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Public Direct Sellers: Growth Continues To Accelerate For The Wellness Companies

January 3, 2019 by DSN Staff Writer Leave a Comment

Avon Products vs. Tupperware in addressing the new paradigm.

Through the halfway mark in the fourth quarter, publicly traded Direct Selling stocks continued to outperform the broader market and consumer index averages so far in 2018. The Lane Research Direct Selling Index, which comprises the stocks of the six publicly traded direct selling companies we follow that are listed in the U.S., Herbalife Nutrition (HLF), Medifast (MED), Nu Skin Enterprises (NUS), Tupperware Brands (TUP), USANA Health Sciences (USNA) and London-based Avon Products (AVP), is up on average nearly +30 percent year to date compared to modest gains so far this year in the S&P 500 following the October sell-off. The Consumer Cyclical ETF (XLY) is up about +8 percent and the Consumer Staple ETF (XLP) is down modestly this year so far.

The key reasons for the strong outperformance have been:

YEAR-OVER-YEAR ORGANIC SALES GROWTH LAST 7 QUARTERS

  • on balance business has been substantially better than expected at the beginning of the year, so many of the companies have been delivering results ahead of Wall Street expectations.
  • multiples on the stocks have expanded following the covering of a large short position in industry bellwether Herbalife Nutrition early in the year.

As the chart illustrates, organic sales growth for the Group continued to accelerate as 2018 progressed. The Group Averages, which are sharply but not solely influenced by the dramatic performance of Optavia this year, have accelerated from posting +10 percent growth on average in the 2017 Q4 to +11 percent in the 2018 Q1, +18 percent in the Q2 and then +25 percent in the Q3. Along with the strong performance at Optavia we have also seen accelerating growth at Herbalife, Nu Skin and Usana as 2018 progressed as well.

Clearly the newer, more wellness-based companies are in the sweet spot of direct selling at present versus the older, more traditional brands like Avon Products and Tupperware. However, age of concept and product categories are not the sole definers behind the success of the former mentioned companies, in our view. We believe it is no coincidence that these companies are also the ones that have spent heavily behind new product development, including a complete rebranding at Optavia, and in technology to advance social selling and the ease with which their respective representatives can manage their businesses and more efficiently market to their customers.

Privately held Rodan + Fields was on the leading edge of this movement at the end of the last decade, and has built a $1.5B skin care business in the U.S. in a short period of time. That is a bigger presence in the U.S. of any of the publicly traded direct selling companies we follow, which have been around for a lot longer. And oh, by the way, according to a recent company press release, Euromonitor has ranked Rodan + Fields as the #1 skin care brand in the U.S. among all distribution channels, with the company projecting continued double-digit growth for the next 5 years.

How are Avon and Tupperware Addressing the New Paradigm?

So, as 2019 unfolds, what are Avon and Tupperware going to do to keep from being left behind? Below are 5 commonalities and 5 differences in their situations as we see it:

KEY COMMONALITIES
  1. NEW CEOs. Jan Zijderveld took over as CEO of Avon in February and Tricia Stitzel became CEO of Tupperware in May.
  2. The new CEOs have brought in new lieutenants. Among new Avon leadership appointed this year are regional heads for markets that account for >50 percent of its business, while Tupperware has new Group Presidents in 3 of its 5 main divisions, which account for over 80 percent if its sales.
  3. Increased focus on technology and social selling. Tupperware is rolling out enhanced mobile applications for on-line and off-line ordering, including catalogs that can be shared with social media. Avon is launching My Avon Store and My Avon Office, and rolling out e-brochures to help reps manage their sales process and business management.
  4. Cost reduction programs. Avon has just come off a sweeping 3-year cost savings program and recently announced another program of additional savings while Tupperware is most of the way through a much more modest cost savings program announced early last year.
  5. Liquidity to finance growth initiatives. Both Avon and Tupperware have ample cash and borrowing capacity to begin to implement their respective growth initiatives. Additionally, the fourth quarter is the largest cash generator seasonally for each company, so they should be in a good financial position to hit the ground running in 2019.
KEY DIFFERENCES
  1. Starting at the top, new management at Avon are outsiders. While at Tupperware they are insiders. Avon has recruited talent with senior level experience at other direct selling concepts such as Herbalife, Natura and Nu Skin as it looks to rebuild its direct selling chops after having abandoned many of them over the years. Tupperware’s recent management moves have been with existing talent, indicative of a much deeper bench from which to draw.
  2. Avon has been in a state of decline for the better part of 10 years. While growth at Tupperware has stalled only in the past 1-2 years. In 2010, Avon had 6.5 million representatives, which has declined to about 6 million today while globally, people participating in direct selling went from approximately 80 million in 2010 to over 100 million today. While not quite keeping pace with the broader direct selling market, Tupperware has continued to consistently grow its sales force, increasing to 3.1 million sellers today from 2.6 million in 2010.
  3. The magnitude of the initiatives for Avon are much larger. Initiatives will take longer to implement than at Tupperware. Avon’s initiatives include hundreds of millions of dollars in spending behind its brand, representatives, category competitiveness and various technology initiatives between 2019-2021. It could be years before investors see the fruits of what has begun to be implemented. The initiatives at Tupperware are much more modest, mostly around technology advancements to develop ecommerce capabilities and enhance the ability of its sales force to manage and grow its business.
  4. Tupperware generates ample free cash flow. Tupperware’s free cash flow pays a generous dividend and is still able to self-fund its growth initiatives. While Avon is relying on generating an additional $400MM in cost savings from the business over the next 3 years on top of the $350MM realized in the past 3 years to self-fund its growth initiatives.

Bottom line, from where we sit Avon looks like a real fixer-upper after many years of neglect. We like what new management has done early in the process, but it’s a tall task to execute on all the initiatives management has outlined, while self-funding the efforts by taking costs out of the existing infrastructure. And, as management outlined at its Investor Day in September, it will take time. Conversely, we view Tupperware as more of a remodel coming off a very successful 10+ year run of positive organic sales growth from 2006 to 2017. Injecting new energy with the new management team may be all the catalyst it needs to get back on a growth track. Meanwhile, existing cash flows should be ample to finance the investments and still pay a healthy dividend while investors wait for growth to resume, which could come as soon as this year.

