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Thirty-One: Driven by Passion, Fueled by Purpose

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Thirty-One Gifts is committed to empowering women—whether consultants, customers, or young girls struggling with confidence and other issues.

This passion to help women is driven by Founder and CEO Cindy Monroe, who began the company 15 years ago in her basement. Thirty-One specializes in personalized handbags, totes, duffle bags, lunch bags and other carryall products. Its mission: “Thirty-One is more than just a company. We are people who believe in celebrating, encouraging and rewarding women for who they are.”

Thirty-One Gifts
Founded: 2003
Headquarters: Columbus, Ohio
Top Executive: Founder and CEO Cindy Monroe
Products: Personalized handbags, jewelry and accessories

The organization recognizes the synergies that come from supporting its core constituencies—customers, consultants and communities. Continued communication and input from these groups inform ongoing strategies at the company and help the team stay on top of a changing business environment.

Revisiting Success

Since its founding in Monroe’s basement, Thirty-One had explosive success and then, she says, “we had a couple of years of decline.” That led to new considerations of how the company might be structured—and restructured—to see greater success.

Cindy Monroe

“I’m pretty proud of our team—we are healthy at the top line and the bottom line,” says Monroe. “We’re super excited to have had a growth year in 2017. I’m so proud of our team and our sales field for how they’ve rallied around momentum and growth.”

That success, she says, wasn’t due to any one silver bullet. It was, in fact, a lot of different factors, some short-term, some bigger ideas—but all driven by coming together in collaboration to turn the business around.

“We’re super excited to have had a growth year in 2017. I’m so proud of our team and our sales field for how they’ve rallied around momentum and growth.”
—Cindy Monroe, Founder and CEO, Thirty-One Gifts

A Flatter Structure Drives Collaboration and Productivity

To get to a flatter structure at the top level of the company, Monroe removed the C-suite and had vice presidents of specific departments continue to drive their areas, but collaboratively. “I feel that they have exposure to other areas of the business that they didn’t previously always have,” says Monroe. In addition, the change has helped leaders understand what motivates the sales field in ways that they didn’t understand before. It’s also driven greater accountability, she says, “not just from me, but from their peers.” Today, she adds, “they’re accomplishing things together, they’re learning together and they’re celebrating together.”

Departments that have been most affected by the change, says Monroe, have been product, sales, marketing, finance and IT. The opportunity to understand the other areas and how they can best work together has “definitely helped them as they’re building out business cases” for initiatives, she says.

A Purposeful Focus on R&D and Design

One of the key differentiating factors for Thirty-One is its focus on personalization. “We’re a personalization company,” says Andrea Dowding, vice president of merchandising. “Customers can take a blank canvas—whether it’s a bag, a bin, or a tote—and make it their own.” Personalization, she says, is the No. 1 gift attribute, according to the Gift and Decorative Accessories Association.

After spending several years in direct sales, then taking a break to become an executive coach, Dowding was called back to the channel when Monroe reached out to her. “I’ve worked with a lot of women, and I love her,” says Dowding. “She’s very much focused on our consultants, their personal growth and development. That really got my attention.”

Monroe’s focus on consultants, says Dowding, extends to product. “It’s a joy to have a CEO that has the same love she has for consultants extend to the products. That makes my job quite delightful.”

Thirty-One uses a purposeful process to develop products, which means paying attention to not only trade shows, consultants, customers and social channels but also field focus groups and field testing. Thirty-One, Dowding says, is known for its whimsical prints and the uniqueness of its designs. In fact, she says, “people can look at our products and say, ‘oh, that’s a Thirty-One print.’ ”

While designers shop the market and research is done into consumer lifestyles and insights, consultants also play an important role. “Many times, we’ll have our top consultants rank our styles and prints,” says Dowding. Products are tested, usually once a year, through a process called “Promising Picks,” where consultants review, rank and test them with their customers to determine their sales potential.

Testing is done in other ways as well. Dowding tells of a recent new product introduction—the company’s $58 Close to Home Tray, a wood and wrought iron tray. The tray was initially introduced as part of the Promising Picks process and, despite its higher price point, it sold out in 28 days. Then it was tested online last March and became the No. 1 SKU in the company. Even though it wasn’t in the catalog for the season, it became Thirty-One’s No. 8 product.

“That let us know that this was a category we need to explore, so we did a ton of research on millennials, what they were buying in accessories and decided we’ve got a category we can expand,” says Dowding. “We built plans accordingly and introduced two new pieces this spring. They are our No. 1 and No. 2 products right now.”

Throughout the design process, Thirty-One also seeks to ensure that important support departments are involved—departments like IT, operations and the back office. “We have to work with operations to make sure the product will be profitable and will work with the machinery, the capabilities and capacities we have,” says Dowding. “We have to make sure we can support the ordering process.”

Thirty-One Gifts headquarters in Columbus, Ohio.

A Vision for 2018

As she was looking toward expansion and other new ideas for the business, in August 2017, Monroe appointed Jeffrey Dahl to serve as the company’s president. Dahl brings 13 years’ experience in direct selling to Thirty-One as well as time spent with Coca-Cola and Lufthansa. In addition to expansion, he is focused on supporting the team from a day-to-day standpoint as Monroe travels to meet with consultants.

Among Dahl’s areas of focus as the company’s relatively new president is brand recognition. “We’ve been sort of quiet about our brand, but we can’t afford to be if we want to grow,” he says. To that end, the company launched a celebration tour in January that is traveling to 69 cities in targeted areas of potential growth. The company already has consultants in those communities to serve as hosts and welcome customers. The celebration tour features a pop-up building to showcase products, videos and to welcome customers.

Thirty-One has a debt-free philosophy, which, says Dahl, is a healthy way to operate a business. “We have a line of credit and a great cash-positive position, but why overextend? That would make it very difficult to operate during a dip.”

But, adds Monroe, even though Thirty-One has a debt-free philosophy, “we never want funding to become an issue; we’re not totally against borrowing or debt if it makes sense, but as much as we can fund our growth and keep up with the execution of different ideas without it, that’s what we’d like to do.”

The approach the company takes with incentives also has a positive impact, Monroe explains. “We focus on incentives that drive specific behaviors such as sponsoring, retaining or selling. Also, we design incentives and programs to be flexible, so we don’t have to layer on top of each incentive as we evolve. We continue to invest in strategic areas that we want to grow, but we’re not always committed to year after year.”

