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EDC Promotes Craig White, Heather Cobb

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Photo: Craig White and Heather Cobb

Educational Development Corporation (EDC), the Tulsa, Okla.-based publishing company specializing in children’s books, recently announced the promotions of Craig White and Heather Cobb.

White, a graduate of Oklahoma State University with over 23 years of experience with EDC, was promoted to chief operating officer. He began his career at EDC as the company’s operating manager and most recently held the title of vice president of Information Technology. As COO, he will oversee the operations and information technology departments of the company.

Cobb, a graduate of Northeastern State University with seven years of management experience with EDC, was promoted to chief sales and marketing officer. She was initially hired as sales manager of the Usborne Books & More (UBAM) Division and most recently served as vice president of UBAM. As chief sales and marketing officer, she will oversee the sales of the UBAM Division as well as the company’s marketing strategies, promotions, branding and product selection.

EDC, founded in 1965, is the American co-publisher of the UK-based Usborne Publishing and owns Kane Miller, which publishes children’s literature from around the world. Both Usborne and Kane Miller products are sold via 4,000 retail outlets and by over 35,000 direct sales consultants nationally.

Mannatech Reports Q2 Net Sales Down 5.3%

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Flower Mound, Texas-based Mannatech, Incorporated recently announced financial results for its second quarter of 2018.

Net sales were $45.1 million, a decrease of $2.6 million, or 5.3 percent, as compared to $47.7 million in the second quarter of 2017. Mannatech’s operations outside of the Americas accounted for approximately 61.6 percent of its consolidated net sales.

Regionally, results included:

  • Asia/Pacific: Net sales decreased by $0.2 million, or 0.8 percent, to $24.5 million, as compared to $24.7 million for the same period in 2017. This decrease was primarily due to a 19.8 percent decline in the number of active independent associates and preferred customers, which was partially offset by a 23.6 percent increase in revenue per active independent associate and preferred customer.
  • Europe, the Middle East and Africa (“EMEA”): Net sales decreased by $0.2 million, or 5.7 percent, to $3.3 million, as compared to $3.5 million for the same period in 2017. This decrease was primarily due to a 21.6 percent decline in revenue per active independent associate and preferred customer, which was partially offset by a 20.2 percent increase in the number of active independent associates and preferred customers.
  • Americas: Net sales decreased by $2.2 million, or 11.3 percent, to $17.3 million, as compared to $19.5 million for the same period in 2017. This decrease was primarily due to a 9.6 percent decline in revenue per active independent associate and preferred customer as well as a 1.8 percent decrease in the number of active independent associates and preferred customers.

The approximate number of new and continuing active independent associates and preferred customers who purchased packs or products or paid associate fees during the twelve months ended June 30, 2018 and 2017 were approximately 202,000 and 218,000, respectively.

To read the full Mannatech Q2 financial report, click here.

LR Health & Beauty Names Andreas Friesch New CEO

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Ahlen, Germany-based LR Health & Beauty Systems, one of Europe´s leading direct sales companies, today announced that, effective immediately, Andreas Friesch is the company’s new CEO.

He succeeds Dr. Thomas Stoffmehl, who leaves the company by mutual agreement.

Friesch’s professional experience roots in the European direct sales industry. For 10 years, he led the product division of another direct selling company, where he was responsible for the German sales organization overseeing more than 16,000 sales partners. His strong commitment played a major role in the international success of the company.

Dr. Stoffmehl, who successfully drove the strategic and operational reorientation of LR over the past years, decided not to prolong his engagement at LR.

Currently, LR Health & Beauty is represented in 28 countries. The management team of the LR Group will now comprise Friesch (CEO), Thomas Heursen (Global Partner Relations) and Dr. Andreas Laabs (CFO/COO).

Isagenix International Launches Essence by Isagenix Essential Oil Collection

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Gilbert, Ariz.-based Isagenix International today announced the launch of the Essence by Isagenix Essential Oil collection, a new product offering designed to help customers meet a range of health and wellness needs, from relieving stress to supporting weight wellness journeys.

Travis Ogden

Travis Ogden

The collection launched yesterday to attendees at the company’s Global Celebration 2018 event, and customers and independent distributors in the U.S., Puerto Rico and Canada can now purchase select products. The complete line will debut later this month and is expected to launch in Australia and New Zealand in September.

The Essence line includes six single oils, four blends, a carrier oil, and a diffuser. The single oils are lavender, lemon, eucalyptus, frankincense, tea tree, and peppermint. The essential oil blends are DefenseShield™, a daily immune support blend; Airway™, a mix of aromatic botanicals that provide a positive breathing experience; Content™, a satiety blend that can enhance the feelings of satisfaction; and TumBliss™, a support for digestive health and comfort.

“By creating a high-quality collection of essential oils and blends people can feel confident using, Isagenix has taken a significant step forward in our mission to transform lives by freeing them of physical and financial pain,” said Isagenix Chief Executive Officer Travis Ogden. “We can better meet the needs of our many existing customers who were already using essential oils as well as tap into a new customer base: the current oil users who can now enjoy our oils while also being introduced to our full line of transformational products and solutions. We look forward to welcoming those new customers into the Isagenix family.”

Seeking Regulatory Clarity

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This Sidebar is part of the August 2018 Cover Story

Continuous and transparent communication about how direct selling works and its value has prompted greater understanding by governments and the public around the world, Tamuna Gabilaia, executive director and COO, WFDSA, says.

Offering this education ensures more favorable operating environments for distinguished and credible direct selling businesses, but global growth also depends upon clarity in the regulatory environment from country to country.