However, Avon recently received a big vote of confidence from the investment community as legendary value investor Bill Miller recently took a very large stake in the company. Sometimes it pays to be the discerning eye looking beyond curb appeal.


Douglas M. Lane, CFA—is a securities analyst with more than 20 years of experience covering companies that employ a direct to consumer business model. He leads a boutique equity research firm, Lane Research, focusing on those companies. He can be reached at doug@laneres.com.

Filed Under: Financial Tagged With: Avon, Avon Products, Consumer Cyclical ETF, Consumer Staple ETF, direct sales, Direct Selling, Direct Selling News, Douglas M. Lane, DSN, Euromonitor, Herbalife, Herbalife Nutrition, Jan Zijderveld, Medifast, MLM, Multi-Level Marketing, Nu Skin, Nu Skin Enterprises, OPTAVIA, publicly traded, Rodan + Fields, stocks, The Lane Research Direct Selling Index, Tricia Stitzel, Tupperware, USANA, XLY

Top 2019 Global Workforce Predictions

January 3, 2019 by DSN Staff Leave a Comment

The Workforce Institute at Kronos Incorporated recently released its annual predictions of the top trends that will impact the global workforce in the coming year.

 

  1. AI and machine learning unmask previously hidden workforce data to make people-centric decisions. Artificial intelligence (AI) and machine learning will finally be woven into workforce management practices, revealing a treasure trove of data organizations have been collecting—but not using—for decades. With regular and digestible access to workforce data trends—like scheduling accuracy, absenteeism, overtime usage and burnout—predictive analytics will shine, helping organizations head off potential issues before they arise. Intelligent automation will also free up managers from admin-heavy tasks like managing schedules, approving time-off requests and shift changes while encouraging data-driven decision-making to provide clarity between what is equal versus what is fair. However, to harness analytical insights to make accurate, actionable decisions for specific employee and business goals, organizations must avoid a “one-size-fits-all” model.
  1. Historically tight labor markets and emerging technologies put people managers in the spotlight. With unemployment low and the exodus of baby boomers reaching critical mass, employers globally will face a historically tight labor market. Sourcing great candidates has never been more difficult, and retention will become an all-out dogfight. While an employer’s brand, innovative hiring technologies and proactive recruiting practices are more important than ever, it’s organizations with the best people managers that will ultimately prevail. Organizations will place an increased focus on leadership development as a retention strategy—especially as millennials flock to middle management—and measuring manager effectiveness will be HR’s top challenge in 2019. Additionally, as AI and machine learning take over mundane managerial tasks, freeing up managers to spend more time with their people, deficits in leadership competencies will be exposed as management expectations continue to shift from a historical command-and-control model to a horizontal style that considers all perspectives and seeks innovative ways to inspire, develop, grow and keep the top talent that drives business value.
  1. The changing face of education redefines trades and challenges traditional hiring practices. As the student loan debt crisis furthers the debate about the value of a college education and credentialing programs for job-specific skills emerge, tomorrow’s best employees may take an unconventional path to employment. Competencies that once required a degree—such as coding, robotics and data analytics—are being redefined as skilled trades with the rise of certificate and micro-credential programs. Also, as yesterday’s jobs become augmented by automation, new skills will be required for traditionally “blue-collar” roles. Employers must revamp their hiring profiles and remove traditional job requirements to tap into this new pool of qualified candidates who will staff the shop floor, store floor, hospital floor and top floor of the future. And, as millennials become parents, many will likely urge their school-aged children to take an alternative educational path for a brighter financial future.
  1. Further fracturing of employment laws globally, nationally and at the local level strain organizations. From minimum wage to sick pay, to fair scheduling proposals to the right to disconnect, governments around the world will continue localizing—and repealing—employment laws. Ever-changing regulations around the world will put increased strain on organizations to avoid sanctions, fines, crippling class action lawsuits and reputation-damaging stories. Technology will be vital for organizations to manage scheduling-related mandates, ensure unbiased practices, monitor fatigue and overtime management and ensure employees are paid accurately and fairly, all while providing analytical insights that surface risky managerial practices otherwise buried in a sea of employment data.
  1. Employee-agnostic flexibility, consumer-grade tech and the rise of the occasional time worker redefine “work your way.”All employees—salaried, hourly, and gig—crave control over when, where and how they work. While employers have put more focus on flexibility and alternative work schedules, most have been slow to reengineer processes that underpin how the organization runs. Tools must meet employees where they naturally work, such as on their mobile phone, tablet or favorite social networking platforms. The gig economy and emergence of the “occasional-time worker” will force organizations to replace traditional hiring and scheduling processes with systems that enable workers to choose when, where and how long they work. Mobile-friendly processes, self-service features and immediate access to real-time data in a consumer-grade technology wrapper will help drive the next iteration of the flexibility phenomenon, as predictability of anytime work will empower employees to be more productive, make more intelligent decisions and be more engaged.
  1. Greater emphasis on disaster preparedness as part of a holistic human capital management strategy. Disasters large and small, natural and man-made, have unfortunately become the norm. Organizations worldwide have been challenged to respond effectively to increasingly frequent crises, with HR, operations and payroll forced to take center stage in the lives of affected employees. With more emphasis on company culture, caring and “doing what’s right” in a world where disasters—and a company’s response to them—are frequently in the news, there is a new level of expectation for an organization’s response, responsibility and employee benefits. Organizations of all sizes must take a hard look at disaster policies, processes and capabilities, including both taking care of employees in the moment and rebuilding in the wake of disaster, which will be near impossible for those operating on a DIY workforce management, HR and payroll system. Sustainability plans that today primarily account for company assets and data will need to incorporate employees and their families.

Filed Under: Insights Tagged With: AI, artificial intelligence, direct sales, Direct Selling, Direct Selling News, disaster preparedness, DSN, education, emerging technologies, hiring practices, HR, Kronos Incorporated, MLM, Multi-Level Marketing, operations, top trends, work your way, Workforce Institute

Primerica Welcomes Senior Leaders to Atlanta to Kick Off 2019

January 3, 2019 by DSN Staff Leave a Comment

Primerica, Inc. (NYSE: PRI) is hosting its top representatives from across the United States and Canada for its Senior Leadership Meeting in Atlanta.

