brand-logo
Subscribe

Seldia to Celebrate 50th Anniversary

by Leave a Comment

Seldia, the European Direct Selling Association, is celebrating its 50th anniversary this month.

Established in 1968 to represent the direct selling industry in Europe, Seldia’s mission is to promote direct selling to European Union (EU) institutions and to ensure that the EU and national policy makers in Europe are aware of the industry’s benefits and advantages, as well as its contribution to national economies.

Currently, Seldia membership includes 28 national direct selling associations and 19 corporate member companies, including Amway, LR Health & Beauty, Herbalife, Mary Kay and Oriflame. All Seldia members abide by the highest ethical standards and are signatories to the European Direct Selling Codes of Conduct.

Seldia’s 7th European Direct Selling Conference, to be held October 16–17 in Brussels, will look ahead to the next 50 years of direct selling in Europe. Magnus Brännström, current chairman of the World Federation of Direct Selling Associations and CEO of Oriflame, will be one of the keynote speakers. Sessions will include such topics as futurism, disruptive technologies, innovative leadership and omni-channel development.

Does Your Message Confuse or Clarify?

by Leave a Comment

It’s never been more important to clarify your messaging while meeting the unfulfilled needs of your customers and distributors.

Ask any Chief Marketing Officer who’s most important to the business, and she’ll say the customer—or, in the case of direct sales, the distributor and the customer. Was there any doubt? What we say and what we do, however, may be at odds. For proof, look no further than the marketing messages of any company who’s having a tough time attracting and retaining customers. Do those messages put the customer (and the independent distributor) at the center of the universe, or is the company the real star here? If your marketing message isn’t clear and concise, the simple truth is no one will listen to what your website or independent distributors have to say, because the human brain is drawn toward clarity and away from confusion.

“If your message doesn’t resonate and connect with your customers’ unfulfilled needs, it becomes part of the noise.”

At no time in our collective history have we been inundated with as much extraneous information as we are today. However, we’re not passive recipients of this deluge. Quite the opposite. Deloitte’s 2017 Global Mobile Consumer Survey: U.S. edition found that the average U.S. consumer checks his or her smartphone 47 times a day. For millennials, that number skyrockets to an average of 86 times a day. Collectively, the estimated 264 million Americans who own smartphones are checking them more than 12 billion times a day.

Before we go any further, let’s define whom we’re talking about when we say “customer.” Within the direct sales space, of course, the term “customer” can mean different things. It can be a customer of an independent distributor, the distributor themselves, and a preferred customer. So, for the sake of brevity, when I use “customer” or “consumer,” I’m referring to all three. And when referring to the needs and wants of the customer, I am also talking about the unique needs and wants of the distributor when it comes to building a business.

Solving Unfulfilled Needs

When a company is bringing a new product to market, the temptation may be to promote how incredible the product is—how it incorporates the latest science and technology, how it works better than the competition, or how it’s priced competitively. Those are all important details to be sure, but haven’t we heard that story before? Where’s the message about delivering on the customer’s unfulfilled needs in all of that product-speak? Truth be told, no one cares about your company story; consumers and distributors care about their own. Companies who are winning are establishing a healthy lead in the marketplace simply by identifying what their customers want and how their products and services will deliver on those needs.

With all of this opportunity for distraction, competition for our attention has never been fiercer. How on earth is a company supposed to peel consumers’ eyes away from those cat videos long enough to get their messages across? How do they not only get our attention but sustain it? More important, how do they convince us to make a purchase? And, most crucial, how do they gain that most coveted prize—our loyalty—so we’ll purchase from them again and again? It might seem counterintuitive, but simplicity can be an effective strategy for cutting through the noise.

A pared-down message stands out in a sea of excess, and it’s easy to remember and repeat. Given that humans process images much faster than they do text; visuals, too, are an extremely effective tool for marketers. In fact, when people hear information, they’re likely to remember only 10 percent of that information three days later. However, if a relevant image is paired with that same information, people retained 65 percent* of the information three days later. Relevancy is everything. If your message doesn’t resonate and connect with your customers’ unfulfilled needs, it becomes part of the noise. Creating that relevancy is a bit of an art. Sometimes, consumers aren’t aware that they have a need until you bring it to their attention.

But most important: Companies have to invest the time and effort necessary to know their customers. And that starts long before they actually want to sell them something.

Building the Relationship

In the past, the responsibility for maintaining communication with the customer mostly fell solely on the distributor, but now with the new regulatory reality, many companies are now taking a bigger role in helping engage with customers. In a past DSN cover story last year titled “Defining Distributors Versus Customers,” Direct Selling Association President Joseph Mariano said, “Direct sellers have always felt a special responsibility to their salespeople and customers.” “So, it only makes sense that the next step in the evolution of our business model is an even greater awareness of the ultimate consumers of our products.”

Modern consumers may be a distracted bunch, but the good news is that we’ve never had more tools at our disposal for engaging them than we do right now. Becoming a customer/distributor-first company isn’t a one-and-done pursuit. Customers are constantly evolving, adapting to new technologies and reshaping their buying preferences. To know and understand their customers, then, companies must maintain communication with them before, during and long after the purchase.

“Truth be told, no one cares about your company story; consumers and distributors care about their own.”

One of the most effective methods for building customer relationships often happens on social media, where brands build online communities not by sending customers to the online ordering page, but instead providing content of genuine value. The idea is to get customers to engage with each other as well as the brand. Over time, those community members may become loyal brand advocates. Should your company ever encounter a crisis—for example, an issue related to product quality or an incident in the field—your brand advocates are likely to speak up on your behalf, which can provide a buffer and some damage control.

Online communities also make it possible for brands to hear directly from consumers and problems quickly. However, a minor issue can easily mushroom into a full-blown reputational crisis if a company doesn’t monitor its online communities and address customer satisfaction issues immediately. Those companies who do take action right away, however, have the opportunity to provide exceptional service in a public forum. Peer reviews and recommendations carry significant weight in our current marketplace and can go viral very quickly, so in every sense, it’s to the company’s advantage to go the extra mile.

“It’s harder, but it’s also easier to correspond with consumers today,” says Vice President of Marketing, Strategy & Solutions for Princess House Victoria Vilbrandt. “It’s harder because information is coming at them from all angles, and to an extent that we don’t necessarily have control of the brand message anymore. It’s easier because consumers are constantly communicating and sharing their needs and wants, so as a brand we have an opportunity to respond and connect with them. They’re letting us know when we’re doing things right, but at the same time, they’re telling us when we’ve missed the mark. That instance gives us the opportunity to be the hero—we can fix it, and now we’ve got the chance to make that customer happy, who in turn will be sharing their experience with others. That’s information and a brand experience we would never have had otherwise. It keeps us on our toes.”

The Art of Storytelling

Seventy-seven percent of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience, according to Forrester Research. Savvy marketers do just that by making the customer the center of their universe.

A “customer-centric” philosophy depends in large part upon storytelling or creating a narrative in which the customer can see himself. To attract attention and cut through the noise, companies must communicate in the simplest of terms how each of their products addresses a specific and pressing human need—and do it in a way that resonates not for a mass audience, but rather on an individual level.

The first step toward effective storytelling, of course, is knowing thy customer. What are her pain points? The typical story includes friction or some sort of problem the main character or characters are trying to resolve. Tension ensues as the protagonist seeks resolution. For marketers, of course, the product delivers that resolution effortlessly. Clarity of message delivery is an absolute must. If the story confuses the customer, there’s no second chance to explain it to her.

Where some companies get off track is the “product is the resolution” phase. They present their product, their company, themselves as the superhero who swoops in and saves the day. However, it’s not about the company; it’s about the customer. The trick to effective storytelling, then, is keeping the customer at the forefront—making the customer the superhero. The brand’s role in giving that customer his or her superpowers is understood, but not said overtly.

Knowing your own company’s values and purpose may be the most critical foundation for any successful story. “It’s easy for us to get caught up corporately in what we need and forget what the field needs, and for field members to forget what their customers need,” says CEO and Founder of Damsel in Defense Mindy Lin. Her company’s mission is to equip, empower and educate women to protect themselves and their families. “We have to step back and evaluate what the company, the field and especially their customers need so we don’t lose sight of where they’re at.” Approximately 78 percent of Damsel’s independent sales force has had direct and personal experience with sexual assault. They lead with their mission, and as a result, their field is comprised of assault survivors who have discovered healing through their alignment with the company and its mission. “New consultants may come to the company as victims, but soon discover a community of survivors,” Lin adds. “They find healing and purpose, take tragedies and turn them into triumphs.”