Pick up your print copy of the August 2018 issue in which this article appeared.

Misconceptions and false perceptions continue to dog direct selling. Despite an evolving 40-year effort to identify and eradicate pyramid schemes, inventory loading, misleading earnings claims, high-pressure sales, scrutiny from lawmakers, press and investors has increased, USDSA Joe Mariano says.

“DSA members are in agreement that we can no longer rely upon our self-congratulations for our industry-leading Code of Ethics,” Mariano says.

More and more USDSA member companies want guidance on what to do and how to compete effectively in a changing marketplace beset by competitors, regulators, press and consumer demand. USDSA-issued guidance papers identifying direct selling best practices will provide additional informal help next year.

Overall, Mariano says, the U.S. regulatory environment is favorable, but the pressing 2018 regulatory issue revolves around the independent contractor status of salespeople.

“Our goal this year will be to continue to fight on Capitol Hill and in the state legislatures to resist any attempt to deprive or diminish their independent status or to delegitimize their activities by defining them as pyramid schemes. We will continue working to educate policymakers on these differences and support policies that define them,” Mariano says.

Within the European market, consumer protections are the focus of regulators where direct selling faces a challenge with consumer policy with the European Union. “A New Deal for Consumers,” published in April lays out additional provisions that would effectively ban doorstep selling if justified by “grounds of public policy or the protection of the respect for private life.”

No factual evidence supports such EU action, Seldia Executive Director Katarina Molin says. The very few reported abuses of certain doorstep selling practices in very few Member states does not justify legislative steps to further restrict commercial practices on the direct sales channel. Seldia does not condone these practices and Molin says existing provisions specifically prohibit “personal visits to the consumer’s home ignoring the consumer’s request to leave or not return.”

Lobbying efforts with European Parliament and the Council are underway and will continue through the fall 2018.

A New Age for Direct Selling – In the age of Amazon, how will the industry continue to compete?

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They may not be losing the war, but traditional American retailers sure are taking a beating in battle.

Forbes has reported that malls and shopping centers lost more than 10,000 stores in 2017, “perhaps the worst year on record,” wrote Ben Gamse, Market Research Manager for the U.S. Direct Selling Association (DSA), in our July issue. In 2018, long-time retailers Toys R Us and Bon-Ton announced they would go out of business for good, while anchors such as Sears and Macy’s continued to thin their ranks.

Nevertheless, with overall sales growth of 4.5 percent and 4,080 net store openings last year, retail is still a good business to be in. Gamse wrote: “The retail sector isn’t collapsing. It’s evolving.” Likewise, despite a second year of falling U.S. direct selling revenue—down 1.8 percent to $34.9 billion in 2017, according to DSA’s 2018 Growth & Outlook survey—the industry is likely experiencing more of a shift than a decline.

Traditional direct selling companies need to find more precise ways of differentiating themselves—perhaps by focusing on how direct selling enables their independent representatives to create long-term relationships with repeat customers to create an ongoing revenue stream.

The dip is prompting reflection but not alarm. The main reason for the shift can be attributed to the fact that there were less people involved in direct selling in the U.S. (1.9 million drop from previous year), mostly due to companies restructuring or re-segmenting their base of independent representatives from discount buyers to preferred customers. But that’s just the starting point. Some direct selling executives see the lower revenue as an indication of a market correction after a period of significant growth. Others believe that the low unemployment rate (4 percent) and pressure from online giants like Amazon and Etsy are simply raising the retail stakes, giving the industry a chance to step up its game.

“Companies and industries have to adjust to the market forces and economic winds that blow,” says Orville Thompson, CEO of Meridian, Idaho-based Scentsy. “We’re just in a transition period. Good companies are setting their sails differently, and bad companies are getting washed out.”

The Way Forward

DSA presented the industry’s sales results at its June annual meeting and surveyed attendees for their opinions on the main reasons for the downturn (see sidebar). DSA’s Industry Research Committee also solicited ideas for how the industry can improve to compete in the marketplace while offering several of its own recommendations:

  • Leverage the still-strong desire among Millennials and Generation Z to make extra income.
  • Offer support, compensation plans and incentives that resonate with modern independent representatives.
  • Segment and track retail consumers and independent representatives.
  • Clearly articulate direct sales’ value proposition, specifically within the gig economy.

Attendees who responded to the survey echoed these recommendations and expanded on them to include the following:

  • Define products and business opportunities clearly.
  • Offer competitive prices.
  • Improve technology tools and the use of big data.
  • Become more customer focused.
  • Develop more effective training for independent representatives.

These big-picture strategies are critical to the health of the industry, but so is everyday “blocking and tackling,” Thompson says. “We need to ask ourselves, ‘Are our products on trend? Are we providing good customer service? Are consultants growing their base?’ Those business fundamentals are what give you growth that’s sustainable.”

Ben Riley, chief sales officer for Lehi, Utah-based Young Living, says that one of his company’s four primary strategies for continued growth is pretty basic, too: “Our consumers want their products faster and for less.” he says. “We are proactively upgrading our logistics solutions globally to offer a more compelling value proposition.”

 

A Bigger Gig

Direct selling executives who have been around for a while aren’t nervous about the downturn because they’ve seen it before. “What the overall industry numbers represent are a broad swath of companies going through a pretty dynamic lifecycle,” says Thompson, who along with wife Heidi started his company 14 years ago. “There are periods in which startup is prevalent. As those companies shift from hyper growth to rational growth, you’re going to see an overall number drop if there aren’t new startups.”