Another exciting venture is an analysis of international expansion. Although the company has 65,000 consultants in the United States and Canada, Dahl says, he thinks opportunities await internationally. Yet, he adds: “I believe we still have a lot of growth opportunity in the U.S.”

Some of that growth will be fueled through a broader use of social platforms as a means of getting the word out to potential customers and consultants.

“I’ve worked with a lot of women, and I love her. She’s very much focused on our consultants, their personal growth and development. That really got my attention.”
—Andrea Dowding, Vice President of Merchandising, Thirty-One Gifts

“It used to be that word-of-mouth was the No. 1 way to connect,” says Dowding. “But, now that we’ve got social platforms, we can introduce the products to new communities of customers and pull those new communities to our consultants for purchasing and sponsoring.”

Thirty-One recently developed a new baby product line, which has been rolled out to leaders and will launch on April 1. The bag is part of a strategy to capture the millennial market which, says Dowding, represents about 80 percent of the 75 million new moms in the country. “We really feel like Thirty-One should own the diaper bag,” she says.

Personalization and customization are hallmarks of the product lines and an area of continued investment, says Monroe. “We believe people come to us for the unique product, so we’re definitely trying to always look at that.” That personalization and customization also extends to consultants, she notes. “One of the areas we also are investing in is how consultants customize their businesses. We have a new order type that’s more traditional direct selling, that we’ve not done before,” she says. As of Feb. 1, consultants can order wholesale product to get discounts up front rather than wait for their commissions.

Working together, with a mission of empowering women and providing opportunities for personal expression, combined with a purposeful approach to new ideas and innovations, is positioning Thirty-One for continued success.

Charitable Giving at the Core of Thirty-One’s Mission

Thirty-One has taken the same purposeful approach to giving that it takes in its product development process. The company’s charitable giving strategy has three areas of focus: girls, women and families.

The pillars provide a litmus test for determining which projects or organizations to support. Consultants are part of the decision-making process as well, through a Care Council that is comprised of 15 members across Canada and the U.S.

Thirty-One donates to CHOICES domestic violence center.

Thirty-One takes giving very seriously. To date, the company has donated more than $100 million in product and cash to nonprofits in the United States and Canada. It also has invested in a team to support, coordinate and carry out these efforts, led by Wendy Bradshaw, executive director of community affairs, through the organization’s Thirty-One Gives program.

“Giving is part of who we are, it’s in our DNA,” says Bradshaw. Giving is incorporated into all aspects of the business, she says, whether it’s the parties themselves, leadership incentive trips, or unique platforms to support consultants in their own community efforts. Here is a list of recent initiatives:

World Vision

World Vision is a Christian humanitarian organization that works with children, families and communities to tackle the causes of poverty and injustice. Thirty-One has provided a product match for the organization’s Giving Tuesday for the past four years—contributing $4.7 million in product to date, $1 million in 2017 in the form of backpacks, apparel and bags.

Throughout the year sales consultants make Hope Kits—travel accessory bags filled with hygiene products for women escaping violence, abuse, poverty or natural disasters. They’ve made 32,000 Hope Kits, each including a hand-written note of encouragement from the person who assembled the kit.

Girls on the Run 5K

Kids in Need Foundation and Hurricane Relief

In 2017, hurricane relief was a major area of focus as hurricanes impacted both consultants and consumers across the country. Through the Kids in Need Foundation, an organization dedicated to ensuring that children have school supplies, Thirty-One was able to provide backpacks that were distributed through shops across the U.S. for teachers to get needed supplies for their students—20,000 backpacks (valued at more than $1 million total) were filled with supplies that were given to students in seven distribution centers in Florida.

The National Network to End Domestic Violence (NNEDV)

One of the challenges that female victims of violence often face is building credit scores to attain housing, food and jobs. In October 2017, Thirty-One helped NNEDV launch the Independent Project through $90,000 in seed funding to pilot the program. A micro-lending program, the initiative offered women a $100 loan and the opportunity to repay the loan, with no interest, over the next 10 months to help them establish credit. It was the first national program of its kind, and is now available in 42 states and Washington, D.C.

Thirty-One Gifts employees volunteer at Ronald McDonald House.

Girls on the Run

Knowing that statistics strongly indicate that girls’ self-esteem is formed by age 9, Thirty-One wanted to do something to reach these girls at a younger age. Girls on the Run meets twice a week in small teams to teach life skills through interactive lessons and games run by Girls on the Run coaches.

It’s an after-school program for girls with a strong curriculum tied to self-esteem. At each session’s conclusion, the girls and their running buddies complete a 5K running event. Through their partnership with Girls on the Run, Thirty-One has impacted 200,000 girls.

Southwestern: Company’s 150-Year-Old Mission Continues to Inspire

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Photo: Southwestern group service project in Dominican Republic.

“THE MOST IMPORTANT THING THAT OUR INDIVIDUAL EXPERIENCES WITH SOUTHWESTERN PROVIDED was the development of character—doing what needed to be done whether we felt like it or not.”

“Yes, the planning, goal setting and book-keeping were all good skills, but it was ‘hitting the wall,’ which we all did, that provided the opportunity for our true selves to be identified, developed and forged. We each found ourselves at some point on a curb somewhere, feeling defeated, but we got up and kept going. Now, each of my children know who they are, what they can do and what their purpose is. It’s simply natural for others to follow them because people want to follow commitment and strength like that.”
—Steve Barnett, Southwestern Advantage alumnus; husband to Jayne Barnett, Southwestern Advantage alumnus; together they are parents to six Southwestern Advantage alumni

SOUTHWESTERN
Founded: 1855 (Direct Sales, 1868)
Headquarters: Nashville, Tennesee
Top Executive: Chairman and CEO Henry Bedford
Products: Leisure and Education

Henry Bedford

As the global culture continues to demand a digital lifestyle, where daily purchases can be made without interacting with a single human, Southwestern’s door-to-door sales model sounds as if it’s from another time—and it is. 1868 to be exact. For 150 years, the company has recruited students from colleges across the country to participate in its flagship summer sales and leadership program, Southwestern Advantage. Throughout that time, the mission of Southwestern has remained the same: to be the best company in the world at helping young people develop the skills and character they need to reach their goals. Year after year, approximately 2,000 college students choose to spend their summer months selling the suite of educational materials offered by Southwestern Advantage in neighborhoods across North America. But company executives would tell you that their ultimate product is far more valuable. At the close of each summer selling season, Southwestern Advantage has produced a fresh class of entrepreneurs who are fully equipped with the resilience, leadership skills and on-the-ground experience to impact every sector of the American economy.