The event, which began yesterday and will run through today, will largely focus on new sales force and client initiatives for 2019.

The meeting will also celebrate Primerica’s ongoing success in 2018, including term life insurance face amount in force of approximately $782 billion at year end, as well as record-breaking Investment and Savings Products sales of $7 billion, an increase of 13 percent year-over-year.

“2018 was another outstanding year for Primerica as we continued to execute our strategy to drive growth and improve performance by expanding distribution and prudently deploying capital,” said Glenn Williams, chief executive officer. “We ended the year with a sales force of more than 130,700 life insurance-licensed representatives and more than 25,000 mutual fund-licensed representatives, both of which represent the highest counts since the company went public in 2010. Our diverse, talented sales force is our biggest competitive advantage, and it positions us well to continue providing exemplary service and financial products to middle income families while delivering long-term value for all of our stakeholders.”

Additional 2018 production results include:

  • Recruiting of New Representatives: 291,000
  • Term Life Insurance Face Amount Issued: $95 billion
  • Term Life Insurance Claims Paid to Policy Beneficiaries: $1.4 billion
  • Client Asset Values of approximately $56 billion at year end
  • Compensation Paid to the Sales Force of approximately $790 million

“In 2019, we plan to refine our clients’ experience, evaluate new product offerings, and enhance distribution capabilities for our representatives,” said Williams. “The middle-income market’s need for income protection and retirement savings is greater than ever. Thanks to the strong leadership of our sales force, I am confident in our ability to meet the financial needs of hard-working families throughout North America in the coming year.”


Filed Under: Daily News Tagged With: direct sales, Direct Selling, Direct Selling News, DSN, event, Glenn Williams, Investment and Savings, MLM, Multi-Level Marketing, Senior Leadership Meeting

Welcome To 2019!

January 3, 2019 by R. Todd Eliason Leave a Comment

Just as the arrival of a new year allows us start a new chapter and usher in new ideas, we too at Direct Selling News are excited to present to you a few new items for show and tell.

As you can see we have added a new coat of paint to our look and feel, in addition to expanding our content offerings. This is all in an effort to better serve the needs of YOU, our audience.

Never in our history have we been witness to a more competitive landscape as we are experiencing right now, with new challenges popping up every day that affect the direct selling channel. Whether it’s the ever-present 800-pound Amazon gorilla and its frictionless consumer experience, or the stealth threats from the gig economy’s easy signup process, delivering customers to our phones (Uber and Lyft) while paying you the same day, we are in a battle to remain relevant.

As LifeVantage CEO Darren Jensen said at DSA Fall Conference 2018, “The people in this room are not my competitors. Uber, Lyft, Shopify, and Amazon are my—and your—competitors.”

This means not only do we need to start discussing how we are going to compete going forward, it’s paramount that we work together as a channel in doing it. And that starts with upping our own game in supplying you with timely information and analysis you will need to make better decisions going forward.

With that said, we have a great lineup of content for you this month, starting with our cover story on the importance of focus when it comes to implementing your 2019 strategy. If your priority list is expanding, you might want to scale back for the fear of spreading you and your team too thin.

Our company spotlight this issue is on PURE, led by CEO Daren Hogge, which has seen impressive growth the past few years, and a resurgence in field activity. You will also see a few snippets of some exclusive online content, including our Direct Selling vs Gig Economy feature (pg. 9) and New Company Interview Series with Gaya Samarasingha of Kalaia (pg. 21). Just scan the QR code with your iPhone camera to be directed to the entire story.

I hope you are as excited to kick off 2019 as I am. We will be launching a few other initiatives in the upcoming months to better serve you. Also, let me know what you think of the new changes to the magazine as well as any other comments that will help us do our job better.

Filed Under: From the Publisher Tagged With: 2019, Amazon, Daren Hogge, Darren Jensen, direct sales, Direct Selling, Direct Selling News, DSA, DSA Fall Conference, DSN, Fall Conference, LifeVantage, Lyft, MLM, Multi-Level Marketing, pure, Shopify, Uber

Worldwide Hair Care Market Expected to Reach $112 Billion by 2023

January 2, 2019 by DSN Staff Leave a Comment

Direct sellers such as Amway, Natura and Avon have reason to be optimistic for the growth of their hair care product lines over the next five years.

A new report by ResearchAndMarkets.com—“Global Hair Care Market Trends, Size – Segmented by Product, Distribution Channel (Direct Selling, Hypermarkets & Retail Chains, e-Commerce), and Geography – Growth, Trends and Forecast”—states the global hair care market was valued at $91.95 billion in 2017 and is expected to reach $112.57 billion by 2023, registering a CAGR of 3.35 percent over the forecast period of 2018–2023.

According to the report, the majority of the global population has become beauty conscious and people are more inclined toward beauty-enhancing products. This has resulted in an increased demand for grooming products. In addition, with more than 54 percent of the population falling in the age bracket of 20–65 years, a significant number of people are concerned about the effects of aging.

With the youth and middle-aged population facing hair-related problems, such as discoloring and thinning, the demand for hair care is also increasing. There has also been a considerable surge in global e-commerce sales and companies are looking for ways to explore this sector to boost their sales.

Filed Under: Insights Tagged With: direct sales, Direct Selling, Direct Selling News, discoloring, DSN, growth, hair care, Hair Care Market, MLM, Multi-Level Marketing, thinning, Trends and Forecast

Touchstone Essentials Expands CBD Oil Line

January 2, 2019 by DSN Staff Leave a Comment

Touchstone Essentials announced it has expanded its CBD oil line with the launch of Calm Advanced+ Hemp Oil, a 1500 mg, full-spectrum, CBD-rich hemp oil.

“Research suggests that cannabinoids, especially cannabidiol (CBD), has a range of benefits from calming temporary inflammation to easing the effects of everyday stress and more,” said Touchstone Essentials founder and CEO Eddie Stone. “I experienced these benefits firsthand after a devastating elbow injury that required emergency surgery. Full-spectrum hemp oil gave me fast relief, eased my discomfort and supported my recovery.”