“We need to ask ourselves, ‘Are our products on trend? Are we providing good customer service? Are consultants growing their base?'”
– Orville Thompson, Scentsy CEO

What the industry hasn’t necessarily faced before, though, is competition from independent contracting competitors, like Uber and TaskRabbit, that don’t define themselves as direct sellers. In the last decade, there’s been an explosion of YouEconomy operators that allow us to make extra cash with very little investment, by selling a short-term share in things we already own—like our homes, our cars, and our talents. As many as one-third of U.S. workers can be categorized as “gig” employees.

Now, Nu Skin President Ryan Napierski would say that at a 50,000-foot level, there’s really no distinction between a Nu Skin and an Uber. “There is not much difference between the basic transaction models of direct sellers and gig companies. Direct selling companies provide a ‘gig and more’ opportunity beyond the single product or service transaction that a gig provides,” states Napierski. Both are “opportunity economy” businesses, so to measure the revenue of just traditional direct sales is to miss an important segment of a market in which the lines among players are less solid than we may think. “That $35 billion in revenue hardly represents the independent contracting business environment,” he says. “There are literally hundreds of multibillion-dollar-value business opportunity companies out there.”Direct selling companies can see the expanding gig marketplace as their biggest threat, but Napierski suggests they see it as, well, an opportunity. They can start by changing how they define themselves, he continues. “How do we identify a direct selling business? It’s a person-to-person trusted transaction of a product or service.” Traditional direct sellers no longer corner the market on freedom and flexibility. They need to find more precise ways of differentiating themselves—perhaps by focusing on how direct selling allows contractors to create long-term relationships with repeat customers to create an ongoing revenue stream. That’s an advantage that some service-oriented gigs can’t typically tout. “After the customer leaves the car, they no longer have any affiliation with the driver,” Napierski says of companies such as Lyft and Uber.

“It’s up to us to look at ourselves differently,” he says. “I’m very optimistic about our future as an industry as we embrace change. I believe that the future is bright.”
– Ryan Napierski, President Nu Skin

The marketplace reality that no company—gig, direct selling or otherwise—can ignore is the Millennial Effect. Businesses that don’t adjust their branding and operations to appeal to the working population and consumers in the largest generation since the Baby Boomers are going to be at a disadvantage.

Pick up your print copy of the August 2018 issue in which this article appeared.

For the direct selling industry, this often means scrapping traditional pieces of the model, executives say. “Last year, for instance, Young Living allowed new members to sign up without a Social Security number if they only wanted to buy our products and not build a business,” Riley says. This particular operational shift not only appeals to Millennials, who aren’t willing to obligate themselves the same way their parents or grandparents did, it satisfies tighter regulations around the industry’s retail sales channels.

Similarly, Nu Skin is waiving sign-up fees for new customers, Napierski says, as well as restructuring compensation and incentive plans to reflect what young independent representatives want instead of “forcing them down a single way of doing business.”

If there’s a macroeconomic lesson to be learned from the industry’s revenue decline, Thompson says, it’s this: “Too often we think we are affected by a poor economy when we’re the cause of the poor economy.” His point is that the downturn, while brief, is a sign that the industry needs to be more responsive to market desires. “Scentsy doesn’t do well if consultants can’t address the needs of customers,” he says.

Napierski agrees. “It’s up to us to look at ourselves differently,” he says. “I’m very optimistic about our future as an industry as we embrace change. I believe that the future is bright.”

A Quest From Good To Great – ARIIX’s Slow And Steady Plan For Success

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Throughout history, high importance has been placed on the number seven. Seven is said to represent completeness and the aspect of things well done.

ARIIX
Founded: 2011
Headquarters: Bountiful, UT
Top Executive: Fred Cooper, Founder and CEO
Products: Toxin-free supplements, weight loss, air/water purification, skincare, personal care and essential oils products.
Annual Revenue: $178 Million

Fred Cooper

With Bountiful, Utah-based ARIIX currently celebrating its seventh anniversary, the company must earn a “well done” given its consistent upward momentum. Consider: ARIIX has experienced 249 percent growth the past three years, with six consecutive record years, and has jumped from position 82 to 78 on DSN’s Global 100 in one year.

Although ARIIX is still growing and has yet to reach that proverbial state of “completeness,” it is a real contender in the world of direct sales leadership. Boasting $178 million in annual revenue, with seven strong and impressive brands, a new loyalty travel program, offices and about 85,000 Representatives in 15 countries, ARIIX has come a long way from a startup in 2011.

As the self-proclaimed “The Opportunity Company,” ARIIX has created an impressive array of products and a unique compensation plan. Founder and CEO Fred Cooper explains: “Many companies are a branded house. They are known for one thing. We want to be a house of brands in which you get the best in class of different types of brands that you choose to represent. We also are not married to just products, we’re not married just to services, we have both.” The key to our success is diversity, he believes. “It’s not just, ‘Here, take a product and earn commissions on it,’ but ways to improve yourself in many different dimensions.”

Protecting Its Representatives Is Vital

Deanna Latson, CPO and Founder giving some love at the Next Level World Tour in Lyon, France.

Deanna Latson, CPO and Founder giving some love at the Next Level World Tour in Lyon, France.

Cooper and five of the other six founders: President Mark Wilson, CFO Jeff Yates, COO Riley Timmer, CIO Wenhan Harry Zhang and CSO Ian Chandler, had worked together at another successful direct selling company prior to creating ARIIX. The seventh partner, Founder and Chief Product Officer Deanna Latson, had no experience in direct selling (more on Deanna’s interesting story later).