“We have a timeless mission,” explains President Dan Moore. “If ever there were a generation of young people that did not need character, perseverance, communication skills, flexibility, adaptability, self-reliance, or service-mindedness, then we’d lose our relevancy. But as long as there are generations that need those qualities, we’ll be here.”

Moore is proof of that mission, having joined the company as a Harvard undergraduate in 1974 and working his way to the top in his 44-year tenure. “I wasn’t born into a wealthy family,” he shares. “(At the time), I wasn’t sure I’d have the money for the second year.” While working as a busboy in the dining hall, Moore was befriended by a senior who shared the experience he’d had selling books door-to-door and how much money he’d earned. “I said ‘if I can do half as well as he did, it’ll take a lot of burden off my family and allow me to be back here again.’ ”

One-on-one sales school training.

Mission Meets Method

In this digital age of online entrepreneurs and social selling, how does Southwestern Advantage’s traditional sales model attract student sellers? “We try to connect what our opportunity offers with the futures students want to have,” Moore says. In practice, this involves sharing the characteristics that employers are looking for, made public by the National Association of Colleges and Employers. “Communication skills, self-reliance, initiative—all are skills that this program grows in students,” he continues. “So a big part of our recruiting approach is to simply expose them to that reality, that this opportunity is waiting for you, and you can do what every other student does, or you can take a calculated risk, and do something that will definitely make you stand out.”

President Dan Moore with student dealer on the field.

Southwestern’s summer sales and leadership program begins with initial recruitment conversations, much like Moore’s in the Harvard dining hall. “We recruit on 205 college campuses nationwide and in 11 countries abroad,” explains Trey Campbell, director of communications. “If a student shows interest in the program, we have them sit down with one of our sales managers or a student manager, who’s returning to the program after a successful summer. We want the program to be right for them and for the students to be right for the program, because it’s not just getting some samples of products and selling it to your friends. It’s actually relocating to another state and living with a host family.”

The next step of the process is critical—a visit with the student’s parents. “The parents endorse their son or daughter into our program, so they’re fully aware of what we’re all about and what their son or daughter wants to do for the summer, even though these students are adults,” says Campbell. “Those parents are their student’s biggest fans and biggest support.”

Once the student decides to participate in the program, he or she attends Southwestern’s sales school, a five-day training program at the company’s headquarters in Nashville, Tennessee. For those five days, these student entrepreneurs learn what it means to operate their own businesses. While they’re required to pay for their transportation to the training, as well as a portion of their room and board for the week, students receive the training, sales kit and samples at no cost. Moore explains the breakdown of this program this way: “The students’ week focuses one-third on selling knowledge, another third on product knowledge and business management, and at least a third on self-motivation, attitude and being prepared for the refusal and obstacles they’re going to face.”

For 150 years, the company has recruited students from colleges across the country to participate in its flagship summer sales and leadership program, Southwestern Advantage

At week’s end, these newly minted student business owners, or “student dealers,” will leave for their assigned territories, move in with host families and put their newfound sales skills to the test. In neighborhoods across the U.S. and Canada, student dealers share the company’s educational books and online subscriptions with area families. Every sale is made in person, with student dealers running their own business on average 70 hours a week, which is about 12 hours a day, six days a week. Even with continued weekly training, the dealers face a vigorous 12 weeks—a goal of 30 presentations per day, repeated rejection and the challenges of working far from home. Approximately 30 percent of the students that attend sales school won’t complete the summer; however, of those dealers that do complete the summer, around 40 percent will return for the next summer and 50-60 percent complete a third summer selling season. The average five-year participant of the program has earned $137,522. Considering the current average cost of tuition, room and board for four years of in-state college is $83,080; these student dealers are coming out ahead in ways beyond the skill set they develop.

“This opportunity is waiting for you, and you can do what every other student does, or you can take a calculated risk, and do something that will definitely make you stand out.”
—Dan Moore, President, Southwestern

Student dealers that complete the program have on-the-ground experience they can use to market themselves to potential employers; though many feel so passionate about Southwestern that they pursue careers with the company, working in the field or in other positions across the organization.

An Engine That Fuels Entrepreneurship

The oldest direct sales company in the country, Southwestern Advantage celebrates its 150th anniversary this year, but it doesn’t celebrate alone. Since 1972, 19 additional companies have joined the Southwestern family of companies with most conceived by veterans of the Southwestern Advantage summer program. Chairman and CEO Henry Bedford, who also began his career as a student dealer, witnessed the birth of each new Southwestern company. “When I joined Southwestern full-time, I worked with (then CEO) Spencer Hays,” Bedford shares. “Spencer had a philosophy of wanting to work with students to continue to build new business in Southwestern.”

With 20 companies operating under the Southwestern name and an ongoing commitment to remain an incubator of new business opportunities, the company continues to grow. “We’re like a small Berkshire Hathaway,” says Bedford. “We’re a collection of businesses, in many different industries. We identify an A+ person and know that if the right person is leading a business, they’ll find a way to persist.” Bedford and his team can quantify their philosophy on growth: 80 percent of the businesses that have been developed internally are still in business today. He says, “It’s not a perfect track record, but it’s pretty good.”

Today, that family of companies continues to be fueled by the talent empowered by the summer sales program. In the past five years alone, more than 200 alumni of the program have been hired in positions within the family of companies. And the business hasn’t simply grown by companies or team members. “In 1972, when I was selling books, our entire wholesale business was $12 million after being in business for roughly 100 years,” Bedford says. “As of last year we’re somewhere in the neighborhood of $220 million. It’s been a wonderful evolution of just believing in people. We have such a wonderful situation where a young person can define what they’re passionate about and then have the opportunity to follow those passions right off the bat, right out of school and build what they want to build.”

The Next 150 Years

Looking ahead to the future of Southwestern and the constant push for more online commerce options, it’s only logical to question both the model and the product. Bedford and his team are confident that the personal, face-to-face sales approach that is Southwestern’s hallmark isn’t going anywhere. Additionally, he says, “I’m often asked, “What are you going to do when books go out of style, or people only want digital content?’ My response is ‘we’ll have a party!’ The idea of going to digital content is wonderful. We’d have a simpler inventory system, can be more adept and quick at making changes and edits. It’s nothing but positive,” he says. “Though we find that parents and grandparents still gravitate towards books and we think that will continue for quite some time. But as it evolves, our strategy is to simply follow the market and go where the market’s going. We view books as a medium and the real value is our (proprietary) content.”