Full-spectrum hemp oil is an extract of hemp that contains cannabinoids, terpenes, flavonoids and several other beneficial phytochemicals.

Calm Advanced+ Hemp Oil joins three other full-spectrum hemp oil products from Touchstone Essentials—Calm Premium Hemp Oil, Soothe Topical Hemp Balm and Calm Pets Hemp Oil—to provide a complete line of cannabinoid-rich solutions for people and pets.

Filed Under: Daily News Tagged With: Calm Advanced, Calm Pets Hemp Oil, Calm Premium Hemp Oil, cannabidiol, cannabinoids, CBD, CBD Oil, direct sales, Direct Selling, Direct Selling News, DSN, Eddie Stone, flavonoids, Hemp, Hemp oil, MLM, Multi-Level Marketing, phytochemicals, Soothe Topical Hemp Balm, terpenes, Touchstone Essentials

MONAT Introduces Studio One Collection

January 2, 2019 by DSN Staff Leave a Comment

MONAT® Global recently announced that it has released its Studio One Collection that focuses on eliminating frizz and protecting hair from high-heat styling tools.

The collection consists of one existing, re-branded product—The CHAMP™ Conditioning Dry Shampoo—and two new products: The Frizz-Fix Smoothing Hair Primer and the Thermal Protect Styling Shield.

“Protecting hair from high-heat tools and environmental factors is a concern that almost everyone can relate to,” said Ray Urdaneta, CEO of MONAT. “The Studio One Collection was formulated to help our customers feel confident that their hair is strong enough to withstand drying, straightening or curling tools. The products in this collection protect hair while being styled and continue to defend locks against humidity and pollution throughout the day.”

The Studio One Collection is dermatologist tested, vegan and cruelty-free. All MONAT formulations use ingredients, in concentrations, that the Cosmetic Ingredient Review (CIR), the FDA, Health Canada and the European Commission consider “safe for their intended cosmetic purpose.”

Filed Under: Daily News Tagged With: CIR, Cosmetic Ingredient Review, cruelty-free, dermatologist, direct sales, Direct Selling, Direct Selling News, DSN, European Commission, FDA, frizz, Hair, Health Canada, MLM, Monat, Monat Global, Multi-Level Marketing, Primer, Ray Urdaneta, Shampoo, Studio One Collection, The CHAMP, Thermal Protect Styling Shield, vegan

LegalShield Names Don Thompson Co-President of Network Division

January 2, 2019 by DSN Staff Leave a Comment

LegalShield recently announced that it has promoted Don Thompson to co-president of the firm’s Network Division, effective immediately.

Thompson will report directly to LegalShield CEO Jeff Bell. In his new role, he will be responsible for creating and driving sales and network marketing strategies that elevate LegalShield in the marketplace. He will play an instrumental role in driving the future expansion of LegalShield.

“During his more than two decades working to further LegalShield’s mission, Don has received several awards recognizing his outstanding work, these include being named a Millionaire Club Member, a $300k Ring Earner and a Top Group Producer,” said Bell. “Don has been an instrumental member of LegalShield’s success for many years. His network marketing and sales experience has been remarkable, and it’s an honor to have him join us.”

In March 1996, Thompson began his career at LegalShield. He served as LegalShield’s regional manager for Northwest Ohio from 1997 to 2001; network regional vice president for South Florida from 2002 to 2007; network regional vice president for Florida from 2009 to 2015; and business vice president covering Florida, Ohio and Michigan from 2015 to 2016. Thompson served as the senior network vice president, responsible for 26 states and 2 Canadian provinces from 2016 to 2018.

“I have been committed to LegalShield’s mission of providing equal access to justice for all for more than 20 years,” said Thompson. “It’s a crucial time for people in North America to have access to our services. I am thrilled and honored to continue fighting to protect and empower people, so that they may live free under the law.”

Filed Under: Daily News Tagged With: direct sales, Direct Selling, Direct Selling Association, Direct Selling News, Don Thompson, DSA, DSN, Jeff Bell, LegalShield, Millionaire Club Member, MLM, Multi-Level Marketing

Jack Spitzer Named Plexus Treasurer, SVP of Finance

January 2, 2019 by DSN Staff Leave a Comment

Plexus Worldwide recently announced the addition of industry leader Jack Spitzer to its executive team as treasurer and senior vice president of Finance. 

“Jack is a well-known leader in the direct-selling industry who brings new ideas and vast experience in global finance to Plexus,” said Steve Howard, chief financial officer. “In addition to his professional expertise, we’re confident Jack will be a great cultural fit who will complement our leadership team as we continue to grow and expand internationally.”

As part of his leadership role at Plexus, Spitzer will oversee the Finance department, including financial planning and analysis, treasury, tax and accounting.

“I am thrilled to join the executive team at Plexus as we enter our second decade,” said Spitzer. “This organization has an outstanding reputation and I am excited for our continued expansion.”   Spitzer most recently served at another direct selling company where he led global treasury and finance teams and international and domestic merchant services teams, among others. He also spent 15 years at Starwood Hotels & Resorts Worldwide as assistant treasurer, head of Global Treasury Operations, Merchant Services and Corporate Receivables. Prior to that, he was an accounts receivable manager in Corporate Accounting for Hilton Worldwide.

Filed Under: Daily News Tagged With: direct sales, Direct Selling, Direct Selling News, DSN, Finance, Jack Spitzer, Multi-Level Marketing, Plexus, Steve Howard

What You Focus On Grows

January 1, 2019 by Courtney Roush Leave a Comment

If you’re too spread out and trying to accomplish too many things, you’re setting yourself—and your team—up for a lot of frustration.

If you were to ask 10 middle managers at your company what your organization’s top three priorities were, would all 10 give you the same answers? Or would those answers vary wildly?
This test is worth is trying. If your managers aren’t all saying the same thing, you’ve got a pretty good indication that you’ve got a case of Shiny Object Syndrome. Your organization is either overcommitted or communication within your company isn’t where it needs to be–or both. And it’s probably both. If your organization’s priority list is always expanding and you’re spinning too many plates, it’s likely that communication is scattered and confusing, too.