“We want to be a house of brands in which you get the best in class of different types of brands that you choose to represent.”
—Fred Cooper, Founder and CEO

Cooper said he initially had no interest in creating his own company; he had a very successful career where he was. However, eventually, he and the other founders felt compelled to leave their positions and create their own company that would respect and protect the rights of its sales force. On this premise, the ARIIX Bill of Rights was born.

“Everyone talks a good game,” says Cooper. “But when it all comes down to it, what you have to really believe is put in writing. What are your contractual rights?” Cooper and his partners felt some companies in the industry did not put their sales force first when changing their policies and procedures. “As a result,” he explains, “we have tried to improve the rights of the Representatives so they feel a little more protected.” Cooper acknowledges ARIIX will change its policies and procedures over time; however, having something in writing gives Representatives a say in how the company changes its policies and compensation plan he adds.

A Plan with a (Successful) View

The ARIIX Activ8 compensation plan allows ARIIX to acquire brands and direct selling companies with different kinds of compensation structures. Founder and Chief Sales Officer Ian Chandler said they realized a new type of compensation plan was needed since most companies offer one of three types of plans: a binary that limits width, a unilevel that limits depth or a matrix that limits both width and depth.

“We basically created a new category of compensation plan tree structure in the industry called the multiline, and it is literally unlimited in width and in depth and that makes it very strategically advantageous for us to be able to take companies and merge into our own, whether they came from a binary, a matrix or a unilevel,” he says. “They don’t have to reposition their structure when we bring the entire organization or tree and merge into ours … We’ve had over 10 companies in the last seven years that we’ve merged into ARIIX—some big, some small.”

Click for a Q&A with Fred Cooper

Q&A with Fred Cooper

From True Skeptic to Loyal Fan

Now, back to Deanna Latson, Founder and Chief Product Officer. There is no way you can talk to this woman and not enjoy the conversation. She pulls no punches when discussing her initial disdain for the direct selling channel before joining ARIIX. “I was the only female partner, the only one not from the direct selling channel, and to be honest with you, I was more than a little skeptical,” she says. But as an ARIIX owner, she saw an opportunity to create highly beneficial products alongside an R&D team and highly qualified councils with diverse professional backgrounds. This enabled her to go beyond her misgivings about network marketing.

With degrees in nutrition, health communications and a specialty in her master’s in how the media influences women’s body images and food choices, Latson understands what makes—or breaks—a human body. All these experiences eventually led her to professional speaking, and for 17 years she traveled the world espousing the importance of giving the body what it needs and making conscious life-changing choices. “My philosophy for the last 20 years has been, you can do things every day that extend your life and improve your health and you don’t have to be like everybody else,” she says. “I dedicated my life to helping people realize your body is a reflection of how you choose to live every day, and sometimes the smallest of changes can make the hugest of differences.”

Latson and her team’s mission to create products that change lives is supported by the ARIIX Seal of Approval that ensures all its products align with the Banned Substances Control Group, United States Pharmacopeia, U.S. Environmental Protection Agency and Good Manufacturing Practices. Its seven brands are Nutrifii (supplements), Jouvé (skincare), Puritii (air/water purification), Reviive (cleansing), Priime (essential oil), Slenderiiz (weight loss) and NuCerity (skincare).

Good Steps into Great Leaps

Training and events are integral to ARIIX’s support for its Representatives. “All of our training basically focuses on how do you get your story, how do you share your story in the 21st century, how you’re able to leverage the comp plan,” says Chandler. One tool provided Representatives is The B.O.S. (Business Orientation System), a comprehensive training system that includes an online portal of training videos as well as an orientation kit. September 28-29 ARIIX will hold its Breakthrough Las Vegas convention, which Chandler says will focus on the Representatives’ experiences rather than flashy stage presentations. It will be “jam-packed with different types of venues, excursions, and experiences” and conclude with a poolside black-tie gala.

Charitable giving is never forgotten at ARIIX—company projects include supporting a women’s foundation in China, donating to areas devastated by natural disasters and participating in a worldwide day of service by partnering with an organization called Do Good. Be Kind.

Pick up your print copy of the August 2018 issue in which this article appeared.

While Cooper acknowledges ARIIX has accomplished a great deal in its seven years, he wishes they had taken a slower approach to opening new markets; he wants to be sure every aspect of the business is in place for any future market launches. And he feels they have skills and tools to hone. One phrase he keeps in mind is “The enemy to great is good.” And being just good enough is not where he wants the company to be. “We are good at a lot of things. Not great at things,” he says. One way he hopes to keep the company striving toward greatness is by continuing to build customer loyalty. ARIIX Travel is a good example of the company’s disruptive approach to this concept—for every dollar Representatives invest in their health and in building their businesses, ARIIX gives back Reward Dollars, dollar for dollar, to put toward incentives and rewards for Representatives who qualify. ARIIX also provides a savings program; in 2017, the company distributed an cumulative $8.2 million in savings bonuses to hundreds of Representatives.

With seven “well done” years under their belt, Cooper and his team are now focused on turning their good steps into great leaps. Considering the number eight symbolizes abundance and power and the ability to make decisions—and in China is considered a synonym for prosperity—next year could be quite a ride for ARIIX.

Q&A with Fred Cooper, CEO of ARIIX

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Photo: ARIIX’s smart car-riding CEO Fred Cooper.

This Q&A is part of the August 2018 Company Spotlight featuring ARIIX.

You celebrated your 7th anniversary this summer. What are your thoughts on where you are as a company?