Bedford shares that as a company, Southwestern’s 30-year goal is to become the largest private company in the world. “We need to grow at 26 percent each year on a compounded basis to be at $200 billion in 30 years,” he reports. “Over the last five years, we’ve really been contemplating that and working toward it, and that’s the picture that we had in mind. My role as chairman is to help build the infrastructure we’ll need to support that goal.”

As the family of companies pursues growth and adds new companies to the portfolio, Southwestern Advantage remains true to its original mission of building character in aspiring leaders. Books are simply the vehicle to achieve it. “We continue to honor the Southwestern Advantage program as the core business here,” says Bedford. “We all look towards that. It’s the most important thing we do.”

Southwestern Family of Companies

Southwestern Consulting
One-on-one accountability coaching and sales consulting.

Southwestern Real Estate
A residential real estate brokerage.

Southwestern Advantage
Assists college students in offsetting educational expenses through running a business.

Southwestern Investment Group
A full-service investment and financial services firm.

Wildtree
A direct sales company that sells gourmet culinary blends, infused grapeseed oils, dressings and sauces.

Great American Opportunities
One of the oldest, largest and most respected fund-raising companies in America.

Global Educational Concepts (GEC)
As a designated sponsor through the U.S. State Department, GEC recruits International students to come to America for work, travel and training.

Tasty Selections
A manufacturer of high-quality frozen bakery products.

ThinkingAhead
An international executive search and recruiting services firm for specialty positions and fields.

SBR Consulting (U.K.)
London-based consultancy dedicated to liberating sales potential worldwide.

3RD HOME
A club that offers its members access to exotic destinations and the ability to expand the current usage and value of their second-home investment.

Southwestern Publishing Group
A well-known cookbook publishing company for non-profits, companies and individuals.

Southwestern Travel
A company dedicated to providing unique travel experiences that broaden horizons and provide a means of self-exploration.

Southwestern Tax Services
Part of the Southwestern Company that provides income tax preparation services to Southwestern Advantage book dealers.

Companies recently added to the family include:

  • Southwestern Coaching
  • Southwestern Speaking
  • Southwestern Training
  • Southwestern Property Insurance
  • BDC – (Business development within Great American Opportunities)
  • QSP – (Fundraising company acquired by Great American Opportunities)

Are We There?

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I do not remember exactly when I first heard the question: Are we there? My memory is of a television commercial many years ago with two kids in the back seat of a car constantly asking their parents that very question.

The question is indeed an excellent one. It is full of anticipation and excitement for the arrival at a destination that is perceived to bring great joy. I have often asked myself the same question when thinking about the completion of a project, progress toward a goal and even the collective advancement of our direct selling community. Are we there? Have we arrived at that moment in time when marketplace perception is more than favorable and brings with it preferred entrepreneurial choices, an excellent customer service proposition, and unsurpassed use of technology to support independent contractors and customers? The list goes on. However, the preceding provides a glimpse into the thoughts of all of us who embrace and advocate direct selling as a channel of distribution.

Are we there yet? I think we are there simply because we must arrive at our destinations in our own mental community and feel like we are there, before we can make it a reality. The kids in the back seat of that car had a clear vision of what it was going to be like when they arrived at their destination, regardless of whether it was the home of relatives or an amusement park. The enthusiasm for the destination is what triggered the question.

Having observed this channel of distribution for many years, I do think we are there. I think we have arrived at a moment in time when we know our strengths, weaknesses, opportunities and threats. My thoughts are not based on recent financial information or company results, but instead are based on our collective experience as a channel of distribution. I believe we are gaining a clearer understanding of how we can improve marketplace perceptions and compete successfully in the gig economy. Improved perception will be the result of our collective marketing as individual companies as well as our channel as a whole. We know why some negative perceptions have existed and what is expected of our channel of distribution. Perhaps, the biggest lesson we have learned over the past few years is that it is not enough to simply say we sell and service customers through an organization of independent contractors. We must demonstrate that real customer acquisition is at the forefront of our business-building activities.

Having observed this channel of distribution for many years, I do think we are there. I think we have arrived at a moment in time when we know our strengths, weaknesses, opportunities and threats.

We can choose the language that positions our brands, products, services and business opportunities. We have more capability and marketing savvy than ever because of the emergence of digital marketing and technology tools we never envisioned 15 short years ago. Our capabilities around brand-positioning are so very competitive and powerful. Direct selling companies can compete with giant brands when digital marketing is used effectively with the additional ingredient that independent contractors bring to the marketing mix—energy, enthusiasm, belief, authenticity and credibility. Today, we design and control our brand positioning more effectively than at any time in the history of the channel.

The business opportunities offered by companies who utilize the direct selling channel, regardless of preferred description—social selling, social entrepreneurship, networker, party plan, direct selling—do not separate us from the common denominator that binds us all. This channel of distribution engages independent contractors who become a primary link between company and consumer. Independent contractors are rewarded for customer acquisition and for attracting and helping other independent contractors succeed in their efforts to acquire customers. The rewards for those who invest time in learning and applying new skills is simply exciting, and the ease of entry is considered one of the most unique attributes of our business model.

Over the past two years, I have observed the phenomena of Uber. I also have interviewed more than 100 Uber drivers. Their primary reason for driving is flexibility and ease of entry. Uber drivers do not appear to receive a promise of income, only the promise of an opportunity to earn an income in proportion to time and effort invested. Uber drivers are equipped with basically one piece of technology, receive virtually no training, and they are in business. They also are rated by their customers immediately after they render their service, so only those who deliver excellence will survive. Uber created a simple model that disrupted the way we look at local transportation services. What is the purpose of this anecdote? Direct selling companies offer a better opportunity. However, there may be a lesson to learn from the Uber model. The evaluation and rating of the Uber driver by customers serves a valuable purpose. It represents and demonstrates how a simple evaluation by the consumer being served supports the desired behavior of the person delivering the service.