“What you focus on is what you get. In fact, what you focus on grows.”
— John Addison, CEO of Addison Leadership Group, Inc.

We’re doing more with less. That’s not a new concept, nor is it unique to direct selling by any means. Regardless of how many resources you have in place, however, it remains incredibly challenging for any company to remain focused on doing a handful of things really well. First, we have access to information 24 hours a day–information about technology, about innovation, economic forecasts and so much more. Change is constant, as is the fear of missing out, or otherwise failing to keep up. If revenue begins to decline, it’s tempting to want to try something radically different instead of considering that maybe staying the course could be the smarter strategy.

In a 2017 article for the Harvard Business Review (“The Overcommitted Organization”), Mark Mortensen and Heidi Gardner discussed the ramifications of assigning employees to multiple projects at the same time. According to the authors, a survey of more than 500 managers in global corporations found that 81 percent of those who were working on teams were, in fact, serving on more than one team simultaneously. “Although most managers recognize the increasing prevalence of multiteaming, few have a complete understanding of how it affects their organizations, their teams, and individual employees.” Further, Mortensen and Gardner found that the more senior employees became, the more likely they were to be leading multiple projects at the same time. That’s stressful in and of itself, but if there’s little or no coordination among all of those initiatives–if employees can’t leverage learnings from one project to aid in another–then confusion reigns.

What makes maintaining focus especially challenging for direct sellers?

While leaders across every industry are tasked with prioritization, there are some very distinct dynamics within direct selling companies that make us particularly vulnerable to overcommitting ourselves.

First, direct selling is a highly customer service-oriented industry. We say yes–a lot. People are at the center of everything, and that includes the corporate environment, where expressing resistance to any proposed new initiative may be perceived as a resistance to support the company’s mission or its field. The relationship between corporate and the field is symbiotic; one wouldn’t exist without the other. Therefore, direct selling companies take great care to ensure that they’re offering products and programs that keep the sales force energized and motivated. That requires keeping an ear to the ground, staying on top of trends–or, better yet, starting trends.

Speaking of the field, field members–and in particular, field leaders–carry influence. “If you’ve got a group of leaders who think there’s an issue and you take it as gospel truth without doing the due diligence yourself and really quantifying it, it might be a big issue to them in the moment, but not over the long term. It’s easy to get distracted by opinions rather than rely upon facts,” says Senior Vice President of Business Development for SUCCESS Partners Noah Westerlund.

Part of the challenge with determining your priorities in the field, Westerlund adds, is the lack of transparency that has traditionally surrounded distributor activity. While we’ve been able to examine daily sales figures, we haven’t been able to take a deep dive into what’s happening behind those numbers–for example, how many people an average distributor is talking to each day. When a distributor calls you and reports a problem, then, there’s not an easy way to quantify the potential impact of the issue she’s reporting. “Our industry’s increased access to meaningful data gives us greater insight into what’s really happening out in the field. However, in order for that data to help you make informed decisions, direct selling companies need to make data analysis “part of the culture so you know everyone’s using it,” Westerlund says. “Otherwise, it’s only a small sample–you get these pockets of information. You need to make sure it’s representative of the entire system.”

Choosing Your Focus

We’re at the start of a new year, and undoubtedly, you’re giving some thought to your overarching goals for the next 12 months. When making changes, waiting on results is another challenging aspect for direct sellers. “Patience is one of the biggest challenges that I’ve watched corporate leaders struggle with. Entrepreneurs are drivers,” says founder of Adams Resource Group, Paul Adams. “They make things happen. It’s difficult to admit that making a change takes time. Getting results from those changes takes longer. Corporate leaders have to know they have taken the time to examine their strategy from all angles and once they commit to it, make it happen.” Your leaders undoubtedly have their own opinions, which likely are shaped by their respective departmental roles.

No matter the direct selling company, we’re all in the business of people. Finding your focal point is easy—all of us should be looking at the same place on the horizon. The field comes first. “In direct sales, your focus always has to be on the salesperson,” says Jessica Honegger, founder and Co-CEO of Noonday Collection.

Most direct sales companies are naturally focused on building a brand, which requires a bit of give and take when allocating resources. “Our focus is first and foremost on the community and how we’re creating value for them, and then the brand,” Honegger adds. “A lot of direct selling companies–they make a choice. They focus on their compensation plan and on their sales force and on growing, growing, growing; whereas we just really want to be a well-recognized brand many years from now. We’re always balancing limited resources. Are we going to use our marketing dollars to enable our sales force, or to grow our brand?”

“My view is, if the incomes of the sales force aren’t growing, you’re not growing,” says John Addison, CEO of Addison Leadership Group, Inc. He recommends examining the pulse of your sales force not only by reviewing the numbers daily, but also monthly in an in-depth session. “That doesn’t mean that when you have a downturn, you need to change a bunch of stuff. I see companies who always think they’re one incentive away from growing and then you get a bunch of confusion and no one knows what to do. Way too many businesses and companies I see are a mile wide and an inch deep. If you’re too spread out and trying to accomplish too many things, it’s going to be a self-defeating thing.”

Pick up the printed issue in which this article is found.

Zeroing in on your key priorities is only part of the picture. Employees must also have the flexibility to adapt as needs arise. This is where a critical distinction comes into play. Strategy is the why; tactics are the how. Westerlund offers a great example: Imagine a mid-level manager rowing a boat furiously on a lake. She’s expending a lot of energy and rowing like crazy, but if you were to ask her where she’s going, she’d have no idea. Her tactic is rowing that boat, but her strategy–her destination–is missing. And, before you pinpoint your destination, “It’s really important to spend that up-front time diagnosing your strategy so you’re not throwing solutions at the wrong problems,” Honegger says. “I always encourage corporate leaders to begin with the end in mind. What are you trying to accomplish and what activities, behaviors, systems, etc. are needed to accomplish that goal? It is easy to let little daily distractions cause us to move away from our goals. Often, I encourage people to stop doing activities that are not leading toward the ultimate goal,” says Adams.