Fred: I’m a perfectionist, so I would say we’re never as big as we hoped to be, but since our third year in business we’ve made the Direct Selling News Global 100 list, and we have moved up the ranks steadily each year. From #91 in 2016 to #82 in 2017, and #78 this year. There can’t be a lot on that list who have accomplished the kind of consistent, year-over-year growth.

What is your leadership style?

Fred: There are many families who are depending on our leadership team to make the right decisions, day in and day out. That’s a lot of responsibility, and I take it very seriously. So that means everyone at our corporate office is doing their job well every day, myself included. I’m not the kind that will be at your desk micromanaging you. I expect our staff to do their job and do it well because if we don’t, we will let many families down as a result. I sleep pretty well at night knowing that our team is up to the task of leading our company in the right direction.

How does being a house of brands help you in being a nimble company?

Fred: Having a house of brands allows us not to get stuck with any one product line. Every product has a lifecycle, and the consumer demand for any one product will eventually wane over time. It’s our diversity of products and services that has been one of the keys to our consistent growth. We also are not married to just products. We’re not married just to services. We have both, and we feel that will serve us well in the future.

It also creates for our Representatives a chance to share a product or service they are passionate about. They don’t have to share other product lines if they so choose. Over time they may want to offer additional products or services we provide. The key is we give them a choice of products and services to share with their friends and family.

What are your criteria for expanding internationally? Any advice you want to give on lessons learned?

Fred: Certainly, the size of the country, the size of the direct selling market, the laws, how friendly they are toward direct selling all have a bearing on our decision. I think we made a mistake at the beginning. We opened too many countries too soon. The infrastructure and the requirements to service those countries get to be exorbitant. My advice would be not to go too fast or too quickly. Make sure that you have the infrastructure in place, and that you can support all the countries all at once because the problems and the requirements and the expenses increase exponentially as you move from country to country internationally.

Pick up your print copy of the August 2018 issue in which this article appeared.

How does ARIIX give back? Share with us some of your philanthropic initiatives.

Fred: We try to make the donations pretty much in the countries where we generate the sales. As we generate those sales, we try to target back to charities or organizations located in that local country. For example, we have a partnership with the Women’s Foundation in China. It’s a significant cause for families in China and specifically helping single mothers.

What are your goals going forward? What skills or mindset do you need to tweak as a company to continue to grow and get where you want to be?

Fred: I want us to move from good to great. I want to start making changes that say, Yes, this is good. It is acceptable, but let’s see if we can make it easier for our Representatives to do business. Because when it comes down to it, a company only needs to do three things very, very well, which is take an order, pay commissions, and ship a great product. That’s it. If you can do those three things better than anyone, our Representatives should have no excuse to be frustrated in doing business with us.

Q&A with Jim and Kathy Coover, Isagenix Co-Founders

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Photo: Jim and Kathy Coover, Isagenix Co-Founders

This Q&A is part of the August 2018 Company Spotlight featuring Isagenix.

What have you been mainly focused on this year and why?

Jim: We’re always focused on creating the best possible customer experience possible. You can’t sign up as an associate without first being a customer. Knowing that their journey, in essence, begins at the very first experience with the company, we want to make that as convenient and as productive as possible.

We also recognize that technology is changing the way people live and the way our Associate family does business, so we’re doing a lot of investing in terms of upgrading our technology platforms.

I really love your “Today is the Day” series that you have on your website. What inspired that campaign?

Kathy: Many people put things off and so we wanted just to reinforce today is the day for people to get started. Today is the day to improve their health. Today is the day to start their business. So it’s just like, “Let’s do it now.”

How do you define value?

Jim: Well I think, first off, we recognize that we’re in the relationship business. Relationships, ideally, shouldn’t be one-sided. They should be a win-win opportunity for everyone. We realize there are many people out there looking for specific health issues to address, whether it be weight wellness, performance, healthy aging and wealth creation. We believe with the solutions we offer and with the culture and community we influence, we’re in an ideal situation to build value in people’s lives.

Why do you think being authentic and transparent is essential in business today?

Kathy: In today’s business climate if you’re not authentic you’re not going to survive. People are sick and tired of all the hype. They’re tired of the pretenders, and they want somebody to tell them the truth. People can see right through you. Especially millennials. You can’t fake them out for very long. You have to be upfront, authentic and transparent in all that you do. I think that’s just the way business is going to have to be done, or you’re going to be kicked to the curb.

What do you feel is the biggest threat we face in the industry. Is there any one thing you can point to?

Kathy: While it’s not a new phenomenon, number one is that while good news travels fast, bad news travels faster in the 24-hour media cycle we live in. Also, very few people understand our channel of distribution. Anything that we can do collectively—not only as an organization but as an industry—that can elevate people’s perceptions is in everyone’s best interest.

Pick up your print copy of the August 2018 issue in which this article appeared.

Any advice you want to give your fellow peer CEOs?

Jim: My advice is to operate from a position of integrity, and don’t ever take for granted the people who align themselves with your company. They are all independent contractors. They don’t have to be doing this. So your number one obligation is to continue to fulfill on assisting them in reaching their goals because I think that’s the only way. What I love about our industry is the way you succeed is by helping other people to be successful. We don’t have to feel that we’re competing against one another, there’s enough business to go around for everybody.

What does success look like for you two at the end of the day?

Kathy: Well success to us is, we want to keep growing and expanding and impacting more people’s lives. Our goal is to impact world health, so we’re not stopping. We want to keep growing, expanding, and delivering the promise that this profession has for people. To show them that they can create something, a safe home for themselves. Something they can count on.