Websites, once thought to be a threat to direct selling, are now a basic staple to the channel, especially personalized websites that an independent contractor can have up and running within hours of engagement with the company of their choice. Some companies also support their independent contractors with landing pages and apps that allow those individuals to promote specific products to a targeted audience who can quickly learn about the products and make a purchase. Technology has empowered direct selling companies to present a more consistent message and professional presentation. Technology has not become a threat. Technology is a powerful asset when utilized effectively.

Direct selling companies overall have kept pace with the advancements in technology, and some are on the leading edge of how technology can serve the current marketplace. Direct selling companies that have kept pace utilize technology as well as any retailer, including Amazon. A rapidly growing segment of consumers is becoming more and more reliant upon technological tools as their primary and preferred method for purchasing products and services. For this very reason, keeping pace with and using technology effectively is an essential component of success when using direct selling as a channel of distribution.

Today, we can let the consumer know through an app if the product is in stock and when it will ship. No more waiting weeks for delivery. Companies providing a service as their product can now enable customers to complete their application process within minutes, a process that formerly took days. Is it possible for a direct selling company to provide the consumer with real-time product status, ship within hours and provide 99 percent order fulfillment and accuracy? Yes, this is possible, and it is happening within direct selling companies. This is another reason why I think we are there.

I should add that being there still takes good decision making, marketing and positioning that resonates with the marketplace. It also takes an impeccable ethical standard, excellence in leadership, profitability, good resource allocation, excellence in communication and excellence in execution of strategy. What is different is the availability of tools that would have been considered dreams less than 10 years ago. The tools are dominated by new and innovative technology; however, print remains relevant, and innovative design for literature and kits continues to make impressive first impressions. Print also has been impacted by technology making print-on-demand our new reality for sales collateral that once occupied much space in the warehouse. Chances are, you are reading this article in the print format because print is still a preferred choice for certain types of information.

Over the past 10 years, we have experienced exponential growth in technology and we should expect the same over the next 10 years. Access to everything important will become easier and faster. Most interesting is the fact that direct sellers are now using much of the same technology the retail competition is using. Retail competition is no longer the big gorilla that once overshadowed the attributes delivered by a direct selling company—personalized and caring service delivered in a fun, sometimes entertaining, manner, which offers information and education not found in traditional retail channel. These strong attributes remain a direct selling company’s competitive advantage, and today this advantage is even stronger because it is supported with technology.

I am personally of the opinion that we are there. We know from the experiences of the past few years what is smart when it comes to strategies and tactics. We know the importance of real customers and not overpromising on expectations, be they product claims or the potential associated with the business opportunity. We have arrived at a great time when the tools available have never been greater and our access is the same as the competition. We know the importance of an impeccable ethical standard for our companies and all independent contractors who are the ambassadors of the corporate brand. Analytics and analysis of historical performance as well as the ability to predict future performance based on desired behaviors has never been greater. We have a rich and historical experience in serving others in a personal manner, and we are better than ever before—or at least we can be.

We are there!

John Fleming

DSN Ambassador John Fleming, a retired direct selling executive and former Publisher/Editor in Chief of Direct Selling News, is the Direct Selling Association’s 2016 Hall of Fame Honoree and 2016 Direct Selling News Lifetime Achiever.

pawTree’s Roger Morgan Talks Dog and Cat

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Roger Morgan founded Southlake, Texas-based pawTree in 2014, armed with the knowledge gained as a CEO of a multinational pet products company and service as a chairman of the American Pet Products Association.

He became a student of the direct selling channel and has since expanded the company into all 50 U.S. states. Over the past year or so, the company has begun to hit its stride thanks in part to the introduction of a food seasoning product that allows people to add variety, and boost nutrition, to their pets’ meals. Direct Selling News had an opportunity to speak with Roger Morgan about his company’s progress. Below is a portion of that conversation.

Roger Morgan

DSN: Let’s start by talking about one of the most unique offerings in pawTree’s catalogue, pawPairings. How did the product come to be?

RM: It’s an important part of our growth and our story. The phrase we use that really seems to resonate with people is, “You don’t like to eat the same thing every day and neither do your pets.”

For people who have pets, we almost all feed them the same thing every single day. There are reasons for that: Pets get digestive upset very easily, and when you start mixing things up, their stomachs react poorly and we end up with messes on our hands. People learn quickly and they stop changing the food.

Talking about pawPairings is usually the first conversation we have with people. Once they try that product, it’s an entry to many other products and solutions that we have to offer. We think of it as the tip of the spear.

DSN: It’s a product that might need a little bit more explanation than some of the other things in your product line. How does the direct selling model help in terms of introducing it to customers?

RM: It does resonate when people hear the story, and most people would never consider it if they just saw a bottle of something on the shelf at a retail store. The product is also very demonstrable. Our petPros are having a lot of success showing a video on their Instagram or Facebook pages. They’ll show a video of them putting the seasonings on the pet food and watching how excited the pets get to have variety in their meal plan, because it just gets so boring eating the same thing literally every day.

This product story has a one-two punch. The one is all about variety and giving pets some excitement at meal time. The two is that all of our pawPairings include eight super foods and a vitamin and mineral pack that goes into every one, and so it’s also very nutritious.

DSN: In addition to the use of video, your petPros also have had success with a sampling program. Tell us a little more about how that program works.

RM: We call our sales approach TSA, for “talk, share, ask.”

First, we talk dog and cat. People who have pets will totally resonate with that concept. When you find somebody who has a pet, you just immediately go to that level, “Oh, let me see a photo of your pet,” or “Let me tell you this story about mine,” or “look at this cute video.” You talk dog and cat.

As part of the “talking dog and cat,” you make the lead-in comment, which is, “You don’t like to eat the same thing every day and neither do your pets. Here are some seasonings you can put on your pet food, would you like to try this? And I’d love to call you tomorrow or the next day and see what Fluffy thought about it.” So that’s the share.

And then the ask is just a follow-up, one to two days later, with the question, “How did Fluffy like it?” And, of course, we always get a resounding, “Wow, Fluffy loved it. That was amazing.” Then the follow-up to that is, “Well, great, would you like to buy some for Fluffy?”

That’s how our sampling program has worked. Also, it’s a smaller product and pretty easy to mail, so you can have a Facebook conversation or a text conversation or a phone call with somebody who is in a different geography and easily follow this same process.

Some of our products are appropriate for certain pets in certain circumstances, but not all pets in all circumstances. An example might be our Joint Support Plus. That’s a really good product for obviously any pet that has joint issues. It can even be used proactively for those pets that don’t right now have joint issues. But not everybody finds a need or sees an immediate benefit.