“We have to step back and evaluate what the company, the field and especially their customers need so we don’t lose sight of where they’re at.”
— Mindy Lin, CEO and Founder of Damsel in Defense

“Stories need to be relevant to the customer, but also be grounded in a deep understanding of the company knowing who they are and what the brand represents,” says Chief Marketing Officer for Scentsy Mark Stastny. “This only works if a company has a clear brand strategy. Foundational to customer-oriented marketing is companies knowing who they are. You don’t want to put that in your customers’ faces constantly, but it’s a backdrop—a consistent and familiar drumbeat that allows customers to decide whether they want to engage with the company or not.”

Data also drives storytelling, enabling marketers to test, tweak and carefully track the success of their messaging and analyze customers’ next steps.

“We constantly watch open rates of emails, opt-outs, bounce backs, track responses via social media, and count participation on group calls,” says President of Sales and Marketing at Plexus Worldwide Janice Jackson. “We’re careful to avoid marketing fatigue of our customers. Our goal is to do more of what works well and do less of what isn’t working. We track conversions from our marketing and communication channels to help make better business decisions and to better tailor our messaging.”

Distributors are Also Storytellers

Another reason why simplicity in marketing is so important: The field is passing your message along to their own customers. The more complex the story, the more likely consultants are to lose potential sales as the message becomes diluted—much like the proverbial game of “telephone.”

At Scentsy, marketing employees aren’t the only ones analyzing data to determine the success of campaigns. “We’re training consultants to do that on their own behalf—to mine customer data and market products to their customers with better results,” Stastny says, adding that company’s focus is on the conversion of first-time customers to second-time customers, and, ultimately, to recurring or subscription-based customers.

“In my mind, it all comes down to the product we’re offering,” Lin says. “The statistics don’t discriminate between the customer and the distributor. The mission we’ve set out before us is all about protecting people. When we’re assessing who needs our products, if you can fog a mirror, you deserve the protection products we offer.” In the market they are in, though, they have the challenge of avoiding coming across as opportunistic. Lin says everyone sees the news and what’s happening in the world, and there’s that urge to protect. They’re training their field not to be fearmongers. “Our approach is more preventative. If you don’t talk about it, you can’t protect yourself. The #MeToo campaign has really created a sense of relevancy in the marketplace because we’re so passionate about these causes. It amplifies our voice.”

Customer-led storytelling, arising from online communities, has proven to be a highly effective way of building brand advocacy. Take, for example, Airbnb. “Stories from the Airbnb Community,” a video series chronicling the adventures of Airbnb hosts and travelers, put customers on center stage and showed in a compelling and highly visual way how the brand is forging relationships and impacting lives for the better.

Marketers recognize that millennials, in particular, are drawn to brands that dedicate themselves to meaningful causes. Lin calls them “impact joiners, or people wanting to make a difference, who are looking for a sense of community.” Her own company, Damsel in Defense, is highly cause-oriented. “One in five women will be raped, and many of our field family members are that one in five,” she says. Lin says their salesforce connect with her company because they’re talking about something that wasn’t being talked about.

“In society as a whole, we’ve seen over the years a shift in focus from what’s happening under your roof to what’s happening out there in the world. There’s less emphasis on getting rich overnight, and instead of being able to pass on a legacy of service to our children. So, we as companies should always meet and serve those customers where they are.”

The Road Ahead

Approximately 80 percent of your future profits will come from just 20 percent of your existing customers, according to research conducted by the Gartner Group. Further, research conducted by Bain & Company found that increasing customer retention by just 5 percent increases profits between 25 percent and 95 percent. The bottom line is this: It’s time to put the customer at the center of every conversation.

As we continue down this path of customer and distributor first marketing, there are some challenges to consider.

“Stories need to be relevant to the customer, but also be grounded in a deep understanding of the company knowing who they are and what the brand represents.”
— Mark Stastny, Chief Marketing Officer for Scentsy

First, customers have become increasingly siloed. Direct selling companies, then, will have to devise innovative methods for expanding their reach.

“There’s a lot of noise out there, but consumers are becoming extremely savvy,” Vilbrandt says. “They go back to the brands and the social platforms and the media outlets they trust. They connect and respond to the ones that align with their positions and values. Of course, this is good from a brand standpoint, since it gives us a consistent insight into consumer targeting.”

Second, we have to keep an ear to the ground and remain flexible enough to make changes as technology’s evolution influences consumer preferences.

“We have to make sure that our products and the way we do business resonate with a generational shift in how people choose to engage with businesses and companies,” Stastny says. “This means that millennials need to be able to connect with companies in ways that make sense to them. If, for instance, you’ve built your communication strategy on a Facebook platform, and your focus is on getting millennials to engage with you, that platform won’t work because millennials are on Instagram now. Right now, our industry is spanning several generations, including some who are barely comfortable with social media and others who are entrenched. So, we have to be flexible enough to adapt to that.”

Though companies should seek to disseminate consistent messaging across all communication channels, considering the nuances of each platform—and the preferences of the audiences who congregate there—demand some degree of personalization. “There really is no one size fits all,” Vilbrandt adds. “What connects us all at Princess House is a passion for healthy cooking and a love for entertaining, but the lens through which customers see it and the way they go about it varies.”

“We’re careful to avoid marketing fatigue of our customers. Our goal is to do more of what works well and do less of what isn’t working.”
— Janice Jackson, President of Sales and Marketing at Plexus Worldwide

What is universal, however, is the growing expectation among consumers of all ages that the companies with whom they do business—either as an independent distributor or customer—listen, understand and respond to their needs and establish a relationship with them doesn’t end after the first purchase. There are no more walls between the C-suite and the public, and those companies who recognize this fact and engage their customers will likely be rewarded in both the short and long term.

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

Let’s face it: Amazon delivers a fast, convenient and relatively easy ordering experience, along with peer recommendations, which is why it’s given many brick-and-mortar retailers a run for their money. What Amazon can’t deliver, though, is an independent consultant who takes the time to know her customers, who recommends products with their tastes in mind, who’s available to answer questions, which provides a VIP shopping experience and even a business opportunity for those who want to take the next step. That highly personalized service is key to the future of the direct selling industry; it’s something no other e-commerce retailer can touch. We can capitalize on that by continuing to speak to our customers in direct and honest terms that speak to their needs and show them exactly how we can make their lives better. And if we succeed, we earn customers for life.

Instagram TV for Direct Selling

by Leave a Comment

The latest disruptive social media platform that could be a powerful tool for direct selling companies and their field…

There are more than 1 billion active users on Instagram, making it the third-largest social media platform behind Facebook and YouTube. This summer, the social media titan launched Instagram TV (IGTV)—a formidable answer to YouTube, but with a few important disruptive twists. This new tool is also becoming a popular way for direct sellers to promote their business, build a following, and maintain their overall brand across all online platforms.

“Instagram TV is becoming a popular way for direct sellers to promote their business, build a following, and maintain their overall brand across all online platforms.”

There are two main features that set IGTV apart from other video platforms. First is the vertical video layout, which is a 9:16 ratio. This is probably the most disruptive and out-of-the-box characteristic, considering almost all other video platforms use a horizontal/landscape format. Why the vertical display? It’s how people naturally hold their phones and view their screens. Also, the vertical display illustrates the quick and almost documentary-style nature of IGTV.

Document in Real Time

The second main feature that makes IGTV unique is the short video length. Videos are 15 seconds to 10 minutes for regular accounts, and up to one hour for verified accounts. Because the videos are shorter, this encourages users to be genuine and document experiences in real time. There is less editing and promotion involved, creating a social platform that feels much more personal.

To get access to IGTV, simply update Instagram or download the separate IGTV app. If using the Instagram app, just tap the IGTV logo in the top-right area of the Instagram title bar. IGTV opens with four main sections to select: For You (videos selected based on your interests or channels you follow), Following (new videos from channels you follow), Popular (trending IGTV videos) Continue Watching (videos you started watching but haven’t finished).

Link Videos to Other Social Platforms

It takes just a few minutes to set up your own channel, which is linked to your Instagram account. You can then upload a video from your mobile device by tapping the plus (+) sign inside your channel. Give your video a title and brief description. You can also link videos to other social platforms such as Facebook. Videos can also be uploaded at Instagram.com. And before you ask… no, IGTV does not currently have a recording feature within the app. And, as of this writing, there is no way to search for specific videos, but you can search for or browse channels.