Jim: Part of my goal in building a world-class management team, frankly, is so that Kathy and I can spend more time in the field. We know that’s where the rubber meets the road and having come from the field ourselves, not only do we always want to stay connected with them that but we always want to continue to learn and grow with right alongside them.

The Driving Force – Isagenix Is Putting People First And Impacting Lives

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It’s not just about the bottom line for Isagenix, although the company’s #27 ranking on the 2018 Global 100 and revenue which recently topped $6 billion in cumulative global sales prove that profitability is a priority.

Travis Ogden

Travis Ogden

Isagenix
Founded: 2002
Headquarters: Gilbert, AZ
Top Executive: Jim & Kathy Coover, Co-Founders, Travis Ogden, CEO
Annual Revenue: $958 Million

Instead, it is being placed on the Best Places to Work by Direct Selling News in 2018 and the Phoenix Business Journal in 2017 that let the heart of Isagenix shine through. As a people-driven, people-focused company, Isagenix has its eyes set on the future—not only the company’s viability and products but the people who will lead and shape the company for years to come.

“Certainly, the impact on people’s lives is ultimately what we care about,” says Isagenix Chief Executive Officer Travis Ogden. “We’re building a company that every decision we make is for the long-term because we want Isagenix to be around for generations.”

“What makes me proud to be a part of Isagenix: the culture of doing what’s right.”
—Travis Ogden, Isagenix Chief Executive Officer

Pick up your print copy of the August 2018 issue in which this article appeared.

That people-first philosophy was established at the company’s launch in 2002 and has remained intact ever since. Their vision statement, which is displayed on the walls of company headquarters in each market they are in around the world, declares the company’s intent to impact world health and free people from physical and financial pain, and in the process, create the largest health and wellness company in the world.

Those three simple words, “in the process,” signal where the company’s priorities lie: impact people’s lives first and success will be a result—not the other way around. Their company motto distills their fervor even further: If it’s not right for the customer, it’s not right for the company.

The Isagenix Trifecta: Nutrition, Flavor and Results

Declarations are important, but words only have so much power. That’s why Isagenix has put its money where its mouth is, investing in extensive testing, clinical trials, collaborations with well-respected universities and laboratories, and employing more than 50 full-time scientists, in addition to the company’s Scientific Advisory Board made up of bright leaders in the medical field and supplemental and pharmaceutical industry.

“Our Associates and customers don’t work for me, they don’t work for the company, we work for them,” says Isagenix Chief Science Officer Dr. Robert Kay Ph.D. Dr. Bob, as he is known within the company holds a fastidious commitment to quality and safety.

Q&A with Jim and Kathy Coover

“We test, test, test, and then confirm the testing we did was real, ” says Dr. Bob. “Our testing never ends; our attention to quality absolutely never ends. The products we make have to be transforming something in someone’s lifestyle, and the raw materials have to be excellent.”

Dr. Bob’s past work with multinational and industry leading companies has also given him experience within the small niche of creating effective products that taste surprisingly great.

Calling on those lessons learned, his approach leans on organoleptic investigations—or how the products engage with the senses—and is the magic behind the intersection of nutrition and flavor that he says has helped propel the popularity of Isagenix products. “What we do is combine all of these great nutrients into food-friendly forms and dietary supplements that taste so doggone good you have to have another one,” Dr. Bob says.

Isagenix AMPED Products

Isagenix AMPED Products

Cross-Cultural Appeal

For a product to have longevity and success, two things are required: demand and results. The IsaBody Challenge—a 16-week journey that invites customers to submit before and after pictures of their weight transformations using Isagenix products, as well as an essay explaining why and how they achieved their results—delivers both while offering vivid, eye-catching transformations that build continued excitement around the product. Since the Challenge began in 2014, the company has received more than 347,000 entries.

“We have hundreds of people who have documented more than 100 pounds lost, and thousands of people who have used the products to lose weight, gain lean muscle mass and transform their physical body,” says Isagenix President of Global Sales and Marketing Travis Garza.

The Isagenix SWOT Analysis

The IsaBody Challenge has proven itself to be a powerful tool domestically, but the Isagenix mission and products are having global success as well, speaking across cultural boundaries.

“Around the world, people are still looking for ways to feel better,” Garza says. They have products and nutrition whether it’s losing weight, need more energy, or want better performance in the gym or in races, they have the solutions. “We consider ourselves a solution-based company that provides real products for real customers,” he adds.

Celebrating Isagenix’ 15th Anniversary

Culturally, each country has different needs—Australia, for instance, offers a young, performance-driven demographic, while the Malaysia consumer is typically drawn to solutions to improve health—but the products and vision don’t change. The Isagenix field leaders in each region focus on maintaining the Isagenix non-negotiable core values while adapting marketing approaches, communication, and products to provide solutions for a country’s unique demands.

Now present in 17 markets, including its launch in Spain in June of this year, Isagenix has learned how to work together with Associates in their international markets and is working on improving their communication efforts with customers and leaders in the field, so that Isagenix fits into the market’s existing culture, rather than sticking out as simply a U.S. company inserting itself on foreign soil.

“One of our company initiatives for the last two years has been to simplify and enhance the customer experience,” Garza says. “No matter what tool we produce, whether for U.S. or international markets, we always keep that in mind.”

Every Voice Is Heard

Maintaining a distinct company culture in an industry that is marked by fluctuations—people entering and exiting the business daily—means creating an atmosphere that transcends that inevitable ebb and flow. For Isagenix, that transcendental attribute is integrity.