With pawPairings, every dog and cat can benefit from that product. It doesn’t matter what food you’ve chosen, you can sprinkle this product on top of it. It really opens the conversation to anybody with a pet. And when a pet parent sees how much their fur baby enjoys it, and they know it’s healthy for their pet, they have an interest in buying.

DSN: Now that you have such a replicable process in place, what are some of the things that you’re focused on in terms of the business strategy as you head deeper into 2018 to continue to grow and expand pawTree’s reach?

RM: It’s one of the things I’m most excited about because, as you said, we’ve really narrowed down and simplified and focused on what we call “The One Thing.” Our “One Thing” is pawPairings. So, in 2018 our customer incentive campaigns are all around pawPairings. Our petPro incentive campaigns are all around pawPairings. Our product trainings are all around pawPairings. Our initial conversations that petPros have with customers are all about pawPairings. We’ve really focused our messaging, our training, our strategy, our incentives, our conversations, all around The One Thing.

DSN: When you founded pawTree, you did not come from a traditional direct selling background. You came out of more of the traditional bigger-box pet retail environment. What are some of the things that you’ve learned along the way?

RM: Direct selling is so much fun and so rewarding. I’ve learned this is a people business and I absolutely love these people. One of the things I’ve experienced is the incredible passion that exists in this space. It’s a really exciting convergence of two industries because the pet industry is also really passionate. People who have pets love their pets. They get so excited about their pets. People who are in direct selling, they love their companies and the products they represent. So you combine two very passionate categories into one and you get these fireworks that go off.

Another thing that I’ve learned is what a powerful sales channel direct selling is for sharing stories. pawTree is a story of unconditional love, and our story is being shared over and over in an incredibly powerful way that could never happen through traditional retail stores. My vision for what we’re building at pawTree and what motivates me as a person at this stage of my career is helping to create more happiness in the world. I believe that love is the key to happiness. Our vision statement is to create a world filled with unconditional love where pets and their people thrive. It is really, really exciting to watch that happen.

A New Web Experience For DSN Readers

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The team at Direct Selling News is pleased to officially introduce our newly redesigned website: dsnsite.wpengine.com. Several months in the making, the redesign incorporates the new look we introduced in the print edition in January 2017 along with a mobile-friendly format, so you can get your direct selling news on the go.

The new site offers:

  • Daily coverage of news from across the global direct selling community, including announcements about new executive hires, corporate expansions, financial updates and philanthropic activities;
  • Content from our monthly print edition, including the full cover stories, exclusive interviews and company features;
  • A live stock ticker, showing the trading activity for the publicly traded direct selling companies;
  • New profiles on every company ever included on our signature Global 100 list;
  • An easy-to-use directory of vendors serving the direct selling community; and
  • Improved search technology.

The site includes extended information about our annual Global 100 program. Now entering its ninth year, the Global 100 list of the world’s largest direct selling companies has become the benchmark list within the channel. Our research team is winding down its effort to collect the data for the 2018 list, so be sure that your company has completed its nomination. Participation is simple: You’ll find both the nomination and revenue certification forms easily accessible from our homepage. The deadline for submissions is March 17.

As before, the site also includes all of the outstanding coverage from each edition of Direct Selling News, such as this month’s cover story, where writer Courtney Roush takes an in-depth look at the power of the pitch, the sales presentations direct sellers use to share their products, services and business opportunities with prospects. Every company and every individual sales person has a unique take on the pitch, but the most successful—and by extension the most replicable—share certain characteristics. Be sure to check out the story beginning on Page 18 to explore these concepts and how they apply across new technologies.

Our feature stories this month highlight three well-known companies in the direct selling channel: 4Life Research, Thirty-One Gifts and Southwestern. Southwestern is celebrating a rare milestone this year: the 150th anniversary of Southwestern Advantage, its direct selling program that offers college students the opportunity to offset their educational expenses through running their own business. The team at Southwestern shared with writer Jenny Vetter the process and core values that keep college students interested in joining the company’s independent salesforce year after year. “We have a timeless mission,” President Dan Moore said. “If ever there were a generation of young people that did not need character, perseverance, communication skills, flexibility, adaptability, self-reliance, or service-mindedness, then we’d lose our relevancy. But as long as there are generations that need those qualities, we’ll be here.”

In a changing world, that clarity of purpose and mission is reassuring. What is your purpose and mission? Will it stand the test of time?

We hope you enjoy our new website and continue to engage with us as we make our way through 2018.

Warmly,
The DSN Staff

Where We Have Gone and the Vision of Where We Are Going

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“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” —Benjamin Franklin

Mr. Franklin’s words can be applied to any of his roles: newspaper publisher, inventor, postmaster, statesman and humorist. But his words have an especially keen meaning for DSA’s ethics and self-regulation program that has been a guiding force in direct selling for more than 40 years. Just as Franklin’s bifocals enable one to see farther as well as closer, DSA executives are engaged in examining the existing self-regulatory program and looking ahead to ways to ensure improvement.

Since the Code of Ethics’ creation, DSA has revised key elements, as well as expanded education initiatives and the Code Administrator’s office, to respond to direct selling’s ongoing evolution. As part of this scrutiny, the association has asked important questions regarding its self-regulatory program.

Does the program address the emerging market dynamics? How can we better protect against pitfalls that might arise from evolving technology? Does DSA’s self-regulatory program foster a productive dialogue between direct selling, law enforcement officials and the regulatory community? Does the program implement measures that ensure increased member company accountability and promotion of consumer protection?

DSA has convened a series of deliberations over the past year and half to answer these and other questions. The result has been a framework of a dramatically enhanced self-regulation program. It seeks to be comprehensive, meet consumer expectations and enable elevation of the direct sellers’ reputation with regulators, lawmakers and thought leaders.

DSA’s existing self-regulation is the foundation of the new 2018-2019 initiatives, including anticipated partnership with independent third-party organizations to ensure a robust, comprehensive, transparent consumer protection effort based on DSA’s productive dialogue with the Federal Trade Commission. Acting Chairman Maureen Ohlhausen shared some characteristics of effective self-regulatory initiatives at DSA’s 2017 Fall Conference. She envisions clear, meaningful and fair standards that win industry support, together with adequately funded mechanisms that remain independent from industry members, supported by effective enforcement mechanisms, and that apply to the entire industry.