Comments can be left on the videos, which is a great way for direct sellers to communicate with their followers. You also can combine your Instagram stories into IGTV “episodes.” IGTV allows you to leave links in the video description, which can help direct sellers increase exposure to their business or website. You can view insights for each video, including the views, comments, likes and audience retention. Video thumbnails can be added to give viewers an idea of what the video is about and to help direct sellers maintain their brand. Of course, the thumbnails are also a vertical/portrait display. Many IGTV users add text to their videos, which gives direct sellers another tool for educating and communicating to their followers.

Here are four effective ways direct sellers (both corporate and field) are using IGTV to grow their business.

1. Share the Direct Selling Culture

Because IGTV is geared more toward documenting instead of broadcasting, it’s a great way for direct sellers to showcase their company and business culture with videos of team parties, events or conventions. Everyone likes to have fun, be inspired, and feel like they’re part of something special. Direct sellers use IGTV to give watchers a peek into this atmosphere, piquing interest and showing how different the direct selling industry is compared to the traditional office job. The message is freedom, fun and camaraderie.

2. Show Results and Benefits

IGTV is a terrific tool for sharing with people the results and benefits of a product. This works great for the fitness and weight loss space. Nutrition supplements, meal-replacement shakes, vitamins, energy drinks, cleaning supplies, essential oils—no matter the product—what people truly want is the results the product provides.

“Savvy direct sellers are using this platform to tell stories that illustrate benefits they and others are experiencing.”

Savvy direct sellers are using this platform to tell stories that illustrate benefits they and others are experiencing. Many people using IGTV don’t even mention specific products, which raises curiosity and prompts watchers to ask questions or request more information. This takes any hard sell out of the equation. Instead, the focus is on providing value.

3. Teach and Educate

Even short videos can be an effective way to teach. This applies to industries such as fitness, beauty, cooking, clothing and several others. Makeup tutorials, workout techniques and cooking demonstrations all make interesting content that brings value and educates. Some leaders post new IGTV videos at the same time every week, creating regular “episodes” on their channel.

4. Communicate Value or Savings

Winning over people’s attention is paramount in marketing, and smart customers don’t want to feel like they are being sold to. So, being a source of value helps direct sellers create a loyal following on their IGTV channel that looks to them as a trusted authority. Communicating value fits with industries such as travel, group savings, energy and home services. Direct sellers who can articulate and explain how their products or services deliver value or savings use this platform to win over customers and potential business partners.

IGTV Facts to Know

  • Vertical, full-screen videos
  • Video Length (regular accounts): 15 seconds to 10 minutes
  • Video Length (large or verified accounts): Up to 60 minutes
  • File Size: up to 3.6 GB
  • File Type: .MP4
  • Video Size: 9:16
  • Video thumbnail/cover image: .JPG
  • Create your own IGTV channel (like YouTube)
  • Browsing Tabs: “For You,” “Following,” “Popular,” “Continue Watching”
  • Engagement: like or comment on videos, or send to friends
  • Watch on IGTV app or inside Instagram app
  • Can add “swipe up” action on videos
  • Upload videos through IGTV app, the website or Facebook Watch

Of Stalk And Stem — Kannaway’s Growth Story

by Leave a Comment

As the first direct selling company to sell cannabis products, Kannaway’s growth stems from selling CBD oil and hemp-based products.

Blake Schroeder

KANNAWAY
Founded: 2014
Headquarters: San Diego, CA
Top Executive: Blake Schroeder, CEO
Products: Hemp-based products, including cannabidiol oil or CBD-oil products

Oh, cannabis. Whether you go all wobbly at the knees at the mere mention of it or want to gear up for a spirited just-say-no debate, you probably feel passionate about the topic either way. Kannaway is counting on that.

Kannaway CEO Blake Schroeder says everybody has a viewpoint on cannabis, whether it’s negative or positive, educated or not educated. It’s the easiest thing in the world to talk about.

“All I have to do is tell someone I’m in the cannabis industry and immediately they want to talk to me. Whether it’s because they agree or disagree. People have strong opinions, and so you can start a conversation and then educate people. That’s what we’re doing.” Schroeder says.

New, Natural and News

As the first direct selling industry company to market cannabidiol or CBD oil and hemp products, Kannaway operates in the U.S. and Europe. “We were the first direct selling company to launch a CBD product,” Schroeder says. “We’re really pioneers in this space, and we have all the quality standards in place.”

Founded in 2014, Kannaway distributes a wide range of hemp products, including CBD oil supplements and vaporized, CBD-oil infused skincare and hemp-based clothing and pet products, plus much more.

“You can ask anybody whether the cannabis industry is going to be bigger five years from now than it is today and there’s no question.”
— Blake Schroeder, CEO of Kannaway

If you haven’t heard about CBD oil yet, you will. On June 25, 2018, the U.S. Food and Drug Administration (FDA) approved the prescription use of Epidiolex, a purified form of CBD oil, for treating two types of epilepsy.

You might say CBD oil is hotter than a summer’s day in Dallas. It has benefits galore and the scientific studies to back them up—as any Google search attests. It’s new, it’s natural, and it’s news.

The amount of media Kannaway gets is overwhelming Schroeder says. “We are in the news every single day. We’re in publications like Fortune and Time and USA Today. We really educate the public and are the leaders in the space.”

Indeed, CBD oil has differentiated Kannaway in the marketplace and generated excitement and enthusiasm among the company’s brand ambassadors. “We’ve grown our network of brand ambassadors significantly,” Schroeder says.

But Schroeder is careful to note that Kannaway is not just a CBD oil company. They are educating the world about the cannabis plant and developing products across multiple lines. “We’re not just a story that’s going to come and go,” he says.

The Pot Thickens

To clarify, Kannaway does not sell psychoactive substances; it sells hemp-based products. Hemp is marijuana’s non-psychoactive cousin. Even though CBD oil comes from marijuana plants, it doesn’t create a “high” effect like the intoxication caused by another cannabinoid, known as THC.

Still, how does Kannaway legally sell CBD oil products and other products that stem from industrial hemp?

“We really educate the public and are the leaders in the space.”
— Blake Schroeder

“The foundation for all this was a 2004 Ninth Circuit Court of Appeals case called Hemp Industries Association v. the Drug Enforcement Administration,” Schroeder says. The Ninth Circuit held that naturally occurring cannabinoids from exempt parts of the cannabis plant can be used in food supplements in our country.

When Schroeder says ‘exempt,’ he means the stalk and stem. That’s why Kannaway is able to sell products that are from the exempt parts of the cannabis plant. The Ninth Circuit Court of Appeals case, abbreviated HIA v. DEA, provides the foundation for legal product sales.

Headquartered in Southern California—“where people could care less if you use cannabis in any form,” as Schroeder quips—Kannaway has a parent company called Medical Marijuana, Inc., or MMI. Touting itself as the “legal cannabis leader,” MMI is traded on the pink sheets under the symbol MJNA (OTCMKTS).

“Our parent company, Medical Marijuana, Inc., is the first ever publicly held cannabis company,” Schroeder says. “They figured out all the legalities and where to grow it, and then figured out how to work with the current laws and bring it here to the United States.”

Schroeder says what Kannaway does really well is educating others and provide an opportunity for people to get involved in the cannabis space that otherwise doesn’t exist. “This is a way for people to get involved in the cannabis industry by simply registering as a Kannaway Brand Ambassador, getting some great products and being able to educate the world,” he adds.

Budding Growth Ahead

Although Kannaway was founded in 2014, March 2016 marks the start of the company’s real re-design which marked the foundation for phenomenal long-term growth. That’s when Schroeder joined the company as CEO. “Since March of 2016 we have worked hard to earn a solid reception and reputation in the direct selling industry. Given my contacts in the industry, I’ve been able to recruit a great corporate team with lots of experience from big companies to come join us.”

Since March 2016 until now, the company has grown nearly 70 times in monthly revenue. “We’ve been on a good run,” he adds. “And I would expect it to continue.”

The U.S. hemp market pulled in $820 million in sales in 2017 and is poised to reach a $1 billion market in 2018 led by hemp-derived CBD, food, personal care, and industrial products, according to Hemp Business Journal. The hemp industry was bolstered by explosive growth in the hemp-derived CBD category, which grew from a market that did not exist five years ago to $190 million in sales in 2017.

“Everybody has a viewpoint on cannabis, whether it’s negative or positive, or educated or not educated.”
— Blake Schroeder

Judging by the signs, that growth isn’t going to slow down either. It’s likely going to speed up, particularly with the impending passage of the 2018 Farm Bill, which includes a provision that would put hemp on the same standing as any other commodity crop.