Global Celebration 2017

“We have great products and an incredible business opportunity, but it really is the culture that is the glue that holds everything together,” says Isagenix Owner and Senior Vice President of Global Field Development and Culture Erik Coover.

In 2015, the Isagenix leadership team established the company’s 12 core values including focuses on gratitude, freedom, fun, and integrity, and designed a slogan and definition for each value, explaining what they meant to the Isagenix culture and mission.

“When you’re a small company, it’s pretty easy to maintain your culture,” Coover says. “But as you continue to grow and become bigger and bigger, it becomes harder to maintain the culture you have.” That’s why Isagenix went through this exercise of redefining their core values. They wanted their company culture around the world to match what people were seeing at an Isagenix event.

Even after the core values campaign ended, the company continued it’s What Drives Us quarterly employee meetings, which have become a highlight for corporate and regional employees alike. The meetings focus on communication, connection, recognition, and impact. In addition, within the past year the company formed an employee-led Culture Council spearheaded by Erik. Taking place monthly, this venue invites representatives from each department across the globe to cultivate ideas and suggestions from their teams for continuous employee engagement and innovation around the company’s culture.

“The overarching theme of these meetings is that every employee at Isagenix has a voice,” Coover says. “We want their ideas to be heard.”

Those ideas have resulted in big benefits for employees—like parental leave, an additional week of vacation, remote working benefits, and a casual dress policy—providing proof that the Isagenix leaders stand behind their core values, and are truly listening.

Isagenix headquarters in Gilbert, Arizona.

Isagenix headquarters in Gilbert, Arizona.

“We understand our responsibility, that so many people are counting on us, and we don’t take that responsibility cavalierly,” Coover says. “We haven’t created this success by accident; it’s been very strategic and done with a legacy vision in mind. Isagenix was built to be a home for life for people.”

The Isagenix of Tomorrow

Isagenix has nearly 1,000 employees globally and nearly 600,000 customers worldwide. The company’s fiscal track record, which achieved nearly $1 billion last year, and philanthropic heart, which contributed $6.4 million to charitable and disaster relief in 2017 alone, as well as its obsessive commitment to the efficacy, safety and flavor of its more than 100 health and wellness products offers proof that the next chapter is charted to follow a trajectory they have become accustomed to.

What comes to mind immediately as far as what makes Ogden proud to be a part of Isagenix’s culture of doing what’s right? “How we treat our customers and Associates, how we’re formulating products to make sure we have the highest quality ingredients, and how we’re dealing with regulators in international markets,” he says. “I love that we have a culture of doing the right things so we don’t get caught several years down the road in a challenging battle because we made sacrifices along the way. We don’t make sacrifices. We stick to our core value of integrity and always doing the right thing. That helps me sleep better at night.”

Speaking with One Voice – Q&A With Rich Goudis, CEO of Herbalife Nutrition

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Direct Selling News’ Publisher and Editor in Chief recently spoke with Rich Goudis about his first year on the job as CEO of Herbalife Nutrition.

So how are you feeling with your first year as CEO now behind you? Sum up for us your first year in the role.

Rich Goudis

Rich Goudis

Rich Goudis: Mostly successful I would say. 2017 was a year of transition for us, complying with the FTC order in the U.S. was obviously a big priority. I had been the executive tasked with the implementation back in 2016, so making sure that we were in compliance and sustainable going forward was crucial. Our North American business pivoted in July 2017 and we made a tremendous recovery by the end of the year. Net sales Q1 of 2018 were up 7 percent over the prior year’s first quarter. So, we have had an amazing, resilient recovery.

What were your goals at the beginning of your tenure? Are they the same today or different?

Rich: I think they’re very similar. Again, I realize that some of the most important things a new CEO can do are to set out a simple game plan in the beginning and don’t change too much. It takes time to get your message all the way down to 8,500 employees, let alone hundreds of thousands of members. So, when you change your message from the top, it has to be well thought out, not a flavor of the month.

Curious about the backstory of why you added ‘Nutrition’ to your company name. How did that come to be?

Rich: It actually started as a marketing campaign about four years ago to try to help ask and answer the question of who is Herbalife Nutrition and what do we do. We have really changed the mindset that we’re a nutrition company that uses direct selling versus a direct selling mindset company that just sells nutrition products, and that has been a really big shift. It worked out to be the same number of letters as Herbalife Nutrition, so it stacked nicely as a logo. Our distributors have embraced it, and we started to evolve a lot of our gear and our branding around it. Our former CEO Michael Johnson initiated the name change to better reflect our strategic transformation as a leader in the nutrition industry.

What do you think is the biggest threat the industry faces today?

Rich: It’s always the unknown. Because I think the biggest threats come from the outside, not from the inside. We’re the poster child for that.

The opportunity now for Herbalife Nutrition—and the entire industry for that matter—is taking to heart one of the biggest lessons that came out of the FTC order: How regulators view this industry through their lens. You have to go back to landmark Amway case in 1979 where the rules were established by the FTC the first time and then reaffirmed with our order in 2016. Our meetings with the regulators around the world have been very productive and have given us clarity on those elements that make the most sense for distributors in helping strengthen their business, like segmentation of distributors and preferred customers, for example.

Tell us a little about your leadership style.

Rich: I subscribe to something called servant leadership, where you care more about those that are in your care than yourself. And I just think that when you do the right thing for others, the right things happen for you. Conversely, when you do the wrong thing, the wrong things will happen to you because that’s just the way the world works. And we didn’t lose any senior executives during this whole process. We have a very transparent and trusting leadership team. And now it’s about vocalizing what we think is important.