Details of the enhanced program will be developed by a working group of executives across the industry with input from the entire membership based on a series of design principles, which inform the program’s vision and trajectory. Guided by the insights from the consumer and law enforcement communities, these principles will include: clear industry standards on issues such as product and earnings representations, identification of relevant best practices from other self-regulatory models, and creation of a process that both monitors and enforces the Code of Ethics principles, raising the bar of excellence among DSA member companies with application to non-members. At the direction of DSA’s Executive Committee and Board, DSA is in early conversations with the Advertising Self-Regulatory Council/the Council for Better Business Bureaus (ASRC/CBBB) to explore ways to work with these entities’ long histories of self-regulation.

DSA will continue to engage the greater direct selling community as we chart the path ahead for a stronger self-regulatory program and continued growth and progress for the 21 million Americans involved in direct selling.

Joseph Aquilina is Ethics & Compliance Counsel for the Direct Selling Association.

Younique Helps Coty See 19% Sales Jump in Consumer Beauty Division

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Cosmetics giant Coty has announced that it saw a 19.4 percent jump in profits in its Consumer Beauty Division for the second quarter of fiscal 2018, which ended Dec. 31, due mostly to its social selling brand Younique.

“Younique continued very strong performance with double-digit sales growth in the quarter with several countries increasing at triple-digit rates, including France, Germany and Spain,” Coty CEO Camillo Pane told investors in an earnings call. “As of December, Younique had over 230,000 active presenters, an over 20 percent increase versus the prior year. Now in its fifth year, Younique continue to distinguish itself as a peer-to-peer pure-play e-commerce beauty platform with a highly scalable technology platform.”

In January 2017, when the brand had about 80,000 sellers, Coty bought a 60 percent interest in Younique. By December, that number had nearly tripled to 230,000, according to Digiday, a division of Digiday Media. The company also saw double-digit sales growth in its Q2, with sellers in countries such as France, Germany and Spain growing sales at triple-digit rates.

“Our Consumer Beauty Division has lifted its profitability by 19.4 percent versus last year to $131.9 million, or 11.6 percent of net revenues, thanks to the good contribution of Younique as well as strong cost discipline,” said Patrice de Talhouet, Coty executive vice president and global chief financial officer.

Younique began in 2012 as a digital-driven version of peer-to-peer companies Avon and Mary Kay. The company helps each seller set up a personal e-commerce site and provides them with digital marketing guidance for promoting skincare and cosmetics products on the seller’s personal social media accounts. Sellers then host an online party by inviting people to shop their page for a certain period. Per Digiday, Younique pays its sellers within three hours of any sale made on their websites.

Younique’s explosive growth in the past year or so can be attributed to a combination of its product offering and viral marketing methods on social media. Sellers act as social influencers for the beauty brand that relies on user- and seller-generated content on social media. By positioning itself as a digital-only brand, Younique has lower overhead costs and an eye for progressive commerce trends.

Coty’s portfolio of 70-plus brands includes COVERGIRL, Clairol and OPI, as well as premium fragrance and skincare labels like Calvin Klein and Marc Jacobs.

Jeunesse Garners 19 Awards in 2018 AVA Digital Awards

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For a second consecutive year, Lake Mary, Florida-based Jeunesse garnered numerous awards at the AVA Digital Awards, an international competition recognizing outstanding work in digital communications. The global youth enhancement company garnered 10 Platinum, 5 Gold and 4 Honorable Mention awards for video and other digital media projects.

One of the company’s newest video releases, “We Live Jeunesse,” received six Platinum awards in the following categories: Company Overview, Recruitment; Graphics/Design; Motion Graphics Design; Special Effects/Animation; and Writing.

The launch video for the company’s Luminesce HydraShield Mask garnered Platinum awards in the Marketing category and for Motion Graphics Design. “Jeunesse Kids 2017 Bringing Hope – Ecuador” and the Jeunesse Spa launch video also were awarded Platinum in the Nonprofit and Marketing categories, respectively.

“Our goal is to deliver highly effective marketing tools that help our global family of Jeunesse Distributors share our story, corporate culture and innovative brands,” said Jeunesse Chief Visionary Officer Scott Lewis. “With over a year of hard work and creative talent dedicated to the making of ‘We Live Jeunesse,’ we are thrilled to have received such high honors for this and the other creative work honored in the AVA Digital Awards.”

Gold awards were received for Jeunesse Kids Identity video (Nonprofit); Jeunesse 2017 Lifestyle Rewards recap video (Travel); NV Application Tips video (Instructional); “We Live Jeunesse” video (Editing); and Jeunesse Global website (Home Page).

The company’s blog, “Jeunesse EXPO Elevate 2018 World Tour” promo video, Naära launch video and “Jeunesse 2017 Diamond Discovery – Bora Bora” recap video, all received Honorable Mention in this year’s competition.

The AVA Digital Awards is administered and judged by the Association of Marketing and Communication Professionals. Approximately 15 percent of entries won Platinum, 20 percent received Gold and 10 percent were Honorable Mention winners.

Herbalife Reports Q4 Net Sales Growth of 4.6%; Full-Year Decrease of 1.4%

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Herbalife Ltd. has released financial results for the fourth quarter and full year ended December 31, 2017. The Los Angeles-based company reported fourth quarter 2017 net sales of $1.1 billion, an increase of 4.6 percent, while net sales for full-year 2017 were $4.4 billion, a decrease of 1.4 percent compared to full-year 2016.

“After a year of transition, we returned to net sales growth in the fourth quarter as expected, and we anticipate stronger net sales growth for the full year in 2018,” said Rich Goudis, CEO of Herbalife. “This growth is due to the determination and hard work of our talented independent distributors and employees around the globe who are continuously looking for ways to fulfill our purpose to make the world healthier and happier.”

Herbalife also announced, consistent with the company’s succession strategy, a new executive organization structure effective May 1, 2018. The company’s president, Des Walsh, will transition to the new role of executive vice chairman, where his 14 years of experience at the company will primarily be used in growing the business and developing and maintaining strong relationships with the company’s distributor leaders around the world.

Concurrently with Walsh’s transition to his new role, two company veterans will each be promoted to serve as co-president of the company, each with separate but complementary responsibilities for leading the company forward.