“You can ask anybody whether the cannabis industry is going to be bigger five years from now than it is today and there’s no question that it will be,” Schroeder says. “Laws are changing in our country and every state, and that’s happening around the world. And it’s in the news every single day. It’s really exciting to be a part of.”

Future Plans

As far as Kannaway’s future plans and growth strategy, Schroeder says things are moving at a rapid clip. “It’s an interesting space because a lot of things are changing all the time,” he says. For example, the company recently launched in Europe, becoming the first direct selling company to offer CBD products throughout the EU. “We’re a company of firsts, and we are proud to be the first and only direct sales company in Europe,” Schroeder says.

Kannaway also has several new products in the works, including a CBD-based coffee and a CBD-based tea which will be released in the coming months. “The company has been growing quite quickly,” Schroeder says. “In the last year, we’ve launched so many products that I think we need to tighten up our messaging and tighten up our branding. That is what we’re working on right now.”

According to Schroeder, there are more than 10,000 uses for an industrial hemp plant—making the possibilities for new products endless. “CBD is just one of over 130 different cannabinoid profiles you can find in an industrial hemp plant,” he adds. “So there are going to be up-and-coming, new cannabis profiles that can be commercialized.”

Simply educating people on the differences between marijuana and industrial hemp is a challenge, Schroeder says. “We offer a unique opportunity for people who want to understand the space and be involved in it. And for people who want to be part of the future—because this is the future.”

Q&A with Perfectly Posh’s Ann Dalton & Eddie Silcock

by Leave a Comment

This Q&A is part of the October 2018 Company Spotlight featuring Perfectly Posh.

The beauty market is a crowded space. What kind of gave you the idea that you could do something different, provide something unique?

Ann: Yeah, Dry skin. I knew there was a huge gap in the market. You cannot find things that are good for you, and fun to use. You can find things that are good for you, and they look and smell like your doctor gave them to you. Or you can go to Victoria Secret Body Shop, Bath and Body Works, even Lush, and it’s a lot of fillers and fragrance, and things you don’t want to put on your body. It is difficult to find really good ingredient decks, but at the same time, those brands tend to take themselves so seriously, and it takes the fun out of it.

Eddie: The magic happens when somebody picks up our products, The Stripper or the Gender Bender, it’s all fluffed up, it’s funny. They’ll pick it up, take it home almost as a joke, and then you use it, and then they think, Wait a minute. Hey, this is really good stuff.

Perfectly Posh, the name, how did that come about?  Is there a story behind the name?

Ann Dalton

Ann Dalton

Ann: It was an inside joke between my husband and me when we were poor and newly married.  It was always a joke when we said, “We can afford it, we’re posh.”

It was jokingly aspirational when you put “Perfectly” before it. Love the Ps, love the alliteration of it. It was so fitting because there is an aspirational quality to what we do. You might not get a whole day off or be able to afford a $250 massage, but you can take 10 or 15 minutes and pamper yourself and feel great.

For a few months, we have been asking our audience how does the direct selling industry compete against the likes of Amazon, and all the big e-commerce giants and in your case, Sephora & Ulta. How does Perfectly Posh compete?

Ann: From a brand and market perspective, we really did try to come in and look at it much more like a skin care pampering company would and not as a direct sales company. We’re proportionally heavy. We’re very seasonally heavy. We do many things very differently than a direct sales company would. It gives us a real advantage.

Eddie Silcock

Eddie: The marketing and creative team are in tune with what that this generation’s about. The packaging, the product, and the imagery stop people. It’s rebellious. I think that the whole generation coming through are much more about, being part of something bigger than themselves. They’ve got the right to actually have some balance, to say no. In a world where you cannot stop people from scrolling online, from our social media, imagery, product names, the one thing I really love that Ann does is she likes to shock and make people stop.

Ann: Eddie gets all the “I’m offended” emails.

Eddie: The point is, it’s interesting, we push, we can be a bit snarky, it pushes boundaries, but at the same time, the overall message is you deserve this. There are many companies that have products that will improve your health, but I genuinely think that our brand entices a whole new generation.

So many companies face the same problems, right? One being their salesforce is aging—where most of their leadership is in their late 30s to 50s—how do you connect with these upcoming generations? How do we go after the next generation? We feel our brand is positioned to connect with the younger generations.

How do you make it easier for customers to get a seamless experience? One of your advantages (being a one on one business model) also can be a disadvantage as it puts one more layer that customer has to go through to get your product.

Eddie: One of our biggest strategies right now is looking at how we ensure that everybody can access our products. Our consultant base wants us to have more brand awareness. We just hired a brand-new head of marketing. She’s very experienced in the world of social media and brand awareness.

Eddie: As I travel, I say I work for Perfectly Posh and very few people know who we are. That’s a massive opportunity. Because, literally, if we’re seeing a return on results, without any brand awareness, when get our SEO and our brand awareness where we want it to be, it’s going to be a very different world.

Ann: Let’s just say, the only thing we did right, for a long time, was brand. And now, as we’ve got the infrastructure in place, and start to focus on less organic growth, we see a lot of opportunity.

Are you only in the US? Are their plans for expansion to other lands?

Eddie: The US is potentially a half a billion-dollar business gross. We don’t want to keep the eyes off the prize, because the mothership has got a long way to go. And then, go international. The US is barely tapped in yet.

Your UnCon event (short for unconventional) wasn’t too long ago–what was some of the feedback that your consultants were giving at the event?

Ann: We grew up. I think that’s probably the overriding message I heard. It’s been great to get Eddie on board, and a really strong executive team. It’s not the Ann Dalton show anymore. It is very goal and work oriented.

Eddie: To add what Ann said, I think we’re listening better to what the field needs. We were able to launch commissions so they now get paid immediately. That’s industry leading.  At UnCon, not only did we raise the energy levels, we gave them some significant goals to focus on, testimonials and training.

What’s the first impression you want to give to a new consultant or a customer that comes on board?

Ann: We want to give one of empowerment. I think people sell themselves short far too often. I joke about a story about our tenth wedding anniversary–we still had three little boys, and I lived in sweatpants and a t-shirt. My husband gave me earrings for our tenth wedding anniversary, and it had been two years since I put on a pair of earrings. “Why would you get me earrings?” I asked my husband. He’s like, “You used to wear jewelry. I miss it.” It’s that realization that it’s okay to take time for you–whether it’s putting on a face mask or some hand cream.

That’s the beauty of this industry. It lets people be very creative and very scrappy. It allows them to take a little opportunity, a lot of vision and work themselves into some magical situations.

Hopefully, that’s the same thing our customers feel to some degree. They come in and try products, and it doesn’t have to be expensive. It doesn’t have to be complicated. It’s these beautiful, natural ingredients. They’re very, very fun to use. When they try it on, we hope they feel I’m a little bit better because I did that.

Eddie: I would add to that, that we layer everything with fun. It’s probably one of the most fun companies that I’ve been involved with. Today, I interviewed a consultant today for our Posh Cast, and this person literally built their business on fun and energy. It’s about you need to have fun in your life, and these products help you do that. It’s empowerment together with, don’t take it too seriously, having fun, while you’re going along the way.

What is your product cycle? Is there a life cycle to them– then you’re always adding new ones? What’s your product philosophy?

Ann: This is one place where we didn’t do direct sales anything. We looked at Philosophy, Soap and Glory, some of those other really good brands that are out there, and we said, what do they do? It’s seasonal–the hand cream I want in my bag today doesn’t smell anything like I’m going to want when it gets cold out. We tried to resonate with the trendsetters and the early adopters– going back to the younger demographic.

Ann: What we’ve got is a foundation­–there are a handful of things that have been around since day one– just really good basics. The beautiful thing about what we do, is soap’s never going to go out of style and people would say it’s one of the most boring things you could do. And yet, we bring in Always Gonna Love You, or Fantasy That. You bring in the Unicorn Soap, and all of a sudden, it’s this beautiful, trendy story. We’ll come out with trendy things all the time. We’re working on some Halloween stuff today. It launches right after Labor Day. We do a lot of LTO (License to Operate), so it’s “get it while you can.” We have about 100 products that live in that core. We will have anywhere from 10 to 20 products that come in seasonally and supplement that story.

Eddie: We also will link a product launch to an event, which is themed. The leaders come dressed up, to the events. We had a Resting Mermaid Face product launch in April, and then the consultants all came dressed as mermaids.

What, is the one key performance indicator that you guys are always looking at each month? That lets you know, either you’re on the right track, or there might be some slippage?

Ann: How many people are working–Is that up or down–is one indicator.

