are pointing all direct selling companies in this direction. This IS the future of our industry,” says McGrath.

RECOGNIZING CUSTOMER- FIRST COMPANIES

With that future in mind, Direct Selling News launches a new Customer Centric Recognition program celebrating direct selling companies that boast high customer-to-distributor ratios and prioritize actual customer sales.

“Businesses built on customer acquisition and retention, especially those that meet the 5:1 and 10:1 customer to- distributor qualifications of DSN’s CCR will be the competitors to beat in this marketplace and environment,” says Stuart Johnson, founder and CEO, SUCCESS Partners.

“What gets measured—and recognized—gets done. With Direct Selling News having created the Customer Centric Program to recognize customer-first companies, it cannot help but have a positive impact on our profession,” says McGrath.

“More than two million people have felt the Total Life Change through our products, and we are hungry for more to experience it. That’s why we are so excited to be a part of this DSN effort and doing what’s right for our customers, our Life Changers, and our entire industry,” says John Licari, COO of Total Life Changes.

“DSN’s recognition has been a strong driver to company behavior for many years. Direct selling organizations have strived for the recognition and rewards that DSN has offered. As the direct selling channel faces increased scrutiny, we are super supportive of DSN’s focus on customer acquisition and retention. We believe this will be instrumental in focusing companies on healthy, long-term sustainable growth and enhance the reputation of a channel we have come to appreciate and so many millions of people rely on,” says MacMillan.

“It is so exciting to launch a recognition of the values, integrity and behaviors that will move our industry into a more sustainable future,” says Johnson.

The new CCR Program will be open to companies with a minimum of one year in business and $5 million in annual revenue. Active customers and distributors are limited to those in the U.S. and Canada. More details can be found at www.directsellingnews.com/ccr/.

RE-EMERGING MORE  VIBRANT THAN BEFORE

But actual transformation takes more than recognitions. In this regulatory environment customer centric-ish won’t be enough for the direct selling industry to re-emerge more vibrant than before.

“Customer acquisition, service and retention shouldn’t be the window dressing. It should be the absolute foundation of who we are!” says Andy McWilliams, CEO of RevitalU. He believes subtraction is necessary too. “Get rid of fees to join, big pack purchases and recruitment bonuses thinly veiled by customer acquisition minimums! LET’S CHANGE!!”

The days of direct sellers purchasing inventory and servicing customers personally is falling away. More companies are facilitating purchases and fulfilling orders for their distributors—while at the same time changing distributors’ customer acquisition expectations. Fleming says 20 or more loyal customers, who purchase frequently, is certainly the possibility for any direct seller who focuses on customer acquisition and retention.

“This changes the game and becomes foundational to a future that appears to be bigger and brighter. Those who aspire to be micro-entrepreneurs, or even entrepreneurs, will benefit from sharing with others this unique model, and sponsoring others who adopt the new behaviors. More focus on customer acquisition and retention will result in a much stronger business model for all involved. It’s exciting. Direct selling will also become a much more vibrant player in the general marketplace!” says Fleming

Team 4Life Welcomes Boxer Jonathan Oquendo

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4Life recently announced that professional boxer Jonathan (Polvo) Oquendo has joined Team 4Life.

Oquendo fights in the super featherweight division. He has 31 wins—including 19 knockouts—and has held numerous belts throughout his career, including the WBO (World Boxing Organization) Latino junior featherweight title and the WBO-NABO (North American Boxing Organization) junior featherweight title

On Saturday, September 5, Oquendo will take on Jamel Herring for the World Junior Lightweight Championship. The fight will take place at the MGM Grand in Las Vegas. ESPN will broadcast the event.

Oquendo was born in Bayamon, Puerto Rico, and now resides and trains in Vega Alta. He began using 4Life’s products in 2016.

Team 4Life, an elite group of athletes who hail from a dozen countries, supplement with 4Life products and represent 4Life supplements as brand ambassadors to customers around the world.