Confusing Tactics With Strategy

All too often, Westerlund says, companies abandon an initiative and don’t give themselves the opportunity to mature a strategy. “The biggest problem that companies have in this industry is we confuse tactics for strategy. Tactics are the day to day–running a promotion, setting up a new warehouse, testing a different pricing model–steps that we take to fulfill our strategy. Strategy is about ‘How are we going to accomplish x given y?’ How you answer that question is your strategy. When you let tactics eclipse strategy, you lack focus and that results in confusion.” That doesn’t mean good ideas won’t pop up every single day, but you’ve got to take that good idea and package it in a form that gets you closer to that strategic goal rather than take you off course. And if it takes you off course, it may be a good idea; it just might not be the right time. Or you might have to re-evaluate your strategy at some point–but you can’t do that every day.


“The biggest problem that companies have in this industry is we confuse tactics for strategy.”
— Noah Westerlund, Senior Vice President of Business Development, SUCCESS Partners

Tactics and strategy aren’t rigid entities; a certain degree of flexibility is required in order to invite creativity and innovation. The term “tactical performance” describes how well a company sticks to its plan, while “adaptive performance” refers to how well a company diverges from its plan, say Lindsay McGregor and Neel Doshi, co-authors of the New York Times bestseller Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation. Tactical performance, say the authors, answers questions like “What are my measurable goals? What is my timeline? How, precisely, am I doing?” Businesses usually focus most of their efforts on tactical performance, which, in most cases, is easily measured–for example, the month’s total sales for your new product, or number of new distributors welcomed during a special promotion. Adaptive performance, according to McGregor and Doshi, enables an organization to deal with variability. “It is what leads to distinctive innovation, customer experience, quality, and customer-centric sales.”

So what’s your plan?

How do you wrap all of this knowledge together into one cohesive, streamlined and yet flexible plan–one that communicates an overarching strategy in which everyone understands his or her role, but which also gives your employees the latitude to suggest improvements or alternative approaches?

Keeping the field top of mind, Addison recommends not only tracking production on a daily basis, but also gathering your leadership at least once a month to review all of the numbers in depth, so potential issues can be discussed–and, if necessary, addressed–before they become larger problems. “You don’t constantly need to change your strategy,” he says, “but you should be constantly analyzing and tweaking your tactics.”

There’s something even more important than strategy and tactics in all of this, though, Addison says–and that’s culture. Everyone on your leadership team and every senior field leader should understand the why of what makes your business great. From there, your strategy and will help define the things you’re going to do to grow the business and build it for the long term.

When communicating your strategy to your employees and especially your sales force, simplicity is one of your most effective tools for keeping everyone focused. “People always talk about who they’re competing with in their business. The truth is, what you’re competing with are the distractions in people’s lives,” Addison continues. “You’re trying to compete with the shelf space of their attention. So if you’re focused on too many different things, they’ll tune you out. Your message better be very focused on their personal development and the growth of their business, and it has to be repetitive.”

Staying the course can be challenging when “you’re in the business of creating excitement and attracting people,” Addison adds. If your employees and your sales force know what you stand for, where you’re headed and how they fit into the picture, you’re far more likely to reach your destination.


Tactical Performance – is how effectively your organization sticks to its strategy. It is the driver of focus and consistency. It allows organizations to increase strength by directing limited resources to the fewest targets.

Adaptive Performance – is how effectively your organization diverges from its strategy. Adaptive performance manifests as creativity, problem solving, grit, innovation, and citizenship.

In a nutshell, tactical performance is how well you stick to your plan, and adaptive performance is how well you diverge from your plan. High-performing companies need both. You can overdo tactical performance, and you can also be too adaptive. For example, if an employee doesn’t have the autonomy to employ creativity to reach a goal, or if your culture is so adaptive that you fail to deliver a consistent experience to your customers.

Source: Harvard Business Review, October 10, 2017. “There Are Two Types of Performance – but Most Organizations Only Focus on One.” Lindsay McGregor and Neel Doshi

Filed Under: Cover Stories Tagged With: Adams Resource Group, Addison Leadership Group, bestseller, Change, Direct Selling, Direct Selling News, DSN, field, field leaders, field members, focus, frustration, Harvard Business Review, Heidi Gardner, Jessica Honegger, John Addison, Lindsay McGregor, Mark Mortensen, MLM, Multi-Level Marketing, Neel Doshi, New York Times, Noah Westerlund, Noonday Collection, overcommitted, Paul Adams, Primed to Perform, Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation, Shiny Object Syndrome, SUCCESS Partners, The Overcommitted Organization

A Promising Path for PURE

January 1, 2019 by Angela E. Soper Leave a Comment

People United Reaching Everyone takes the Hi-Act to new growth.

PURE
Founded: 2008
Headquarters: Frisco, Texas
Top Executive: Daren Hogge, CEO | Dae Geun Jung, Founder & Chairman of the Board
Products: Health and Wellness

Daren Hogge

Daren Hogge

Dae Geun Jung

Dae Geun Jung

According to the dictionary, evolve means “to come forth gradually into being.” This seems to sum up the path PURE: People United Reaching Everyone has taken as it makes steady gains in both sales force and revenue. Based in Frisco, Texas, with offices in Taiwan, Korea and Thailand and an NFR (not for resale) presence in Japan, Canada, Australia and New Zealand, PURE’s renewed vigor has evolved not only from new ideas but also from returning to its roots. Celebrating its tenth anniversary in August 2018, PURE has made significant strides in a short time. “This last year we’ve seen significant growth in all key metrics—recruiting, retention, rank advancements and consumer engagement over the prior year,” states Founder & Chairman of the Board Dae Geun Jung. In addition, the company has reached record-setting rank advancements. A company press release states that 2018 was one of the company’s best years in history, with over 1,600 rank advancements year-to-date.


“This last year we’ve seen significant growth in all key metrics: recruiting, retention, rank advancements and consumer engagement over the prior year.”
— Dae Geun Jung, Founder & Chairman of the Board

Daren Hogge, PURE CEO—a 31-year veteran of the industry, feels the key to PURE’s emergence as a worthy contender in the health and wellness market is how company leaders have reshaped it to embrace its founding principles.