Eddie: It’s about the revolving door. As a company, we want more people coming in than leave, customers and the consultants. To realize what we want to achieve in the US, we need new people all of the time. Look at it geographically–Texas, for example, is bigger than half of Europe–and we barely exist there in terms of potential sales. That’s what blows my mind about … It’s just about strategy to access all these customers who don’t even know we exist yet. New customers, total active consultants.

What marketing tools do you offer your field?

Eddie: I feel that the collateral we give to our leaders is probably some of the best I’ve ever seen. We do everything from banners, to collateral, to help support them in the social media world. We do a lot of short promotions, in two days, just to get energy moving. We are relaunching our onboarding with a brand-new program starting October 1st.

Ann: We support them when they get their swag. We try to approach it from a teamwork perspective. At any point, we launch something, our consultants they dress up, they’re very excited. It’s trying to get them to be hands-on and jump in with us.

What main initiative is your company working on the rest of this year and into 2019?

Eddie: SEO brand awareness is probably our initiative right now, and we feel it will change everything for us.  Right now, as I travel across the country and when I say I work for Perfectly Posh, very few people know who we are.  That’s a massive opportunity for us and a great problem to have.

Ann: Opportunities to be less organic.  We’re very much a democratized brand. A consultant can take it, love the personality of the product, and put their spin on it.  That does cost us in the ability to have the brand be tight, but the tradeoff is worth it. We want to be able to get our arms around telling stories which will help us in attracting people looking for what we have to offer.

As CEO, how do you measure Success?

Ann: A Paris office. I mean, it’s about world domination (laughs). Just taking a few minutes to pamper yourself. The entire world needs that. Our mantra is you live a busy life, and you deserve 10 minutes of your life just to feel good. I think that’s a worldwide message, so I think that’s a real success. And absolutely someday being an international brand.

When it comes to the company–what are you most proud of?

Ann: Seven years in business and still keeping the doors open. We joke about this sometimes, but there’s a real truth to it–especially for the first five years we were in business. The only thing we did right was brand. Just think about anywhere else in the industry, it’s the reverse. We want a brand that it can live forever, be trendy, universally appealing and has traction. It’s let your hair down, have a good time. It’s to have a brand that is tight and solid and lasting. This is who we are, and we have stayed true to it.

Eddie: We know there will be inevitable bumps in the road going forward, both operationally and technologically. We feel we have built a solid brand and business foundation, with great people—consultants and employees— that we will be able to lean on to get us through those hard times. We will learn from them, and then go forward and do a lot of incredible things together.

What advice would you give your executive colleagues in the industry as far as what you’ve learned over your years?

Ann: Having been in this industry for almost 13 years, I remember hearing someone at a conference comparing many companies in the direct selling industry to five-year-old’s playing soccer. It’s just a bunch of kids chasing a ball, essentially following the one thing that’s moving.

We’ve come into this space and tried to just authentically be us, and do things for the right reasons in spite of what the skin care and direct sales universe thinks we should be doing. I think that’s where we can win. The world and business have changed within direct sales. My two cents would be to focus on doing the right thing for the right reasons and to be a little disruptive. Take a chance, try something and leverage some of the opportunities that out there to stand out and be unique. I think that’s where we’ve been able to come in and be a little bit different.

Permission To Pamper – Perfectly Posh’s On-Trend, Retail Direct Selling Style

by Leave a Comment

Perfectly Posh proudly says it owns its awesomeness and gives permission to its consultants and customers to do the same. It’s a pampering company that is a little edgy, mixing posh design with sweet, sassy and sometimes snarky messaging into fun and indulgent skin care products.

Ann Dalton

Ann Dalton

Sam Funk

Sam Funk
PERFECTLY POSH
Founded: 2011
Headquarters: Salt Lake City, UT
Top Executive: Ann Dalton, CEO & Founder, Sam Funk, President
Products: Skincare, Personal Care, Home Party and Online

 

Since its launch in October 2011, Perfectly Posh has upended the status quo with campy and irreverent branding, on-trend retail products, “give back” ingredient sourcing programs and pioneering business operations. Now with over $100 million in revenue, the company’s founder and CEO Ann Dalton say it’s poised for “world domination,” then shares a hearty laugh.

“We try not to take it too seriously because it takes the fun out,” Dalton says. But the company and brand she created could be one of the best-kept secrets in direct selling and that’s seriously about to change.

Falling In Love

In a past life, Dalton built a company providing marketing supplies and tools for a direct selling company. Dalton fell in love with direct selling’s business model and its ability to ease women’s burdens and help their families.

Dalton remembers a very kind woman that lived in the middle of Nevada in a trailer, who couldn’t keep her electricity on and her husband was not very nice to her. In the five years she was affiliated with the company, she watched her leave him, move out, build her own house, take care of her kids and send them to college, and marry a great guy. “When you see things like that it changes you,” Dalton says.

Perfectly Posh was born of Dalton’s desire to help women change their own lives and give them permission to pamper themselves. “As a busy mom, I learned that you give and give and give, and you give yourself away. One day you look in the mirror and you wonder what happened to you? If you take a few minutes every day to really take care of yourself, it really is magical,” Dalton says.

Retail Look and Feel

Skin care products are often straight out of the doctor’s office or packed with fillers and fragrance that do nothing. Perfectly Posh says their products are different—pampering, affordable, effective and ethical, made with naturally based ingredients that tell a story and inspire people to have a blast while using them.

They have set themselves apart through a unique approach to product development and product launches, along with quirky product names and packaging. It also makes business operations a bit more complicated.

Q&A with Ann Dalton, CEO & Founder & Eddie Silcock, Chief Sales Officer

(Click to read the interview)

“We are on trend. Trends launch every season,” says Vice President of Product Development Stacy Simmons. “We use the same trend agency that retailers such as Sephora and Ulta do. So, we are able to offer the same trends but in the direct sales space. It’s affordable luxury and high-end trend at your fingertips.”

 

From mermaids to galaxy collections, Perfectly Posh offers a whole lineup of fun products every trend season, as well as monthly product launches. “Our products create an awesome experience from the packaging to the names that get people taking to the formulas that feel amazing on the skin. All together it creates a really social product,” adds Simmons.

“We joke a bit about calling ourselves product whores because we love new things and fun new trends,” Dalton says. But innovation and quick-turn SKUs aren’t just fun, they produce more early adopters for this direct selling company, whose consultant base is young, fun, and forward thinking.

“There’s an immediacy around everything we do and it makes Posh that much more pampering when I can work today and play tonight or feed my family tonight.”
— Ann Dalton,CEO & Founder

In step with that demographic is Posh’s sustainable ingredient sourcing and “give-back” initiatives that have really resonated with the 20- and 30-somethings. They want to know what they’re buying and they are buying into something better, says Dalton. “There’s so much transparency with social media and easily accessible information, it’s been really nice for us to support everything we do, hold it up and say we’re proud of our products inside and out.”

Unconventional Pampering

Posh corporate culture is unconventional. They even dub their annual national convention “Uncon,” where in July they threw out the red carpet to Elvis and Dolly Parton impersonators and drag queens to launch new products in Nashville, Tennessee.

“One of our brand tenets is: ‘We’re serious about not taking ourselves too seriously.’ Part of pampering should be laughing and getting some levity,” adds Dalton. “We talk about intentionally shallow moments because so much of life isn’t,” she says. “It’s heavy and serious and busy. So, when we can take time to let our hair down and go crazy, we take the opportunity every chance we get.”

“We’re one of the first direct sales companies in the world to break into Salesforce technology.”
— Ann Dalton

Unconventional also describes the Posh view of tech and the risks they will take for their consultants and future growth.

In early 2018, Dalton posed the idea of paying Perfectly Posh consultants instant commissions. President Sam Funk says after they were all done laughing at the prospect, they got down to the hard work of making it happen. Several solid months of IT development working with third-party vendors, finance and other logistical folks created a pioneering payment system that went live August 1, 2018.

They commit to pay commissions on personal volume in less than three hours for any consultant with $1,000 lifetime volume. That stipulation lets Posh know the consultant is a real person. The money deposits into pay portal accounts at no extra cost.

The success of the program was immediate. Funk says Posh has been paying on average about four minutes after a sale has been made. “I don’t think anybody is doing it this fast,” he says.

“It’s very much how the world works today. There’s an immediacy around everything we do and it makes Posh that much more pampering when I can work today and play tonight or feed my family tonight,” Dalton says.

“People are excited and they’re looking at it as a way to both find new team members as well as re-energize existing teams,” Funk says.

Breaking into Salesforce

This isn’t the first time Perfectly Posh has taken a big risk with technology. Not quite a year ago, the company moved on from a direct selling industry technology’s platform and placed their faith in Salesforce flexibility.