John DeSimone, currently chief financial officer, will assume the role of co-president and chief strategic officer, where he will manage the company’s regional leadership, who have responsibility for growing the company’s nutrition business and driving performance in more than 90 countries around the globe. These will be new duties for DeSimone, who will continue to manage the company’s financial planning and investor relations operations.

Chief health and nutrition officer, Dr. John Agwunobi, also will assume the role of co-president and continue in his position leading the company’s nutrition and fitness training and medical and consumer affairs. He will expand his responsibilities to concentrate on enhancing the distributor and customer experience. This new position will work intimately with distributors and customers, ensuring that the company is continuously innovating in the areas of corporate sales, technology, marketing and product development.

As part of this new organization structure, current senior vice president and principal accounting officer, Bosco Chiu, having served close to 25 years at the company, will be promoted to executive vice president and chief financial officer. In addition, current acting general counsel Richard Werber will assume the new role of chief legal officer, while current senior vice president, deputy general counsel and chief compliance officer Henry Wang will be promoted to executive vice president and general counsel.

To read the full Herbalife Q4 2017 report, click here.

Patricia Stitzel Elected President and CEO of Tupperware

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Tupperware Brands Corp.’s Board of Directors has elected Patricia A. Stitzel to the position of president and CEO, effective May 9, 2018. Stitzel will succeed current Tupperware CEO Rick Goings, who will serve as executive chairman and focus on the successful transition and leadership of the company’s purpose-centered initiatives.

Stitzel has served as the company’s president and chief operating officer since October 2016. Prior to this role, she served as group president, Americas, and in leadership positions of increasing responsibility in Europe and the United States since joining the company in 1997.

“I am grateful to the Board of Directors for its trust and confidence, and I am excited to lead this great company into the future, supporting our important global purpose and executing on our strategic growth initiatives,” said Stitzel. “With our high-quality and innovative products, dedicated sales force of over 3 million people and experienced global leadership team, we are poised to build upon our strong foundation in capitalizing on new and exciting growth opportunities. I thank Rick for his leadership, mentorship and friendship and look forward to his guidance as executive chairman through the transition.”

Kriss Cloninger III, the company’s presiding director of its Board of Directors, said, “The Board is delighted to elevate an executive of Tricia’s caliber to serve as president and chief executive officer, as we have great confidence in her 20-year proven track record of success in building high-performance teams and delivering sales and profit growth.

“The Board is also grateful to Rick for his strong leadership and tireless commitment and is pleased that he will continue to play a key transitional role as executive chairman. Rick established Tupperware as a free-standing, publicly traded company in 1996, modernizing product offerings and expanding its portfolio. His more than 25 years of leadership has transformed Tupperware into an international brand that provides life-changing opportunities for its global sales force.”

Goings has led the company since 1992 and has served as its chairman and CEO since 1997.

“It has been a true honor to lead Tupperware Brands and I am proud of what we have accomplished for our stakeholders, especially for the women and men around the world who are part of our sales force,” said Goings. “I look forward to transitioning the role to Tricia, who has demonstrated strong leadership abilities for the current and future needs of the company. As group president, Americas, she led this critical portfolio to new and impressive levels of growth. She is the right person to lead Tupperware Brands into the next era, reinforcing Tupperware’s purpose of empowering women through economic opportunity.”

Youngevity Completes Acquisition of Nature Direct

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Youngevity International, a Chula Vista, California-based omni-direct lifestyle company, has acquired Nature Direct, an Australian manufacturer and distributor of essential oil-based nontoxic cleaning and care products for personal, home and professional use.

“Youngevity has been searching for a green alternative line of cleaning products that would be synergistic with our philosophy of offering products that are supportive of a healthy lifestyle for some time,” said Dave Briskie, president and CFO of Youngevity. “Nature Direct’s products embody those attributes we were seeking and are a welcome addition to our Youngevity family of products.”

Nature Direct was formed in Australia in 2007 to create eco-friendly, effective and affordable home cleaning products using essential oils. The company has grown its product lines to include personal care and professional use nontoxic disinfectant products.

Nature Direct’s salesforce has been located in and focused on the Australian market. As part of Youngevity, their products will now be made available throughout Youngevity’s social selling program that operates in seven countries, including New Zealand, Mexico, Columbia and the United States.

“We are excited to join the Youngevity team and become a part of their innovative omni-direct platform as we bring with our clean-living message to the company,” said Jeanette Anderson, co-owner of Nature Direct. “We knew our essential oil homecare solutions were unique, and now a much wider audience around the world will know, too. We expect our distributors will also enjoy the benefits of enhanced earning opportunities and global cross-selling opportunities that exist as part of Youngevity’s unique selling platform.”

Nature Direct Co-Owner Neil Reid added, “We are honored and privileged to offer a legacy to our incredible team with global opportunities to build an exciting and solid business. We look forward to a whole new generation of families enjoying healthier and safer homes that are free from toxic chemicals.”

“We see the global Youngevity opportunities in the emerging gig economy providing an exciting future for our Australian distributors,” said Karla Hart, who co-founded Nature Direct and is a Master Distributor.

Avon to Exit Australia and New Zealand Markets by End of 2018

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Avon Products Inc., the second largest direct seller in the world, has announced that it will exit the Australia and New Zealand markets by the end of this year.

The London-based company provided Direct Selling News with the following statement: “As part of the strategy to return Avon to long-term sustainable profitable growth, the company is focusing on markets with the greatest potential for future growth to support its vision of becoming the world’s leading social beauty company. In line with this, after a thorough deliberation on performance, the direct selling conditions in the market, and potential for growth, the company considered all options for the business and is announcing our decision to exit the Australia and New Zealand markets by the end of 2018. There are currently no plans for any further business closures.”

“This has been a difficult decision to make and I would like to take this opportunity to thank every Associate and Representative in Australia and New Zealand for their hard work and dedication to Avon,” said Avon Global President Miguel Fernandez. “Our commitment is to support our Associates and Representatives in the region through this transition period, with sensitivity and respect, guided by our Avon values.”

Fernandez added, “There is much work to be done ahead. But working together, we will be able to work through the challenges and move forward toward steady recovery and growth.”

According to Australia’s Sydney Morning Herald, the closure will leave 220 employees in both countries without jobs. In Australia, where Avon has been operating since 1963, more than 21,000 Representatives will be affected.

Avon was founded by David H. McConnell in New York in 1886. Last week, the company reported sales of $5.7 billion for 2017, which was relatively unchanged from 2016.