I share with all the executives that your number one role as a leader is to create more leaders. Your number one role is to make sure you’re planning for who’s taking your seat next. That’s got to be your commitment to me. In the last year, probably three-quarters of the people that we’ve hired or promoted have come from within the company.

When it comes to your company, what are you most proud of?

Rich: I think our culture and our values. Do the right thing, right. And as we say internally don’t shoot the messenger, because if you do you will never get a good message ever again. Be honest and be truthful. It’s just what we teach our kids, you lie, there are certain consequences. Everybody makes mistakes, everybody. So, understand it, be transparent and be honest about it. If you make a mistake and you walk into my office and say, Rich, I screwed up. I’m like, okay, what can I do to help? That’s the culture. Versus you hide it, you push it off, and the problem just gets bigger and bigger.

What is Herbalife Nutrition doing to stay nimble and agile to counteract the disruptive market forces we are seeing today?

Rich: I think there are two parts to that question. First off, I think we are very nimble when we’re challenged ( e.g. the FTC or Bill Ackman’s attack on us) we’re great firefighters. The second part is how do we create a culture of agility so we don’t feel like we’re always in a firefight, right?

We strive with an intense focus to stay nimble and flexible by creating a culture of innovation. Otherwise, we’ll become slow and bureaucratic. There are a lot of great companies that have grown and fallen from grace because they were too slow to react to where the market was going. The two things I want to usher in during my tenure: a culture of innovation and making sure we have the best trained and educated distributors in the marketplace. We’ve made the investments needed for both and the team is moving forward to execute on both these important initiatives.

We’re very fortunate as an industry to work for very nimble, flexible, entrepreneurial-minded individuals, which my peers can attest to. If anything changes they’re quick to let us know what they think. We have to be as nimble just to keep up with our salesforce.

What specific feedback are you getting from the field? What are they telling you they need or are happy with?

Rich: They’re seeing our company embrace their point of view more. We get together twice a year with the field leadership. And for the first time ever that I can recall in the 14 years I have been with the company, the last day we were with them we had a breakout day, where the whole purpose was to talk about transformative ideas. We broke out the groups so there were no language barriers and we had each group come back and present to the bigger group their findings. Interestingly enough, the top three ideas of each group were nearly identical.

Pick up your print copy of the August 2018 issue in which this article appeared.

So we are learning to speak as one voice—field and corporate—and many field leaders have come up to me and said this is the first time anyone has asked about our input on these long-term strategic initiatives, and we greatly appreciate it and look forward to working more together.

What keeps you up at night?

Rich: Nothing. Honestly, nothing does. I’m usually in bed by 9:00 and I’m up at 5:00, in the gym by 6:00, so nothing keeps me awake. I think we’ve created a circle of trust where the threats are only coming from the outside, not from the inside. Whatever those threats are, we’ll deal with them. We’ll deal with them in an honest and transparent way and if we’ve made mistakes, we’ll own up to it and we’ll change and correct and improve. And you can sleep well at night. We’re not insecure in anything that we do. We’re very secure in our own skin. So I think that we’re very fortunate in that regard and I try to emanate that from the top and hopefully everybody buys into it.

Steady Global Growth

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It’s August, and you all know what that means, right? Yes, it’s our Billion Dollar Markets issue.

Each year we provide you with an analysis of the World Federation of Direct Selling Associations’ global sales data. Writer Beth Douglass Silcox identifies the 24 countries with retail sales of $1 billion or more from direct selling. She also digs into the numbers to not only extract the economic impact our industry is having on economies around the world (global retail sales up 1.6 percent over 2016) but also reveals some insights to what the future will hold. The first of which is China, who is inching ever closer to overtaking the United States for the top spot, and most likely will by the end of the year. The industry also added Ecuador to the billion dollar market club, which makes 24 in total.

In this issue, we have the second installment of our series analyzing the U.S. DSA’s 2017 Growth & Outlook survey, which reported that for the second year in a row retail sales are down for our channel. In our July issue Ben Gamse, Market Research Manager for the DSA, gave us the data and a few reasons why the U.S. revenue numbers are down. This month writer Heather Martin moves the discussion forward by asking how does our industry better compete in the marketplace against the likes of Amazon and shifting consumer needs. Her research consisted of sifting through early response data from workshop attendees at the DSA Annual Meeting, as well as interviewing some executives to get their thoughts on how we can right the ship and get back to growth.

Pick up your print copy of the August 2018 issue in which this article appeared.

This month we also have a great lineup of companies to feature. Writer Angela Soper shares the story of ARIIX, led by CEO Fred Cooper. ARIIX’s house of brands philosophy has worked well for them, moving them up the DSN Global 100 list rankings each of the past three years. “We want to be a house of brands in which you get the best in class of different types of brands that you choose to represent”, says Cooper. “We also are not married to just products, we’re not married just to services, we have both.”

Next, writer Sarah Paulk takes a look at Isagenix, whose driving force is not only impacting the lives of people but long-term success. “Certainly, the impact on people’s lives is ultimately what we care about,” says Isagenix Chief Executive Officer Travis Ogden. “We’re building a company that every decision we make is for the long-term because we want Isagenix to be around for generations.”

And finally, I just wanted to thank you all for your kind emails of support since taking this new position. I love what I do and am honored and grateful to serve you in this capacity. Be sure and drop me an email to let us know how we are doing and how we can better serve you.