“We operate much more like a retail skincare company. It’s a lot of SKUs that turn very quickly, a lot of SKUs and movement and we needed software that could keep up with us. We’re one of the first direct sales companies in the world to break into Salesforce technology,” Dalton says.

The old platform crashed with 11 concurrent transactions at checkout, so Perfectly Posh moved more quickly than they or their platform advisors would have liked. Development began in January with round-the-clock work from a world-class team. The site went live September 2017.

“The first couple months were a little bit rockier than we would have liked because we just ran out of time, but now there’s a tremendous amount of functionality and reliability,” Funk says.

Now they can handle over 800 concurrent transactions. Of course, there is still refining to be done, but Dalton says it swings the door wide open.

“It gives us a lot more flexibility. We can be a lot more promotional. We can put bundles together. We can encourage people to build regimens. There’s a lot that we’re able to do on the platform and that we need to do because our product line works more like a retail store. It really was a necessity for us to be as nimble as we wanted to be,” Dalton says.

Thinking Forward

Start thinking like a billion-dollar company, and Chief Sales Officer Eddie Silcock says, “We’ll start to operate like one.”

So Perfectly Posh has recruited a regional sales team working with leaders on coaching and accountability training and will launch a complete revamp of their training system in late 2018. They’ve also installed some simple field incentives, switched up the comp plan, and drastically changed their field engagement strategy.

“Our products, our packaging and our vibe stop people scrolling. In this busy world of Facebook and Instagram, we have the ability to get people’s attention.
”
— Eddie Silcock, Chief Sales Officer

Silcock believes 2019 to be a pivotal year in a three-year Posh strategy focused on U.S. customer acquisition. “Our products, our packaging and our vibe stop people scrolling. In this busy world of Facebook and Instagram, we have the ability to get people’s attention,” he says. That’s an advantage over other companies who are trying to reinvent themselves for the millennial market. “We are already set up to really speak to and resonate with the millennial market. We just need to continue to execute on the strategies to do so.”

Posh is also looking to capture share of the U.S. Latino market. “That world of family being together and taking care of each other really suits our brand,” Silcock says.

“We’ve still got a lot of opportunities to grow here (in the U.S.). Having said that, obviously the move to Salesforce makes it easier to go into other countries. We have an incredible executive team that has a lot of experience, so as we start to look at other opportunities we are leaving the door open and having conversations about what products would do well in other markets,” Dalton says.

But with a chuckle, Funk adds, “We’re currently in the U.S. and we see that changing someday.”

You deserve it Sisterhood Helps Women, Children

The You Deserve It foundation, the charitable arm of Perfectly Posh, launched nearly three years ago and turned its attention this year to “give back” ingredient sourcing programs that benefit women and children of remote Guatemala, Ghana and sub-Saharan Africa.

The responsible sourcing of palm oil is rare among skincare companies and adds expense, but Posh is serious about helping its Guatemalan sources and has a yearlong commitment to nutritionally support babies and infants. “Our field really rose to the occasion. They collected change at all of their events and presented a $40,000 check for our global initiative,” CEO and Founder Ann Dalton says.

You Deserve It is also building the Shea Sisterhood through a partnership with Global Shea Alliance. Forty Posh products contain shea, purchased as seasonally as possible through the Alliance, which in turn provides hands-on training to women in Ghana and 21 sub-Saharan African countries who are building shea businesses.

Posh sold out of 25,000 units of its first Shea Sisterhood fundraiser quickly and a reorder of 25,000 arrives shortly. This initiative will help sponsor a warehouse in Ghana, where 500 women can participate in collective buying power and increase their incomes by over 40 percent in the next shea season alone.

Three Keys to Engaging Employees and Reducing Turnover

by Leave a Comment

56%Wouldn’t it be nice if that were the growth rate in the direct selling industry?

Unfortunately, it’s the employee turnover rate. Being a direct selling company in a digital world dominated by Apple, Google, and Amazon is challenging enough. If you’re losing your top talent, how do you survive—let alone thrive—in the marketplace?

To reduce turnover, it’s imperative that you inspire loyalty in your employees by engaging them. If you look at the top places to work in direct selling (according to the Direct Selling News 2018 Best Places to Work in Direct Selling survey), one thing the frontrunners have in common is high levels of employee engagement. The majority of companies, however, struggle with employee relationships. As Businessolver’s 2018 State of Workplace Empathy report shows, only 31 percent of employees are engaged at work.

To get some insight into why employees are apathetic or dissatisfied, look up any company on an employee review site like Glassdoor or Indeed and read what people say it’s like to work for any company. While this method is by no means scientific, that feedback reveals three common themes that will help you pave the way for engaging employees.

1. A Sense of Growth and Purpose

Engaged employees have a strong sense that they’re fulfilling their company’s mission and giving back to the community. They realize the work they do on a day-to-day basis is valuable. Rather than just taking calls or designing marketing materials, they know they’re helping create opportunities for a student to pay his way through school or a single mom to support her family.

However, making sure employees know your company’s mission isn’t enough. They want to feel empowered to carry it out. In online reviews, many employees said that a lack of innovation, leaders who were stuck in their ways, and outdated technology (like a DOS-based CRM and buggy website) interfered with the company’s success. These specific complaints illustrate the importance of keeping an eye to the future. Be open to change, consider employees’ ideas, and leverage technology to benefit your business.

As you carve out new paths for growth, ensure your employees are progressing as well. They want to know where they’re going with the company, but a common refrain in many of the employees’ online reviews was that there were no opportunities for advancement. In some cases, promotions weren’t available because of existing employees’ tenure (a good problem for a company to have!). Often, however, employees were dissatisfied with the lack of upward mobility because leadership didn’t communicate with them about available opportunities or there was a political company culture where promotions were handed out on a who-you-know basis.

Of course, promotions aren’t always possible for every employee, but investing in personal and professional development—such as one-on-one coaching, training courses, certifications, and higher education—shows that you’re committed to helping them achieve their career goals within your company.

2. Empathy

Businessolver’s research found that 9 in 10 employees are more likely to stay with an organization that empathizes with their needs. Not only that, 8 in 10 employees, HR professionals, and CEOs say empathy in the workplace positively affects business success by engaging employees and even boosting financial performance.

Empathy is more than just lip service. As one reviewer pointed out, “[Leaders] tell you that their employees are very important, but they do not show that. In the call center, employees are not viewed as people, they are looked at in terms of coverage.”

So how do you show your employees that you are empathetic? Take some advice from employees themselves:

  • “Treat people like people not machines.”
  • “Care about your employees and get to know who they are. Be more down to earth and friendly.”
  • “Do better at trying to retain employees of long stature, as they carry with them a ton of business knowledge.”

Showing your staff you value them could involve prioritizing work-life balance, offering generous benefits, allowing flexible schedules, embracing diversity, acknowledging employees’ milestones and accomplishments, and encouraging innovation.

3. Communication

Championing employee growth and showing empathy have a common denominator: communication. Employees feel valued and empowered when they know how the business operates and how they’re personally performing. However, a common theme among most companies’ employee reviews was confusion about company processes, which led to inefficiency, and in many cases, turnover.

Several people wanted more clarity and organization in the following areas:

  • Hiring
  • Organizational structure (e.g., relation of headquarters staff to regional staff and global reporting structure)
  • Internal career paths
  • Performance review process

Communication doesn’t have to be all business, though. Employees love talking about things that are important to them. Ask them about their families, their hobbies, and the vacation they took over the summer.

When it comes to showing empathy through communication, Businessolver found that 90 percent of employees, HR professionals, and CEOs agree that face-to-face conversations and team meetings are ideal. This is a delicate balance, however—several reviewers complained of too many meetings, which made decision-making difficult. There’s also the issue of company growth. The more staff your company adds, the more challenging it is for executives to connect with employees.

Don’t let these challenges stop you from communicating with your employees. Try having open conference calls, during which you can share company updates, recognize employees, and open up the floor for questions. Another effective way to build engagement is to send an eNewsletter that features a personal message from you, notable employee accomplishments, and positive feedback from distributors about specific staff members or departments. All newsletter content should reflect and reiterate your company’s values and mission.

Finally, remember that the way you communicate is just as important as the medium through which you communicate. Micromanaging projects, ignoring or discounting new ideas, and withholding praise and constructive feedback erodes employees’ sense of purpose and value.

You’ll find that when you develop, value, and connect with employees, your turnover rate will drop. As your employees stay and grow, so too will your revenue, profits, and business.