From GoYin to Pure Step-by-Step

The company began with the creation of GoYin, a company Hogge helped start several years ago. Built around its namesake GoYin product—a beverage based on traditional Asian medicine and formulated in collaboration with Cal Berkeley and the University of Shanghai—GoYin merged with another company in 2008 founded by Dea Geun Jung, now Founder and Chairman of the Board for PURE, before undergoing a rebrand in 2017 to become PURE: People United Reaching Everyone.

Hogge headed the first and second iterations of the company before leaving in 2012 to pursue another venture. He returned two years ago when he saw an opportunity to take the company back to specific values he helped create in 2008.

“We put in some founding principles that were pillars,” he explains. “One of them was the philosophy of our products that have come to life through the CORE4—to cleanse the body, to balance the body, to build the body and to provide focus for the body. All of the products we developed, we created to make sure they fit into those categories and help to deliver whole health. The other principles we came up with are what I term the Hi-Act.”

For Hogge, the Hi-Act forms the crux for how he wants to build the company and how he wants its Independent Business Owners (IBOs) to build their businesses. An acronym for the principles of honesty, integrity, accountability, commitment and trustworthiness, Hogge says it is the foundation for everything the company does. “We wanted to make sure we used the Hi-Act in all of our dealings,” Hogge says. “We make that commitment to all of our IBOs and customers.”

IBOs quickly responded to this commitment. According to Hogge, when the leaders saw that the founding principles and trust had been re-established, they renewed their efforts to build successful businesses. “Not only did we return to our core values and beliefs but we evolved the brand with a fresh look, new products, new incentives and innovations,” says Director of US Sales Sam Crossley.

Modernizing the Products

Pick up the printed issue in which this article is found.

The evolution of PURE is also evident in its products. “We’ve been modernizing and evolving our packaging in order to make it a little more mainstream or aligned with what consumers see in the marketplace,” says Shay Kiper, director of marketing. These updates started with the design of the GoYin bottle for the company’s tenth anniversary this past summer. “GoYin is our flagship product so we rolled out a limited-edition design,” explains Kiper. “It’s a little bit bolder packaging than what we’ve seen in the past, so we used that as a nod to the evolution of the brand and what you can expect to see in the future.”


“Not only did we return to our core values and beliefs but we evolved the brand with a fresh look, new products, new incentives and innovations.”
— Sam Crossley, Director of U.S. Sales

PURE also supports its products with recognition from highly credible organizations. The majority of the products in the GPS sports performance line have received Informed Sports Certification, a distinction that clears all the products in the line for use by professional, collegiate and Olympic athletes.

PURE’s top-selling product set is Core4, products designed to promote the company’s mission to cleanse, balance and build the body as well as provide focus. All Core4 products are featured in the 2018 Physicians’ Desk Reference. This past summer PURE launched its seven and 28-day Detox Program to further support the cleanse philosophy. “It’s been a very popular way for people to come in as either a customer or from a business perspective,” says Kiper. To date, PURE offers 35 products, with many available in various flavors and product forms.

Company Leaders Work for Field Leaders

Detox program participants proudly display their weight loss on stage at Xcelerate in October 2018.

PURE’s sales force is intrinsic to the company’s success, and Hogge is adamant that he and his team remember that they work for the IBOs. “If we work for the IBOs, we should take their input, we should see where they want the company to go and allow them to have a say in where we go. The detox program is an example of a system driven by leader input,” says Hogge. PURE’s focus continues to be the U.S. market, which has experienced the largest growth the past two years. “I’m very proud of that because as we have gone forward with the rebranding and some of the enhancements to the compensation plan, we’re hitting on key points that people around the world are craving,” says Hogge.

To keep its sales force informed and charged, PURE recently hosted 1,400 IBOs at its Xcelerate event in Texas and took 103 leaders to Bora Bora in November as part of its incentive program. Hogge knows that leaders appreciate strong corporate support, and he feels the company’s rank advancement bonus is one of the most lucrative in the industry.


“I think we’ll see quadruple growth over the next few years from the projections we set two years ago.”
— Daren Hogge, Pure CEO

Going forward, Hogge says their strategy is to continue to look for strong leaders who share the company’s Hi-Act principles and want to share them with like-minded individuals. “I believe that we have only scratched the surface here in the U.S.,” adds Hogge. “I think we’ll see quadruple growth over the next few years from the projections we set two years ago—and we’ve exceeded—and where we’re headed over the next four years.” Hogge says the company also plans to expand globally to increase their international presence.

As PURE: People United Reaching Everyone continues to evolve, Hogge is optimistic that he and his team will find ways to keep the momentum going. PURE is dedicated to delivering Whole Health with high-quality products for physical health, opportunity for financial health, relationships for personal health and social impact for philanthropic health. Hogge firmly believes it is the company’s five principles—honesty, integrity, accountability, commitment and trustworthiness—that has fueled the fire of PURE’s recent surge in growth and will continue to do so long into the future.


Giving Back & Creating PURE Relationships

PURE’s Dae Geun Jung and Daren Hogge present the first check to DAV at 2018 Xcelerate. Graciously accepting the check are Trisa Paschal of Personal Philanthropy Programs and Jennifer Kellogg, Air Force veteran.

An important aspect of a company’s culture is defining its philanthropic spirit. To this end, PURE recently announced a partnership with Disabled American Veterans (DAV). PURE CEO Daren Hogge says they are proud to support the country’s heroes since many of PURE’s IBOs are veterans. In addition to giving back to the men and women who serve the United States, the company’s $25 enrollment fee is waived for veterans and active military personnel.


Powerful PURE Partnerships

Driver Gary Gaulding in his PURE brand wrapped NASCAR 08 Camaro.

National exposure is another key component of moving a company forward. PURE recently announced a partnership with one of its IBOs, NASCAR driver Gary Gaulding. Gaulding is one of many millennials finding value in both the product and opportunity with PURE. He believes so strongly in the company that he wrapped his 08, Chevrolet Camaro in the PURE brand, which he will compete with in the 2019 NASCAR Xfinity Series. “We were so excited that Gray pursued this as the number eight has great value to us at PURE as we were founded on 8/8/08,” states Daren Hogge, CEO.