Steve HenningWith over 20 years leading client service and operations teams, Steve Henning is the Senior Marketing and Operations Director for IMN. He oversees teams in three distinct locations across the U.S., serving industries such as direct selling, financial services and automotive dealerships. Regardless of location or industry, his teams focus on helping clients reach their customers through numerous channels by communicating a variety of targeted messages designed to improve revenue and customer satisfaction — all while fostering a positive internal team culture.

Public Direct Sellers: Strong Q2 for Wellness Companies

by Leave a Comment

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 (NUS), Tupperware (TUP), USANA (USNA) and London-based Avon Products (AVP), on balance continued their strong run in the Q2.

Through the first six months of the year, our proprietary Lane Research index for Direct Selling companies is up +23 percent, sharply outpacing the S&P 500 (+2 percent) and Consumer Staples stocks (-9 percent). Our index even outpaced the more economically sensitive Consumer Cyclical stocks by a factor greater than 2x. This leadership has continued so far in the Q3 as well.

Interestingly, our work shows that the key driver to the stock outperformance for Direct Sellers has been a multiple expansion on the group, we think driven by a) the covering of an outsized short position in bellwether Herbalife Nutrition, which has likely carried over to the other names, and b) better than expected business trends. Meanwhile the multiples for the S&P 500 have actually declined, most likely as earnings estimates have finally caught up with stock price moves made a year ago and into January of 2018.

Fundamental Trends Improved In The Q2 And On Balance Remain Favorable

In aggregate, on an equal weighted basis, the group average organic sales growth for the six companies in Q2 of 2018 was +18 percent, a further acceleration from +11 percent in the Q1 and the third straight quarter of double-digit growth. Each of the six companies in the index showed sequential improvement in the Q2 from Q1 trends, with even stronger double-digit growth rates posted at Medifast (OPTAVIA) and Nu Skin, a jump to double-digit growth from the single digits at USANA and Herbalife Nutrition, while Avon and Tupperware, which have been soft lately, reported lesser declines.

Source: Company reports, Lane Research estimates. Lane Research Index is equal weighted. Consumer Staples index is the XLP Exchange Traded Fund (ETF). Consumer Cyclicals is the XLY ETF.

OPTAVIA

OPTAVIA parent Medifast handily beat Q2 estimates and management raised its full year 2018 outlook substantially, well ahead of our estimate increase following a visit to what was a very upbeat annual OPTAVIA convention in St. Louis from July 19th to the 22nd. The key new product initiative announced at the convention, in our view, was Purposeful Hydration, a system designed to keep clients properly hydrated throughout the day, which we believe should be largely incremental to its business. Over the past 5 quarters, OPTAVIA organic sales growth has gone from +2 percent in the 2017 Q1 to +11 percent in the Q2, +18 percent in the Q3 and +32 percent in the Q4, with growth so far in 2018 of +52 percent and +70 percent in the Q1 and Q2 respectively. Clearly the recently rebranded OPTAVIA business has gained significant momentum, which is made more notable in that it has yet to expand internationally pending the entry of Hong Kong and Singapore in the 2019 Q1. We continue to believe OPTAVIA is in the early days of its next wave of growth.

Nu Skin

Once again Nu Skin handily beat on the top line in the Q2, but EPS were constrained by non-cash, non-operating factors. The company appears to have built substantial underlying momentum as LumiSpa and social sharing initiatives have gained good traction coming out of the 2017 Q4. Sales of $704 million were up +28 percent, well above our $654 million forecast and management’s previous $630-$650 million expectations, driven by the third straight quarter of strong double-digit growth in both organic sales and sales leaders; clearly the company has gained good momentum following the introduction of the AgeLOC LumiSpa in the 2017 Q4. Management raised its full year 2018 sales outlook but maintained the upper end of its EPS range. However, with a difficult comparison coupled with the recent spike in the dollar, Q4 reported results could appear somewhat muted year over year.

USANA

USANA’s Q2 EPS substantially beat expectations with better sales and operating margins driving the upside. This marks the 4th straight quarter of accelerating growth trends, led by growth in organic sales and sales leadership, which was able to be leveraged through substantial operating margin expansion. Q2 sales of $302 million were up +17 percent, ahead of our $287 million estimate as organic sales growth of +12 percent was well ahead of our +6.5 percent forecast. Additionally, the size and quality of the Q2 upside, and increased full year outlook, accelerated from Q1 trends as well. The full year raise was more than the Q2 beat, indicating the company expects the momentum built so far this year to carry into the second half.

Herbalife Nutrition

Herbalife Nutrition reported Q2 results that were well ahead of expectations and management raised its full year outlook as well. The EPS raise was slightly muted by recent adverse currency moves, but the underlying business has firmed considerably. Volume points grew +12 percent, well ahead of our +5 percent estimate and mgt’s range of +4 percent to +8 percent. Biggest upside versus our estimates was China +27 percent vs our flattish forecast and biggest downside was So & Cent America, -1 percent vs our +5 percent, but not unexpected given macro difficulties in Brazil with the truckers strike there. The growth in volume points in North America (+18 percent) and China (+27 percent) were particularly impressive given recent challenges in those two markets, indicating that those two important markets are getting back on track.

Conversely, Tupperware and Avon continued recent soft trends, each with organic sales declines in Q2, though of a lesser degree than in Q1.

“Through the first six months of the year, our proprietary Lane Research index for Direct Selling companies is up +23 percent, sharply outpacing the S&P 500 (+2%) and Consumer Staples stocks (-9%).”
— Douglas M. Lane

Tupperware

Tupperware Brands reported Q2 ongoing EPS in line with previous expectations but adjusting for an unusually low tax rate was actually below. Organic sales growth of -4 percent was modestly below our recently reduced -3.5 percent forecast and mgt’s original range of -2 percent to 0 percent. Momentum clearly continues soft. Best performing units were China, Fuller Mexico, Tupperware Mexico and Tupperware South Africa, which have been performing well lately. Softer markets include Brazil, where the trucker strike and the decline in the real had a large adverse impact, as well as continued softness in India, Indonesia, France and Tupperware Australia & New Zealand. Management reduced its outlook for full year 2018 organic sales and EPS given the continued soft underlying business trends and recent adverse currency moves. The company also announced sweeping management changes following the recent CEO succession.

Avon

Avon’s Q2 sales declined -3.2 percent slightly better than our recently reduced -3.6 percent forecast. Loss per share was ($0.03), below our recently reduced ($0.01) and consensus $0.00. Momentum indicators were mixed in the Q2.

Active Reps were down -4 percent, slightly below our forecast for -3 percent but even sequentially with -4 percent in the Q1. Organic Sales growth of -3 percent was better than our most recent -4 percent forecast and improved sequentially from -4 percent in the Q1. Units Sold were down -5 percent, in line with our forecast and a deceleration from the -3 percent in the Q1. In our view, what investors are most focused in on is the forward strategy that will be articulated by the new CEO and his team at the investor day being held in New York in September.

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.

 

Disclosures: Financial Interests
The analyst, Douglas M. Lane, and members of his household own equity and/or equity derivative securities in Herbalife Ltd., which had previously been publicly disclosed in a Direct Selling News article originally published in January 2013.
Other than mentioned above, neither I, Douglas M. Lane, nor a member of my household, owns any security(ies) which is/are the subject of this article. Neither I, nor a member of my household is an officer, director, or advisory board member of the issuer(s) or has another significant affiliation with the issuer(s) that is/are the subject of this research report. I do not know or have reason to know at the time of this publication of any other material conflict of interest.

Ethics And Sharpening Our Competitive Edge

by Leave a Comment

We all know how Amazon has impacted competition on the product side of our business, and the emerging gig economy players that rely on independent contractors have brought even more disruption to the marketplace.

What makes direct selling so attractive—our commitment to creating a more supportive world for independent contractors—is central to who we are as an industry.

While DSA’s new ethics and self-regulation initiative will ultimately protect consumers, it also shows the world our “true north” and our commitment to being held to the highest ethical standards. This new ethics and self-regulation program will make direct selling more competitive than ever before; I can state without reservation that this initiative represents one of the most valuable and momentous programs for the membership and industry alike.

The anticipated program has been built upon DSA’s decades long legacy of self-regulation and represents a new bold, revolutionary effort to improve direct selling’s reputation and positively position our dynamic retail channel and support the independent contractors who are the lifeblood of our micro-entrepreneurial opportunity.

Over the course of the last several years, DSA has sought to “raise the bar” for our ethics and self-regulation program with frequent input from Federal Trade Commission (FTC) staff and sitting FTC Commissioners. At last year’s DSA Fall Conference 2017, Federal Trade Commission Acting Chairman Maureen Ohlhausen shared characteristics that the FTC views as the most ambitious and effective self-regulatory initiatives being used today. Ohlhausen described characteristics of effective self-regulatory programs as:

  • Having clear, meaningful and fair standards;
  • Adequately-funded and independent from industry members; and,
  • Supported by effective enforcement mechanisms, applicable to the entire industry.

DSA also set out its own principles to define the program’s framework. DSA engaged the Advertising Self-Regulatory Council/Council of Better Business Bureaus to develop a new third-party self-regulatory program for the direct selling channel, to work in conjunction with the DSA Code and to meet the characteristics set out by Ohlhausen, and the principles identified by DSA.

The resulting program will demonstrate the commitment of DSA members to establish and support a comprehensive self-regulatory program based on existing standards of advertising law and regulation, as well as standards embodied in the DSA Code of Ethics. The direct selling program will provide an independent mechanism for monitoring income representations and product claims by direct selling companies on an industry-wide basis.

In addition, DSA has consulted with a broad range of industry leaders for their input on the program and has continued to inform the Federal Trade Commission of our progress while garnering additional insights.

I am enormously grateful for the engagement of the membership on this crucial initiative and your invaluable leadership and support. I am excited to discuss how this bold new program’s impartial, independent, and accountable processes will set new standards for direct selling industry participants and favorably position direct selling and DSA.

3 Things NASA Can Teach You About Leadership

by Leave a Comment

You know the old saying, “Give a man a fish and he’ll eat for a day; teach a man to fish and he’ll eat for a lifetime”? What if that message is actually wrong?

Stay with me, friends. I promise you this isn’t blasphemy.

You see, teaching a man to fish won’t feed him for a lifetime… unless you actually let the man go out and fish.

Here’s what I see in the business world all the time: Leaders, wanting to create a powerful team, pour their energy and resources into building their people. Conferences, workshops, retreats—no expense is spared to offer all the team members the skills they need to solve problems and contribute to the organization. Everyone is told how important it is for each individual to be empowered, to be able to reach objectives on his or her own.

“Empowerment happens only when a leader gives people the trust, permission and resources to make decisions and act in the organization’s best interest.”

And then everyone goes back to work—and waits for the leader to take charge. No decisions. No initiatives. No from-the-bottom-up ideas.

What happened?

The leader hasn’t really empowered his people. He has simply trained them. Empowerment happens only when a leader gives people the trust, permission and resources to make decisions and act in the organization’s best interest.

This philosophy can be a struggle to embrace. It was a lesson I learned early in my career after some members of my team confronted me and pointed out my self-centeredness. That’s when I realized that if everything depends on the leader, the team will achieve only what its leader is capable of achieving.

I made a commitment right then to empower my people. Releasing authority isn’t easy. Yet once I began handing power to my team, I was amazed at how much our organization increased its impact.

Empowerment is the way to blow the lid off any organization

Trained people who are skilled at their jobs and trusted by their leaders can do extraordinary things.

History provides us with one of the most remarkable and dramatic examples of what can happen with an empowered team: the Apollo 13 mission to the moon, one of the most famous episodes in the history of space travel—if only because it could have been one of the most tragic incidents in the history of space travel. If you weren’t around in 1970 when this perilous situation grabbed the public’s attention (or if you didn’t see the Tom Hanks movie about the moonshot gone wrong), here’s what happened: Damage to the spacecraft resulted in a life-threatening situation for the three men on board. The air supply in the lunar module—the crew’s “lifeboat” when the service module broke down—wouldn’t last long enough to bring the crew home alive.

“Yet once I began handing power to my team, I was amazed at how much our organization increased its impact.”
— John C. Maxwell

The astronauts were literally contaminating the air with carbon dioxide every time they exhaled. That’s when a scrappy team of engineers at NASA in Houston averted disaster. They took a pile of random objects—including duct tape, plastic bags and cardboard—and used them to devise an air-filtration system essential to survival.

With lives on the line, NASA leaders trusted their people to make the impossible possible. They empowered the engineers to create a miracle, and they did.

How did the NASA brain trust do it?

They had confidence in their staff.

The engineers at NASA are some of the best in their respective fields, but so are the people who lead them. Because of the gravity of the moment, some of those leaders might have quite logically said, “I have years of experience in this field, and this is a huge assignment. I’ll take it from here.” Instead they put their faith in the engineering team, trusting them to solve the crisis.

They gave the staff permission to work.

There were no parameters, no limitations. The leaders simply said, “You have these materials with this objective, and it has to work.” Because of the situation, NASA leaders understood a powerful truth: When it comes to getting someone’s very best, expectations are better than rules. Rather than narrowing the possible outcomes, NASA opened the door for the engineers to explore the boundaries of their creativity.

They gave the staff all the resources they could.

This doesn’t mean the engineers received a blank check to do whatever they wished. They had to work with a very limited pile of materials available to the astronauts in the Apollo module. But they were told they could use any of those materials in whatever combinations they desired. In this case, the quantity of resources was limited, but the use of the resources was not.

The astronauts said, “Houston, we have a problem;” and before it was too late, NASA’s empowered engineers said, “OK, Odyssey, here’s a solution.” Great leadership made the solution possible.

While you and your team may never face a situation as dire as the Apollo 13 mission, you still face challenges together every day. Some are small; some are large; all are opportunities for your team to produce outstanding results.

The question is: Will you truly empower them?

JOHN C. MAXWELL is a leadership expert, speaker, best-selling author and the founder of EQUIP and.the John Maxwell Co., which have trained more than 5 million leaders worldwide.

How Your Message Can Win the Day

by Leave a Comment

It’s only natural to tell the world through your marketing how great and unique your company and products and services are.

That’s been the formula for as long as marketing has been around. But in today’s competitive landscape companies need to communicate clearly why their prospective customers and distributors need their products in their lives.

In our cover story this month, writer Courtney Roush talks about how everyday people the world over are looking for solutions to their problems. And those direct selling companies who can effectively show empathy for what they are going through, while helping them solve their problems through their products and services, will win their business time and time again, and create raving fans who will spread the gospel of how you helped them.

At the end of the day, if your message doesn’t clearly communicate how you can help customers and distributors win the day, you will be simply ignored. Your company story may be very compelling and worth telling, but it needs to also connect the dots in helping people get their unfulfilled needs met.

In this issue we also take a look at how many field organizations are using Instagram TV (IGTV) in promoting their businesses, building a following and their own personal brand. Writer David Lee offers a few effective ways direct sellers (both at corporate and in the field) can get the most out of this new Instagram feature.

We also are excited to share with you company profiles on Perfectly Posh and Kannaway. I was able to visit Perfectly Posh’s headquarters in Salt Lake City recently and came away thoroughly impressed and delighted how CEO Ann Dalton and team have created an open and fun culture that also extends to their consultants and their fun products. Be sure to read the Q&A with Ann and Chief Sales Officer Eddie Silcock.

Did you know the U.S. hemp market pulled in $820 million in sales in 2017? With the current Farm Bill set to be passed later this year, the market is poised for continued growth. Kannaway is one of the companies who have entered this exploding market. CEO Blake Schroeder shares his story of being a pioneer in the cannabis space, as well as the first company in direct selling to enter the market. How he and his team have successfully dealt with regulation, sourcing, and promotion is a great primer to all that are considering entering the market.

And finally, if your company hasn’t nominated itself for the Best Places to Work, be sure to do so as nominations close October 27.

For more information go to DirectSellingNews.com/BestPlacesToWork.

All the best,

Todd Eliason
Publisher and Editor in Chief
teliason@directsellingnews.com

SimplyFun Receives Distinguished Teachers’ Choice℠ Award

by Leave a Comment

SimplyFun, LLC recently received a Learning® Magazine 2019 Teachers’ Choice℠ Award for the Classroom for its Math & STEM game, Owl Solve That!

Each year, a team of teachers evaluates each submitted game in the classroom based on quality, instructional value, ease of use, and innovation. Owl Solve That! is one of 27 products that received this honor for 2019.

This is the second consecutive Learning® Magazine 2019 Teachers’ Choice℠ Award for the Classroom for a SimplyFun game. Math Medalist received the award in 2018.

“Supporting learning through play in the classroom is an important part of our mission at SimplyFun,” said SimplyFun President and CEO, Patty Pearcy. “It is especially meaningful for us to be honored with this award for the second year in a row for our unique math games.”

Owl Solve That! was designed by renowned game designer, Dr. Reiner Knizia.

SimplyFun believes in the undeniable power of shared play to learn, grow, and realize fullest, brightest potential.