Filed Under: Company Spotlights Tagged With: Bora Bora, Cal Berkeley, CORE4, Dae Geun Jung, Daren Hogge, Direct Selling, Direct Selling News, DSN, Frisco, GoYin, Hi-Act, IBO, Independent Business Owner, MLM, Multi-Level Marketing, People United Reaching Everyone, pure, Sam Crossley, Shay Kiper, Texas, Xcelerate

The Affordable Technology Trap

January 1, 2019 by Heather Martin Leave a Comment

Low cost and fancy filters and features fool us into thinking everyone’s a professional designer.

You’ve spent serious money for quality research and production teams. You’re sparing no expense to hire the best minds for your executive team. You pay big dollars for technology expertise. But your intern is shooting video at your national conference and photographing your top team members with her iPhone?

We get it. Creative talent isn’t cheap, and as technology becomes more sophisticated and more affordable, it’s tempting to cut marketing corners. But while your intern may know how to use “portrait” mode on her cell phone, does she know when or if she should use it?

Skimping Leads to Inconsistency in Your Brand

“You can’t replace artistry with technical competency,” says Noah Westerlund, Senior Vice President of Business Development for Success Partners. And therein lies the difference between pros and amateurs: Professionals shape and tell a brand story with their tools. Amateurs let the tools shape and tell the stories for them. “This business is driven by storytelling and enabling your distributors to tell stories effectively. Why would you skimp on the story?” says Westerlund.

Studies show that 90% of all consumers expect their brand experience to be consistent across all platforms and devices. Building on that, 71% of users who have a positive social experience with a brand will share that experience and recommend the brand to others.

The lesson learned? Your visual brand is the face of your company to customers, distributors and prospects. It’s too important to leave in untrained hands.

Creativity on a Budget

Money, especially for startups, is tight. So how do you get the high-quality images, video and graphics you need for a clear, polished visual brand without breaking the bank?

Don’t try to create it all at once, Westerlund advises. “Decide on a few key components and do those things really well rather than do five or six things in a mediocre way.” It will cost more than pennies. A startup should expect to spend between $25,000 and $50,000 for basic deliverables, like a website and one or two product videos, he says. But the photographs on your brochures and video on your website and social pages are the first impression you won’t have a second chance to make, experts say. Don’t waste the opportunity.

“The quality of photography will directly influence the perceived value of your product,” says Annette Ferraro, a professional commercial photographer in Columbus, Ohio, and owner of Annette Ferraro Photography. “If a consumer or client isn’t immediately sold on an image he or she will not engage with your content and will simply move on.”

Westerlund agrees. “When poor design is at its most egregious, the prospect is going to look at it and say, ‘This is not something I have faith in.’” There are even long-term consequences to not investing in quality brand creative, Westerlund says. “I’ve seen so many startups make that mistake. And when you start out cheap you’re fighting that uphill battle for years to come.” Because eventually you’ll want to rebrand but people will be loyal to the original one “even if it was amateurish boring” and the change will be painful.

Creative Licenses

If you can’t afford a high-end designer or a whole design team, at least invest in a solid brand style guide, Westerlund says. “Then you can hire kids out of design school to execute on that style guide.”

Outsourcing also is a great way to get strong creative content without the payroll expense of top talent. That’s the path Roger Morgan chose from day one in 2014 when he founded pawTree, a Southlake, Texas-based pet product direct selling company.

As a past CEO of a multinational pet products company, Morgan understood the value of high-quality visual content—“especially at the beginning when you’re not a known brand.” Prospective salespeople and customers are not going to take a chance on a company or product if the brand doesn’t look reputable or high-quality, he says.

But as a start-up—and even now—PawTree couldn’t afford to hire the expertise it needed full time. So it has one in-house marketing director who manages teams of freelance creatives who handle everything from product photography to video production to logo design. And the company doesn’t always need a stable of designers, either. “Outsourcing gives us the ability to flex up and down with the resources,” Morgan says.

It’s an Investment in Your Brand

There are situations in which taking the amateur path makes sense, especially on the social networking front, says Ferraro, who has many small-brand clients whose visual brand strategies thrive on a mixture of professional photos and cell phone captures. Because their customers want to know as much about the owners as people as they do about the company’s products—and they want that information in real time—a bit of leeway in brand consistency and polished images for every post is okay. These small brands are still deliberate about their branding choices, and they still use professional images to showcase their final products in ads and on their websites.

“Investing in a professional may seem expensive,” Ferraro says, “but it will boost your brand, save you money and time, eliminate frustrations, and positively impact sales.”


3 Reasons to Outsource to the Pros

Pick up the printed issue in which this article is found.

Because cameras and design software have become more feature-heavy in addition to user friendly, they have made it easier for the average person to produce decent pictures as well as graphics. While the differences between professional and nonprofessional work are sometimes subtle, they’re important.

Annette Ferraro, a professional commercial photographer, points to three technical advantages that professional photographers and videographers bring:
  1. Proper lighting. “How are you supposed to effectively communicate the message of your brand if your customer can’t even see what you’re selling?” she asks. Lighting mistakes are easy for non-pros to make, she adds, because they haven’t spent years mastering the concept of light.
  2. Post-production expertise. The default image setting on phone cameras and most DSLR cameras is JPEG—basically a photo file for dummies, automatically correcting exposure and color, for example, and finalizing the photo. But if the subject is not well-lit to begin with, for example, there’s only so much the auto-correct process can do. And even if an amateur knew how to set the camera to take correctable RAW images (the digital equivalent of a film negative), chances are he wouldn’t have the photo editing tools or skills to make those images suitable for publication—and for your brand.
  3. A new perspective. Professionals can see your products and people in a way you may never have looked at them before. They can position and frame them to emphasize their best qualities.

Filed Under: Feature Articles Tagged With: Annette Ferraro, Direct Selling, Direct Selling News, DSN, graphics, images, MLM, Multi-Level Marketing, Noah Westerlund, pawTree, Roger Morgan, Southlake, SUCCESS Partners, Texas, video

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